The Alabama Landlord

Can I Still Charge Termination Penalties?

2012-01-31T07:09:00.000-08:00

This question comes to us from one of the properties that we represent in Shelby County, Alabama:

Question: I served a Notice of Rental Agreement Noncompliance to a tenant that was behind on their rent. The tenant moved out within seven days and we did not file an unlawful detainer action. Can I still charge them termination penalties for failing to fulfill the terms of their lease agreement?

This is an interesting question. As most of you are aware, the language in your Notice of Rental Agreement Noncompliance for nonpayment of rent should include language that states: "Should you fail to cure your default, demand is hereby made upon you to surrender possession of the leased premises by removing all personal property from the leased premises and return the keys to the Landlord."

One of the essential elements of the unlawful detainer statute is that the landlord has demanded possession from the tenant and the tenant has failed to surrender possession to the landlord. Therefore, that language is required in a valid notice. However, tenant's organizations have argued that the landlord is making an "offer of settlement" with that language. The logic tracks as follows: 1) the lease has penalties in place if the tenant "breaches" the lease; 2) the landlord is demanding that the tenant surrender possession; 3) therefore, the tenant is not "breaching" the lease - if he moves out, he is merely complying with the landlord's demand. While it may seem counterintuitive that complying with the requirements of the unlawful detainer statute may waive your right to termination penalties under a lease agreement, this argument has held weight before numerous district court judges if the tenant skips during the seven-day window.

The fix on this is fairly simple: simply add language to your Notice of Rental Agreement Noncompliance Termination that states: "Please note that surrendering the property will not waive the landlord's right to pursue any monetary damages provided for under your lease agreement."

Is your rent drop-box worth it?

2012-01-04T11:16:00.000-08:00

How secure is your drop box? How hard is it to reach the payments inside? In my practice, I get numerous calls from landlords who have drop box break-ins. In a drop box break-in situation it is impossible to disprove the claims of the many tenants who allege deposit of cash payments into the drop box.

If you insist on having a drop box, it is very important that you provide your residents with written procedures regarding the use of the drop box. Specifically, inform the residents that use of the box is optional; that they may use it for their convenience, but that there always is a risk of loss or theft. Rent will not be considered paid until you actually receive their check. And of course, never deposit cash.

Also provide the residents with a physical address where they can personally deliver the rent, not a PO Box, if they prefer not to deposit the rent into the drop box. By not requiring the use of the drop box, there is case law support for the principle that the resident will bear the risk of loss. However, if you mandate the use of a drop box, and fail to provide a physical address for payment, or require payment to be made to a PO Box, case law dictates that the risk of loss transfers to you upon their placement in the drop box, or in the mail.

On a final note, make sure that your drop box has a prominent notice stating that the tenant is using it at his own risk.

Final Video

2011-12-13T12:26:00.000-08:00

Video 2 of 3

2011-12-13T12:24:00.000-08:00

Please excuse the lack of technological ability. :)

The "Sarahviction" - Video One of Three

2011-12-13T12:20:00.001-08:00

If you are seeing this video, you have been sent here by my office regarding the "negotiated pay and stay".

Bed Bugs and Fair Housing

2011-10-14T07:41:00.000-07:00

An apartment owner was recently walking a prospective resident through his community when an awkward topic came up. The prospect volunteered that he was looking for a new place to live because the place he was living in had bed bugs. The owner, aware of the nature and expense associated with a multi-family bed bug infestation, was immediately concerned about the risk that this prospective resident would pose to his apartment community if he were approved. What if the prospect brought the bugs with him? At the same time, the owner wondered if he could legally turn the prospect down because of the bugs given the requirements of fair housing. Or perhaps the prospect mentioned that he was moving from an apartment community that the owner knew was battling an extensive bed bug infestation.

These are actually fairly common scenarios but, thankfully, bed bugs are not a protected class under Fair Housing. So while it is an awkward situation as long as a landlord applies the same criteria or policy to every prospect with regards to the bugs there should not be any fair housing implications. According to an article published in the National Apartment Association's Units magazine, a policy could be along the lines of, "If we have reasonably credible third-party information that a prospective tenant is coming from environments with a bed bug infestation, we will require that the prospect have all their belongings sanitized (or encased in plastic, or disposed of, etc etc etc) before they will be allowed to take possession of the leased premises."

