1 Landlord-Tenant Law Real Estate Transactions I Mike Brigner, J.D.

2 Today’s Discussion  Leases at Common Law & Definitions  Ohio Landlord-Tenant Law  Preparing a Residential Lease  Commercial Leases

3 Leases at Common Law & Definitions

4 Lease Law  Leases are covered by –Common law of contracts –Common law of real estate –Federal & state anti-discrimination laws –State landlord-tenant law –Local statutes

5 Common Law: Contracts  A lease is a contract & must meet four basic criteria for a valid, binding agreement: –Offer & acceptance –Consideration –Capacity of parties to contract –Legal subject matter  Contracts are usually drawn by, & favor, landlord –Under contract law, in event of dispute over terms, all contracts are construed against the drafter –Best if both parties are represented, and negotiate a fact-specific and mutually fair agreement

6 Common Law: Real Estate  Historically, caveat emptor, buyer beware  Tenant took premises as he/she found it  Landlord had no duty to provide habitable premises, or to make repairs –Most states now require habitable condition, and don’t allow tenant to waive this right  Landlord only had duty to keep common areas and fixtures safe –This idea has carried over into modern law

7 Common Law Remedies  Constructive eviction: If premises becomes uninhabitable, tenant could move out & not pay rent  Distress: If tenant failed to pay rent, landlord could use self-help: forcibly remove tenant, and seize tenant’s goods to satisfy rent arrearage –Most states, including Ohio, now forbid self- help in residential leases, and require a legal eviction proceeding, with proper notice & hearing

8 Statutory Law  Common law has been greatly modified, by statutory law, such as:  Federal laws –Fair Housing Act (42 U.S.C. § 3604) –Handicap accommodation (24 CFR )  Ohio statutes –Landlord Tenant Law (R.C. Chap 5321) –Ohio Fair Housing (R.C. 4112(H))  Local ordinances –Zoning ordinances, health codes, rent caps –Occupancy & use limits, safety rules

9 Ohio Landlord-Tenant Law

10 Lease Definitions  Lease: A document that conveys a leasehold interest in real property, which includes: –Right of possession, but not ownership –For a certain period of time –In return for the payment of rent  Statute of Frauds requires any transfer of an interest in real estate, including a leasehold interest, to be in writing (R.C ) –Leases for less than one year generally do not have to be in writing (R.C )

11 Parties to a Lease  Lessor = Landlord  Party to a lease who owns the property and transfers occupancy in exchange for rent payments  Issue: Does landlord have good title?  A concern for tenants primarily in long-term & commercial leases  They can: do title search

12 Parties to a Lease  Lessee = Tenant  Party to a lease who occupies the premises and pays rent  Issue: Is tenant financially responsible?  A concern for landlords  They can: do credit check, get deposits, get third party guarantees

Revised Code Chapter 5321  Applies to residential leases, except: –Condominiums –Hotels, motels, tourist homes –Boarding schools –Jails  Does not apply to commercial leases

Forbidden Lease Terms  R.C  Agreement to pay other party’s attorney fees  Agreement to waive legal duties of landlord  Limitation or forgiveness of a landlord’s legal liabilities

Landlord’s Obligations  R.C  Comply with all health, safety, housing codes  Keep premises fit & habitable  Keep common areas safe & sanitary  Supply running water, hot water, reasonable heat  Give reasonable notice (24 hours) of intent to enter, except in emergencies

Landlord’s Restrictions  R.C  Forbids landlord from –cutting off utilities, –locking out tenant, –seizing tenant’s possessions, –or threatening any unlawful act against tenant  Violation allows tenant to recover damages and attorney fees

Tenant’s Obligations  Keep premises safe & sanitary  Obey applicable safety & housing rules  Don’t damage or destroy premises or fixtures, or allow others to do so  Maintain appliances supplied by landlord

Tenant’s Obligations  Use electrical & plumbing properly  Do not disturb neighbors, or allow others to do so  No controlled substances  Allow reasonable access for inspection & repairs

Tenant’s Rights  R.C  Landlord may NOT increase rent, decrease services, or start eviction to retaliate for tenant’s action of: –Complaining to landlord of a breach of any R.C duty –Depositing rent with clerk –Complaining to a government agency of any code violation –Joining other tenants to bargain collectively with landlord

Tenant’s Rights: Security Deposits  R.C  Security deposit of over one month’s rent kept for 6 months or more carries 5% interest  Deposit may be applied to any unpaid rent  Landlord must provide written statement of any deductions within 30 days  Tenant must provide forwarding address

21 Preparing a Residential Lease

22 Residential Lease Elements 1. Date the lease is executed 2. Parties to the lease 3. Description of the premises 4. Duration of the lease, & renewal 5. Rent 6. Misc. terms: security deposit, default, pets, option to purchase, alterations, subletting, etc.

23 Lease Elements PARTIES: By name or at least number. Can landlord forbid: Kids? Seniors? Handicapped? Sexual predator? DESCRIPTION: Address, apartment number, in some states legal description, parking places

24 Lease Elements DURATION & RENEWAL: Notice required? Terms of renewal? RENT: Total amount, monthly installments, date & place due, late fees. Sometimes 1 st &/or last month’s rent payable in advance DEPOSITS: Security deposit, pet deposit -- amount, conditions for return, interest

25 Lease Elements PERSONALTY: If furnished premises --Should have inspection before/after INSURANCE/INDEMNITY: Landlords may try to limit liability for property or personal injury damages to tenant (Illegal in Ohio) MAINTENANCE/REPAIRS: Spell out who is responsible for what

26 Lease Elements ALTERATIONS: What may tenant change? May require written permission. May restrict tenant from placing liens. Fixtures (existing & new) to remain after lease. SUBLETTING: Require prior consent? --Tenant remains liable until original lease term expires

27 Landlord-Tenant Law Concluded Thank You Mike Brigner, J.D. END OF CLASS: (EVERY Class) Clean up classroom; log off computers; check for personal property & computer disks; make sure you have signed in.