ARTICLE

Lober Dobson & Desai LLC
Attorneys at Law
Atlanta | Macon

Email: info@lddlawyers.com

LANDLORD / TENANT LAW - PART II

Last month, we looked at the different issues that cause the landlord-tenant relationship to become problematic – from the landlord’s perspective. This month, we will take a look at the some critical issues that tenants face. Whether the tenant is a college student or a large corporation, leases can be quite complicated and unless you as a tenant have a good grasp on what you are looking for, the lease agreements appear to be just a great deal of verbiage. Something to keep in mind when reviewing either type of lease is that it was likely prepared by an attorney hired by the landlord, or at the very least prepared by the landlord himself. Regardless of who prepared it, it will usually be favorable to the landlord’s interests rather than the tenants.

There are two main categories of tenants: residential and commercial. These two classes of tenants often have extremely different leases and different concerns. While some of their concerns may be the same, the two types of leases are treated very differently by the law.

The residential tenant is most concerned with issues like:

  1. Who will fix the plumbing or heater if it needs repair?

  2. What if I want to sublet my apartment?

  3. What happened to my security deposit?

As a residential tenant, you may not be looking for a very permanent commitment, but for the time that you are bound by the lease agreement, you should know what your responsibilities are as opposed to the landlords’. Pay special attention to who is responsible for repairs. Make sure your lease clearly states who will repair problems with heat, water, sewer, etc.

Also, look at the parts of the lease that talk about whether you as a tenant have the right to sublet. The landlord may try to discourage you from subletting by adding on extra fees and landlord approval before you can sublet your leased space. There may also be hefty penalties if you sublet without notifying the landlord. Subletting may be a good option if you are a college student going home for the summer or are moving in the middle of your lease, but you may still be on the hook if the person subletting does not pay his rent.

Finally, make sure you know where your security deposit is going and under what circumstances the entire amount will not be returned to you. In many states, the landlord is required to notify you as to where your money is being held, often times in a separate account. In many instances, that money cannot be touched unless the landlord provides you with a checklist at the beginning of your lease where you approve the condition of the premises and mark anything that you believe is damaged or in need of repair and provides you with a list of defects at the end of your lease. If you do not receive the full amount of your security deposit back and you believe you are entitled to it, you should look at the landlord-tenant laws in your state to find out the procedure for getting your deposit back or and/or contact a local attorney for assistance. Very often tenants assume that the landlord is entitled to keep the security deposit resulting in tenants foregoing money that they are entitled to.

On the other hand, a commercial tenant is more concerned with:

  1. How much will I have to pay to terminate my lease in case my business doesn’t go as well as I hope?

  2. What if a new landlord buys out the retail space I am renting? Can he kick me out?

  3. What happens if I don’t have enough money to pay my rent?

As a commercial tenant, you are more concerned with the nuances of the lease that will affect your bottom line. Because there is always the risk of your business not doing as well as you had projected, you want to make sure that you know what getting out of your lease entails. There is often an acceleration clause built into leases meaning that you will owe rent for the remainder of your lease period if you terminate early. That lease period could be several years!

The commercial tenant should also be concerned about asking another “what if…” question. What if the landlord sells the shopping center or strip mall to someone else? What will happen to my lease? This is a very valid question and too often leases do not have the subordination, nondisturbance and attornment clauses that they should. These clauses will protect the tenant’s lease and will require that in the event the landlord assigns the lease to a new landlord, the tenant’s lease will remain under the same terms as prior to the assignment. Without these clauses, what you thought was a 10 year lease may be abruptly terminated by a new landlord.

Finally, going back to the business purpose of the lease, what happens if the commercial tenant does not have enough to pay its rent? Like residential leases, if the tenant does not have enough to pay, the landlord can initiate dispossessory proceedings against the tenant in an effort to evict him and collect past due rent and damages. Check the language of the contract to determine what events will cause you to be in default under the lease, how much notice the landlord has to give you to cure the default and what the landlord is entitled to if you fail to cure the default and the lease terminates.

Irrespective of what type of lease you have, you should always try to keep the communication lines open with the landlord or manager. Addressing the issue is always better than hiding behind the curtain of denial. Finally, like any other contract or agreement, leases are ALWAYS NEGOTIABLE. Do not assume that they landlord will only let you rent the premises if you agree to each and every term in the lease. Negotiate the terms that are troubling to you so that both parties are satisfied. The landlord has an interest to rent the space just as much, if not more, as you have an interest in leasing it.

 

 

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