Warranty of Habitability

Originally, a landlord had no duty to present the rental in a habitable condition, or to make any repairs to keep it in a habitable condition. The only obligations the landlord had were the terms and conditions in the lease contract. This is still true of commercial tenancies, but in residential tenancies a warranty of habitability is implied as a matter of law.

The seminal court case is Javins v First National Realty Corp decided in 1970.  The District of Columbia Circuit Court of Appeals held that a warranty of habitability is implied in residential leases, and breach of the warranty of habitability is a defense in an eviction.

The Court reasoned that local housing codes require a warranty to be implied. The Court also noted that society had changed since the old common law rules first evolved.

In agrarian England and early America where these rules first developed, the primary purpose of a lease was use of the land for agriculture. If a peasant erected a thatched hut on the land, that was secondary to agrarian purposes. In modern life, a residential tenant seeks a habitable dwelling, not land to farm.

The Court also noted that the modern trend was to treat a lease as contract as well as a conveyance of land. The Court pointed to implied warranties in other consumer contracts, such as sales contracts.

The Javins Court found that landlords and tenants in urban housing markets have unequal bargaining power, preventing tenants from bargaining for an express covenant of habitability.

After the Javins decision, states began adopting an implied warranty of habitability through court decisions and/or legislation. Now in the US a warranty of habitability rule is essentially universal. The standards the landlord must meet to satisfy the implied warranty, and the remedies available to the tenant upon breach of the implied warranty vary among the different states.

If you have questions about the implied warranty of habitability, you should contact a lawyer in your jurisdiction.

Rent Control Coming to Washington?

There is a widely-held consensus among economists—of both the “left” and “right” of economic thought—that rent control is bad economic policy. Consider these observations of economist Paul Krugman:

The analysis of rent control is among the best-understood issues in all of economics, and among economists, anyway—one of the least controversial.  In 1992 a poll of the American Economic Association found 93 percent of its members agreeing that “a ceiling on rents reduced the quality and quantity of housing.” Almost every freshman-level textbook contains a case study on rent control, using its known adverse side effects to illustrate the principles of supply and demand.[1]

Wherever rent control has been implemented, adverse side effects have followed.  Rents of uncontrolled apartments go sky-high. Builders fear extension of rent controls and simply stop building new apartments in favor of condominiums, office buildings, and other structures not subject to rent control, exacerbating the shortage of affordable housing. Bitter relationships ensue between landlords and tenants as, with cash flow from rents capped, landlords fail to maintain properties, and seek ever more clever ways to curtail rent controls and get rid of tenants. This leads to a proliferation of government regulations.  Economists consider all these adverse side effects of rent control “predictable”, according to Paul Krugman.

Some economists go even further.  Rent control is “the most effective technique presently known to destroy a city–except for bombing,” according to a celebrated quote from a prominent Swedish economist.[2]

Even leaders of communist countries have become disenchanted with rent control. “The Americans couldn’t destroy Hanoi, but we destroyed our city by very low rents and controls. We realized that it was stupid and that we must change policy,” Vietnamese revolutionary, diplomat, and politician Nguyen Co Thach has said in a well known quote.[3]

More than nine out of ten economists agree rent control is bad policy.  Yet in Washington state a movement is afoot to impose rent controls. Rent control by Washington cities has long been banned under state law.[4]  New legislative proposals would lift this ban as to residential rentals.[5] Seattle is widely expected to pass rent control if the state-wide ban is lifted.

______________________________

[1] Paul Krugman, Reckonings; A Rent Affair, New York Times (June 7, 2000).

[2] Assar Lindbeck, The Political Economy of the New Left (New York: Harper and Row, 1972); cited in Sven Rydenfelt, “The Rise, Fall and Revival of Swedish Rent Control,” in Rent Control: Myths and Realities, Walter Block and Edgar Olsen, eds. (Vancouver: The Fraser Institute, 1981), pp. 213, 230.

[3] See, for example, Britain Goes Wild as Ed Miliband Proposes Rent Controls, Forbes April 27, 2015;

[4] RCW 35.21.830.

[5] HB 1082; SB 5286.

