TVS Tenant Verification Articles of Interest

Beware of tenant repair duties in lease

Fri, 04 May 2012 00:00:00 -0700

Q: The lease for our single-family house specifies that we will do "routine maintenance." The landlord claims that this includes fixing the roof and doing exterior painting. We had no idea that he saw it this way; we were thinking drain repair and so on. When we refused to re-roof the garage, he told us he'd sue us for the water damage that will result from a leaky roof. Can he? --Mark and Linda

A: Your question illustrates the dangers of handing over maintenance duties to tenants without a clear understanding of what those duties involve. Fortunately, the problem is relatively rare, because most states do not allow landlords to contract away their duty to maintain a fit and habitable rental. Of those that do, the statutes limit the practice to single-family homes, and typically require that the duties be spelled out in writing and that the arrangement be a fair bargain (in other words, the tenant must be paid for the labor or get a good deal on rent).

The landlord must treat the arrangement separately from his other duties as a landlord. This means, for example, that if the landlord is unhappy about the job the tenant is doing, he cannot retaliate by shutting off the water.

Even in states that allow landlords to delegate legally required upkeep, few do so. Most owners are not willing to entrust the integrity of their property to tenants who may not know much about property maintenance, and have less incentive to do things right than if they owned the property themselves.

Let's assume for now that your state allows the landlord to pass along the obligation to maintain the property, and you decline to re-roof the garage. If your landlord sues you for the resulting water damage, the burden will be on him to convince the judge or jury that you broke the maintenance agreement. And he could have a hard time doing so: The agreement, which the landlord wrote, is so vague as to be meaningless. A judge may well conclude that the landlord had a chance to write it correctly, failed to do so, and cannot now complain about the consequences.

Your landlord will be similarly out of luck if he tries to get his insurance company to cover the damage. Property damage policies cover damage that results from a sudden event, such as water that pours in after a tree has fallen on the roof. Deferred maintenance that causes water damage over time won't be covered.

Before it comes to that, get together with your landlord and revisit the delegation issue. Although the lease was signed some time ago, there's no reason why the two of you can't amend it now and fix it. Make sure that if you want to take on minor repairs only, their precise nature and extent is described thoroughly in the lease, and that you are fairly compensated for your efforts.

Q: I've always told my tenants that their rent check must be postmarked by the first of the month (rent is due the first). I've just hired a property manager, who says I should instead require receipt of the rent on the first. What do you think? --Peter A.

A: I'm with your property manager. "Due on the first of the month" means in your hand, or in your bank account if there's an electronic transfer of funds. If tenants are mailing a check, it's up to them to mail it in time to be received by the first.

Here's the practical problem with your approach: Not only will you receive the rent a number of days after it's due, but you also will have given your tenants an unintended grace period when it comes to failure to pay the rent.

Suppose, for example, that a tenant insists that she mailed the check on the first, and that date happens to have fallen on the Saturday of Labor Day weekend. Because Monday is a federal holiday, the earliest the check will arrive is the following Tuesday, a full three days after the first. In fact, if she missed the last pick-up on Saturday, it will not have been processed until Tuesday ... and you can't expect to get it until Wednesday or even Thursday. So you wait until Thursday or even Friday, and don't give her a three-day notice to pay or quit until Friday or Saturday. She's managed to not pay rent for an entire week, and has another three days to come up with the rent -- 10 days after it was due.

But suppose she moves out instead? You have to take those 10 days' worth of rent from her security deposit. That leaves the balance to cover damage beyond ordinary wear and tear. If the cost to repair damage exceeds the balance of the deposit, you'll have to either sue for the remainder or swallow the loss.

Had you insisted on actually receiving rent on the first, you could have served your notice on the second, and the tenant would have had to pay by the end of the day on the fourth. If she moved out instead, you'd take only four days' worth of rent from the deposit, leaving more to cover damage.

Of course, the delay caused by your approach will delay any eviction proceedings too, which you'll need to begin if the tenant neither pays nor moves out. It's far better to file an eviction lawsuit early on, when the unpaid rent is lower, because that rent will also come out of the security deposit, leaving less to cover damage.

I hope all of this convinces you to write your future leases to require that you receive the rent by the first of the month. Putting the risk of mail delays on the tenant is the only sensible way to go.

Lease-break rights for military personnel

Thu, 26 Apr 2012 00:00:00 -0700

Q: I'm an active-duty Army sergeant, and my wife and I rent an apartment off-base. I just got transfer orders that require me to move out of state. Our landlord is holding us to the terms of our lease, saying that because only one of us has to move, he doesn't have to cancel the lease. Is this correct? --Jose B.

A: Let's give your landlord the benefit of the doubt and assume that he's never heard of the Servicemembers' Civil Relief Act (SCRA). That federal law dates back to the Civil War and is intended to ease the burden on service members who are called to active duty. The law gives these soldiers special considerations when it comes to financial, employment and housing issues that the rest of us don't enjoy. Quite bluntly, when you're off fighting a war, you deserve a break.

One of the most important provisions concerns a service member's right to legally cancel a lease when entering military service or receiving orders for a "permanent change of station or to deploy with a military unit, or as an individual in support of a military operation, for a period of not less than 90 days." (SCRA Section 535(b)(1).) Upon receiving notice of the activation or transfer orders, the landlord must consider the lease to be terminated 30 days after the rent is next due.

For example, if your rent is due on the first of the month, and you give the landlord notice of your activation or transfer on May 10, the lease is over on July 1, which is 30 days after the rent is next due (June 1).

Congress anticipated the argument your landlord is now making. The law says that if a service member terminates for one of the above reasons, any obligation of a co-tenant who is a dependent of that service member also terminates. (SCRA Section 535(a)(2).) The term "dependent" is defined much more broadly here than it is in tax situations. Under the SCRA, a dependent includes the service member's spouse, child, or even someone for whom the service member provided more than one-half of that person's support for 180 days preceding the service member's invocation of his or her rights under the SCRA. (SCRA Section 511(4).)

