Today’s Question? My tenant’s utilities have been turned off. Can I re-take possession of the unit?

Retaking possession of a property can be a tricky situation.  Landlords who wish to  take possession when it is not clear that the tenant has vacated must weigh the risk of  a lawsuit for unlawful eviction with the lost time and income that can result from delay.  If you are considering retaking possession of your property because of abandonment of the premises, you should look at all the circumstances before taking any steps to remove your tenant’s belongings. The safest way to protect yourself from being sued for an unlawful eviction is to use the court system to retake possession, but sometimes landlords want to avoid using the courts because it can be time consuming.

If you are faced with the decision of whether to retake possession of your property it is probably a good idea to document your reasoning. Ordinarily, a landlord has no right to retake possession of the property just because a tenant has failed to maintain the utilities.  However,  disconnected utilities can be evidence that the tenant has abandoned the residence.  If you find that the utilities in your property have been disconnected, it may make sense to visit the property and talk to your tenant.  If your tenant is still actively living there, you probably do not have grounds to retake possession.  But, if you find that all of the utilities are shut off and the furniture has been removed, it may be appropriate to retake possession without resort to litigation.

If you decide to retake the possession because of abandonment, it is a good idea to document your reasoning. One way to do that would be to send your tenant a dated letter that explains that you have noticed that the property appears to be vacant and that any possessions left in the property will be discarded after 14 days.  The letter might also explain the reasons you have come to those conclusions and give the tenant a way to contact you to collect leftover possessions if you have changed the locks.

Remember, if you decide to retake possession without filing an eviction there is no way to ensure that your tenant will not sue you for unlawful eviction, but an ounce of prevention is always worth a pound of cure.

• Understand the fee structure: It goes without saying that you should consider the cost of the service in relation to the services offered.  Often managment companies charge 10% or more of the rental income on your properties.  You can also expect additional fees for the initial rental and maintenance costs.  Review the contract to ensure that you are not surprised by the cost of services.
• Review the rental companies proposed lease and termination notices: Ultimately, you are responsible if your manager is using outdated leases and termination notices.  Problems with these forms can cause you to lose precious time and money if your eviction proceeding is delayed or dismissed because of inadequate forms.
• Review their fair housing policies: All property managers should know that there are federal anti-discrimination laws that apply in housing rentals.  If a potential manager cannot answer your questions about the laws or openly makes discriminatory statements in your presence, you may want to think twice.
• Take a look at other properties the potential manager is currently handling.  Do they look well kept?  Is the yard maintained?  If the other properties in the manager’s portfolio look run down, you may want to look elsewhere. 
• How does the manager talk about the tenants? If a potential manager sees the tenants as the enemy, you may have future problems.  In my experience, when people have healthy relationships with the landlord or property manager, they tend to cooperate and pay the rent.  When the relationship breaks down or the tenant feels disrespected, it becomes harder to collect. 
• What are the manager’s policies with regard to scheduled maintenance and inspections?  It is a good practice to have quarterly walk throughs of your property to ensure that they are maintained.  While you are there, you can see the properties yourself and talk to your tenants if there are things that need repairing.  This is also a way to verify that the mainenance you were charged for was done in a satisfactory manner.

Under existing law, the provider of certain goods and services may require a landlord to pay the delinquent bill of a tenant for goods and services provided to the tenant of the landlord. This bill would prohibit the provider of goods and services from requiring a landlord or property owner to pay the delinquent bill of a tenant for goods or services provided to the tenant if the account for the service is in the name of the tenant.

A BILL
TO BE ENTITLED
AN ACTRelating to certain goods and services provided a tenant; to prohibit the provider of goods or services from requiring a landlord or property owner to pay the delinquent bill of a tenant for goods or services provided to the tenant if the account for the service is in the name of the tenant.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. The provider of goods or services may not require a landlord or property owner to pay the delinquent bill of a tenant for goods or services provided to the tenant of the landlord if the account for the goods or services is in the name of the tenant. In addition, the provider of goods or services shall not have a lien on the property for any goods or services provided in the name of the tenant.

Section 2. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

1. Know how much notice you must give the tenant. Some notice periods, like notice of termination after expiration of the lease, can often be found in your lease.  Others are found in the Code of Alabama.  For example, in a residential lease you must give a seven day notice for non-payment of rent but any other breach of the lease requires a 14 day notice.  If there is no breach of the lease, the notice could be as little as 30 days or more depending on the wording of your lease.
2. Make sure your notice spells out the reason for the termination and the address of the property. The notice should explain exactly what default must be cured, so that the tenant has an opportunity to fix the problem.  In the event that the tenant is unable to fix the problem, the judge will also need to know that the notice was served on the right person, at the right address.  If the addresses do not match, you may have to submit an affidavit to the Court explaining which version of the address is correct.
3. Give the notice the right way. In Alabama, typically a landlord must give notice by handing the tenant the notice personally or posting the notice on the door and mailing another copy to the tenant.  Certified mail alone will probably not be enough to give proper notice.
4. Make sure you keep a copy of the notice and any certified mail receipts. It is common for tenants to deny receiving notice. Make sure you can prove that you followed the law.
   