As bed bugs are becoming more of an issue in our geographical region, I would remind readers that bed bugs are the ultimate communists: they do not care about rent level or "class" of property.

Form Book For Sale

2011-08-18T17:35:00.000-07:00

I used the amendments to the landlord-tenant act as an excuse to update my forms and have assembled them into a book. These forms are Alabama-specific. There are 20 total forms, I believe, including a rental application, residential lease agreement, notice of adverse action under the FCRA, pet lease/pet disclosure, rental insurance addendum, rental access addendum, property management agreement, notice of rental agreement noncompliance, move in/move out inspection form, etc. This form book is available for sale and if you purchase the form book we will also provide you with electronic versions of the forms.

A Landlord's Obligation re: Criminal Activity

2011-07-29T06:58:00.001-07:00

As proof that someone is actually reading this blog (I know, I was shocked as well) I have a question to answer!

Alex, a student at Auburn, requested that I speak to a landlord's obligation to provide protection against the criminal acts of third parties.

Generally under Alabama law "absent a special relationship or circumstances" a person has no duty to protect another person from the criminal activity of third parties. Understanding that landlords are not law enforcement officers, courts are generally reluctant to impose liability for nonfeasance, i.e., failure to act. A limited singular exception arises where the particular criminal conduct is foreseeable. Cases indicate that knowledge of a specific threat is necessary before a court will impose liability - a large volume of crime in the area surrounding the premises themselves will not, by itself, impose a duty to provide protection against a criminal attack. Bailey v. Bruno's, Inc. 551 So.2d 509 (Ala. 1990). You most commonly see the court impose a duty upon a landlord when the landlord has knowledge of a tenant's violent criminal history or behavior and the landlord fails to act. That is why smart practices dictate that a landlord engage in appropriate rental screening and have policies in place regarding applicants with violent criminal histories. Most of the case law out there, including states other than Alabama, focuses specifically on criminal assaults and not property crime. I would be surprised if the court was willing to impose a duty upon a landlord to safeguard the personal property of a tenant (i.e., a car getting broken into). That sort of thing is the province of a rental insurance policy.

2011 Updates to the Landlord-Tenant Act

2011-07-29T06:49:00.000-07:00

The Alabama Residential Landlord and Tenant Act was amended on the last day of the legislative session by a unanimous House vote and a near unanimous Senate Vote. The Governor signed the 2011 amendments on June 21, 2011 and they are set to go into effect on August 1, 2011. These amendments are, by and large, positive for landlords.

I am giving several mini-classes on the updates throughout the month of September. The dates and locations are as follows:

Thursday, August 4, 2011: 2:00PM @ the Lexingtons
Monday, August 8, 2011: 1:00PM @ the Board of Realtors (as part of Property Management A)*
Thursday, August 11, 2011: 9:00AM @ Executive Lodge
Thursday, August 18, 2011: 1:00PM @ the Holiday Inn Downtown (as part of the Apartment Association of North Alabama's Landlord-Tenant Law Summit)*

Unless marked by an asterisk, the cost of the mini-class is $5. That cost just represents a reimbursement for the printing expenses associated with the handouts. Please RSVP to Ambre Twitty at atwitty@sarahtaggart.com at least two business days before the class to ensure that we have sufficient handouts.

Terminating a Month-to-Month Tenancy

2011-05-13T10:25:00.001-07:00

In order to properly terminate a month-to-month tenant’s possessory rights in the leased premises, please note that the requirement is not “thirty days notice” but rather “notice equal to the length of the tenancy”. The tenancy is calculated from when rent is due. That means you have to give the tenant one FULL months’ notice. The tenant remains rent responsible for the time that he is in the leased premises.

For example, if it is May 3, 2011 and you have decided you want to terminate a month-to-month tenancy, the notice that you give would state that the tenant has until June 30, 2011 to vacate - NOT June 3, 2011.

This is an incredibly common mistake made by managers who have been in the industry for years. Part of the confusion results from the fact that attorneys and managers alike call the form a “30 Day Notice”.

