What Every Pennsylvania Landlord Should Know

If you are a commercial Landlord in the state of Pennsylvania, there is a provision you should be negotiating into all of your leases.  Pennsylvania is one of a handful of states where Confession of Judgment is permitted.  It is not permitted in residential leases or consumer transactions.  Confession of Judgment is a pleading filed in the Court of Common Pleas of Pennsylvania that allows Landlord to obtain an immediate judgment against Tenant without prior notice or an opportunity to be heard in court by Tenant.  Confession of Judgment can be used to obtain a money judgment for unpaid rent and additional rent or it can be used to retake possession of the leased premises.  There are essentially two separate Confession clauses, one for money damages and one for possession.  MMDC’s strategy is to negotiate for both money and possession from the start.  It is worth noting that Tenants not based in Pennsylvania are usually unfamiliar with this powerful remedy and they need to be talked through the process and it is best handled by experienced attorneys.

Commercial landlords favor Confession of Judgment clauses due to the fact that they can immediately obtain the judgment against Tenant without having to wait the usual thirty (30) days after serving a Complaint.  Confession of Judgment streamlines the process for the Landlord.  An action for money damages often will include an award for Landlord’s attorney fees.

There are requirements that must be met in order to file a Confession of Judgment.  The most important being the written authority to file such given by Tenant within the lease document.  To make it an inarguable fact that Tenant was aware of the provision in the lease, we typically BOLD and CAPITALIZE the entire provision and even go so far as to have the Tenant initial the clause.  Taking these steps also eliminates one of the legal grounds Tenant has to strike or open the judgment, which is the claim that Tenant did not knowingly or voluntarily waive his or her due process rights.  Conspicuous is the key word with Confession.  It should not be contained in an addendum or exhibit to your lease agreement but rather in the body of the lease.  Additionally, if an amendment to lease or an assignment of the lease is entered into at any point in your lease agreement, it is essential to reiterate the Confession clause as it is originally stated in the lease.  There is an argument that referring to the language that is contained in the original lease is sufficient, however, MMDC’s experienced real estate attorneys always err on the side of caution and copy the entire provision.  

If you are a commercial landlord in Pennsylvania, it is best to have an attorney draft this provision to be contained in your lease agreement.  Confession of Judgment clauses are complicated.  Drafted properly it is one of the most powerful legal tools that exists which is why the Court strictly construes these provisions.  Having Confession of Judgment in your lease agreement can mean the difference between drawn out, lengthy litigation to recover both monetary damages as well as the leased premises and quick, decisive action.