How To Divide Damages Between Departing Co-Tenants

Posted by on November 21, 2006 under Landlord Tenant Lawsuits | icon: commentBe the First to Comment

A landlord who has a rental agreement signed by co-tenants can often find himself / herself in a quandary. For example, you as a landlord have two co-tenants, who have given notice that they will be vacating your rental property in a month’s time. One of them, who lived in the house for a year, has already left, while the other, who just moved in a couple of months back, will be leaving at the end of the 30-days notice. When you try to deduct for damage or cleaning charges, the first tenant claims he / she left the property sparklingly clean, in mint condition, therefore he / she is not responsible for any damage that might take place after his / her departure. The question is how are you going to handle the costs for damage repair and cleaning?

Simple, there is no need to frazzle yourself! Remember, you have the signature of both tenants on the rental lease, ergo; both are responsible for ensuring that the place is cleaned up and damage if any, accounted for out of the security amount deposited with you. A landlord does not need to worry as to, who of the two co-tenants is to be charged for the damage, courtesy of a legal principle known as joint and several liability. Simply put, it means, any one of the two co-tenants has to pay for all the damage, and even whole of the rent, if one or the other skips, without paying. The co-tenants are responsible for splitting up the responsibility or the bill between themselves.

When the second tenant leaves, inspect your rental property, deducting from the security deposit only what is necessary to cover unpaid rent, damage and cleaning beyond normal wear and tear. Split the balance of the security deposit, sending half to each of the co-tenants.

Actually, the newcomer before joining an existing tenancy should have asked the landlord to inspect the property before he / she moved in to avoid being charged for pre-existing damage. Or, he / she should have discussed the matter with pre-existing tenants. All a landlord has to worry about is that any costs incurred for cleaning or damage repair is paid up from the security deposit.

Invasion Of A Tenant’s Privacy

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As a landlord, you must realise, although are the owner of the rental property, you cannot invade a tenant’s privacy by walking in and out of his / her rental unit, at will. Of course, you need to check and repair any reported deficiencies or damages, even to show the unit to new prospective tenants, in the event the present one is vacating the unit. However, if you do not inform your tenant and get prior permission for entering the rental unit, you can be held liable for violating and invading his / her privacy. This may well be the right time to explain what is the legal meaning of the term invasion of privacy’.

It was only in the 20th century the term ‘invasion of privacy’ was invented as a legal concept. Inquisitiveness and nosing into other people’s business has been around since time immemorial, however, it took a judge’s wife to help create a new theory out of sheer nosiness and inquisitiveness. Upset with a journalist for snooping around for a major news scoop at a private party, the judge’s wife complained to her husband to do something about the journalist’s nosiness, only to be informed there was nothing in the legal lexicon to hold a person liable for sheer inquisitiveness. Ruminating on the issue, the judge later on wrote an article on theright to privacyand from then on a series of rules relating to the subject were developed.

The right to privacy means a person has the inalienable right to be left alone. There are various ways a person’s right to privacy is invaded. The most common invasion of privacy situations law recognizes are as follows:

  1. False Light i.e. falsely portraying an individual in a highly offensive manner. For example, posting the photograph of a law abiding man, a man who has never committed a crime on the ‘America’s Most Wanted’ website.
  2. Disclosure of Private Facts i.e. revealing private or embarrassing facts about an individual, even though there is no established relation to a legitimate public concern. For example, a thief who has served time for a robbery 20 years ago, but now has rehabilitated himself, and is working as a pastor, it would be considered an invasion of his privacy if one were to publish facts of the 20-year old robbery today, unless a related public interest can be proven i.e. if the pastor is again arrested for a crime.
  3. Intrusion is a legal offence as one cannot intrude upon a person’s reasonable expectation of privacy. For example, spying on the person at home, secretly eavesdropping on conversations, or opening their mail.

Similarly, entering a tenant’s apartment, without prior notice and without obtaining his / her consent, is tantamount to invasion of his / her privacy. While, every state has its own set of rules, determine whether a specific act constitutes an invasion of privacy in your state. Most states require a landlord to issue a 24-hour or 48-hour notice to the tenant, informing him / her of his / her intention to enter the rental unit for conducting repairs or showing it to prospective tenants. If, a landlord does enter a tenant’s rental unit without issuing a notice or getting prior permission, the tenant can sue him / her for invading his / her privacy.

