The Landlord - Tenant Relationship. Presented by Title Stream

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1 The Landlord - Tenant Relationship Presented by Title Stream

2 I. Overview of Lease Law Lease Defined Essential Elements of a Lease

3 What is a Lease? A lease is an agreement which legally binds both the lessor (landlord) and lessee (tenant) to the terms for a period of time Obligation is heritable

4 Essential Elements of a Lease 1. Agreement 2. Thing 3. Rent 4. Term

5 Agreement Agreement may be made orally or in writing The lease may be oral or written Oral agreements may be impossible to prove in court should a dispute arise Parties must intend to be bound

6 The Thing All things, corporeal or incorporeal, that are susceptible of ownership may be the object of a lease, except those that cannot be used without being destroyed by that very use, or those the lease of which is prohibited by law La Civ Code Art. 2673

7 The Thing Description of the thing should be sufficient to identify the property between the parties

8 The Rent Agreement as to rent is essential The rent may consist of money, commodities, fruits, services, or other performances sufficient to support an onerous contract Rent should be in proportion to the property s value

9 The Term Fixed Term Lease: Duration is a fixed period of time Cannot exceed ninety-nine (99) years Lease terminates at a designated date or upon the occurrence of a designated event Expires at the time agreed upon without need for notice unless agreed otherwise

10 The Term Indeterminate Term: If no duration stated, it is presumed to be month-to-month The tenant or the landlord may terminate or change the terms of the lease with ten (10) days written notice before the end of the month Lease continues into next month without 10 days notice

11 The Term Tacit Reconduction If the landlord allows the tenant to remain for one week after expiration of the term, the lease is continued as an indefinite term lease on a month-to-month basis All other terms and conditions of the lease continue 10 day notice to vacate by tenant is required Any change to the terms of the lease must be made with ten (10) days written notice prior to the end of the monthly period

12 Expiration of Term Automatic Renewal Clauses: Can renew the lease for another term equal to the original term Either the tenant or the landlord can avoid automatic renewal by giving written notice of his/her intent to vacate Most leases require written notice for termination at least 30 days prior to the current lease s expiration

13 Expiration of Term Renewal Clauses: Other leases contain automatic month-tomonth renewal clauses All lease terms will remain the same Any alteration to these terms must be made with the proper notice as provided for in the lease

14 II. Obligations & Rights of Lessor Delivery of premises Condition of premises Maintenance and Repair Guarantee Possession Refrain from making alterations Pay taxes and other charges

15 Delivery of Premises Deliver the property to the tenant at the agreed time and in good condition for its leased purpose What if the prior tenant is not out? What if property is unavailable due to delayed repairs?

16 Condition of Premises Warranty against vices and defects Can be waived Waiver must be clear and unequivocal Waiver not effective if landlord knew / should have known prior to the lease and did not remedy Warranty does not extend to 3 rd parties Landlord can also transfer responsibility for the condition of the leased premises to the tenant

17 Condition of Premises Landlord can also assign responsibility for the condition of the leased premises to the tenant Assignment not effective if landlord knew / should have known of vice / defect prior to the lease and did not remedy

18 Maintenance and Repairs Must maintain the property in a suitable condition for the purpose for which it was leased Responsibility for maintenance can be shifted to the tenant by mutual agreement

19 Peaceful Possession Cannot be waived by agreement Can enter with reasonable notice for repairs Place for rent / for sale signs and show property with reasonable notice What about acts of 3 rd parties?

20 Peaceful Possession What if property is sold? Purchase subject to lease Assignment / assumption agreement with buyer

21 Registry of Leases 3 rd parties are not bound by the terms of an unrecorded lease, even if they have actual knowledge This includes third party buyers and other lessees Tenant can protect himself from eviction by third party by recording lease

22 Registry of Leases Extract / Memorandum of Lease Signed by both lessee and lessor Property description Date, term and provisions for any extensions or renewals Reference to any options, rights of first refusal If a sublease, reference to recorded primary lease

23 Refrain from Making Alterations Alterations only allowed if they can t be postponed May give rise to rent reduction or cancellation of lease

24 Taxes, Insurance and Other Charges Responsibility can be shifted to the tenant by mutual agreement Gross Lease vs. Net Lease

