Chapter 9 The Landlord-Tenant Relationship Types of Leases Tenancies - temporary possession/leases For years • Lease for a specific period At will By agreement Either side can terminate No damages Periodic • Month-to-month At sufferance Lease has ended Tenant remains Leases: Formation Uniform Residential Landlord Tenant Act (URLTA) State statutes requiring written record – Statute of Frauds Sample Residential Lease Premises Sample Residential Lease #2 Identity of the parties Rent No Written Contract Example. Edson wanted Signatures a three year lease and told that to Perry Development. Perry Development rented a Term place and confirmed the dates and amount in a letter it sent to Edson. After Edson occupied the location for three months, Perry sent a notice terminating the lease. What are Edson’s rights? Lessor’s Obligations 4 Covenant of Quiet Enjoyment. Protection from intrusion by landlord or by someone claiming an interest in the property. Right to Possession. The landlord agrees to give possession to the tenant at the start of the lease. Warranty of Habitability – See next slide. Duty to Repair. No duty under common law. Many states have passed laws imposing a duty and warranty of habitability imposes a duty. Duty to Pay Taxes. Building Code Compliance. Most jurisdictions Warranty of Habitability Applies in residential leases Adequate temperature in cold weather Livable conditions in hot weather Running water Hot and cold water Freedom from infestation Compliance with code (?) Other issues: mold, dust Wilson v. Fieldgrove (#1) 8787 NW2d 707 (Neb 2010) 6 Oral agreement to lease farm land year-to-year March 1 – February 28. Rent paid in cash. Tenant Dies/Family Continues to Farm. The family wanted to continue to lease the land on a year-to-year basis. Landlord Failed to Give Notice of Termination. The landlord terminates the lease. Six month notice is required for year-to-year leases in Neb, Issue: Is the landlord required to give notice to a tenant’s heirs if the tenant dies during the term of the lease. Sub-Issue: Slander of Title. Facts – Sharecrop Leases. Where a landlord agrees to accept a portion of the crop as payment for a lease, the landlord implicitly cares about the person doing the farming to ensure maximum yield and accordingly a lease would not pass to another. HOWEVER, this is not a sharecrop lease – it’s a cash lease. Bender v. Green (#2) 874 NYS2d (NY Civ Ct 2009), p. 183 Green rented a rent controlled apartment in NYC Bedbugs in apt made green and his partner rotate between sleeping ti the bedroom and kitchen. He did not get a single nights sleep during the summer months. This impacted is work and his relationship 7 . Green withheld two months of rent. The landlord (Bender) brought a forcible detainer action to have him evicted. The exterminator sprayed but could not find any bugs. The exterminator believed the tenants brought the bugs into the apartment. No other complaints about bed bugs. A neighbor that knew about bedbugs went into the apartment 20 times looking for and never found bedbugs. If misconduct of lessee causes inhabitability – does the lessee still have a claim? Is this a breach of the warranty of habitability? Consider 9.1 Schuman v. Kobets, 760 NE2d 682 (Ind App 2002) 8 Pigeons were nesting on an apartment’s broken window casing. Tenant request that the holes in the walls be repaired. The landlord did not expedite the repairs. She experienced fevers, swollen lymph notes and other maladies. She was diagnosed with histoplasmosis. This is a fungus which is spread by spores that are typically carried in bird excrement. She gave her medical bills to the landlord for payment. The landlord did not pay. This was in 1990. In 1995, the disease cam back and she nearly died. She had medical bills of $138,000. Does the implied warranty of habitability extend to personal injury actions? Consequential damages? Should it? Caveat lessee v. caveat lessor. Should foreseeability matter – a poorly secured overhead fixture falling and insuring a person versus a rare pigeon related disease? Lessor’s Remedies Eviction Wrongful Abandonment Action for Rent or Damages Lessor’s Obligations Duty to Repair. Deliver the property back in the condition received. Usually no duty to make substantial repairs. Waste. Damage caused by a tenant, including failure to protect the premises from decay and ruin caused by the natural elements. Duty to Insure. Neither the tenant nor landlord has a duty to insure the premises. – – 10 Tenant leases both land and improvements, the tenant remains obligated to pay after fire or other loss. Tenant leases just the improvements (i.e. an apartment), the obligation to pay rent terminates if the improvements are destroyed. Fixtures. Become property of the landlord. Lessee’s Remedies 11 Wrongful Eviction. Constructive Eviction. Damages, Reformation and Rescission Rent Withholding General Principals Rents due at the beginning of lease period (opposite of old common law) Security deposits are paid (generally one months rent or sometimes more) – 12 Not to be treated as liquidated damages Third party guarantee of rent Suggested for Leases Security