Commercial Sub-lease: Can The Rent Be Raised And How Much

Posted by on November 14, 2006 under Landlord Tips | icon: commentBe the First to Comment

A tenant – landlord, who has sub-leased a part of his / her commercial building on a month-to-month basis, has not raised the rent for four years. Now, he / she feels it is time to do so, but is confused as to whether the rent can be raised, including how much it can be raised for the sub-let portion of his / her commercial rental unit.

The answer is that raising the rent after five years is an understandably reasonable move, since every landlord would like to get true market value for his / her rental property. However, since you too are a tenant sub-leasing his / her rental unit, it is essential to check your own lease to ensure there is no clause in it, restricting you from sub-leasing it at a rental rate higher than what you are paying as rent, or would pay for the portion you are sub-leasing. This clause prevents and constrains you from profiting by charging a higher rent from sub-leasing your rental unit to a sub-tenant.

For month-to-month commercial property tenants, a landlord is allowed to raise the rent by giving 30-days advance notice, but check the sub-lease to see, whether you can do so for the sub-leased portion of your rental unit. At the most, your month-to-month tenant will disagree with the raise and decide to move out.

To soften the blow of a rental increase, perhaps, rather than delivering the news couched in the formal, legal jargon used by lawyers, it would be a far better idea to discuss and plan the rental increase with the tenant in advance,. As to how much should you raise the rent by? Look to the marketplace rental values, which will impose a limit on the rent charges, or the willingness of your tenant to suffer a rental increase.

Cable TV: Who Pays For It, Landlord Or Tenant

Posted by on November 10, 2006 under Landlord Tips | icon: commentBe the First to Comment

A good question, especially if you have a commercial rental property, which is being leased as office space by a tenant, who would like to run a cable through the entire building for networking purposes. And expensive proposition, as the service amounts to over $12,000, which the tenant would like you, as the landlord to pay for. And, when the lease expires, the tenant says, he / she will move out taking the server, but will leave the cable behind. You might well ask if it is normal for landlords to provide cable, and whether he / she has any obligations towards the tenant, relating to down time, or if work is lost due to the system malfunctioning.

You may not like the initial expenditure outlay, but accept it, as when the current tenant moves out, you will be able to raise the rent for your commercial rental property on the basis of it coming equipped with network cable.

Apart, from that, it is but natural on a landlord’s part to worry about potential legal liability, but liability problems can be warded off, as a commercial lease is a contract agreement and landlords and tenants are free to set their own rules. As long as, both landlord and tenant agree, the legal liability issue can be resolved by discussing both tenant / landlord responsibilities together, and putting it all down in writing.

When you negotiate lease terms regarding the cable with current or future tenants, inform them that they are free to make use of the existing cabling, but you will not be held responsible for its functioning and will not make any guarantees about its condition. If, your tenants also agree that the responsibility of maintaining the cable is not yours and that you are exempt from paying for any losses due to any malfunctions, ensure it is put down in writing, in order to avoid any problems, later on.

Part II of FAQs: Rent Control Laws And Security Deposits

Posted by on November 9, 2006 under Landlord Tips | icon: commentBe the First to Comment

Every landlord should familiarise himself / herself with the manner in which legally valid leases or rental agreements can be drawn up, including how rent control laws work.

Ques. How Do Rent Control Laws Work?
Only five American states, those of California, the District of Columbia, Maryland, New Jersey, and New York have laws limiting the rental amount to be legally charged by landlords. They have rent control ordinances, alias rent stabilization, or maximum rent regulation that limits the number of times and situation types a landlord is allowed to raise a tenant’s rent with impunity. As well, a good many of these rent control laws require a legal or just cause i.e. good reason for a landlord to terminate any unwanted tenancy. For example, a tenant refusing to pay rent, or a landlord wanting to offer the rental unit to a family member are considered just causes for ending tenancies under rent control laws.

Landlords and tenants residing either in New York City, Newark, San Francisco, or other cities with rent control laws in place, should read and understand the most recent copy of the state’s rent control ordinance, including other regulations, so as to keep themselves informed, as to what is permissible in the state, where their rental property is located. They can acquire a current copy by getting in touch with the local rent control board, or by contacting the mayor or city manager’s office.