Terminating a lease in a premises damages by storms or fire

2011-05-04T08:56:00.001-07:00

This is a timely post, given the recent destruction facing all of Alabama:

If your rental housing is destroyed (or your ability to live there is substantially impaired) due to fire, storm or other casualty damage a tenant may be legally entitled to terminate their lease pursuant to Ala. Code 35-9A-406 which states:

The tenant may vacate the property immediately and send written notice to their landlord of that fact within fourteen days
The lease is thereafter terminated as of the date the tenant vacated the property
The tenant is entitled to the return of their security deposit and any prepaid rent

If only a portion of the home is destroyed:

A tenant may elect to remain in the property, so long as the property is legally livable, and pay rent reduced in proportion to the diminished value based on the date of the event

If your home is damaged by the storms but not rendered unlivable a tenant is legally entitled to request repairs pursuant to Ala. Code 35-9A-401 which states:

The tenant must give the landlord written notice of no less than fourteen days regarding the request for repairs
The tenant’s written notice must include the repairs requested and that the lease will terminate if the repairs are not completed
The tenant is thereafter entitled to the return of their security deposit and any prepaid rent after they have vacated the property
The tenant must continue to pay rent for the time they reside in the property

NOTE: A tenant may seek the remedies under 35-9A-401 and 35-9A-406 only to the extent that the tenant did not cause the damage or is otherwise responsible for it.

Abandonment Issues & Landlords

2011-04-06T14:22:00.000-07:00

Tenant abandonment is a complicated issue and there are no clear answers. The bottom line though, is this: a writ of possession, issued and executed by the sheriff, is ALWAYS the safest option.
First, you need to realize that the law on abandonment of a leasehold is not favorable to a landlord. It turns on the tenant's subjective intent: to-wit, the tenant has to have the mindset "I am abandoning this property and I have no intention of returning".
Very few landlords are mind readers and very few tenants (especially those in default under a lease) provide a landlord with unequivocal evidence of their intent to abandon the leasehold. The tenant's mindset does not have to be reasonable or feasible, it just has to exist. A tenant may argue that he had the intention of turning the utilities back on or that he had the intention of coming back for the "broken down" couch or "discarded trash bags".

In one recent instance, a landlord learned the hard way that some tenants use plastic trash bags to move their personal property.

As I always point out, “There is a big difference between a tenant that has ‘abandoned’ and one that is ‘taking his time moving out’ and just because the landlord may find the conditions of the leasehold uninhabitable does not mean that the tenant shares his standards.”
Landlords, and the Court, are left at looking to the tenant's actions as outward manifestations of their subjective intent. The court will look at a variety of factors in determining the tenant's subjective intent, including: 1) Are the utilities on? 2) What property, if any, is left in the leasehold? 3) Has the tenant surrendered keys? 4) Does the lease contain an abandonment provision?
Short of a tenant returning the keys to the landlord, construing a property as “abandoned” even when factors point towards abandonment is a risky proposition.
Penalties for lockouts and "abandonments" are steep:
• three months' rent for each instance of lock-out,
• plus actual damages if the tenant's belongings are misappropriated or discarded.

I have seen a dramatic spike in lock-out claims in the last six months. Legal Services of North Alabama filed suit against three landlords in the month of February (2011) on behalf of tenants who it could reasonably be argued had abandoned their leaseholds. You should always contact an attorney before construing the property as abandoned, as she may have advice on how to minimize your liability exposure should you decide to retake the property.

Your late fees provision may not be enforceable.

2011-03-18T08:00:00.000-07:00

It has come to my attention that several District Court judges in Madison County have been refusing to enforce certain late fees provisions in residential lease agreements, finding the late fees to be exorbitant and unconscionable, under the case Abb’s Moving Service, Inc. v. Sarah P. Wooldridge, et al, 612 So.2d 449 (Ala. 1993).

Under this Alabama Supreme Court case, judges can refuse to enforce late fees provisions that they find are designed only to “punish” tenants for nonperformance and not reasonably designed to compensate a landlord for an actual monetary damage suffered by the tenant’s default. On a personal note, I disagree with this particular case and believe that it wrongfully infringes on the ability of private parties to structure contractual agreements. I also think that it is distinguishable in the majority of situations in residential leases that present themselves to the district court.

