There is an important rule of landlord-tenant law that, in its essence, says this: A landlord can evict a tenant or a landlord can sue a tenant for unpaid future rent, but not both.
This has been for decades and remains today the law in Indiana. So, for example, if a tenant breaches a one-year lease agreement just three months after the lease starts, the landlord can sue for eviction and collect the unpaid back rent. However, by electing to repossess the rental property, the landlord cannot sue the tenant for future rent. In other words, a landlord must decide whether to sue for future rent or sue for possession.
There is an important exception to this rule of law- the Savings Clause. A Savings Clause is specific language in a lease allowing a landlord to sue for back rent, future rent and possession. Because a Savings Clause is an exception to Indiana law, very clear language is required in a written lease signed by the tenant before a court will accept and follow a Savings Clause. Years ago, it was common for small claims court judges to ignore Savings Clauses. Thankfully, judges are more aware of the Savings Clause and Indiana appellate case law that reinforces the validity of properly written Savings Clauses.
Whether a Savings Clause will be enforced by an Indiana court rests on how the lease has been written. If you are a landlord or property manager and you are unsure whether the lease agreement form you use contains a properly drafted Savings Clause, please feel free to contact the attorneys at GRIFFITH LAW GROUP.