deposits (some limits and regulations on return and requirements of interest) Cleaning deposits Other deposits (nonrefundable disclosures) Prepaid rent (Limitations on amount) Lease term Attorney’s fees Deposits Security Deposits – – – Can landlords use the funds? Pay interest? As liquidated damages? Prepaid rent Cleaning Pet Must state if nonrefundable URLTA limits on amounts required for beginning lease Furlan V. Farrar 8982 A2d 581 (RI 2009) 15 Lease. Furlan leased an apartment from Farrar. $800 security deposit plus $800 first month rent paid. Start Date Dispute. Tenant asserted a start date of September 1 but landlord said it was Oct 1. Tenant Delayed. The tenant then told landlord she would not move in on Oct 1. Attempted Cancellation. Tenant called to cancel rental agreement and she asked for her money back – the $800 security deposit portion only. Landlord refused. She then called ½ hour later and said her brother would bring over her furniture. Landlord Refused Brother on Oct 6. The landlord did not let the brother in. Issue: Who gets the $1,600 paid? Value of rent from Oct 6 to Oct 31 = $625. What type of lease was created? Month-to-month? Consider 9.3, p. 187 Security Deposit 16 $1,050 Security Deposit. Landlord has $1,050 security deposit $1,050 monthly rent Breach of Contract. Two roommates move out 3 months early without paying for remaining rent ($3,150 owing) Landlord cannot lease for three months. Security deposit as liquidated damages? Offset against full damages? Consider 9.4 Problems with Rent Control NY and LA 2/3 of residential property under rent control with average rent $650. The remaining 1/3 have average rent of $1,500-$2,000. Waiting list for apartments. Landlords converting to condos. Little turnover. Charlie Rangel has multiple rent controlled apartments. Rent Control 17 “Poor door” No access to fitness facilities Average rent = $1,321 if rent controlled and $2,696 if market rate A “taking”? Antitrust violation? Pre-Paid Rent First and Last Month’s Rent Limitations under URLTA – may be 1 ½ time monthly rent damages? Prepaid rent Cleaning Pet Must state if nonrefundable URLTA limits on amounts required for beginning lease Fisher v. City of Berkeley CA (#6) 475 US 260 (1986) 19 Rent Control v. Antitrust Berlinger v. Suburban Apt Management (#7) 454 NE2d 1367 (Ohio 1982) 20 Liquidated damages issue $50 fine for parking a motorcycle (or $1,500 for a 30 day month). MN Landlord Tenant Law 21 Written Lease Required. A landlord with a residential building with 12 or more rental units must have a written lease. Landlord must give a complete copy of lease to the tenant. Failure to give a written copy is a valid defense to many actions against the tenant – but not for nonpayment of rent. Written Receipt Immediately for Cash Rent Payment Restrictions on Lease Terms for “Buildings in Financial Distress”. Once a landlord receive a notice of foreclosure it can only enter into periodic leases with a term of not more than two months. (a bunch of exceptions). Cold Weather Notice Before Vacation of Building. Tenant must give notice of termination of tenancy if leaves between November 15 and April 15. Failure to do so is a misdemeanor. Covenants of Landlord. “Fit for the use intended by the parties.” “…reasonable repair….” “to make the building reasonable energy efficient…” Cannot waive these provisions. Covenants of Both Landlord and Tenant – No unlawful controlled substances – No prostitution – No use of firearms on the premises – No stolen property – No use of common areas to sell controlled substances MN Landlord Tenant Law, p.2 22 Late Fees. No late fees unless it’s in the lease or otherwise agreed to in writing. Security Deposits. Must pay interest - 1% (3% prior to Aug 2003). Must return security deposit within three weeks (with some exceptions). – Bad Faith Retention. Landlord shall pay punitive damages not to exceed $500. Not paying is presumed to be bad faith – unless accounted for in damage statement. – Tenant May Not Withhold Last Month’s Rent. Unless otherwise agreed. Damages. Must provide written statement of damages within three weeks. Required Disclosures. – Name of person managing the premises – Who to serve process on Right to Terminate Lease for Domestic Abuse Right to Privacy/Only Enter for Reasonable Causes Required Management Background Checks Screening Fees – cannot charge when landlord know no units are available – must return if applicant rejected for a reason not disclosed prior to the screening. Security Deposit. No limits to size in MN Department of Housing and Urban Development v. Rucker (#X) 53 US 125 (202), p. 205 Can a tenant be evicted for drug use by household members or guests whether or not the tenant knew of the activity? Grandsons of tenant were caught smoking marijuana in the apartment’s parking lot. The tenant’s daughter, who lives in the apartment was caught with cocaine and crack cocaine three blocks away. Tenant evicted even though tenant claimed no knowledge of drug use. Wrongful eviction? 