5. Wait until the entire notice period expires before taking any action. If you do not give the tenant the entire notice period, there is a good chance your eviction will fail.  Be patient, or you may have to start over at the beginning.

A potential client called an attorney after he had obtained a judgment in District Court against a tenant and was scheduled to go before the Court to prove damages the next day.  The attorney got the call at 8:00 p.m.  the night before the hearing and first asked a few basic details about the case.  The first thing the attorney learned was that the damages were close to $45,000 and the unlawful detainer was filed in a court  that could only award him $10,000. The attorney advised the potential client that he needed to retain an attorney who would ask for a transfer to the correct court so that he could get a judgment for the full amount owed.  The potential client declined to do so.

A few weeks later, the attorney gets a call from the same potential client.  The client had decided not to pursue the transfer to the other court and as a result only had a $10,000 judgment.  The client was seeking to collect the judgment with a garnishment.  The potential client was calling because he had received a letter from the court that said his garnishment was being dismissed because he had not answered the defendant’s claim of exemption in a timely fashion.  He was ultimately unable to collect any of the money that was owed.

Some landlords must retain an attorney.

If you rental property company is incorporated or a limited liability company you must hire an attorney to file your eviction in Alabama. In Alabama, individuals always have the right to represent themselves in Court but only licensed attorneys may make appearances in court on behalf of others.  Corporations and limited liability companies are considered legal “people”  distinct from their officers, shareholders and/or members. That is because the purpose of these entities is to shield those people from personal liability for the debts or responsibilities of the business. As a result, Officers, shareholders and members of the business may not represent the business in Court and risk having their case dismissed or criminal prosecution for unauthorized practice of law if they attempt to file an eviction on a company’s behalf.

Sole proprietorship landlords may represent themselves.

If you own your properties in your own name, you are not legally required to retain an attorney to file an eviction.  When deciding whether to retain an attorney, you should consider whether you have the expertise and resources to get the result you desire in Court.   A knowledgeable attorney will know the eviction law and the rules of civil procedure that apply to all Court cases.  If you choose to represent yourself you are presumed to know the rules and the law. The Court may not make any allowances or waive the rules for parties that choose to represent themselves. Failure to read or understand the laws could cause your case to be dismissed or result in a less than optimal outcome.

In an unlawful detainer, time is money.  The longer a tenant stays in the property without paying, the more money the landlord loses.  A knowledgeable attorney can reduce the amount of time your case lingers in the court.  First, an attorney will have access to a process server who knows the service rules and can get your tenant served quickly.  If you file the unlawful detainer yourself, you will need to wait for the sheriff or the constable to serve the documents for you.  Depending on the county the service can take weeks. Second, evictions are a multi-step process with deadlines that must be met. Most reputable attorneys will have access to the Court’s online file system, Alacourt.  The system allows attorneys to see whether a tenant has responded and take immediate action when necessary.  In most cases, attorneys can also electronically file the pleadings in your case which also saves time.

Finally, one advantages of hiring an attorney is that if you win, the tenant can be ordered to reimburse the landlord’s attorney fee.  So in many cases, hiring an attorney can  give you peace of mind, speed the process and be an economical solution for the landlord.

Today’s Topic: The Tenant’s Right to Sue the Landlord

As we have discussed before, Alabama tenants now have more ammunition if the landlord tenant relationship should result in a legal dispute.  Most landlords and tenants are aware that the landlord can initiate legal action in the form of an unlawful detainer (eviction).  What is probably less well known is that the tenant can assert claims against the landlord in the same legal action.  If those claims are asserted and proven by the tenant the result could be that the landlord is unable to evict the tenant and/or could owe the tenant money. These counterclaims do not, however relieve tenants who remain in possession from the duty to pay rent. Therefore, if the tenant wishes to assert a counterclaim for breach of the lease, retaliation or failure to provide the minimum requirements under the landlord tenant law, he or she must pay the rent due to the landlord into the court as it becomes due.

§ 35-9A-405. Counterclaims for action for possession or rent.