Ques. What is the permissible amount a landlord can charge as security deposit, and what can it be used for?
Every state makes provisions for landlord to collect security deposit, every time a new tenant moves in. A number of states limit the amount landlords can charge, and usually not more than one or two months worth of rent is allowed, with the exact amount depending on the state the landlord’s rental property is located in. Many states require landlords to keep the security deposit money in a separate account, with the landlord paying back the interest accrued on the deposits.

Landlords are allowed to use the security deposit to cover any unpaid rent or necessary repairs or cleaning, resulting from tenant mis-use, but not normal wear and tear. For instance, a landlord is not allowed to withhold a tenant’s security deposit to pay for house cleaning, carpet cleaning, or repainting unless and until all these chores became necessary, due to a tenant’s unreasonable use of the rental. To play it safe, so that the tenant does not sue for the security deposit, record the condition of the rental property when a tenant moves in by using a move-in checklist and/or taking photographs of the property.

Part I of FAQs: Leases And Rental Agreements

Posted by on November 8, 2006 under Landlord and Tenant FAQs, Landlord Tips | icon: commentBe the First to Comment

In order to be successful in his / her rental business, a landlord must have in-depth knowledge of various subjects related to his / her livelihood. First of all, he / she should know how to create a legally valid lease or rental agreement, as under, which should give a fair idea of why an agreement is of vital importance between a landlord and tenant.

Ques. Is it necessary for a landlord to have a written lease or rental agreement?
A key element of the rental business, it is vital for any landlord to ensure he / she has a signed agreement with each tenant. As well, care should be taken to ensure the following key points have been clearly stated in the agreement:

  1. The duration of the tenancy.
  2. The rental and security amount to be paid by the tenant.
  3. Number of people allowed to occupy the property.
  4. Person responsible for paying the utilities, i.e. landlord or tenant.
  5. Whether, the building has a ‘Pets Allowed’ or ‘No Pets’ policy.
  6. Whether, the tenant has the landlord’s permission to sublet the property.
  7. Landlord’s access rights to the rental property, including,
  8. Who is responsible for paying the legal fees, in the eventuality, there is a lawsuit regarding implementation of the lease or rental agreement?

A landlord should always bear in mind that leases and rental agreements should be written ones; despite the fact most states do have laws to enforce oral (spoken) agreements for a certain period of time. The easy informality of oral agreements may sound friendly; however, they often lead to heated disputes. During the course of the tenancy, if a landlord and tenant, later on, disagree about, say sub-letting by the tenant, it could all too likely lead to a court argument over who said what to whom, when, and in what context. A particular problem with long-term leases, therefore, courts in most states refuse to enforce oral agreements after the passage of a year.

Ques. Is there a difference between rental agreements and leases?
Most definitely, yes! While, a rental agreement is for short-term tenancies, providing tenancy rights for, often 30-days, and is automatically renewed each month, unless and until the landlord or tenant end it, by giving proper written notice. As well, agreement terms can be changed for month-to-month rentals, after the landlord has given adequate notice in writing.

On the other hand, a written lease agreement allows the tenant fixed-term occupancy rights to the rental unit, e.g. a fixed time-frame that can be for anywhere from six months to a year, perhaps, longer, so long as the tenant continues to pay rent and comply with all lease provisos. During the lease term, the landlord cannot raise the rent or change other tenancy terms, unless the tenant agrees.

Unlike, a rental agreement, a lease does not get automatically renewed on its expiry. And, if a tenant continues to stay on after his / her lease expires, with of course, the landlord’s consent, he / she become a month-to-month tenant, who is subject to the rental terms contained in the lease.

How To Handle The Expiring Lease Of Co-Tenants

Posted by on November 7, 2006 under Eviction, Landlord Tips | icon: commentBe the First to Comment

If, you are a landlord in a non-rent controlled city and have two tenants signed up on a year’s lease drawing to a close, which leaves you to decide, whether you wish to renew it or let it expire. However, if one roommate offers to renew the lease, stipulating that it should only be in his / her name and would like you to ask the other tenant to move out. Now, what is a landlord to do, if despite repeated phone calls, the second tenant does not return them, nor indicates, whether he / she would like to renew the lease? In a situation such as this, who can blame a landlord for wishing to offer a new lease to the tenant, who is willing to sign on for another year. To play it legally safe, a landlord should keep in mind the following:

When a fixed term lease draws to a close, it ends the tenancy rights of concerned renters. Of course, one can send the tenants a polite note to remind them of the approaching deadline, before they cease to be your tenants. Remember to follow the 30-day notice period even if it is a fixed term lease.