Trump Administration Threatens Marijuana Businesses

The Trump administration recently announced that it is rolling back Obama administration polices that had tolerated marijuana businesses where legal under state law.  Federal prosecutors are now free to enforce federal laws against marijuana, even if legal under local state law.  [1]

The sale and use of marijuana has remained illegal under federal law, despite legalization under state law in several states. Marijuana businesses and the landlords who rent space to them are subject to criminal penalties including imprisonment. Landlords may lose their property in civil forfeiture actions.

Landlords who knowingly rent to marijuana businesses do so at their peril. It is best to consult with an attorney before taking actions that may place your freedom and your property in jeopardy.

 

[1] See this CNN page, for example. http://www.cnn.com/2018/01/04/politics/jeff-sessions-cole-memo/index.html

$100,000 in Attorney Fees Awarded in Service Animal Dispute

A Florida condominium resident who suffered from post-traumatic stress disorder (PTSD) was awarded $5,000 in damages by a jury and over $100,000 in attorney fees by the court.[1]

The condominium association had a twenty-five pound weight restriction for dogs.

Ajit Bhogaita, a resident, acquired a dog that exceeded the weight limit. Bhogaita suffered from PTSD after a sexual assault he endured during his military service.

No medical professional initially prescribed the dog.  Nevertheless, Bhogaita’s symptoms improved and he began to rely on the dog to help him manage his condition.  He kept the dog for two years without incident.

About two years later the condominium association demanded Bhogaita remove the dog. Bhogaita then obtained and produced letters from his psychiatrist explaining that the dog was an emotional support animal.

Twice the Association demanded more information, and Bhogaita responded by producing another letter from his psychiatrist. After the third such letter, Bhogaita did not respond for over two months. The Association then sent yet another request for information to include a sworn statement from the psychiatrist providing “specific facts” about Bhogaita’s condition and what individualized training the dog had received.

The Association’s request for information gave a deadline for a response, informed Bhogaita that the notice served as a formal demand to remove the dog if the deadline were not met, threatened legal action, and admonished Bhogaita to “PLEASE GOVERN YOURSELF ACCORDINGLY.” [2]

Bhogaita filed a complaint with the United States Department of Housing and Urban Development (“HUD”) and the Florida Commission on Human Relations. The Commission issued findings of cause against the Association.

Bhogaita then brought a lawsuit. After a two-day trial the jury returned a verdict in favor of Bhogaita and awarded $5,000 in damages. The court granted over $100,000 in attorney fees. The Association appealed. [3]

The appellate court noted that once a housing provider is made aware of a request for a reasonable accommodation, the provider has an opportunity to make a final determination, which includes the ability to conduct a meaningful review.

An undue delay in responding to a reasonable accommodation request may constitute a failure to accommodate.  For more than six months, the Association had demanded additional information, sometimes making repeat demands for information that had already been provided, and then threatened legal action.  The Court ruled that the Association committed undue delay in investigating the request for accommodation.

In most cases, an individual’s medical records or detailed information about the nature of a person’s disability is not necessary to determine whether an accommodation is required.

The Association demanded information regarding Bhogaita’s treatment, medications, and

the number of counseling sessions he attended per week; details about how the diagnosis was made; whether the condition was permanent or temporary; and details of the prescribed treatment.  The Court found that the Association’s demands for extraneous information were not necessary for it to make a determination of the reasonableness and necessity of the request for an accommodation.

The verdict and attorney fee award were upheld on appeal.

 

[1] The condominium resident was not a tenant, but that has no bearing on the legal issues discussed. The same analysis would apply to a tenant.

[2] Emphasis in original.

[3] Bhogaita v. Altamonte Heights Condominium Ass’n, Inc., 765 F.3d 1277 (2014).

Property Damaged By Tenants – What Should You Do?

Sadly, it is not unusual for tenants facing eviction to take ‘revenge’ (or to recoup what they see as their losses) by damaging your property or stealing things like appliances. Obviously this is not a situation in which any landlord wishes to find themselves. Tenant-inflicted damage (especially if willful and malicious) can cost thousands of dollars to set right – not only in the actual rep air costs, but in lost rent while the repairs are taking place. Such things can put a struggling landlord into serious financial straits. However, there may be ways in which you can get some of your money back, and there may be ways to turn this nasty situation around. Here are the steps you should take if your property has been damaged by a tenant:

Record Everything

It is more than worth photographing or videoing the property in detail, making meticulous records of all damages. Ideally, you will have photographed the state of the property before the commencement of the tenancy (and will thus be able to compare ‘before’ and ‘after’) – but don’t worry if you haven’t. It is still useful to have a photographic and/or video record of the damage, and will help greatly with any ensuing investigation or court proceedings.