(a) In an action for possession or in an action for rent when the tenant is in possession, the tenant may counterclaim for any amount the tenant may recover under the rental agreement or this chapter. It is in the court’s discretion whether the tenant is to remain in possession. The tenant shall pay into court rent accrued and thereafter accruing as it comes due. The court shall determine the amount due to each party. The party to whom a net amount is owed shall be paid first from the money paid into court, and the balance by the other party. If no rent remains due after application of this section, judgment shall be entered for the tenant in the action for possession. If the defense or counterclaim by the tenant is without merit and is not raised in good faith, the landlord may recover reasonable attorney’s fees.

(b) In an action for rent when the tenant is not in possession, the tenant may counterclaim as provided in subsection (a) but is not required to pay any rent into court.

Today’s Topic: The Tenant’s Remedies for the Landlord’s Failure to Provide the Essentials

Yesterday we talked about the tenant’s remedies for the landlord’s breach of the the lease. Today we focus on the tenant’s remedies for failure to comply with the minimum standards set forth in the landlord tenant law. Until the enactment of the new landlord tenant law, landlords could rent apartments on an as-is basis. There was no requirement that the landlord provide many of the things that most people would consider basic necessities. As a result it was not unheard of for some landlords to rent dwellings that did not have heat or had problems with infestation.

Since the new laws have taken effect, the landlord has a legal duty to provide essential services like heat, running water and access to utilities. If the landlord does not provide those services the tenant may give the landlord a written notification of the problems. If the landlord does not cure the defect within 14 days, the tenant may choose to:

• Vacate the unit with a full refund of the deposit and unearned rent; or
• Recover from the landlord for the decrease in value caused by the defect.

§ 35-9A-404. Wrongful failure to make available heat, water, hot water, or essential services.

(a) The landlord is not responsible for the payment of utility services unless agreed in the lease.

(b) If contrary to the rental agreement or Section 35-9A-204, after receiving notice of the breach from the tenant, the landlord willfully or negligently fails to promptly make available heat, running water, hot water, electric, gas, or other essential service, the tenant may:

(1) send a written notice specifying the date of termination not less than 14 days after receipt of notice and upon vacation of the premises, the rental agreement shall be rightfully terminated without further obligation or penalty. If the rental agreement is terminated pursuant to this section, the landlord shall return all security recoverable by the tenant under Section 35-9A-201 and all unearned prepaid rent; or

(2) recover damages based upon the diminution in the fair rental value of the dwelling unit.

(c) If the tenant proceeds under this section, the tenant may not proceed under Section 35-9A-401 as to that breach.

(d) Rights of the tenant under this section do not arise if the condition was caused by the wilful or negligent act or omission of the tenant, a member of the tenant’s family, a licensee or other person on the premises with the tenant’s consent.

Today’s Topic: The Tenant’s Remedies for the Landlord’s Breach of the Lease

Yesterday we talked about the landlord’s right to impose rules that the tenant’s must follow. Today we will focus on the tenant’s options when the landlord does not cure a default of the terms of the lease. At its core a residential lease is nothing more than a contract. Since a lease is a contract both the landlord and the tenant have a duty to perform. If the landlord fails to perform one or more of the duties required under the contract, the new landlord tenant law provides that the tenant may send the landlord a termination letter advising of the nature of breach. The letter must give the landlord at least 14 days to fix the problems. If the landlord does not fix the problems within the time specified by the tenant’s letter and the problem was not caused by the tenant’s negligence or intentional acts, the tenant may terminate the lease. If the tenant terminates for the landlord’s failure to comply with the lease, the tenant is due to receive the full security deposit and the remainder of any unused rent.

§ 35-9A-401. Noncompliance by the landlord — In general.

(a) Except as provided in this chapter, if there is a material noncompliance by the landlord with the rental agreement or a noncompliance with Section 35-9A-204 materially affecting health and safety, the tenant may deliver a written notice to the landlord specifying the acts and omissions constituting the breach and that the rental agreement will terminate upon a date not less than 14 days after receipt of the notice if the breach is not remedied within that period, and the rental agreement shall terminate as provided in the notice subject to the following:

(1) If the breach is remediable by repairs or the payment of damages or otherwise and the landlord adequately remedies the breach before the date specified in the notice, the rental agreement shall not terminate by reason of the breach.

(2) The tenant may not terminate for a condition caused by the deliberate or negligent act or omission of the tenant, a member of the tenant’s family, a licensee, or other person on the premises with the tenant’s consent.

(b) Except as provided in this chapter, the tenant may recover actual damages and obtain injunctive relief for noncompliance by the landlord with the rental agreement or Section 35-9A-204. If the landlord’s noncompliance is in bad faith, the tenant may recover reasonable attorney’s fees.

(c) The remedy provided in subsection (b) is in addition to any right of the tenant arising under subsection (a).

(d) If the rental agreement is terminated pursuant to this section, the landlord shall return all security recoverable by the tenant under Section 35-9A-201 and all unearned prepaid rent.