A lease that ends means the landlord is free to rent to whomsoever he / she wishes or desires. A landlord can decline to make an offer of renewal, as long as his / her decision to do so is based on valid business reasons, reasons that are neither discriminatory nor retaliatory in nature. In other words, one cannot refuse to rent to a tenant on the basis of race, religion, etc. etc.; nor because a tenant taking advantage of his / her legal rights, complained to a health inspector about code violations on the rental property.

This advice may not apply to a landlord whose rental property is located in a rent-controlled city. However, if the property is in a rent-controlled city, then a landlord will require ‘just cause’ for eviction or non-renewal of the lease, unless the second tenant does something that justifies eviction. Perhaps, the only way out of this quandary is to offer the place to both the tenants, and ask them to discuss the situation with each other. Before, doing so it would make good sense to check the details of rent-control ordinances to help you out!

On that cautionary note, another bit of advice, to avoid expensive landlord / tenant litigation, take necessary precautions, such as, screening tenants and conducting background checks on prospective tenants. A simple click of the mouse and one can visit for tenant screening and background check services.

An Eviction Process Overview

Posted by on November 6, 2006 under Eviction | icon: commentBe the First to Comment

It is important for landlords to know that they cannot begin eviction proceedings, unless and until, they have first legally terminated the tenancy. What this means is, first, the tenant must be given a written notice, as specified in state termination statutes. If, a tenant refuses to vacate the premises, or change his / her attitude, for example, by paying up rent, or moving the pet to a new home, then this gives a landlord the opportunity to file an eviction lawsuit, which also goes under its technical name of unlawful detainer.

A careful scrutiny of state laws shows how they have set out very detailed requirements to end unwanted tenancies. According to them, different kinds of termination notices are required for different situations, each state having its own procedures on the phrasing and servicing i.e. delivery of termination notices and eviction papers.

Termination Notice

While, terminology may vary from state to state, basically, there are three types of tenancy termination notices that landlords can issue to misbehaving tenants.

  • Typically, when a tenant has not paid rent, Pay Rent or Quit Notices are used. These notices give a tenant a few days (3-5-days in most states) to pay the rent or vacate (quit) the premises.
  • Cure or Quit Notices are given when a certain term or condition of the lease or rental agreement has been violated by a tenant. It could be the violation of a no-pets clause or to refraining from making excessive noise. Usually, the tenant is given a period of grace in which to rectify, correct, or ‘cure’, the violation. Failure to do so means, the tenant must vacate the rental premises, or face the possibility of an eviction lawsuit.
  • Harshest of all are the Unconditional Quit Notices. The tenant is ordered to vacate the premises and is not given any chance to pay the rent, or correct a lease or rental agreement violation. However, most states allow unconditional quit notices, only when a tenant:
    • Repeatedly violates important lease or rental agreement clauses.
    • Has paid rent late on several occasions.
    • Has seriously damaged the premises.
    • Or, is engaged in serious illegal activity on the rental premises e.g. drug dealing.

Lease Or Rental Agreements: Ten Essential Terms

Posted by on November 3, 2006 under Landlord Tenant Lawsuits | icon: commentBe the First to Comment

Before drawing up a lease or rental agreement, a good question to ask is what terms should be included in it. An agreement sets down rules for landlords and tenants to follow during a rental relationship. Rental agreements are not only legal contracts; they are also practical documents containing critical business details, such as, duration of the tenancy, monthly rental, and more. Lengthy or brief, professionally typed or brief, rental agreements should cover basic tenancy terms, including the following points:

