• 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the rental companies proposed lease and termination notices: Ultimately, you are responsible if your manager is using outdated leases and termination notices.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.

Today’s Topic: What Happens in Case of Catastrophe?

Accidents happen. Unfortunately for property owners and tenants, sometimes when accidents happen the property may be damaged in such a way that it cannot be used for its intended purpose. Perhaps the problem is water, smoke or fire damage that requires significant repair. It could also be that a storm causes significant damage to the property that makes it no longer suitable for occupants. As long as the reason for the damage is not the tenant’s negligence or intentional acts, the landlord tenant act makes clear that there is no duty on the part of the tenant to remain in, or pay rent for, a property that is severely damaged. If the unit is destroyed or severely damaged the tenant can choose to vacate the property by giving the landlord notice of termination of the lease or stay in the undamaged portion of the property at a rental rate that is reduced by an amount that will compensate for the loss of use of the damaged portion of the property.

§ 35-9A-406. Fire or casualty damage.

(a) If the dwelling unit or premises are damaged or destroyed by fire or casualty not caused by the tenant to an extent that enjoyment of the dwelling unit is substantially impaired, the tenant may:

(1) immediately vacate the premises and notify the landlord in writing within 14 days thereafter of the tenant’s intention to terminate the rental agreement, in which case the rental agreement terminates as of the date of vacating; or

(2) if continued occupancy is lawful, vacate any part of the dwelling unit rendered unusable by the fire or casualty, in which case the tenant’s liability for rent is reduced in proportion to the diminution in the fair rental value of the dwelling unit.

(b) If the rental agreement is terminated pursuant to this section, the landlord shall return all security recoverable under Section 35-9A-201 and all unearned prepaid rent. Accounting for rent in the event of termination or apportionment shall be made as of the date of the fire or casualty.

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.