Today’s Topic: The Landlord’s RIght to Establish Rules

In my last post I mentioned that it is a good idea for landlords to incorporate a set of rules into their leases. Today, we will talk about the types of things that can and should be included in those rules. The main goal of any set of tenant rules is to provide the landlord a basis to terminate a tenant’s lease in the event that the tenants behavior is detrimental to the property owner’s interests. The new landlord tenant law does allow landlords to create rules that tenants must follow as long as those rules are reasonably related to the landlords legitimate goals. The landlord may even adopt new rules during a lease year if the new rules are presented to the tenant and the tenant consents in writing. The rules must be clear enough that the tenant will understand what conduct is prohibited and should not be retroactive or applied in a way that that treats similarly situated tenants differently.

When drafting the rules, landlords should consider what types of behaviors would increase the potential for property damage, public safety concerns and conflict between neighboring tenants. Once those behaviors are identified, the landlord should draft rules that address those concerns. Some possible subjects of rules could include:

• Notification of extended absences
• Notification of all occupants who will be living on the premisis
• Guidelines on care and misuse of the unit, its appliances, fixtures and/or plumbing
• Responsibility for damage caused by occupants and guests
• Prohibitions against drug use
• Prohibitions against illegal activity on the premises
• Noise levels
• Maintenance of utilities

§ 35-9A-302. Rules and regulations.

(a) “Rules” or “Regulations” pertaining to a residential lease are defined as policies of the landlord affecting the maintenance, operation, or governance of the common areas of the premises, or concerning the general conduct of tenants in their use and enjoyment of the leased premises.

(b) A landlord, from time to time, may adopt a rule or regulation. It is enforceable against the tenant only if:

(1) its purpose is to promote the convenience, safety, or welfare of the tenants in the premises, preserve the landlord’s property from abusive use, or make a fair distribution of services and facilities held out for the tenants generally;

(2) it is reasonably related to the purpose of which it is adopted;

(3) it applies to all tenants in the premises in a fair manner;

(4) it is sufficiently explicit in its prohibition, direction, or limitation of the tenant’s conduct to fairly inform the tenant of what the tenant must or must not do to comply;

(5) it is not for the purpose of evading the obligations of the landlord; and

(6) the tenant has notice of it at the time the tenant enters into the rental agreement, or when it is adopted.

(c) If a rule or regulation is adopted after the tenant enters into the rental agreement that works a substantial modification of the tenant’s use of the leased premises, it is not valid unless the tenant consents to it in writing. In the case of any variance between the lease and a rule or regulation, the lease prevails.

Today’s Topic: The Tenant’s Responsibilities

For the last few days we have focused on things that landlords must do for tenants. Today we will focus on some of the things that tenants must do to ensure that they are in compliance with the new law.

The new law essentially imposes upon tenants a duty to treat the property in a way that would not diminish its value. To that end, the law requires the tenant to:

• Keep the apartment reasonably clean. This includes taking out the trash as well as general cleaning that would be necessary to ensure that the property is not damaged.
• Refrain from deliberate or negligent behavior that would damage the property. Examples of this might be allowing large objects to be put down the drains. This could also include removing or destroying the fixtures in the unit without the owner’s permission.
• Refrain from using the apartment in such a way that would be a safety hazard. This might include interfering with the wiring or using the stove as a heating unit or other risky behavior that could cause damage to the unit.
• Refrain from behaviors that would be disruptive to the neighbors.

Although having these provisions in the law is extremely helpful, it is a good idea to include a set of rules in the lease or as a signed exhibit to the lease so that each tenant understands the landlord’s expectations. Landlords should review the property rules with each tenant at the signing of the lease and make sure that the rules are signed by the tenant in case there is a future legal dispute.

§ 35-9A-301. Tenant to maintain dwelling unit.

A tenant shall:

(1) comply with all obligations primarily imposed upon tenants by applicable provisions of building and housing codes materially affecting health and safety;

(2) keep that part of the premises that the tenant occupies and uses as clean and safe as the condition of the premises permit;

(3) dispose from the dwelling unit all ashes, garbage, rubbish, and other waste in a clean and safe manner;

(4) keep all plumbing fixtures in the dwelling unit or used by the tenant as clear as their condition permits;

(5) use in a reasonable manner all electrical, plumbing, sanitary, heating, ventilating, air-conditioning, and other facilities and appliances including elevators in the premises;

(6) not deliberately or negligently destroy, deface, damage, impair, or remove any part of the premises; or knowingly, recklessly, or negligently permit any person to do so; and

(7) conduct himself or herself and require other persons on the premises with the tenant’s consent to conduct themselves in a manner that will not disturb the neighbors’ peaceful enjoyment of the premises.