25 III. Obligations & Rights of the Lessee Pay Rent Return property in the same condition Refrain from altering the premises Allow landlord to make necessary repairs Use property for the leased purpose Inform landlord of damage/needed repairs

26 Pay Rent To pay the rent in accordance with the lease terms Late fees are permissible if agreed upon in advance The law sets no specific amount for late fees, but unreasonably high fees can be contested

27 Condition of the Property Return the property in same condition, normal wear and tear excluded Good to fill out and sign Landlord / Tenant Checklist prior to executing lease Good to have the landlord do a final inspection one week before termination

28 Alterations Alterations require landlord s written consent At termination of the lease, tenant must return property to its former condition If tenant does not remove: Pay tenant for the cost of improvements for enhanced value, whichever is less; or Landlord may demand removal by tenant within a reasonable time

29 Alterations cont d If tenant fails to remove the improvements after demand, landlord may remove the improvements at tenant s cost acquire the improvements without any obligation to reimburse the tenant

30 Allow Necessary Repairs If the repair cannot be postponed until the end of the lease, then the tenant must allow the landlord to make these repairs, even if they are an inconvenience. However, a reduction in rent may be possible. La Civ Code Art. 2693

31 Use Property for Leased Purpose Lease will generally spell out permitted or prohibited uses Any misuse could give rise to dissolution of the lease or breach claim

32 Inform Landlord of Damage or Necessary Repairs The landlord must maintain the property by making all necessary repairs La Civ Code Art The tenant is responsible for the damages caused by his fault, the fault of his guests, and those exceeding normal wear and tear La Civ Code Art 2692

33 Maintenance & Repairs All requests for repairs should be made in writing and/or in the presence of witnesses Tenants are strongly advised to keep a record of all maintenance problems, repairs and failures to repair

34 Maintenance & Repairs If landlord refuses to repair, Tenant can: File complaint with Attorney General s Consumer Protection Section If structural or hazardous defect, tenant can complain to local building officials Terminate the lease Requires substantial proof --- seek legal advice first Repair and deduct

35 Repair & Deduct Louisiana law allows tenants to pay for necessary repairs and to deduct the repair cost from the rent due or demand immediate reimbursement from the landlord.

36 Repair & Deduct In order to deduct repair costs, tenants must be able to prove each of the following: 1. The repairs were necessary. 2. The landlord failed to act within a reasonable time after being notified. 3. The price paid was reasonable.

37 Repair & Deduct The tenant should keep copies of estimates, letters, receipts and other documents which support his/her case

38 Co-Signing a Lease Either or both tenants can be held responsible for: Entire amount of rent Damages Other breaches

39 IV. Dissolution of Leases Expiration of Term Loss of Thing Leased Failure of Parties to fulfill obligations

40 Expiration of Term Lease expires at the time agreed upon without need for notice unless agreed otherwise

41 Loss of the Thing Leased If the leased thing is lost or totally destroyed, without the fault of either party, or if it is expropriated, the lease terminates and neither party owes damages to the other La Civ Code Art. 2714

42 Failure of Parties to Fulfill Obligations When a party to the lease fails to perform his obligations under the lease or under this Title, the other party may obtain dissolution of the lease " La Civ Code Art. 2719

43 Failure of Lessor to Fulfill Obligations If a serious problem is ignored, then the tenant may terminate the lease Terminating the lease requires substantial proof of failure to perform obligations Terminating a lease without sufficient cause will result in serious financial and legal consequences

44 Failure of Lessee to Fulfill Obligations When lessee defaults, the lessor has the following remedies available: Sue to cancel the lease Sue to enforce the lease

45 Suit to Cancel Lease Lease is terminated Landlord is returned possession Landlord may recover accrued rentals due Waives right to collect future rentals

46 Suit to Enforce Lease Lease remains in place and tenant retains right of occupancy for remainder of lease term Recover accrued rentals Recover future accelerated rentals if lease contains an acceleration clause

47 Abandonment by Tenant Landlord has the right to take possession of the premises and relet the premises to a 3 rd party without canceling the lease or relieving the lessee of his obligations Rent collected applies towards tenant s lease obligation subject to a charge off for landlord s costs If landlord reenters premises for own benefit, he effectively cancels the lease

48 Past Due Rent A landlord may file a separate suit to collect past due rent and may seize personal items, such as furniture and appliances, found in the property If the landlord is unable to locate the tenant, the landlord may get a court order to seize personal property in the property without posting a bond or other security Best to consult an attorney

