ARTICLE

Lober Dobson & Desai LLC
Attorneys at Law
Atlanta | Macon

Email: info@lddlawyers.com

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.

 

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