Although the judges in Madison County are not applying a bright-line rule, in my practice I have found that as long as your late fees do not exceed 15 - 20% of the base rent the Court will enforce your late fees provision.

Please note that although this case is the law of the State of Alabama, currently Madison County is the only county of the twelve that I practice in that is citing this precedent and refusing to enforce contractually agreed upon late fees provisions. However, I do not see the judges changing their policy anytime soon. Therefore, I would recommend that you re-work your late fees provision so that it does not exceed 15% of the base rent in any given month if you want late fees to be awarded by the Court in the future. I further recommend that you contact your attorney and request language to insert into the late fees provision of your residential that may circumvent the impact of the Abb’s Moving Service, Inc. case.

Towing a Tenant's Car: Making Sure Your "Abandoned Vehicle" Policy Won't Expose You To Risk

2011-03-08T08:51:00.000-08:00

Question: I have a tenant who has parked an inoperable vehicle in my parking lot. This is a clear violation of his lease agreement and we called the tenant repeatedly about his car and he did nothing. Earlier in the week my courtesy officer “tagged” the car and this morning we had it towed. This afternoon I received a call from Legal Services threatening to sue because I did not follow the “abandoned vehicle towing statute”. Is there really such a thing?

Answer: The relevant state law that applies to this situation is Alabama Code 32-13-4. It states that a car that has an expired license plate or is inoperable in a parking area of an apartment community or other private property that is leased or made available to tenants, residents, and guests is considered “abandoned” after a period of 30 days or more. After that period of time has elapsed, the property manager can post a dated notice in a conspicuous place on the vehicle in question stating that the vehicle has been determined to be abandoned or inoperable and will be removed at the direction of the property owner in seven calendar days from the date of the notice. That notice should include the name and address of the last registered owner of the vehicle and the name and address of the property manager and should also be mailed to the last registered owner of the vehicle. At the expiration of the seven days the property manager can contact a towing company and have the car towed at which point the last registered owner of the vehicle will be responsible for the costs of the tow and any lien the towing service may have on the vehicle. Please note that within 24 hours after removing the abandoned vehicle, the property owner should give written notice to law enforcement that they have removed the vehicle from the property. The property manager is liable to the owner of the motor vehicle only for gross negligence under this statute.

A 'Reasonable' Accommodation

2011-02-08T13:55:00.000-08:00

Fair housing laws require that a landlord permit "reasonable modifications" to a rental unit and make "reasonable accommodations" in rules, policies, practices or service.

An accommodation is some “bending” of a rule so that a handicapped person can live in the rental unit. It can mean changing some rule that is applicable to everyone so as to make its burden less onerous on the handicapped individual. The landlord must make the accommodation if it is reasonable to do so.

Fair housing laws do not define the word “reasonable”. HUD regulations also don’t shed much light, indicating a reasonable accommodation is one that is “feasible and practical”.

Generally, an accommodation is considered "reasonable" if it would: (1) not require a fundamental alteration in the nature of the landlord’s business, and (2) not impose undue financial or administrative burdens on the landlord.

Here are the two classic examples offered by HUD:

Example #1: A blind applicant for rental housing wants to live in a dwelling unit with a seeing eye dog. The building has a no pets policy. The landlord must permit the applicant to live in the apartment with a seeing eye dog, because without the seeing eye dog, the blind person will not have an equal opportunity to use and enjoy a dwelling.

Example #2: A 300 unit apartment complex has 450 parking spaces which are available to tenants and guests, on a first come, first served basis. An applicant is mobility impaired and unable to walk more than a short distance. He requests that a parking space near his unit be reserved for him, so he will not have to walk very far to get to his apartment. The landlord must make this accommodation. Without a reserved space, the individual might be unable to live in the apartment complex at all, or when he has to park in a space far from his unit, might have great difficulty getting from his car to his unit. The accommodation therefore is necessary to afford the applicant an equal opportunity to use and enjoy a dwelling.

A Thanks to Denise Evans!