Point your landlord toward this law and hope that he gets the message. You might mention that the Department of Justice has gotten rather active recently when it comes to tenant rights under the SCRA.

In January in San Diego, Calif., and in March in Nebraska, the Department of Justice announced major settlements against large apartment firms that were systematically refusing to honor the lease termination rules of the SCRA. A quick read of those settlements, highlighted on the DOJ page linked above, ought to convince even the most stubborn landlord.

If you still encounter resistance, follow the DOJ's instructions for contacting the Armed Forces Legal Assistance Program.

Q: In our apartment complex, there are two ways to the garage: around the side of the building, or out the back. The walkway around the side is quicker, but has never been lighted, and the landlord has signs saying, "To access garage at night, use back entrance."

I used the side path one night and tripped on a raised part of the walkway, which I didn't see. I think there should have been lights, and that the landlord should cover the cost of treating my injured knee. What do you think? --Rashen B.

A: You may have a hard time pinning the cause of your trip-and-fall on the landlord. Here's the problem: In spite of being told to use the back entrance, you chose a path that you knew was not lighted. Lawyers might say that the risk of walking on a pathway in the dark was a risk that you willingly assumed, and that the consequences (not being able to see variations in the pavement height) were also something you knowingly took on. In legal jargon, you may have "assumed the risk" of a fall, which will defeat, if not lessen, any responsibility of the landlord for your injuries.

As with most personal injury situations, however, there's room for argument, depending on the facts of the situation. Sometimes, no matter how many warnings a property owner may make, he cannot shield himself from liability. This is particularly true if the danger involved is a serious safety problem or a significant code violation, and certainly if tenants have little choice but to ignore the warnings.

Imagine, for example, that the garage could be accessed only from the side path, and that the "variation" in sidewalk level actually involved chunks of broken concrete. It's unreasonable to expect tenants to avoid the garage except during the day, and the condition of the sidewalk is dangerous, even during daylight. A tenant who used the pathway and tripped over a protruding chunk would have a better shot at recovering damages from the landlord than one who chose a risky, alternate route whose imperfections were slight.

Withholding rent over dog nuisance

Fri, 20 Apr 2012 00:00:00 -0700

Q: We rent the top half of a duplex in Chicago. The tenants below adopted a shelter dog eight months ago, who has severe separation anxiety and barks loudly and incessantly any time he's alone. We've spoken to the neighbors (who don't want to give the dog drugs or use a bark collar, thinking that these will "hurt" the dog), and then we took it to the landlord, over a month ago. The landlord talked to the neighbors twice, but nothing has changed. Are we within our rights to withhold rent until the dog is gone or the problem is resolved? --Fred and Alice

A: Withholding rent is an option for tenants when the landlord has failed to maintain the property according to law, if state law provides for this remedy. Not all states give tenants this option; only about two-thirds of the states do, and some of them limit the withholding remedy to specific types of repairs.

It would be unusual for a rent-withholding statute to allow tenants to use this strategy for the type of problem you're facing (a lack of reasonable peace and quiet), which does not involve making structural repairs or providing essential services.

In fact, in Illinois, rent withholding is allowed only when the property has been taken over by a receiver, after the landlord has failed to pay for utilities. The court directs the tenants to pay rent to the receiver directly. (Ill. Comp. Stat. 735/2.)

But in the city of Chicago, which has its own rental ordinance, rent withholding is available to tenants. They may withhold rent when the landlord fails to maintain the property, but that's not all: The list of maintenance failures that will support withholding is introduced with the phrase, "includes but is not limited to." (Residential Landlord and Tenant Ordinance.)

This handy phrase may give you the ability to withhold rent due to the landlord's failure to live up to his duty to give you "quiet enjoyment" of your rented home. An age-old concept, this duty exists in every rental, requiring landlords to deal with noisy tenants by getting them to quiet down or by evicting them. If a judge were to decide that failure to give you quiet enjoyment was a valid reason for withholding rent, you'd be on safe ground. (To find out, you'll need to do a little research to find out if similar cases have prevailed.)

Suppose, however, that you can't use withholding in response to a breach of the duty to deliver quiet enjoyment. Not all is lost. By law everywhere, if the landlord doesn't fulfill this duty, the tenant may consider that failure to be a breach of the rental agreement, justifying the tenant's moving out. Typically, the tenant must give the landlord notice of the problem and a reasonable amount of time to fix it.

I realize that moving out is not the remedy you asked about, but it could give you a way to exert pressure on your landlord to resolve the problem and allow you to stay put. Alert the landlord that not only will you move, but you'll also sue in small claims court for the damages you've suffered as a result of his breach of the lease. Such damages could include the cost of moving; applying for a new rental; and the difference, if any, between the rent you're now paying and the rent you end up paying for a comparable apartment.

Any savvy landlord will think twice before allowing this scenario to unfold. Even a less-savvy owner will realize that unless he deals with the barking dog, he'll face this problem again, with new tenants. The only sensible solution is to confront the dog-owning neighbors and demand that they solve the problem. If they cannot retrain their dog (or refuse to try), they are the ones who should move out or, sad as it may be, find another home for the dog.

Q: My tenant, who lives alone in her half of our duplex, has left for a monthlong vacation, which I knew about. I did not know that she was planning on having someone come to the property twice a day to feed and look after her cats. This person is quite annoying -- she parks in our driveway, plays loud music while she's there, invites others to come over, and stays several hours each day. Is there anything I can do about it? --Deborah E.

