Navigating the World of Lease Enforcement

By Timothy M. McLean

Two recent Illinois court rulings once again highlight the importance of every word in drafting leases and related notices.

Recovery of Attorneys’ Fees
In Housing Authority of Champaign County v. Lyles, 918 N.E.2d 1276 (4th Dist. 2009), the trial court awarded $5,089.50 in attorneys’ fees to a tenant who defeated a  andlord’s claim for breach of a lease. Since the lease allowed only the party “enforcing” it to recover attorneys’ fees, however, the Illinois Appellate Court reversed the award finding the attorneys’ fees were not recoverable because they had been incurred “defending” a lawsuit by the landlord rather than “enforcing” the lease provisions.

To preserve the right to recover attorneys’ fees against a tenant, a landlord thus should include the following language in its leases: In the event of any Default by Tenant or in the event of any litigation arising under this Lease, Landlord shall be entitled to payment by Tenant of all costs and expenses (including reasonable attorneys’ fees) incurred by Landlord in enforcing the terms of this Lease or in defending any claims by Tenant concerning this Lease, whether or not suit shall be required or commenced.

Five-Day Notices
Some landlords use outdated and improper five-day notices that state the landlord will terminate the lease if a default is not cured within the specified time. Instead of terminating the entire lease, a landlord always should notify a tenant that only the “right to possession” of the premises will be terminated if the rent default is not cured in time.

A recent ruling from the DuPage Circuit Court illustrates the devastating consequences an improperly worded five-day notice can have for a landlord. (DuPage County Case No. 07 CH 2404). In that case, the court ruled that a landlord cannot recover future rent from a tenant after sending a notice to terminate the lease rather than the right to possession. By sending an improperly worded Five-Day Notice, the landlord effectively waived its right to recover future rent for the many years that remained under the lease at issue.