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The Case of the Walking Tenants – by Zachary Lawrence, JD

Posted on 01. Jun, 2014 by in all

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I’ve been walking lately. Some people call it “power walking”.  It’s when you walk like you’re in a hurry, for as long as you can handle the brisk pace.  It’s really a great exercise – I sweat and don’t worry about the wear and tear on my knees. After my “power walks”, I feel great.  It’s a “win-win” situation.

Tenants often do their own version of a “power walk”.  They breach the terms of their lease by vacating the premises prior to the termination date on their lease, often without prior notification to the landlord.

I was hired to mediate a dispute between tenants that vacated their unit, without prior notice and before the termination date of their lease.  This appears to be (and in fact was) a blatant breach of contract by the tenant.

Notwithstanding the tenant’s breach, the landlord has a duty to make reasonable efforts to re-let the unit. The landlord also has the right to file a legal action against the vacating tenants for possession and/or rents due under their lease.

The tenants are also liable for any damages to the unit, which are over and above “normal wear and tear.”

My client (the landlord) was not a happy camper.  She felt violated and wanted compensation from these tenants. The vacating tenants hired an attorney who claimed that it was the landlord who breached a duty … the duty to maintain a habitable unit. What a surprise!

This breach, he claimed, allowed the tenants to vacate the unit without notice and to be legally excused from their leasehold obligations.  Their lawyer also wanted the landlord to return the entire security deposit. As I often do with my power walks, I had to stop and catch my breath.

The law requires a landlord to maintain his units in a habitable condition.  The law also requires that he make reasonable repairs within a reasonable time frame to those units which require maintenance.   The tenant, however, must also give the landlord reasonable advanced notice of the need for these repairs and allow him a reasonable amount of time to make them.

These tenants claim that they gave such notice and that the landlord ignored their requests for maintenance.  My client denies this.  Now here’s a lawyer who has something genuine to say – “In a court of law, the burden of proof would be on both landlord and tenant,” says eviction attorney and talk show host Dennis P. Block. “In order for these tenants to be legally excused from their lease and receive a full refund of their security deposit, they must prove that their unit was in fact uninhabitable, that they notified the landlord of this condition, that the landlord failed to act within a reasonable time, and that they left the unit without causing any damages.

“In order for the landlord to keep the full amount of the security deposit and collect for unpaid rent, she must prove that she maintained this unit in a habitable condition during their tenancy and that the costs for making repairs and re-letting this unit exceeded the amount of the security deposit,” says Block.

This is a classic case of a landlord being asked to weigh the costs of possible legal action versus settling out of court. In other words, the landlord must “pick his poison”.

As everyone knows, lawyers and trials aren’t cheap.  As everyone also knows, the prevailing party in a legal action usually is often awarded attorneys fees. The question here is not one of right or wrong, but what is the most efficient and cost effective way to deal with a bad situation.

Lawyers get paid for their time.  Their billing clock starts when you call them or send them an e-mail. They are not your therapist or friend.  Your misery is their billable hour.

In situations like this, have a pocket calculator handy.  Ask yourself how much it will cost you to chase the tenant for the monies owed vs. the legal fees spent on chasing that money.

In this case, the tenant was “demanding” the return of their $900.00 security deposit.  The monthly rent for this unit was also $900.00.  As the tenant had vacated without paying the last month’s rent, the landlord has already lost $900.00 plus the cost of repairs  (in this case $500.00) plus the rent lost while the unit remains vacant, which will be at least another month, or $900.00. Add those amounts to your lawyer’s retainer and /or hourly fee.

Most lawyers I know want a $5,000.00 retainer and charge $450.00 per hour.  These amounts are just the beginning.  Should the case move forward, so will the process of “discovery” – that endless, costly stream of subpoenas, interrogatories and exchange of documents. Let the games begin. Like in a game of “chicken”, the tenants have put these same numbers to paper and are betting that the landlord will be the one to blink.

In this case, my client kept meticulous records of the maintenance history on this unit. The landlord clearly had satisfied his duty to maintain a habitable unit.  My client had a very strong case and would likely have prevailed in court. So what now?  Is it more important to be “right”, or to simply do the right thing?  And…what is the right thing?  If we’ve learned anything over the years, we have learned that there are no certainties in a court of law.

At the end of your litigation day, you may win or lose, but the lawyers always win. I overheard one lawyer say “Clients go to jail, lawyers go to lunch”.

It takes courage for a landlord to step back, “read the tea leaves” and make a decision which is economically and emotionally sound.  My client and I elected to settle without “selling out”.  As this was a rent controlled unit, it became “de-controlled” upon the tenant’s departure. This allowed her to raise the rents to market levels.

Game over – gotta go.  I’ll be out walking.

Zachary Lawrence JD is the owner of Parkside Property Management and Affordable Landlord Consulting.  For management or consultation services, Zachary Lawrence can be reached at (310) 636- 1200 or park806@aol.com.