Check’s in the Mail? Tenants Get More Creative

When it comes to dreaming up excuses for not paying the rent, tenants in even the most mundane businesses can display a remarkable talent for creativity.

There was the office tenant, for example, who said she shouldn’t have to pay the rent because a malfunctioning elevator frightened her dog.

Then there was the restaurateur who said he shouldn’t have to pay rent because loud music at a nearby business was keeping customers away from his outdoor tables.

Or how about the office tenant whose excuse was that he couldn’t come in to pay the rent because he’d flushed his keys down a toilet?

These are just some of the imaginative tales that property managers listen to month-in and month-out, in good times and bad, from business tenants who just can’t seem to make that payment on time.

“Any landlord with 50 or more tenants gets at least one excuse per month,” says Tom McAndrews, president of Newport Beach-based Tiarna Real Estate Services, a property management and brokerage firm.

The woman whose dog got frightened by a malfunctioning elevator was a tenant in a building managed by McAndrews some years ago.

“She said the dog suffered emotional distress and she had to take him to the vet for treatment because of it, so she felt that she should be excused from paying the rent for a month because of the extra expense she incurred,” McAndrews said. “Never mind that her lease prohibited animals in her suite.”

Anyone who has plied the property management trade for a while has at least one favorite story of a tenant whose excuse for not paying the rent was either so creative or so outrageous that it was unforgettable.

“My favorite was a guy who said he flushed his keys down a public toilet by mistake,” recalls Dave Mgrublian, managing director of Los Angeles-based Investment Development Services. “The creativity of the story alone was enough to move me to allow him a few days reprieve.”

Indeed, Mgrublian said, the tenant described the misfortune in such detail that it sounded true. The key flusher eventually paid his rent, but eventually left the building when his business tanked, a common fate for folks who habitually dream up excuses for being late with the rent.

“Typically, the excuses are a harbinger of things to come,” said Brian Galligan, senior portfolio manager with Cushman & Wakefield Asset Services Group in Los Angeles.

And usually what comes is bad, such as the tenant going out of business or just leaving the building unannounced, Mgrublian said. “After a while, when you have to keep listening to their troubles, you almost feel like a grief counselor.”

Cindi Langendoen’s favorite story harks back to the 1980s, when landlords often gave new tenants anywhere from six to 18 months of free rent to entice them to sign leases.

“We had a tenant who would use up whatever free rent the landlord gave, then when the free rent was gone, he would go to a different building under a different name and do the same thing to a different landlord,” said Langendoen, who is the Los Angeles-based director of asset services for CB Richard Ellis.

Despite the new and improved excuses that some tenants manufacture each month, many still prefer to employ the tried-and-true “the check is in the mail,” Cushman & Wakefield’s Galligan said.

Other recurring reasons that Galligan has spotted include “I’m going through a divorce and my wife (or husband) has all the money” and “We’re waiting for a big settlement,” a favorite lament of law firms.

Property managers say the highest percentage of excuses come from small businesses, especially operators of small retail shops, but even big companies with the wherewithal to pay sometimes come up with a humdinger of an excuse when the first of the month rolls around.

“One of the ones I’ve heard is that ‘We’re a huge corporation and it’s lost in the system,’ ” Langendoen said.

Galligan tells of a government agency that is routinely late with its rent check. “It has so many divisions that nobody in the agency can ever figure out who is responsible for paying the little extra fees each month, like the service charges for after-hours air conditioning,” he said.

Most property managers develop an appreciation for a well-turned excuse, often admiring the imagination and creativity behind it even as they roll their eyes in disbelief.

Probably the most unusual excuse he has ever heard was also an airtight alibi for not paying the rent, according to McAndrews.

The tenant, a psychologist renting office space, submitted a long, detailed report in which he analyzed himself and found that he was mentally unstable--and therefore unable to operate a business or pay the rent. He wanted to be excused from the remainder of his lease.

McAndrews thought about taking legal action, but he changed his mind after talking it over with his lawyer. As any experienced property manager will attest, there are times when going after the rent is more trouble than it’s worth.