A: At this point, the horse is out of the barn ... rather, the cat is out of the house. Your best bet is to meet the sitter when she arrives and speak to her about her activities. Point out to her that, as your tenant's guest, she is legally bound to the same standards as her traveling friend -- no parking in the driveway, no loud music. You can also try to insist that she not invite others to the house, for reasons explained just below.

In the future, when a tenant announces a long absence and the plan for a regular house sitter or pet sitter, consider it to be a request that the tenant sublet the rental for the length of the vacation. A subtenant is someone who steps into the shoes of the main tenant for a period of time, bound to the same terms and conditions of the tenant's lease. Crucially, a subtenant requires the consent of the landlord. This will give you an opportunity to insist on meeting the proposed subtenant and going over the rules, including parking and noise.

As for inviting more friends, you can also attempt to stop this. Although it would be unreasonable to say "No visitors" to someone who is planning on living there, it's not unreasonable to say so for someone who is stopping by to check on the cats. Making this rule after the fact, however, is going to be difficult, because you may hear a protest along the lines of, "If I'm stepping into the shoes of the tenant, and she can have visitors, why can't I?" You have a rejoinder if these meetups are themselves creating a disturbance.

Can you ask renters about immigration status?

Thu, 12 Apr 2012 00:00:00 -0700

Q: I normally do not ask my applicants whether they are legally in the U.S., but one of my tenants says I should, because if I rent to people who are here illegally, I could be charged with harboring illegals. Is this a realistic worry? --Paul N.

A: A person is guilty of harboring when he knows that a person is illegally in the country (or he recklessly disregards clear evidence that points to this conclusion), and takes steps to conceal, harbor or shield the person from detection (or attempts to do these things), in any place, including a building or a means of transportation -- see 18 U.S. Code Section 1324(a)(1)(A)(iii).

As you can see, the crime requires first of all that you know the person is in this country illegally, or that you recklessly disregard clear evidence that points to this conclusion.

From what you've told me, you don't have that knowledge, because you don't question them; nor have you described any facts supporting this conclusion that you are willfully disregarding.

Because you have no knowledge -- actual or constructive -- it's hard to imagine a U.S. attorney filing federal criminal charges against you for unwittingly renting to people who are in the country without legal status.

Let's take your question a bit further. Suppose you do know that an applicant is in the U.S. without legal status, but rent to him anyway. Now we get to the "harboring" part: Is your decision to rent, without more, a violation of the law?

Probably not, although the precise definition of harboring varies among the federal appellate courts. One court holds that the conduct must "substantially facilitate" the alien's remaining in the country illegally, or be some act of obstruction that prevents authorities from discovering the alien's presence.

Simply renting an apartment, without more, hardly qualifies as preventing the government from discovering the alien's presence. In fact, by giving him a permanent and open place to live, you've made it easier for the feds to find him.

You may recall the effort among several cities, starting with the city of Hazelton, Pa., to require landlords to verify legal status before renting a residence. All such ordinances have either been struck down or withdrawn, and no current law requires that a landlord ask such questions (in California, there's even a law forbidding inquiries into immigration status).

You're much better off to focus on "good tenant" criteria such as steady employment, good references, and an income that can support the rent.

If someone who's here illegally does not have steady employment, you may certainly reject on that basis, but the important thing is that your rejection be grounded on sound business reasons, not on immigration status alone.

Q: I rent an apartment to two tenants who have asked to be let out of their lease. They've suggested a replacement tenant, who appears to be acceptable. What's the best way to end this tenancy and begin the next one? --Ivana B.

A: From your current tenants' point of view, the best thing for them would be for you to terminate their lease and start fresh with a new tenant, as if they had stayed until the end of the lease term.

That option completely severs the relationship you have with the current tenants, and leaves them without any responsibility for rent for the rest of the lease term.

An alternate approach would be to assign the current lease to the new tenant. This approach has a possible upside for you: In an assignment, the assigning tenants (the ones who are leaving) remain in the picture as guarantors of the new tenant's financial performance.

In other words, if the new tenant defaults on the rent, you can look to the old tenants for that rent payment, for as long as the original lease runs.

Keeping departing tenants on the financial hook for the financial obligations of their substitute can be very handy, as long as the right circumstances are present. You'd need to make sure that you could find and sue, if necessary, these departing renters.

If they're leaving for a stint in the Peace Corps, in practical terms you won't be able to enforce this obligation, and it will be rather useless. On the other hand, tenants who are leaving because they've just bought a house across town will be easy to locate, serve and sue; they have the potential to be useful guarantors.

This analysis puts the cart before the horse, however. You write that the substitute "appears to be acceptable." Don't make decisions on appearances -- do your homework and check this person out, with a credit check and a full rental application.

No amount of chasing down ex-tenant-guarantors can compensate you for damage or general headaches that a hastily chosen replacement can inflict.

Landlord shames tenants by posting offenses online

Fri, 06 Apr 2012 00:00:00 -0700

Q: Our landlord has begun posting the names of tenants who violate the "house rules" on the property's website. For example, people who park illegally or get talked to by management for excessive noise get listed (so do those who pay rent late). He claims it's a way to encourage compliance and it will make the property a safer and cleaner place to live. I think it's an invasion of privacy. Is it legal? --Betsy B.

A: Perhaps your landlord has recently revisited a classic from his childhood, "The Scarlet Letter," and wants to see if websites are as effective as letters sewn onto a dress. Or maybe he's heard about California's new law, which took effect in January 2012, that makes employers who willfully misclassify workers as independent contractors (when they should be classified as employees) put a statement on their company website or in the workplace, for a year, saying that they violated the law (see California Labor Code Sections 226.8 and 2753).

Commentators haven't hesitated to call this "public shaming," and it's not new; in Tennessee, drunken-driving offenders must pick up trash on the side of the road while wearing a jumpsuit that says, "I am a drunk driver" (see Tennessee Code Section 55-10-403).

