AN ACT TO AMEND TITLE 25 OF THE DELAWARE CODE RELATING TO RIGHT OF REDEMPTION.

Legislation Document

SPONSOR:

Sen. Lockman & Rep. K. Johnson

Sens. Cruce, Hoffner; Reps. Berry, Gorman, Lambert, Ortega, Romer

DELAWARE STATE SENATE

153rd GENERAL ASSEMBLY

SENATE SUBSTITUTE NO. 1

FOR

SENATE BILL NO. 116

AN ACT TO AMEND TITLE 25 OF THE DELAWARE CODE RELATING TO RIGHT OF REDEMPTION.

WHEREAS, evictions create significant costs for state and local governments related to shelter funding, education funding, health care provided in the hospitals instead of by community-based providers, transportation costs for homeless youth, and foster care; and

WHEREAS, evictions have significant, well-documented, and long-lasting effects on the lives of individuals and families, including poorer physical and mental health, increased risk of homelessness, increased risk of employment loss, loss of personal property, damage to credit standing, and relocation into substandard housing; and

WHEREAS, evictions, and the subsequent housing instability and displacement, damage the lives of children by negatively impacting their mental and physical health, decreasing school attendance rates, impeding academic performance, increasing instances of school discipline, and increasing the likelihood of out-of-home placement; and

WHEREAS, providing a right to tenants in eviction cases to make the landlord whole and maintain their housing stability is a proven means of significantly reducing the disruptive displacement of families and the resulting social, economic, and public health costs of such displacement; and

WHEREAS, the General Assembly declares that tenants facing an eviction must have an opportunity to cure an action for failure to pay rent.

NOW, THEREFORE:

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Chapter 55, Title 25 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 5502. Landlord remedies for failure to pay rent.

(a) A landlord or the landlord’s agent may, any time after

rent is due, including

the time period between the date the rent is due and the date under this Code when late fees may be imposed, demand payment

thereof

for the past due rent

and notify the tenant in writing that unless payment is made within a time mentioned in such notice, to be not less than

5

7

days after the date notice was given or sent, the

rental agreement shall be terminated

landlord may file a court action to terminate the rental agreement

. If the tenant remains in default, the landlord may

thereafter

then

bring an action for summary possession of the dwelling unit or any other proper proceeding,

action

action,

or suit for possession.

(b) A landlord or the landlord’s agent may bring an action for rent alone at any time after the landlord has

properly

demanded payment of past-due

rent and

rent,

has notified the tenant of the landlord’s intention to bring such an action

, and the required time under this section has passed

. This action may include late charges, which have accrued as additional rent.

(c) If a tenant

, or another person or entity on behalf of a tenant,

pays all rent due before the landlord has initiated an action against the tenant

and the landlord accepts such payment without a written reservation of rights

, the landlord may not then initiate an action for summary possession

that is based such failure to pay rent

or for failure to pay rent.

The landlord may not refuse to accept rental payments by or on behalf of a tenant. The landlord may restrict the method of any payments to those accepted under the terms of the lease.

(d) If a tenant

, or another person or entity on behalf of a tenant,

pays all rent due

under the terms of the lease

after the landlord has initiated an action for nonpayment or late payment of rent against the tenant

and the landlord accepts such payment without a written reservation of rights

, then the landlord may not maintain that action

for

based upon such failure to pay

past due rent.

The landlord may not refuse to accept rental payments by or on behalf of a tenant. The landlord may restrict the method of payment as follows:

a. Prior to a judgment being entered against the tenant, the landlord may restrict the method of any payments to those accepted under the terms of the lease.

b. Once a judgment has been entered against the tenant, the landlord may require payment be made by either certified check or money order.

Section 2. Amend Chapter 57, Title 25 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 5716A. Stay of proceedings by the court; right of redemption.

(a) Whenever a tenant fails to pay rent when due and payable under Chapters 55, 57, or 70 of this title, a landlord may file an action under this section.

(b) In an action for summary possession of a rental unit or a lot in a manufactured home community for failure to pay rent where the landlord or the landlord’s agent has requested or is awarded a judgment of possession, the tenant has the right to redemption of the rental unit or lot by tendering all past due amounts as determined by the court, including all rent due under the terms of the lease, plus all court-awarded costs and fees, by cash, certified check, or money order to the landlord or the landlord’s agent.

