1 Chapter 11 Renters and Landlords © 2012 South-Western, a part of Cengage Learning

2 Quote "I had a bad tenant who lived in my rental home. When I evicted him, he destroyed my property. He stole the air conditioner and the copper line that went with it, and the aluminum from the windows. He had stored garbage in the attic, because he did not pay his garbage fees. The garbage rotted and maggots formed. It was hideous. ……….But, the clincher was how he literally walked thru my walls, leaving an outline of a body throughout my sheetrock. He did a total of $5, This stinks!"  Landlord Horror Story © 2012 South-Western, a part of Cengage Learning

3 Quote “The slogan of the National Association of Landlords is the commaless "We Shelter You America." The truth of the matter is, however, that landlords shelter no one, while in fact the law shelters them... from the immediate expropriation that would occur if there were not force of gun and jail to back up this phoney (sic), abusive, so-called property right.”  Fred Woodworth, Rent: An Injustice © 2012 South-Western, a part of Cengage Learning

4 The Lease Transfers a right of possession to a tenant who gives consideration (rent) Both a conveyance and a contract Required to be in writing per statute of frauds  Often only required if term is for more than a year a writing is required © 2012 South-Western, a part of Cengage Learning

5 The Lease Covenants: Promises in the lease to do or not do a certain thing  Breach of covenant (money damages) Conditions: Qualifications or restrictions upon the landlord or tenant  Failure of condition (forfeiture of the lease) © 2012 South-Western, a part of Cengage Learning

6 Types of Lease Tenancies Tenancy for Years: Specified time identified in the lease Periodic Tenancy: Tenancy for successive periods of time often determined by frequency of rent payments. Automatic renewal unless proper notice Tenancy at Will: Tenancy for as long as both parties agree; no termination notice required Tenancy at Sufferance: A tenant who remains without permission after expired lease. Legal process required to remove tenant © 2012 South-Western, a part of Cengage Learning

7 R ental Agreement v Lease Rental Agreement: Written month to month tenancy Lease: Written tenancy for a term of time  Oral lease is possible as long as it is for less than a year in many states. © 2012 South-Western, a part of Cengage Learning

8 Landlord Right to Enter Premises Emergency Permission Reasonable notice for permissible purpose  Repair  Show premises for new tenant or sale  Abandonment © 2012 South-Western, a part of Cengage Learning

9 Surrender of Lease Term Expiration Mutual agreement Abandonment: Tenant leaves the premises with no intention of returning. Relinquishes all rights Forfeiture: Breach of express condition in lease Eviction: Failure to pay rent © 2012 South-Western, a part of Cengage Learning

10 Right to Return of Premises A landlord has a right to the premises after the expiration of the term If the term is month to month the landlord should give the appropriate notice. Usually 30 days © 2012 South-Western, a part of Cengage Learning

11 Legal Remedies for Landlords Damages and Eviction  Abandonment: Tenant leaves tenancy without cause or intent to return  Forcible or peaceful eviction are illegal: Landlord evicts without legal process  Unlawful detainer: Statutory remedy to evict the tenant for cause Summary court proceeding to provide judicial eviction Many states allow grace period for tenant to fulfill obligations and cure default © 2012 South-Western, a part of Cengage Learning

12 Right to Return of Premises A landlord can use a written three-day notice (eviction notice) if the tenant has:eviction notice  Failed to pay the rent  Violated any conditions of the lease or rental agreement.  Materially damaged the rental property ("committed waste")  Substantially interfered with the other tenants ("committed a nuisance")  Used the rental property for an unlawful purpose © 2012 South-Western, a part of Cengage Learning

13 Destruction of Premises Tenants are responsible for keeping their own living quarters clean and sanitary A landlord can usually delegate his repair and maintenance tasks to the tenant in exchange for a reduction in rent Tenants are responsible for reasonable use of common areas such as lobbies, garages and recreational areas © 2012 South-Western, a part of Cengage Learning

14 Rental Deposits Sum of money collected by the landlord to secure tenant responsibilities  Includes any amount held as last months rent  Landlord is expected to detail in writing any deductions kept from deposit  No part of the deposit can be treated as non-refundable If the landlord intentionally and flagrantly violates the law, in some states, a tenant may recover the entire deposit -- sometimes even two or three times this amount -- plus attorneys' fees and other damages © 2012 South-Western, a part of Cengage Learning

15 Rights of the Tenant Habitability Quiet enjoyment Repairs Tenant Safety © 2012 South-Western, a part of Cengage Learning

16 Implied Warranty of Habitability A requirement that a landlord maintain livable premises for their tenants Failure to provide habitable housing may allow a tenant to withhold rent, repair, sue landlord or vacate the premises © 2012 South-Western, a part of Cengage Learning

17 Implied Warranty of Habitability Common code habitability issues  Roofs and walls must not leak  Doors and windows must not be broken  Plumbing and gas must work  Hot and cold water must be provided  Sewer must be connected and operating  The heater must work and be safe  Lights and wiring must work and be safe  Floors, stairways, and railings must be maintained and safe © 2012 South-Western, a part of Cengage Learning

18 Quiet Enjoyment Tenant will not be put out of possession (i.e., evicted) by any act or failure of the landlord  Can be failure to make habitable  Can be failure of promises in lease by landlord  Can be failure to enforce lease against other tenants No disturbance or interference with tenants enjoyment of the property ejectment, threats, forcible eviction © 2012 South-Western, a part of Cengage Learning

19 Repairs In many states a tenant may deduct money from rent to pay for the repair of conditions covered by the implied warranty of habitability Remedy requires these steps  Written request for repairs  Allow reasonable time for compliance  If no response you may make or arrange for repairs. The repair cost can be deducted from your rent  Deduct an amount equal to one months rent. Remedy available twice during any 12 month period  Cannot use remedy if damage caused by you or guest © 2012 South-Western, a part of Cengage Learning

20 Tenant Safety A landlord is liable to the tenant for negligence and other torts  Common areas  Habitability (safety hazards)  Invasion of privacy  Safety devices and protections from criminal activity or other tenants © 2012 South-Western, a part of Cengage Learning

21 Assignment Conveyance of the tenants entire interest Assignee assumes the status of the tenant with all the rights and duties. The tenants rights terminate but the duties remain The assignee must perform all duties (there must be a delegation or the landlord may enforce covenants © 2012 South-Western, a part of Cengage Learning

22 Subletting Holds a portion of the estate and the assignee is responsible to the tenant Usually the lease will restrict subleases and assignments. If it does not then allowed. Original tenant has remaining property interest Majority of states - no duty to relet. Landlord must be careful not to consent to abandonment through actions - if relets the tenant is liable for the remaining amount Duty to relet if abandonment certain © 2012 South-Western, a part of Cengage Learning