It's one thing for the legislature to specifically permit or require public shaming for convicted defendants, but can a private businessperson adopt a public shaming strategy of its own, without worrying about breaking a criminal law or civil liability? That depends on how your state would approach the question.

Let's start with whether the landlord has committed a crime. A person whose name ends up on a website or lobby bulletin board might go to the police or prosecutor and complain of harassment. All states have anti-harassment statutes, which make it a crime to act in a way designed to annoy, provoke, threaten or otherwise cause another person emotional distress.

To be guilty of harassment, the offender must specifically intend the results of his actions (the distress). But when you apply this definition to what you've described, you can see that the required intent isn't present: Your landlord is posting the information to deter similar misconduct, not to cause the "victim" distress.

What about a civil action? A claim for defamation comes to mind, but here, too, there's a major problem. Defamation requires the publication of a statement that hurts the subject's reputation -- but the statement must be false. As long as the statements are true, there's generally no liability.

Suing for the "intentional infliction of emotional distress" is another possible claim, but again there's a problem: The landlord arguably intended only to teach other tenants a lesson, not to pour salt on the wounds of the transgressors.

That leaves us with negligently inflicting emotional distress, but this usually involves distress that follows someone's careless act, such as the pain suffered by a parent who watches a child be injured during a car accident. That's a far cry from embarrassment resulting from a printed statement that you were late paying your rent.

So the unfortunate subjects of your landlord's list may not have legal recourse. But one can't help but wonder about the practical wisdom of the landlord's practice. From a marketing angle, it can't be helping him.

Prospective tenants who visit the website may decide to look elsewhere, for fear that their accidental mistakes may set them up for public shaming.

Q: My tenants want to install shelving in the garage and track lighting in the kitchen. What's the best way to handle this? --Brandon T.

A: Your tenants' proposals amount to a request that they "alter" the rental property by adding to it. All too often, tenants think that at the end of the tenancy, they can take away what they've installed; and landlords either think they can keep the additions or charge the tenants for the cost of returning the property to its original state.

Arguments ensue, deductions from the security deposit follow, and sometimes small claims court is the end result.

With a little forethought, however, you can avoid this confusion. First, understand that an alteration that is attached to or becomes part of the structure legally belongs to the landlord, unless there's a different agreement. Your tenants' proposals qualify; hooking up a portable dishwasher would not, nor would shelving that is kept in place by isometric pressure.

Next, decide whether these additions are likely to enhance your property and make it possible to either set a higher rent next time, or give the rental a marketing edge. If so, and if you trust your tenants to do the job right (a big "if"), you may want to keep these additions when the tenants move out.

But to be fair, you'll need to pay for at least some of the materials and some of the labor, too. How much? That's up for negotiation -- you may feel that something less than full price is fair, because it's the tenants' wish, not yours, to add these things now. The more valuable the additions and the more they add to your property's marketability, the more you ought to pay for them.

48-hour bedbug rule may not fly

Thu, 29 Mar 2012 00:00:00 -0700

Q: I've just signed a lease that has a clause about bedbugs. It says that I must report any evidence of bedbugs in my apartment within 48 hours of seeing it, and that if I don't, I'll be responsible for the cost of getting rid of them.

The lease also makes me agree to inspection without prior notice, when the purpose is to check for an infestation. Are these legal provisions? --Marcus D.

A: Like many landlords, your landlord is getting serious about detecting and getting rid of bedbugs. He may have had trouble in the past with tenants who had the problem but failed to report it.

Some tenants think they can handle it on their own; some are afraid of retaliation if they inform the landlord; and some are just in denial or too embarrassed to bring it up. The consequence of delay is often a building-wide infestation, which is a huge problem for other residents and the owners.

Your landlord's idea of holding you responsible for eradication costs if you fail to report an infestation within 48 hours is similar to a provision in a bill being considered in Iowa, House Study Bill 520.

That bill goes quite a bit further, however: Tenants who fail to report bedbugs will be responsible for building-wide remediation. The Iowa bill also provides that a tenant who doesn't report an infestation within seven days of moving in is acknowledging that the unit is bedbug-free.

Interestingly, the state's attorney general has come out against the bill, pointing out that its provisions remove any incentive for landlords to act on their own. And expecting every tenant to recognize an infestation may be asking too much if tenants are not aware of the telltale signs of bedbugs.

It's one thing for legislators to change the rules. Judges will enforce these changes unless there's something seriously wrong, public policy-wise, about the new regime. But your landlord is trying to change the rules on his own, without any help from the Legislature. And here is where your landlord may have a problem.

First, what about that "no bugs within 48 hours, it's bedbug-free" acknowledgement? Presumably, if an infestation appears one week into the tenancy, the landlord can argue that it's the new tenant who introduced them.

Consequently, the landlord will argue, the tenant should pay the remediation costs. But this reasoning ignores a fact of bedbug life: These hardy creatures can go dormant and live on for months, without a source of food, then spring to life when food (a tenant's warm body) appears.

In other words, bugs in a vacant apartment may well simply hang out for a while -- more than 48 hours after the new resident moves in -- before becoming active. Their activity does not mean that the new tenant brought them with him.

Second, the provision that allows for no-notice entry to deal with a bedbug problem may run afoul of your state's access laws. Most states regulate how much notice a landlord must give before entering, though all allow entry in case of an emergency.

A bedbug infestation, albeit nasty, is not an emergency at the level of leaking gas or billowing smoke. If your state has notice requirements, asking you to waive your rights to notice so that the infestation can be addressed will violate your state's law.

Q: I need to break my lease to take a job in another city. My lease says that I will be responsible for the landlord's costs to ready, advertise, show the unit, and screen any replacement. Is this legal? --Rich S.

