The Paletz Law Blog

The Tenant Escrowed Their Rent – NOW WHAT?

A Forcible Entry and Detainer action for eviction in Ohio is supposed to be relatively straightforward. When the landlord has been keeping the rental premises in proper repair and the tenant has failed to pay their rent, the next step would be to issue a 3-Day Notice. If the tenant still fails to pay their rent, a property owner may file suit – with the best option being using your excellent attorneys at Paletz Law.

However, what if the tenant puts their rent in escrow? This is an account with the court where funds are held until alleged conditions with the rental unit have been satisfied. Escrow law, under Ohio Revised Code Section 5321.07, provides certain rights for a tenant if they believe “a landlord [has] fail[ed] to fulfill any obligation imposed upon [them].” Generally, it speaks to the landlord being required to keep the rental premises in a fit and habitable condition. It’s not one-sided though, as it does place multiple requirements on the tenant, including sending the landlord written notice of the items needing to be repaired and allowing a time frame, typically thirty days, for the landlord to repair the issues.

If a property manager receives a court document from the tenant, it typically means the tenant has started to escrow their rent with the court and a formal process must be followed to get those funds released. Your first step, rather than file suit of your own, should be to send it to your attorney.

Your attorney should review the filing and assess with you the validity of the tenant’s allegations, which may very well be unfounded but still need to be responded to. Often, it may be necessary to investigate the claims and issues raised, even if they seem baseless and were made without prior notice as it is unlikely at this early stage that the court has done any independent investigation.

Options do exist to take assertive action, but they generally need to be done through the confines of the court process and could depend on the jurisdiction:

• Motion the court for immediate release of the escrow;
• Proceed with the court’s mediation process; or
• Enter into an agreement with the tenant for the release of the escrow.

As to the notice received from the court and regardless of the above options, a manager could still be summoned to court. Alternatively, nothing could happen until your attorney takes action to have the escrow released as outlined above.

The Bottom Line: If a tenant puts their rent into escrow with an Ohio Court, consult with your attorney.  A determination needs to be made if the tenant has followed escrow law or is abusing the court process to delay your legal right to obtain possession of the unit.