Lober Dobson & Desai LLC
Attorneys at Law
Atlanta | Macon
LANDLORD / TENANT LAW - PART I
The landlord – tenant relationship can often be of a bittersweet nature. Aside
from providing tenants with some basic services and maintaining the property, a landlord
is in the business of making money. What happens when the tenant stops paying or fails
to comply with lease terms? Is the landlord stuck with a bad tenant because the lease
contract is for a year, three years or twenty years? Does the landlord have some options?
We will address these issues from a landlord’s perspective this month and focus
on the tenant rights in next month’s issue.
Like in many other areas of business, the levels of experience of landlords greatly
vary. There are some that have multiple properties and have had a great deal of experience
with tenant issues. On the other hand, there are several new landlords who get into the
business simply because they thought they could make some extra money on the side without
doing too much extra work. Regardless of the experience level of landlords, they soon
find out that being a landlord has its ups and downs, but that they are in a much better
position if their lease agreements are solid and they understand their rights.
A common concern for both commercial and residential landlords is the landlord’s
rights in a dispossessory action. If the tenant does not agree to vacate the premises
and return his or her keys to the landlord upon termination of the lease for whatever
reason, the landlord may need to initiate a dispossessory proceeding. Although, filing
the action with the court takes some time and money, it is the best way to ensure that
the landlord regains his or her rights to the premises. The landlord should carefully
follow the procedural instructions of the county where the dispossessory action is being
filed because failure to do so may leave the landlord without any rights. For example,
accepting a payment for the full rent amount due plus reimbursement for any court filing
fees from the tenant will result in the landlord waiving his or her right to dispossessory.
Thus, if the landlord really wants to evict the tenant, the landlord should be very careful
about accepting money from the tenant prior to the dispossessory hearing.
Commercial landlords also have to worry about a few more particular issues that are
likely to cause them damage if they are not careful when drafting their leases and if
they do not adhere to the local statutes governing them. When addressing accelerated
lease payments, landlords should be careful to classify them as liquidated damages and
not as a penalty for terminating the lease or for defaulting on the lease. Many courts
do not allow for such penalties to tenants, but will allow liquidated damages if they
comply with state law standards. Additionally, commercial landlords should also be particular
in describing assets that are owned by them on the leased premises, that costs of collection
of past due rent including attorneys fees that can be collected from the tenant, venue
for legal action if necessary, what will constitute default under the lease and specifics
addressing the landlord’s rights in the event of such default.
The residential landlord has different issues to be weary of since this type of arrangement
involves individuals instead of businesses. For the residential lease, landlords should
be extremely careful about following their state statutes, both when preparing their
leases as well as during their lease term with the tenant. From the moment a tenant occupies
the premises to the time they leave or are evicted, the landlord will need to pay heed
to particular nuances of landlord-tenant law. For example, many states require that the
landlord give the tenant a chance to make a thorough inspection of the premises prior
to moving in and require that a list of all defects on the premises be noted and signed
by the respective parties. Also, some states require that landlords hold a tenant’s
security deposit in a special escrow account and notify the tenant as to the location
of that money. Some states also limit the amount of the security deposit that may be
held by a landlord. Furthermore, landlords are required to give tenants notice when they
default on their leases and notice before evicting tenants. If the specifics of these
state by state rules are not complied with, the landlord runs the risk of not being able
to bring any claim against the tenant for damage to the property including and cannot
even withhold the tenant’s security deposit. If that were not enough of a deterrent,
in some states, the landlord can be liable for three times the amount of the security
deposit for using a tenant’s security deposit to pay for damage to the premises
without complying with some of the provisions noted above.
Regardless of whether the landlord owns residential or commercial property and regardless
of how long they have been in the business, they should be careful to follow the specific
rules of their state and county when preparing leases and managing tenants. They should
seek assistance of a local attorney when drafting leases to make sure that they are protected
and also when beginning a dispossessory action to ensure that the correct steps are taken
to re-obtain possession of the leased premises.