A: When tenants break a lease without legal justification, they are still responsible for the rent for the balance of the lease term. However, many states require landlords to use reasonable efforts to re-rent the unit; once a new tenant moves in, the original tenant's responsibility ends.

In all states that impose this "duty to mitigate," if the landlord fails to take steps to re-rent, the tenant is off the hook. On the other hand, if the landlord is able to find a new tenant only at a lower rent (perhaps the market has cooled), the tenant remains responsible for the difference.

Whether the lease-breaking tenant is also responsible for the landlord's costs to re-rent is not so clear, however. A few state laws say so directly.

For example, Washington allows landlords to collect their "actual costs" of finding a new tenant (see Washington Revised Statute Section 59.18.310). Arizona effectively allows the same thing, by declaring that the security deposit of a tenant who abandons the rental is forfeited, to be applied to "any accrued rent and other reasonable costs incurred by the landlord by reason of the tenant's abandonment" (see: Arizona Revised Statute, Section 33-1370).

Some states simply don't address the issue. Others give vague directions: For example, California allows landlords to recover from the tenant, in addition to lost rent, compensation for "all the detriment" caused by the tenant's breach (see: California Civil Code Section 1951.2).

So, whether your landlord can stick you with re-renting costs will depend on your state's law on the subject. If there is no clear answer, you might try arguing against having to pay those costs this way: The landlord would have incurred re-renting costs had you stayed until the end of the lease term, and you certainly would not have been responsible for them at that time.

Why should you pay now, simply because the costs are hitting several months earlier? To say that it's part of your punishment for breaking the lease without justification won't fly. People who back out of contracts are expected to pay for the actual damages they cause, not to pay penalties.

But that's not to say that your early departure did not cause damages besides the loss of the rent. There is a fair way to measure your landlord's damages: His early re-renting efforts meant that he spent money several months earlier than he had planned. For those months, the money he had to lay out was not in his bank account, earning interest.

That lost interest is a true measure of his damages. In addition, he's had to devote staff and personal time to a chore that he expected would arrive later; he may be able to put a reasonable monetary figure on the value of postponing what he and the staff would otherwise have been doing.

Taken together, these are the landlord's true damages caused by having to find a new tenant sooner.

Don't assume landlord's insurance covers all damage

Thu, 22 Mar 2012 00:00:00 -0700

Q: I read a recent New York Times article about renters insurance, which quoted an insurance professional who warned that if a tenant's possessions are damaged, "the landlord's policy is not going to cover your damages." But the article says there's "an exception to that ... if the landlord was 'aware of a prior hazardous condition, failed to correct it in a reasonable time frame, and your property was damaged.'"

I'm confused -- as a landlord, am I insuring my tenant's property if it's damaged as a result of my carelessness? --Paul B.

A: Your confusion is understandable. In a sense, this insurance professional was right: Tenants in this situation might get some money from the landlord's carrier. But it's not correct to conclude that when landlord carelessness is involved, the landlord's policy will "cover" the tenant. Once you see how these claims work, you'll see what I mean.

Here's a typical scenario:

Suppose Sam's computer, which he left on the kitchen floor while it was recharging, is ruined when the pipes burst under the kitchen sink, causing a flood. Sam's landlord had supposedly fixed the leak just that day, but a plumber later confirms that the landlord did a shoddy job. It's pretty clear that the landlord was careless.

Sam's landlord has property insurance, but that insurance covers only the landlord's property; it wouldn't extend to Sam's computer. The landlord also has liability insurance, which covers the landlord when his carelessness results in damages or injury.

If Sam the tenant has renters insurance ...

Here's how things would play out if Sam has his own policy. Sam takes pictures of the floor and his computer, gets a statement from a computer repair shop and the plumber, and submits the claim to his insurance carrier. The company pays Sam; most companies do not dispute these claims unless they have solid reasons to suspect fraud. Sam buys another computer. (Hopefully, he's got "replacement value," not "actual cash value" coverage, which results in enough money to cover the total cost of a new computer.) Sam's carrier can go after the landlord (known as "subrogation") to get reimbursed, but because this is a small claim, it probably won't. Even if it did, Sam wouldn't be involved.

If Sam has no renters insurance ...

In the absence of his own policy, Sam wants the landlord to pay for the results of his shoddy repair. He sends documentation of the damage to the landlord, demanding reimbursement. Sam cannot make a claim on the landlord's property policy, because that policy did not insure Sam's stuff.

The landlord then has three options: Pay Sam; refer the claim to his carrier, which will treat it as a claim against the landlord's liability policy; or ignore Sam. If he doesn't pay voluntarily but refers the claim, the carrier will get in touch with Sam and probably settle. But if he simply ignores Sam, Sam will have to sue the landlord to get his money. Even then, the landlord is under no obligation to involve his insurance company, and may choose not to in order to keep his record clean.

If Sam wins in small claims court, he will get a judgment that he will have to collect. But if the landlord won't pay, he can't just present the judgment to the landlord's insurance company. Instead, he will have to attach the landlord's bank account or garnish his wages.

So you see, Sam may eventually get his money from the landlord's carrier, but only if the landlord chooses to involve the insurance company, and only if they settle or Sam wins in court. That's a far cry from saying that the landlord's insurance will "cover" damage to the tenant's property caused by the landlord's carelessness. The bottom line: It's a lot easier to have your own coverage and let the insurance companies sort it out.

Q: The lease I've been asked to sign has an odd clause concerning attorney's fees and costs in case there's a lawsuit. It says that the loser will pay the winner, but only up to $1,500. Is this legal? --Geoff S.

A: Lawsuits between landlords and tenants can arise over the meaning and implementation of the lease, or over issues that aren't covered by the lease. A lawsuit over the landlord's retention of the security deposit is an example of the first kind; a tenant's claim that the landlord charged her more rent because of her race is an example of the second.