Tell The Police

It’s not often that the police make any actual arrests in the case of tenants damaging properties – but they may still issue you with a police report number, which is very much needed if you’re going to sue your tenants or claim the damage against your insurance. If your tenants have stolen appliances or anything else of yours that is valuable, the police may decide that they have grounds to make an arrest, in which case you can decide whether or not to press charges. Should it transpire that criminal activity has been occurring on the property, and if there is evidence of this, it is more likely that the police will take action against the tenants than if they’ve simply caused damage. Drug dealing or preparation within the property is a common reason for police to arrest former tenants on the landlord’s information – but you need to be able to present evidence of this to the police before they will take any serious action. However, even if the police don’t make any arrests, it’s still helpful from an insurance point of view to have informed them, and potentially to have had them assess the damage.

Contact Your Insurers

Depending on what kind of cover you have for your property, you may well find that your insurers are able to cover much of the cost of repairs. Getting reimbursed for rent lost while repairs are occurring is trickier, but not impossible depending upon your insurer and the status of the case. Your insurer is likely to want to see your photos of the damage, plus any police reports on the case. Most insurers who deal specifically with landlords will be sympathetic to you. However, you may have a battle on your hands in some cases, so it’s wise to be as organized, thorough, and meticulous as you can when presenting your case to the insurers.

Be Sensible With The Security Deposit

Whatever your tenants have done to your property, you still have to abide by the law when it comes to the security deposit your tenant left behind. If you use any or all of the deposit to pay for damages, you must present an itemized receipt to them for having done so. The precise ins and outs of landlord/tenant law varies from state to state, so it’s wise to familiarize yourself with your duties and responsibilities in this area. No matter how angry you are at the state of your property, withholding the security deposit or failing to fulfil your legal obligations will not help matters at all!

Decide Whether Or Not To Sue

On occasion, the best way to get justice and to recoup your losses is to take your former tenants to court. Sometimes, however, the costs of doing this exceed the costs of repairing your property. You may decide that the principle of getting justice is worth the extra costs, or you may decide to cut your losses and work on getting your property back into a reasonable condition. This is entirely up to you. The small claims court, however, is available for situations like this!

Evicting a Family Member

In many jurisdictions the typical expedited eviction process is not available to evict a family member. In some jurisdictions, rather than evicting a family member through the unlawful detainer process – which is the expedited eviction process applicable to landlord-tenant relationships – the family member can only be evicted through an ejectment action, which is slower and more expensive.[1]

This rule has been applied to fired erstwhile employees[2], and to buyers in possession in real property sales.[3]

Check with an attorney in your location for information about eviction laws in your state.

 


[1] See, for example: Rosentiel v. Rosentiel, 20 A.D.2d 71; Minors v. Tyler, 137 Misc.2d 505.

[2] Turner v. White, 20 Wn. App. 290, 579 P.2d 410(1978).

[3] Bar K Land Co. v. Webb, 72 Wn. App. 380, 864 P.2d 435 (1993).

Looking For Honesty Is The Best Policy

Looking For Honesty Is The Best Policy

The vast majority of those in rented accommodation are good tenants who pay their rent on time and never cause their landlords any unnecessary trouble. Unfortunately however sometimes a good tenant can go bad and what was a happy, mutually beneficial relationship breaks down with it. On other occasions the tenant was just bad to start with and the tenure of their stay was wrought with problems from start to finish. Unfortunately, evicting a problem tenant is not always the end of the matter. If the damage they have done goes beyond what can be covered by their security deposit, landlords may well find themselves out of pocket and have trouble finding someone new to live in the property. Relationships with neighbors and the wider neighborhood may also be adversely affected. It is better, therefore, to look for the warning signs before the lease is agreed.