9.5 23 Rules and Regulations Must be posted Either copy furnished at the lease is signed or notice of changes Can be incorporated into the lease as an addendum Must be reasonable Must be enforced uniformly Landlord’s Right of Access For Repairs For Emergencies Notice in advance of repairs, inspections, etc. (two days under URLTA) Transfers of Leases 1. Sublease – 2. Portion of lease is transferred; original tenant will return Assignment – Full transfer of what’s left on the lease Neither eliminates liability of original tenant End-of-Chapter Q 2 – Deduct Repairs from Rent. child eating paint flakes. The landlord did not fix. The tenant fixed and deducted $29.53 for materials plus $70 for labor from rent. Can tenant repair and deduct cost of repair from the rent? Tenant Remedies Warranty of habitability Constructive eviction Partial constructive eviction Self-help (dollar threshold) Repair and deduct Reports to city, county, housing authorities Protection against retaliatory conduct Landlord Duty of Maintenance 28 Must maintain common areas. Duty of care to maintain all areas to prevent injury Yu Fang Tan v. Arnel Management CO (#9) 170 Cal App 4th 1087 (Cal App 2009), p. 202 29 Rented apartment but did not pay for extra parking spot. Had to park in non-fenced open area. Shot in neck by car jacker. Duty to Maintain Premises to Prevent Injury. Consider 9.10 p. 202 Railing failure. Tenant’s friend injured when helping to move furniture into the apartment by pushing it over a railing onto a second floor balcony. He stood outside the railing and held onto the railing to prevent himself from falling. After an hour of moving furniture in this manner the railing gave and he fell. 30 End-of-Chapter Q: 3 Tennant tripped on tree trunk Landlord Liability for Actions of Third Parties Was there notice? Ongoing patterns of criminal conduct Was it foreseeable? Does the landlord have necessary security? Necessary lighting? Example: Death of an office in an apartment used to sell drugs. Apartment door was reinforced and added a separate “window” or “peephole” for passing drugs. Was landlord negligent? Landlord Obligation to Mitigate Damages 32 End-of-Chapter Q 7 Ella terminated her six-month lease at the end of three months by abandoning her apartment. Her rent was $800/month. Landlord had several opportunities to lease it. Why should a landlord bother to search for another renter when she can sue and collect from the tenant that broke the lease and left early? End-of-Chapter Q 1, p. 201 33 Child burned with boiling water being carried to bathroom due to lack of hot water. Retaliatory Action by Landlords 34 General Retaliatory Issues – For filing a complaint with housing authorities – For organizing or joining a tenant’s union – For using self-help remedies MN Retaliatory Defense to Eviction 1) Effort to Secure Rights Under the Lease. the alleged termination was intended in whole or part as a penalty for the defendant's good faith attempt to secure or enforce rights under a lease or contract, oral or written, under the laws of the state or any of its governmental subdivisions, or of the United States; or (2)Effort to Secure Rights Under the Law. he alleged termination was intended in whole or part as a penalty for the defendant's good faith report to a governmental authority of the plaintiff's violation of a health, safety, housing, or building code or ordinance. Consider 9.8, p. 201 Evicted for making a noise complaint. Tenant had a month-to-month lease and complained to the manager 15 times about a neighbors loud TV. Is that a retaliatory eviction? Retaliatory Action by Landlords Uniform Law. (1) complained to a government agency charged with responsibility for enforcement of a minimum building housing code of a violation applicable to the premises materially affecting health and safety; (2)organized or become a member of a residents’ union, association or similar organization; (3)acted in good faith to exercise his rights provided under the [UORRA], including when the resident makes a written request or complaint to the owner to make repairs to comply with the owner’s obligations under Section 47–8–20 NMSA 1978; (4)made a fair housing complaint to a government agency charged with authority for enforcement of laws or regulations prohibiting discrimination in rental housing; (5) prevailed in a lawsuit as either plaintiff or defendant or has a lawsuit pending against the owner relating to the residency; (6) testified on behalf of another resident; or (7) abated rent in accordance with the provisions of Sections 47–8–27.1 or 47–8–27.2 NMSA 1978. 35 Knudsen v. Lax (#8) – Constructive Eviction 17 Mis 3d 350, 842 NYS2d 341 (2007), p. 197 36 3rd degree sex offender State law does not allow eviction of convicted sex offenders Woman with three young girls not comfortable living next to sex offender. Constructive Eviction Consider 9.7, p. 200 Ceiling fan fire. • • • • 37 • • Improper venting created foul odors. The landlord knew of the problem before they rented. Tenants stopped paying rent. Tenants kept the ceiling fan running all the time to reduce the odor and this caused the fan to overheat and cause a fire. Landlord sued to evict and for rent. Tenants claimed breach of warranty of habitability and retaliatory eviction.