Whether your landlord's attempt to limit the loser's liability for court costs and fees will hold up depends on the kind of lawsuit at issue, and on what your state law has to say about the matter. Let's take a look at each situation.

Lawsuits over the lease

Some landlord-tenant disputes arise when one side claims that the other isn't abiding by the lease terms, or is implementing them in a way that is contrary to the spirit of the lease. For example, a landlord might claim that a tenant is failing to take reasonable care of the property, in violation of the lease clause that requires such care, and terminate accordingly. The tenant contests the ensuing eviction lawsuit, and one side wins. In this situation, your lease's cap on the loser's liability might hold up, as long as there's no state law or policy that would lead a judge to strike it down.

But suppose the lawsuit is over the tenant's use of a rent-withholding remedy, which was followed by the landlord's decision to take away the tenant's parking privileges. The tenant, claiming unlawful retaliation, sues and wins. Will the cap be applied? That depends on whether the anti-retaliation statute itself requires the loser to pay the winner's costs. When retaliation is involved, many statutes include this type of provision.

For example, California law specifies, "In any action brought for damages for retaliatory eviction, the court shall award reasonable attorney's fees to the prevailing party if either party requests attorney's fees upon the initiation of the action." (Cal. Civil Code Â§ 1942.5(g).)

The statute in Illinois does not provide for these fees (765 Il. Comp. Stat. Â§ 720/1), but Texas law does (Tx. Prop. Code Ann. Â§ 92.333).

So, if your state's anti-retaliation statute requires the loser to pay reasonable fees, but the loser's attorney fees exceed $1,500, will a court uphold the lease's attempt to vary the statutory rule? It depends. Sometimes, courts allow landlords and tenants to vary the rules, but often they don't.

For example, courts won't uphold a lease clause that relieves a landlord of the duty to maintain fit housing.

Lawsuits that arise independently of the lease

Now, suppose you're dealing with a legal spat that does not have its origin in the lease, such as a discrimination lawsuit. It's doubtful that a hearing officer or a judge would apply a lease clause that attempted to limit the liability of the losing party. Often, the antidiscrimination statute itself specifies that the loser will pay.

And from a practical point of view, such a limitation would limit the number of cases brought to challenge illegal landlord acts, which is not what state legislators want.

Here's the problem: Imagine a winning tenant whose attorney has billed for many thousands of dollars, as is common. If the losing landlord is responsible for only $1,500, the balance will have to come from the winning tenant. If the award to the tenant in the lawsuit is modest, the lawyer could end up with most of it. Knowing that this may be how things turn out, tenants may be discouraged from bringing such suits, which is not what legislators intended when they wrote laws proscribing discrimination.

For this reason, a court might refuse to apply a lease clause that limits the loser's liability for the winner's fees.

Single renter questions family favoritism

Thu, 15 Mar 2012 00:00:00 -0700

Q: I applied to rent an apartment in a small complex that has lots of families. The owners live there, too, and told me that they prefer to rent to families because, that way, everyone knows that there will be kids running around and a bit of noise, and they will be OK with it. I'm OK with it, too, but felt unwelcome. Can an owner discriminate against me, as a single person? --Janice D.

A: Most of the discrimination that involves families happens the other way around: Families are turned away, shunted to specific rental units, or charged higher rents because they have children. All of these landlord practices are illegal, and have been for many years under the federal Fair Housing Act and state counterparts.

"Familial discrimination" also includes negative treatment of elderly persons. For example, turning away an elderly applicant in order to preserve a "youthful tenant mix," or because the landlord assumes that an elderly person will be a liability, is illegal.

Interestingly, under federal standards, turning away a young applicant has not yet been considered a type of familial discrimination, but some states fill the breach by declaring that discrimination on the basis of age is illegal.

But now to your question: What about discrimination against a single applicant, regardless of that applicant's age? You'd think this would have been addressed by Congress, and indeed it was -- way back in 1937.

In the Housing Act of that year, which started the federal government's assisted housing program, the law provided that "the term 'families' includes families consisting of a single person in the case of (i) an elderly person, (ii) a disabled person, (iii) a displaced person, (iv) the remaining member of a tenant family, and (v) any other single persons"Â (emphasis added), per 42 U.S.C. Section 1437a(3)(b)(3)(A).

As far as the U.S. Department of Housing and Urband Development is concerned, that definition applies to the Fair Housing Act's provisions as well, as evidenced by HUD's answer to your very question in its recent rule extending and clarifying protection to tenants regardless of their sexual orientation or gender identity (see: 24 CFR Parts 5, 200, and following).

Q: My lease says I can keep one dog, but when my daughter enlisted in the military, she asked me to take her dog. I did, and the landlord knew it. He lives on the property, but never objected. Now, he's trying to evict me for violating the lease, but I think it's a ruse, and that he wants me out so he can have the place for his son. Can he do this? --Maxie D.

A: Your landlord would have been clearly within his rights to demand that you find another home for your daughter's dog had he done so when he realized that you were keeping two dogs, in violation of your lease. But it seems that he has let months go by, and now suddenly wants to enforce the lease.

Whether a judge would allow this depends on whether your state has specifically addressed such tardy attempts by landlords. If it hasn't, the answer will be less clear.

Oregon is one state that has sensibly addressed this common problem. In Oregon, if a landlord has accepted rent during three or more rental problems with knowledge of the violation, or if he's simply accepted what the tenant has been doing, he's given up his right to terminate for that lease violation (see: Oregon Revised Statutes Section 90.412).

The landlord can avoid this result by refunding the rent within 10 days of accepting it; or by giving a written warning notice to the tenant, explaining the violation and demanding that it cease, and advising the tenant that a recurrence of the conduct may result in termination.

When the tenant's conduct (or that of his pet) involves substantial property damage, violence or injury, these limitations don't apply.