  1. Names of all the tenants. Every adult renting a unit, including both halves of a married or unmarried couple, should be named as tenants and made to sign the lease or rental agreement. This ensures each tenant is legally responsible for all agreement terms, including full rental amount and correct use of the rental property. This means, if one of the tenants is unable to pay rent or skips out; legal redressal for the entire rent can be sought from tenants that remain. As well, if one tenant violates an important lease term, the tenancy for all tenants on that lease or rental agreement can be terminated.
  2. Occupancy limits. The agreement should clearly specify the rental unit is only to be occupied by those tenants, whose name and signature is on the lease, including minor children, if any. This guarantees a landlord’s right to determine who has the right to live on his / her property, as well as, allowing him / her to limit the number of occupants. This clause provides a landlord sufficient grounds to evict a tenant who allows an unauthorized person to move in, or even sublets the unit, without permission.
  3. Tenancy Duration. All rental documents should state, whether they are rental agreements or fixed-term leases. Usually, rental agreements run month-to-month and automatically self-renew, unless and until terminated by a landlord or tenant. On the other hand, leases, typically last a year.
  4. Rent: Each lease or rental agreement should specify the monthly rental amount, its due date (typically, the first of the month), its mode of payment, i.e. by mail or in person. Avoid unnecessary confusion and disputes by clearly specifying the minutest details, such as:
    1. Acceptable payment methods (e.g. personal cheques only)
    2. Whether, late fees will be charged for rent not paid on time, the fee amount, and grace period, if any.
    3. Charges for bounced cheques.
  5. Security deposits and fees: Security deposits are a frequent source of friction between landlords and tenants, therefore, a lease or rental agreement should be clear on the following points, to avoid legal problems later on:
    1. The amount that is to be charged as security deposit, which should comply with the maximum amount set by state law.
    2. What the deposit will be used for i.e. damage repair, and what it may not be used for i.e. the tenant applying it to last month’s rent.
    3. When and how the security deposit will be returned after accounting for deductions, after a tenant moves out.
    4. Any legal non-returnable fees, such as, for cleaning or damage caused by pets.

    Details of where the security deposit is being held and, if interest incurred on the security deposit will be paid to the tenant, should also be included in the rental agreement.

  6. Repairs and maintenance: Avoid problems resulting from rent-withholding by clearly setting out landlord / tenant responsibilities for repair and maintenance in the lease or rental agreement, including:
    1. Tenant’s responsibility to keep the rental premises clean and to pay for any damage caused by abuse or neglect.
    2. The tenant should be responsible for immediately informing about any defective or dangerous conditions on the rental property. And, the agreement should also contain the specific details on your procedures for handling complaint and repair requests.
    3. Specify your restrictions on tenant repairs and alterations without permission.
  7. Entry to rental property: To avoid tenant claims of illegal entry or violation of privacy rights, the lease or rental agreement should clarify a landlord’s legal right of access to the property for making repairs, or if the tenant is moving out, for showing it to prospective tenants, by stating how much advance notice will be provided to the tenant before entering.
  8. Restrictions on tenant illegal activity: There should be an explicit clause in the lease or rental agreement that prohibits residents from indulging in disruptive behaviour, such as excessive noise, including illegal activities e.g. drug dealing. This will help avoid trouble from other tenants, prevent property damage, and limit exposure to lawsuits from residents and neighbours.
  9. Pets: A rental agreement should be clear on the subject of a landlord’s No Pets or Pets Allowed policy. If, pets are allowed, identify any special restrictions, such as, a limit on the size or number of pets, or that the tenant will keep the yard free of doggie poop.
  10. Other Restrictions: Ensure the lease or rental agreement complies with all relevant laws, including rent control ordinances, health and safety codes, occupancy rules, and anti-discrimination laws. Comply with all state laws, such as, setting security deposit limits, notice requirements for entering rental property, tenant subletting or additional roommates rights, rules for changing or ending a tenancy, and specific disclosure requirements, such as, past flooding or lead / asbestos in the rental unit.

Other legal restrictions, such as, limits on the type of home business that a tenant can run from the rental property, including important rules and regulation governing parking and common area usage should also be specifically mentioned in the lease or rental agreement.

Legal Mistakes Landlords Should Avoid Making

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Before renting out property, landlords must make it a point to understand federal and state laws to avoid legal hassles, later on.

To be a successful landlord, one requires a lot of practical, business know-how, and of course, familiarity with the rental market. As well, since federal and state laws closely regulate almost every aspect of the residential or commercial rental business, if a landlord is not aware of the rules, he / she could land himself / herself into legal trouble. A landlord should always keep in mind the following, when renting out his / her property.