The Importance of Good Faith

In America, the law provides us with a safety net but it does not control our lives. Consequently it is possible to have a tenant who lives entirely within legal boundaries but is still a liability to deal with. A tenant who performs only the bare minimum that the law requires cannot be said to be acting with honesty and good faith. They will be a frustration to deal with while they pay their rent, but can be far worse when things go wrong. They will try every trick in the book to make your life as difficult as possible, whilst giving you as little room for recourse as they can.

For example, most leases do not permit the use of illegal drugs on the property, and current usage can be a reason for rejecting an application. The reason that certain substances are prohibited is that their consumption has a deleterious effect on society itself. Dealing with an unstable heroin addict or even an irresponsible marijuana smoker is every landlord’s nightmare. The spirit of the law is the desire to maintain and orderly, workable society, but this can be subverted by a disingenuous person. There are plenty of legally available substances that have a narcotic effect if ingested. These so-called ‘legal highs’ can be just as dangerous to the user as illegal drugs and cause just as many problems for their landlord, especially as they are much less likely to acknowledge the problem and seek appropriate help.

Avoiding Evasiveness

Prevention is always better than a cure, and when deciding whether to agree a lease with a new tenant, it is sensible to check their background. Asking for references is a good start, but as they can be relatively easy to fake, conducting an interview is always worth the effort. Prepare you questions in advance and consider how to interpret their answers. The key quality to look for is honesty. A person who has had trouble in the past but is up-front about it is far less likely to cause you problems than someone who tries to shift responsibility for their own mistakes.

This does not mean you should be suspicious of a blemish-less record, most people have never given trouble and never will. What you should be wary of is evasiveness or shiftiness. Hard times can befall even the most blameless person. When they do, what you want are tenants who when facing difficulties paying their rent or who damage your property by accident, let you know at the earliest opportunity. This allows you to mitigate any losses you incur, process insurance claims easily, and helps to maintain a positive, low-stress relationship. Tenants who promise to pay the rent on time and make excuses for failure or who hide damage until they have vacated are far more trouble to deal with!

Ultimately, honesty is the barometer by which you can decide whether to cut a tenant some slack. Someone who lies to you to protect themselves is likely to do so again and again, until they have normalized what would have been unacceptable behavior and made themselves impossible to remove. Even an honest tenant with an unstable life is better, provided they keep you up to speed with it, and help to manage the problems it causes. With time and luck they will get their lives back on track and become the best kind of tenant; honest and trouble-free!

Join the Forum discussion on this post

When to Evict?

When To Evict? How New Landlords Can Know When To Start Eviction Proceedings

All landlords would happily go their whole lives without having to evict any of their tenants. When eviction proceedings are called for, it means that something has obviously gone very wrong in the agreement. Making the decision to evict can be a very difficult process for landlords, no one wants to throw people out on the streets, but despite your best efforts as a landlord, so tenants don’t keep their side of the bargain and you are then well within your rights to obtain a court order to get them out. Remember, you are running a business and it could seriously damage your business and ultimately destroy it if you let the triumvirate of bad tenants, debtors, destroyers and violators, run roughshod over you.

Debtors

The most common reason why you would want to get someone out of your property is that they have not been paying their rent. Depending on your state, they will usually have a few days leeway, between 3 to 5 days normally, to pay up before you can start proceedings. You can, at your own discretion allow them a little longer if you know they are usually good payers and are creditworthy. Most tenants either forget to pay their rent once or twice, or struggle for a month or two, and a good landlord will be able to tell the difference between absent-mindedness and true delinquency. However, don’t take ignorance as an excuse, there is no need any more for tenants not to know your and their rights, and a good landlord will also be firm with their tenants and say that if they cannot afford the rent every month then maybe they should look for somewhere cheaper.

Destroyers

Whereas with people missing their rental payment you can often make a subjective assessment of the situation and see that some people don’t mean to miss their payments and will only be a day or two late, you should take a much firmer stance against those that wilfully destroy property. Property destruction can be difficult to assess unless you have regular access to the property. Make sure you check up on any house or apartment that you think might be at risk on a regular basis, remembering to give the tenants the required notice of you visiting their home (usually at least 24 hours). This is a good reason to cultivate good relationships with all your tenants. If one think that another might be causing damage, they are more likely to tell a friendly landlord than a difficult one. There is almost never a good reason for property damage and unless the tenant immediately called the problem to your attention and offered recompense, you are completely within your rights to start eviction proceedings, probably the sooner the better.