The drafters of the Oregon law probably intended to make landlords "fish or cut bait" -- either enforce their rules or lose them. The advantage of such a system is that it prevents landlords from having a reason for termination and eviction in their back pockets, to use when it suits them and when no other valid reason for termination exists.

Such procrastination can be particularly unfair when tenants have come to rely on the landlord's apparent dismissal of his own rule. This is what you suspect is going on now.

If your state has not specifically addressed this issue, all is not lost, however. Judges have the power to refuse to enforce a contract clause (that's what you'd ask for if you end up in an eviction lawsuit for having two dogs) when they feel that one side has, by its conduct, waived the right to rely on that clause.

In your case, the landlord knew about the second dog for months but accepted its presence, which could lead you to reasonably expect that he really didn't care about the one-dog limitation. It boils down to the legal version of "use it or lose it."

Your chances of prevailing on this defense will go up if you can point to evidence of his real motive -- to get you out in order to make room for a family member. To do that, he may need to wait until your lease is up.

A doggy whodunit for landlords

Thu, 08 Mar 2012 00:00:00 -0800

Q: At my property, which is dog-friendly, I've got a really bad hygiene problem. Despite my best efforts to educate my tenants (and catch offenders), some tenants are not cleaning up after their dogs. I've read about a company that can trace dog (doo-doo) to the dog (and the owner) by matching the DNA sample to the dog, whose DNA it has already gathered using a cheek swab. However, it's expensive, and I want to know if I can charge my tenants for it. --David R.

A: You're referring to Poo Prints, a company that does just what you describe. The company's website explains the service -- and the cost. Landlords who have 20 or more dogs to swab at the same time pay about $30 per dog; single collections (for new tenants) run about $35. Collection kits cost $10, and a lab analysis is about $50.

Typically, landlords impose a "fine" on tenants whose dogs have been identified as the source (to be fair, it's the humans who are the culprits!). Testimonials reveal that a $100 fine is not uncommon, and that once the program is in place, there are few violations -- in other words, deterrence seems to work.

There are a few ways that you might pass on the costs of this service to your tenants. Let's look at each of them separately.

Can I charge new tenants for the cost of the cheek swab?

In most states, you can legally tell prospective tenants that if they have or later obtain a dog, they will have to pay the cost of the cheek swab.

In a few states, however, you might have a problem. These are the states that forbid landlords from collecting "nonrefundable fees." California is one such state; it passed the law in response to some landlords' schemes to get around the state's limit on security deposits.

These landlords, not content with collecting the legal limit of two times the rent as a deposit, also collected a variety of creative fees, such as "key money," "application money," and even "tenant initiation money." Landlords never intended to refund these amounts; they simply became a way to squeeze more money out of the tenant.

Legislators put a stop to these practices by decreeing that any fee collected upfront that would be used to, among other things, remedy damage caused by the tenant, was part of the security deposit.

Henceforth, those fees had to be counted when determining whether the landlord had exceeded the legal limit, and they had to be refunded if the tenant left and there was no unpaid rent or damage to the unit.

Because state legislators used the expansive phrase "among other uses" when explaining how such fees were intended to be used, quite arguably a fee that allows landlords to determine the source of property damage (doggy doo-doo on the lawn) falls into the security deposit camp.

In California, at least (and perhaps also in Delaware, Hawaii, Montana and Oregon, which also ban nonrefundable fees), your "pet fee" would be legal only if you refund it when the tenant moves out (assuming no unpaid rent or damage) and only if the fee, plus the regular deposit, does not exceed the state's deposit limit.

Can I charge current tenants for the cost of the cheek swab?

Let's assume for now that in your state, you can impose the fee on a new tenant. But what about a current tenant? This question has a more universal answer: No.

These tenants already have leases and rental agreements, and you can't vary the terms of the rental midlease unless both you and the tenant agree to it. The only way for a dog-owning tenant to avoid the fee would be to get rid of the dog, which is not a reasonable alternative.

So, I'd say that lease-holding tenants could legally refuse to pay the swab fee. If you have month-to-month tenants, you can vary the terms of their rental by giving proper notice, which is 30 days in most states. Your new terms could condition the right to keep a dog on paying the swab fee.

If I offer to pay for the cheek swab, but a tenant refuses to allow it, can I terminate the tenancy?

Here, you'd be demanding that the tenant do something (bring the dog in for a cheek swab) that was not a condition or term of the lease. For the same reason that you can't impose a fee midlease without the consent of the tenant, you can't make this demand until the lease is renegotiated or you've given proper notice to month-to-month tenants.

Can I charge offending owners for the cost of the collection kit and the lab analysis?

Dog poop on the lawn is property damage, which you can always charge for. You can charge for the time it takes your maintenance people to collect it, as well as the materials and analysis to trace it. That's no different than charging a tenant for the cost of a broken window, when you learn (through time-consuming investigation) that it was caused by his ball-playing child.

Can I impose a fine on violators?

Here things get tricky. If you've been a steady reader of this column, you might guess what the problem is: Governments impose fines; businesspeople are entitled damages. And damages must reflect the injured party's actual losses as closely as possible, which means they should be assessed after the damage has occurred.

Only in very limited circumstances will judges uphold a monetary consequence that's set ahead of time, known as "liquidated damages." These clauses are upheld only when both parties have agreed ahead of time that it will be very difficult to measure damages that might occur in the future.

They must also agree that the liquidated damages figure they've agreed upon is a fair and accurate estimate of what those damages might be.

A consumer-imposed fine would fail as a liquidated damages provision. There has been no agreement between landlord and tenant that the loss to the landlord would be extremely hard to measure when the maintenance staff finds poop on the lawn.