(1) A tenant’s right of redemption applies at any time before the actual execution of the eviction order.

(2) After the landlord or landlord’s agent has received the payment, the landlord or landlord’s agent shall immediately notify the court and constable or sheriff to which the writ of possession was directed and make all reasonable efforts to prevent execution of the judgment that is based upon failure to pay rent.

(3) Upon receiving notification of or evidence of redemption, the court shall issue an immediate stay of the writ or the proceedings relating to failure to pay rent and must provide a minimum of 5 days for any appropriate evidence or filings to be submitted to the court.

a. If payment is made after the writ of possession has posted, in order for the court to issue a stay of the writ, a request to stay the writ must be filed with the court.

b. If payment is made after the writ of possession has been posted, the landlord may request the court delay any action under paragraph (5) of this subsection until any checks used for payment have fully cleared any involved banks.

(4) An electronic or written check issued by any entity, including a governmental entity, has the same legal effect as a payment made by the tenant under this subsection.

(5) Once the court is provided with the notification of redemption by the landlord or adequate evidence is submitted to the court of the redemption, the court shall vacate any judgment of possession entered relating to failure to pay rent and terminate any such writs issued.

(6) This subsection does not apply to any tenant against whom 3 judgments of possession have been entered for failure to pay rent in the 24 months before the initiation of the action to which this subsection would otherwise apply.

Section 3. Amend Chapter 70, Title 25 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows

§ 7016. Termination or nonrenewal of rental agreement by landlord; due cause: noncompliance.

(b) A landlord may terminate a rental agreement with a tenant by providing prior written notice as follows:

(3) If rent, which includes late fees for rent, other fees and charges, including utility charges, and the Trust Funds assessment, is not received by the landlord by the 5th day after the due date or during the grace period stated in the rental agreement, whichever is longer, the landlord shall notify the tenant in writing, demanding payment and stating that unless the required payment is made within 7 days from the date of mailing or personal service, the

rental agreement will be terminated

the landlord may file a court action to terminate the rental agreement

. If the tenant remains in default after the 7-day period, whether or not the 7-day period falls within 1 lease period or overlaps 2 lease periods, the landlord may

terminate the rental agreement and

bring an action to

terminate the rental agreement,

recover the rent

due

due,

and for summary possession.

a. If a tenant, or another person or entity on behalf of a tenant, pays all rent due, including all rent due under the terms of the lease, before the landlord has initiated an action against the tenant, the landlord may not then initiate an action for summary possession relating to failure to pay rent. The landlord may not refuse to accept rental payments by or on behalf of a tenant. The landlord may restrict the method of any payments to those accepted under the terms of the lease.

b. If a tenant, or another person or entity on behalf of a tenant, pays all rent due, including all rent due under the terms of the lease, after the landlord has initiated an action for nonpayment or late payment of rent against the tenant, then the landlord may not maintain that action for past due rent. The landlord may not refuse to accept rental payments by or on behalf of a tenant. The landlord may restrict the method of payment as follows:

1. Prior to a judgment being entered against the tenant, the landlord may restrict the method of any payments to those accepted under the terms of the lease.

2. Once a judgment has been entered against the tenant, the landlord may require payment be made by either certified check or money order.

SYNOPSIS

This Act allows tenants who are being evicted for failure to pay rent to remain in their homes if they pay all amounts owed prior to being evicted. It also makes technical corrections to conform existing law to the standards of the Drafting Manual.

This Substitute differs from the original Act by incorporating the changes from Senate Amendment No. 1 to Senate Bill No. 116 which includes the following changes:

- Increased the time from 12 to 24 months for the lookback period for restricting the number of times the right of redemption is available to a tenant.

- Puts a requirement to proactively file with the court a request for a stay of the writ if payment is made after the writ of possession has been posted.

- Makes clear that payment after posting of the writ only stays the writ until the payment has cleared and dismissal is not required until such time.

This Substitute also adds the following changes based on further input from stakeholders:

- Makes it clear that this Act only applies to evictions based on failure to pay rent.

- Clarifies that any rent that is due under the terms of the lease must also be paid, in addition to any demanded past due and per diem rent, for redemption to apply.

- Adds language that the landlord may restrict any payments to methods accepted under the terms of the lease, and the landlord may further restrict any payments made after judgment is entered to certified checks or money orders.

Author: Senator Lockman