2010-09-22T11:17:00.001-07:00

I had the opportunity to speak with Denise Evans the other day - www.deniselevans.com - and I wanted to thank her for the wonderful endorsement on her website. Be sure to check it out!

Sarah Taggart on WHNT 19

2010-09-09T12:47:00.000-07:00

Military Orders & Residential Leases

2010-06-28T10:15:00.000-07:00

Termination of Residential Leases. The Service Member’s Relief Act allows individuals to break a lease when they go onto active duty, if the lease was entered into before going onto active duty. Additionally, the act allows a service member to terminate a residential lease entered into while in the military, if the member receives permanent change of station (PCS) orders, or orders to deploy for a period of not less than 90 days.

This protection covers "lease of premises occupied, or intended to be occupied, by a servicemember or a servicemember's dependents for a residential, professional, business, agricultural, or similar purpose."

To break a lease under these provisions, the servicemember must make the request in writing, and must include a copy of their orders (orders placing them on active duty, PCS orders, or deployment orders). The member may deliver the notification by hand, by commercial carrier, or by mail (return receipt requested).

The termination date for a lease that requires monthly rent, the earliest termination date is 30 days after the first date on which the next payment is due, following proper notification of termination of lease. For example, if Sgt John pays his rent on the first of every month, and he notifies his landlord (and gives the landlord a copy of his orders), on the 18th of June, that he wishes to terminate the lease under the provisions of the SCRA, the earliest termination date 1 August (the next rent is due 1 July, and 30 days later is 1 August).

I'm often asked, "What if there are other people on the lease? Who has to make up the rent?" Not the landlord, that's for sure. Also, not the service member. The SCRA is silent in this area. In most states, the burden would likely fall on the remaining roommates. They would either have to make up the military member's share of the rent, or find another roommate. The SCRA gives the military member the right to terminate his/her own portion of the lease early, but the law does not require the landlord to decrease the amount of total rent for the property, nor does the law protect remaining non-military roommates (unless, of course, they are the member's legal dependents).

Landlords & Lockouts

2010-05-20T08:41:00.000-07:00

Five Minute Fact Pattern:

Manager Marta, who is new to property management, lives on-site at an apartment community. At 3:00 in the morning, Social Sam, a “tenant” knocks on her door. Social Sam is obviously intoxicated and has misplaced his keys. Manager Marta lets Social Sam into the apartment that she knows he shares with his girlfriend, Leaseholding Lily. Leaseholding Lily is on vacation this week trying to get away from Social Sam, who she dumped earlier in the day. Unbeknownst to Manager Marta, Social Sam is not a leaseholder and is merely an unauthorized occupant. Social Sam decides, once Manager Marta grants him access, to take his girlfriend’s valuables and leave, never to return again. What did Manager Marta do wrong here?

It is quite obvious what the problem is in this case. Manager Marta failed to see if this person was indeed the tenant on the lease, and the ramifications could be severe. Manager Marta may argue that it was not her fault that the unauthorized person took his roommate’s personal property, as after all they have been living together for quite some time, but the problem remains. Manager Marta allowed an unauthorized occupant, not on the lease, access to the rental premises.

How to avoid this problem: Your first step should be to create a written policy for your company regarding lock outs. All employees who engage in allowing a locked out tenant access should be required to read this policy and sign a statement that they have read it and agree to abide by the policy. No exceptions should ever be made to the policy. Your next step will be to provide the lock out access rules or procedures to the tenant and make this part of the lease, the Community Rules and Regulations, or a separate addendum to which the tenant has clearly agreed.

In the event a tenant is locked out, they need to follow certain procedures for you to even act upon this lock out. They should be required to provide you with 2 forms of government issued identification. This identification should then be brought to the office and compared with the copies of the identification you have in the tenant’s file. Names should match up completely, and a visual examination of the picture ID you have in the file should match up with not only the ID the tenant is showing you, but the tenant himself. Once this match is established to the satisfaction of you or the bleary eyed maintenance tech who was just awakened, the identification provided by the locked out tenant should be copied, notes made on the copy, and the copy of the ID placed in the file. If the tenant cannot provide you with the required ID, the tenant should not be given access. If the tenant cannot provide you the required identification, there is no doubt that the tenant will not be satisfied, and an altercation or argument could ensue. Keep your lock out policy handy in the event the tenant is not able to satisfy your requirement, express regret, and tell him he must hire a locksmith.