And besides, those damages are not, in fact, hard to calculate. It's the cost of the kit, the analysis and the staff time needed to deal with the problem. When there's a violation, the landlord can easily tally up the numbers.

So to be safe, don't impose "fines" on offending tenants. Simply add up the costs of addressing the incident, as explained above, and charge the tenant accordingly. This is no different than charging for staff time and materials needed to repair a broken window.

And when it comes to the cost of collecting the DNA in the cheek swab, take the high road and absorb the cost yourself. If, as seems to be the case, you'll have a dramatic drop in cleanup operations, this expense will more than pay for itself quite shortly.

Restraining order may provide lease-break rights

Thu, 01 Mar 2012 00:00:00 -0800

Q: I've been asked by one of my tenants for permission to break her lease. She has a restraining order against her estranged husband, and wants to move away. I told her I'd hold her to the same standard I apply to anyone who breaks a lease -- she'll be responsible for the rent until I can re-rent, and I expect her to pay the back rent that has piled up (two months' worth).

I feel badly for this lady, but I can't afford to lose the rent, either. --Mark S.

A: I'm not sure which question you're asking -- whether it's morally OK for you to proceed as you plan, or whether it's legally permissible. I'll leave the first one to you and your spiritual advisers; me, I'm only about the law.

And the law might, depending on where you live, have something to say about treating this person the way you'd treat any lease-breaking tenant who has no legally justified basis for leaving the rental.

Justifiable reasons include a landlord's failure to offer and maintain fit and habitable premises, but they also include, increasingly, the tenant's need to leave because of fear of continued domestic violence.

When the tenant leaves because of a legally recognized event or reason, the tenant's responsibility for future rent due under the lease is extinguished (though unpaid back rent will still be due).

States began recognizing a domestic violence victim's need to leave as a valid reason for breaking a lease after Congress passed the Violence Against Women and Department of Justice Reauthorization Act of 2005 (VAWA).

That federal law applied only to people renting with public assistance, in public housing or private housing (Section 8). It relaxed the rules concerning when a recipient could move without jeopardizing their right to continued assistance.

States soon followed with laws that applied to private landlords renting not just to assisted individuals, but to regular tenants as well.

Today, slightly less than half of the states extend some form of protection to victims, typically allowing them to break a lease and move without responsibility for future rent when they have documented the abuse and have notified the landlord in a timely manner.

One such state, Texas, goes one step further: Landlords are allowed to collect unpaid back rent, as you intend to do, only if their lease contains a statement like (or substantially like) this: "Tenants may have special statutory rights to terminate the lease early in certain situations involving family violence or a military deployment or transfer." (Tex. Prop. Code Ann. 92.016.)

In other words, unless Texas landlords educate their tenants of their rights to terminate, whether as domestic violence victims or because they've received deployment or transfer orders, they will lose their right to any back rent that exists when the tenant leaves.

That's pretty strong stuff -- the reader is left wondering whether the Legislature enacted this proviso in response to Texas landlords' practice of denying tenants their rights to terminate in these situations.

Q: I'm about to move into a rental situation in which I'll be the third roommate, replacing someone who's leaving. The departing tenant wants me to buy him out of his deposit. But what if the landlord charges us later for damage that happened before I moved in? How can I protect myself from this? --Jason S.

A: This scenario is very common and doesn't, unfortunately, have a simple solution. To handle this fairly, you'll need the good-faith cooperation of all roommates, and ideally, your landlord's cooperation too. Here are some avenues to try.

1. Ask for an inspection now. Although it's a long shot, you might consider asking the landlord to conduct an inspection now, when the person you're replacing moves out.

Like an end-of-tenancy inspection, this one would look for damage beyond ordinary wear and tear. A landlord who agrees to a midtenancy inspection might be able to spot problems that he'd deduct for, if the entire tenancy were ending right then.

For example, suppose the rug has been damaged by stains and misuse -- ideally, the owner would tell you that he'd charge a certain amount for its cleaning or replacement.

The original roommates should cover this expense, which should come out of their shares, and you could buy the departing tenant's deposit for the original sum less his portion of the ruined rug deduction.

Landlords also inspect for cleanliness at the end of the term. At this point, however, there's no reason to polish up the rental, because the entire group isn't moving. If you stay to the end, you'll have to do your part to clean the unit, which the departing tenant has happily avoided. You might ask that tenant to compensate you for part of the time you'll spend on this end-of-lease chore.

But as mentioned at the outset, it's not likely that your landlord will go along with this request. First of all, in an occupied rental, furniture and personal items may cover or mask damage that the landlord just won't see.

If he sees it at the end, he won't want an argument as to why he didn't note it earlier. And in a broader sense, the landlord really has nothing to gain from this added bit of work: He's entitled to keep the entire deposit until the whole tenancy ends, and how the co-tenants allocate it among them is not his problem.

The last thing the landlord wants is to get in the middle of a spat among roommates as to who caused the damage, and when it happened.

2. Do your own inspection. While you can't force your landlord to conduct an early inspection, there's no reason why all of you can't do one yourselves.

Take a good hard look at the rental and ask yourselves, if we were the owner, knowing how he or she does business and how this place looked when we moved in, what would we deduct for today?

How much would it cost to replace that ruined rug, or clean it? What about the multiple picture hangers in every room -- will these result in a claim that the entire place has to be painted?

When you come up with an estimate for repairs or replacement, divide that cost by the number of roommates, subtract the result from each roommate's share, and offer to buy the departing tenant's deposit share minus that sum.

Of course, you can't be sure that your estimates will be the same as those used by the landlord. Here is where ongoing communication and good faith among all tenants are required.

Suppose the landlord insists on replacing the rug rather than cleaning, which makes your original deduction for cleaning too small. Ideally, you'd contact the departed tenant and be reimbursed for your share of the difference between the actual deduction and your initial estimate.