Violators

Most other evictions will come as the result of violations of the tenancy agreement, and that will be down to exactly what you have prohibited in your properties. These might be fairly minor such as the rules for pets in the property, noise restrictions or restrictions on the number of guests allowed to stay and for how long. If you have put limitations such as these in your tenancy agreements then you should enforce them, otherwise they are useless. Every tenant should look over the agreement before signing and if their 20-pound Chihuahua is actually a 70-pound German Shepard then they should think twice rather than trying to pull the wool over your eyes. Again, the course of action you take is at your discretion, but any court will uphold an eviction order if the tenant has blatantly broken the rules. Though you might overlook the odd violation you have to seriously consider that this might lead to further breaking of the rules, and can have a negative effect on other tenants, especially concerning such things as noise pollution. If you are seen as too much of a soft touch, it can encourage people to flaunt the agreement, leading to more serious issues within your community. Any illegal activity, such as recreational narcotics use, may be immediate grounds for eviction and you should start the process without delay.

It is important to remember that however annoying and terrible a tenant may be, you can and should never evict them yourselves. You have entered into a legal agreement with these people, and it can only be dealt with by the courts. Do not change locks or throw people’s belongings into the street as it is you that will be hauled up in front of a judge rather than them. Contact professionals and contact the courts and start proceedings as soon as possible and then let the law deal with the debtors, destroyers and violators while you concentrate on your decent tenants.

The Fair Credit Reporting Act and Landlord-Tenant Law

The federal Fair Credit Reporting Act (FCRA) went into effect in 1971.  It regulates consumer reporting agencies (CRAs), the use of reports, and furnishers of information to CRAs. Some states have similar statutes.[1]

  1. CRAs

CRAs must utilize reasonable procedures to ensure maximum possible accuracy of information and must conduct an investigation after a consumer disputes the accuracy of information.

Violation may lead to damages and attorney fees if negligent, and also statutory damages and attorney fees if willful.

  1. Use of Reports

Users of consumer reports must give written notice of adverse action. The notice must contain

  • A statement of the adverse action taken;
  • The name, address, and phone number of the CRA that supplied the report;
  • A statement that the CRA did not make the decision and cannot supply the reasons for the adverse action;
  • A notice that, upon a request by the consumer made within sixty days, the consumer may obtain a free copy of his or her consumer report;
  • Disclosure of the consumer’s right to dispute with the CRA the accuracy or completeness of the report; and
  • The credit score used by the person in taking the adverse action and related information.

 

Denial of a lease based on a consumer report is an adverse action.[2]

 

The 7th Circuit Court of Appeals has held there is no private cause of action for violations of adverse action duties under federal law.[3]  However, state law must also be considered.



[1] See, for example, chapter 19.182 RCW (Washington).

[2] 15 U.S.C. §1681a(k)(1)(B)(iv); Cotto v. Jenney, 721 F.Supp. 5 (D. Mass. 1989); RCW 19.182.010(1)(a)(iv); RCW 59.18.257.

[3] Perry v. First Nat. Bank, 459 F.3d 816 (7th Cir. 2006).

Landlord Duty to Deliver Possession

“English” Rule

The covenant to deliver possession is enforceable against the landlord when a third party wrongfully remains in possession at the time the tenant is entitled to possession. The landlord’s obligation is to ensure actual possession, not a mere right of possession.

This is the long-established rule in England and is followed by a number of American jurisdictions.[1]

“American” Rule

The landlord need only convey the right of possession, not actual possession – unless there is an express lease covenant to the contrary.  This rule was developed historically in US jurisdictions but has been largely modified or abandoned, particularly as to residential tenancies.

Many states have adopted the Uniform Residential Landlord-Tenant Act.[2]  The Uniform Residential Landlord-Tenant Act in its current form has provisions expressly creating a duty to deliver actual possession.

Although statutes in many states are based on this model act, the model and the various statutes in jurisdictions that adopted it evolve separately and differ more and more over time. The Washington Residential Landlord-Tenant Act does not have these provisions.


[1] American Law of Landlord and Tenant, Robert S. Schoshinski.