Open House

2010-01-13T18:23:00.001-08:00

On January 15, 2010 from 3:00p.m. to 5:00p.m. our office will be having a Ribbon Cutting and Open House in celebration of our new location. Please contact the office at (256) 562 - 1999 x2 if you would like an invitation - I belong to the school of thought that says the more the merrier.

The change in location has been a very difficult transition. I spent nearly four weeks without a functioning phone system, which is makes running any business difficult, but makes running a law firm nearly impossible.

Once the smoke clears from the Ribbon Cutting, more blog entries will appear!

Bed Bugs

2009-11-19T13:20:00.001-08:00

At the request of the Apartment Association of North Alabama, I gave a presentation today on bedbugs in conjunction with Cook's Pest Control. Although we have been remarkably insulated from the wide-spread infestation and resulting litigation that has plagued other geographic regions, I have seen an increase in reported cases amongst my clients and expect this to continue. I have included excerpts from my handout in this blog entry for those of you who were unable to attend.

The bedbug is an insect that lives by hematophagy - feeding on the blood of humans or other warm-blooded hosts. Its name comes from its preferred habitat - mattresses, sofas, and other furniture. Although it is not strictly nocturnal, bedbugs are mainly active at night and, contrary to a popular misconception, bedbugs are visible to the naked eye. Adults can grow to 4mm in length (often compared to apple seeds or lentils) and bedbugs do not move quickly enough to escape the notice of an attentive observer.

Dwellings become infested in a variety of ways - for example, people can acquire bedbugs at hotels and bring them back to their homes in their luggage, or inadvertently bring them home in infested furniture. As most landlords and property managers in the multi-family housing industry realize, bedbugs can travel between units in multi-unit dwellings after being originally brought into the building by one of the above routes. Furthermore, because there are documented reports that bedbugs are able to lie dormant for up to five hundred days, it can be very difficult to trace the source of the infestation to a single responsible party.

There are two potential avenues of liability facing a landlord with a bedbug infestation: statutory and contractual claims, and tort claims. For breach of contract and statutory violation claims, the elements are similar: a recognized obligation and the failure to complete that obligation. As landlords and property owners, you are familiar with tenants breaching their lease agreements by failing to pay rent or complying with statutory duties (such as Ala. Code 35-9A-303’s requirements for landlord-access).

The methods of analysis for claims against a landlord are fundamentally the same. For bedbugs, like all pests, there are three key statutes to consider:

Ala.Code 35-9A-204(a)(2): the landlord shall “make all repairs and do whatever is necessary to put and keep the premises in a habitable condition”;
Ala.Code 35-9A-142: requires that every duty must be performed in “good faith”; and
Ala. Code 35-9A-407: if a landlord negligently or willfully diminishes services to the tenant the tenant may recover possession or terminate the rental agreement and, in either case, recover an amount equal to not more than three months' periodic rent or the actual damages sustained by the tenant, whichever is greater, and reasonable attorney's fees.

The presence of bedbugs has been held, by courts in other jurisdictions, to render the premises uninhabitable and therefore could constitute a violation of Ala. Code 204(a)(2), the penalties for which is actual damages. It is arguable that Ala. Code 407 could also be applied to a situation in which a landlord fails to act when confronted with evidence of a bedbug infestation.

In addition to claims of breach of contract and of statutory duty, there exists an additional, oftentimes more attractive, path to damages - the tort claim. Torts like “negligence”, “fraud”, and “intentional infliction of emotional distress” have been reduced to buzz words in modern parlance, but they have specific elements that must be proven in order to be successful.

Negligence, is the “bread and butter” of tort claims and requires a plaintiff to prove: 1) a duty of care owed by defendant to plaintiff; 2) a breach of that duty; 3) causation (i.e., that the acts or omissions by the defendant were the cause of the plaintiff’s injury); and 4) damages. For example, a tenant wanting to demonstrate that her landlord was “negligent” in allowing her personal property to be infested by bedbugs would have to demonstrate that: 1) the landlord/defendant owed the tenant/plaintiff a duty of care to provide a habitable premise; 2) the landlord/defendant failed to make reasonable efforts to provide the tenant/plaintiff a habitable premise by refusing to pay for remediation efforts; 3) that landlord/defendant’s failure to pay for remediation efforts resulted in the destruction of tenant/plaintiff’s property; and 4) that the property had value.