49 V. Eviction Notice & Procedure Notice Sheriff s Right to Execute Notice Tenant Damages for Wrongful Eviction

50 Notice to Vacate PROPER PROCEDURE MUST BE STRICTLY FOLLOWED Landlord must first deliver a written Notice to Vacate to the tenant giving tenant five (5) days to vacate, not counting weekends or holidays 5 day notice is often waived in the lease

51 Notice to Vacate cont d If the tenant is not at home, notice may be posted on the door of the leased property This has the same effect as delivering the notice to the tenant personally If a tenant fails to vacate within five (5) days of notice (or immediately if waived), landlord can begin eviction proceedings

52 Eviction Proceeding Landlord files petition with the justice of the peace or city court, and petition is served upon Tenant Trial is heard three (3) days after the tenant has been served Tenant is ordered to appear in court and state why he/she should not be ordered to vacate If the justice of the peace finds the landlord entitled to evict the tenant, or if the tenant fails to appear at the trial, then the court will rule in favor of the landlord Tenant must vacate the property within twenty-four (24) hours

53 Sheriff s Right to Execute Notice If the tenant fails to vacate the premises within twenty four (24) hours after the judgment of eviction, then the court must issue a warrant commanding the local sheriff, constable, or marshal to seize the leased property, remove the noncomplying tenant, and return possession of the leased thing to the landlord

54 Tenant Damages for Wrongful Eviction An attorney is recommended if you believe you have legally valid reasons to contest the eviction and/or wish to preserve your rights to appeal the judge s or justice s decision A tenant who has appeared at the trial and argued a defense can file a suspensive appeal within twenty-four (24) hours of judgment of eviction. If the landlord locks the tenant out of the leased property, puts the tenant s possessions on the street or otherwise takes the law into his/her own hands, the landlord may be liable for damages for wrongful eviction

55 VI. Security Deposits The Rent Deposit Return Act (La. R.S. 9: 3251 et seq.)

56 Rent Deposit Return Act The Rent Deposit Return Act requires the landlord to return deposits within thirty (30) days after the end of the lease, provided the tenant fulfilled the lease obligations and left a forwarding address

57 Rent Deposit Return Act If any part of the deposit is retained, the landlord must send the tenant an itemized list of deductions and any remaining balance within thirty (30) days If the landlord fails to return the deposit or to send the itemized list within thirty (30), the tenant may sue to recover the deposit

58 Rent Deposit Return Act If landlord fails to account for the deposit within thirty (30) days of a tenant s written request for a refund, then the law allows the tenant to recover actual damages (amount of damages made) or $ whichever is greater The judge may also award court costs and attorney fees to the person who wins the suit The law does not permit the tenant to give up, or waive, this right in a lease

59 Rent Deposit Return Act Tenants should request deposit refunds by certified mail, return receipt requested, on the last day of tenancy Tenant should give a forwarding address in the letter for his/her records

60 Deposits vs. Fees (Pets as an Example) Money held as a pet deposit is recoverable under the Rent Deposit Return Act. Tenants should apply for refunds of pet deposits in writing on the final day of occupancy, the same way they would request security or damage deposits. Money held as a pet fee or charge is not covered by the Act and may or may not be recoverable according to the terms of the lease.

61 VII. Tenant Damage Claims Warranty of Habitability Peaceable Possession Unfair Trade Practices Act Federal Fair Debt Collection Practices Act Federal Fair Credit Reporting Act Invasion of Privacy & Trespass Property Damage

62 VIII. Equal / Fair Housing State / Federal Laws Prohibited Bases of Discrimination Examples of Discriminatory Practices

63 Louisiana Equal Housing Opportunity Act Prohibits discrimination in housing and related activities based on a person s: Familial status Race Ethnicity Sex Handicap status Color Religion Nationality

64 Louisiana Equal Housing Opportunity Act Attorney General s office conducts investigation upon receipt of complaint AG s office will also assist landlords with understanding their obligations to tenants

65 Federal Fair Housing Act Administered through HUD through Office of Fair Housing and Equal Opportunity (FHEO) Same prohibitions as LA Equal Housing Opportunity Act Applies to landlords leasing space in their primary residence if the residence contains living quarters for three or more families living independently of each other

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