  1. Under no circumstances should generic or outdated lease forms be used. While, every landlord knows it is important to have a written lease or rental agreement, using the wrong form could spell trouble. Avoid the ‘standard’ forms sold everywhere, as likely as not; they do not comply with state laws. By using the wrong form, you could end up short-cutting tenant rights, which could lead to finding yourself at the losing end of a lawsuit. Then too, sometimes some standard forms will actually impose greater obligations and restrictions on a landlord than the state’s law dictates!
  2. Be careful not to ask the wrong questions while screening prospective tenants. Tenant screening is the most important aspect of a rental business and poor tenant selection can result in unwanted headaches, such as, non-payment of rent, trashed or damaged property, perhaps, worse. However, questioning rental applicants, even in the most well-meaning manner about a disability, or whether a couple is married, could be termed as illegal forms of discrimination. If, the applicant is rejected, even though the rejection has nothing to do with questions asked, a disappointed tenant may use them to lodge a complaint with the fair housing watchdogs.
  3. Do not set policies that discriminate against families with young children. Remember, discriminating against families and excluding them, because children cause more wear and tear, and a ‘mature, quiet’ environment is preferable is absolutely illegal. And, while a landlord is allowed to limit the number of residents in a unit i.e. two occupants per bedroom, in most situations, the same standard cannot be applied in a different manner, to prevent renting out to a family with young children. This type of discrimination could also end up with a trip to a lawyer’s office, to deal with a fair housing complaint.
  4. Avoid making promises that can’t be delivered on. Don’t stretch the merits and benefits of your property. While, it may be necessary to do so in a competitive rental market, try to understand your enthusiastic promises can become binding, if an applicant’s decision to rent your property is based on them. For example, if you assured the applicant your rental property provided parking space, satellite service, or a new paint job; ensure that is exactly what they get. If, after renting a tenant does not get what has been promised, he / she is legally entitled to break the lease, or even sue for the difference between, the services promised and those delivered.
  5. Avoid excessive late fee charges. While, late fee charges are powerful enough to motivate tenants to pay rent on time, don’t cross the line, by setting fees that have little bearing on actual damages suffered, when a tenant pays rent late. Far better a modest fee that reflects your true damages, while dealing with chronic late-payers by serving them with pay-or-quit notices.
  6. Do not violate a tenant’s rights to privacy. Despite, detailed state rules as to when, for what reasons, and with how much notice a landlord may enter a tenant’s rental unit, many landlords still stop by unannounced and ask to check things over, or perform on-the-spot repair, or show the place to prospective tenants. Repeated tenant privacy violations excuses a tenant from being bound or obligated to your rental lease terms, and if he / she goes to court, the result could be the court asking the landlord to pay damages in currency.
  7. Do not use security deposits for any other unrelated purpose. The basic rule is that security deposits are only to be used to cover damage beyond wear and tear, necessary cleaning of the rental unit, and unpaid rent. Beyond that, they cannot be used to cover appliance upgrades, cosmetic improvements and other refurbishing.
  8. Do not ignore dangerous conditions in and around the rental unit. In every state, landlords are required to offer and maintain housing that meets basic health and safety standards, in compliance with state and local building codes, health ordinances, and landlord-tenant laws. Failure to take care of important repairs, deal with environmental hazards, or respond when your property has become an easy target for criminals, can result in tenants breaking the lease, or withholding the rent, or making repairs themselves, deducting the expense from the rent. Failing to make a rental property secure in the face of repeated on-site crime can result in court orders to compensate the tenant-victim, in the face of another crime.
  9. If, a tenant breaks the lease, do not make the mistake of keeping the security deposit. Landlords tend to keep the entire security deposit in the event a tenant breaks his / her lease and leaves early. They reason a tenant’s bad behaviour is adequate justification for doing so, and that ultimately it is needed to cover the rent. This is illegal in most states, as a landlord is required to take reasonably prompt action to re-rent, crediting any new rent toward the tenant’s obligation for the rest of the lease.
  10. Ensure the security deposit is returned as the law demands. Use security deposits properly, and return them according to state laws. Many states have deadlines for landlords to itemise their use of the deposit and to return the balance.