Misrepresentation and fraud are two aspects of the same offense: presenting circumstances in an untrue light to induce a party to agree to a transaction. Negligent misrepresentation relies upon providing that the alleged tortfeasor withheld or neglected to pass along information (such as the presence of bedbugs) to the customer that would have allowed the customer to make an informed decision (and, presumably, not enter into the lease for that apartment in the first place). Fraud by concealment is a tort claim where the party offering the contract not only failed to disclose certain information but also actively concealed it - potentially to the extent of outright lying about the issue. These “intentional torts” open up the possibility of punitive damages that go beyond making the plaintiff whole (the job of “compensatory damages”) and instead focus on punishing the defendant for his or her conduct.

In considering the question of tort claims from the perspective of a landlord, an infestation in a single apartment is probably only an issue for negligence-related claims and an allegation of breach of contract. When a landlord refuses to take action to remedy the problem or willfully ignores it, or allows a problem to become endemic throughout a community, the measure of damages grows.

In closing, I would remind you that dealing effectively with bedbug cases is essentially a customer service issue. Tenants who believe that their landlord or property manager has been responsive to their concerns and helped to the best of their ability is far less likely to seek redress through the courts than tenants who believe their landlord has failed to take their concerns seriously or who has outright lied about the source of the infestation.

Bedbug remediation is going to be expensive and is going to require treatment of more than just the infested unit. Most of this treatment will not be covered by conventional insurance policies. When confronted with an infestation, contact your pest elimination vendor immediately and then instruct the resident on what he/she needs to do to prepare for treatment. Aggressively monitor the problem and compel compliance by your residents if necessary, with fourteen day notices of rental agreement noncompliance. Failing to act aggressively and consistently can result in an infestation becoming an epidemic and one tenant’s complaint becoming a multi-plaintiff lawsuit. Avoid belittling the tenant or directly accusing the tenant of being the source of the infestation, and be sure to “paper the record” with every conversation relating to the infestation. Seek legal advice immediately and remember that there is no stigma attached to a bedbug infestation - bedbugs are the “ultimate communists” - they do not respect any form of status and can infest any dwelling, from the ritziest of multifamily communities to the sleaziest of flophouses.

Abandonment Issues

2009-09-10T14:04:00.000-07:00

There is a big difference between a tenant that is “in the process of moving” and a tenant that has “abandoned” the leased premises. Determining the difference is one of the trickiest issues that confronts a property manager. For example, I was recently contacted by a property manager who had a tenant under eviction and faced a situation in which the utilities have been turned off and most of the furniture had been removed from the leased premises, but the neighbors said that the tenant was “still staying there.” The property manager was unsure of what to do and could not reach the tenant by telephone. On the one hand, the property manager wanted her unit back so that she could begin efforts to re-let it. On the other hand, she did not want to expose her apartment complex to legal liability for “wrongfully evicting” a tenant in residence.

As a general rule, “abandonment” refers to a tenant's voluntary relinquishment of all interests and rights in the leased premises with no intention of reclaiming them. The primary elements of abandonment consist of an intention to abandon plus an overt act by which that intention is carried into effect. Furthermore, the question of abandonment is a factual one, depending on all the surrounding circumstances. Bowdoin Square LLC v. Winn-Dixie Montgomery, Inc., 873 So.2d 1091 (Ala. 2003). From a practical perspective, a returned key coupled with the complete removal of personal property from the leased premises is the purest form of abandonment. However, other facts showing the nonuse of the leased premises (such as a tenant’s change of address card filed with the post office, utilities being switched over to another residence in the tenant’s name, verbal repudiation of the lease coupled with extended absence from the property) are competent evidence of an intent to abandon. Alabama’s version of the Uniform Residential Landlord-Tenant Act speaks to abandonment circuitously, requiring a tenant to notify the landlord of any absences from the leased premises that exceed fourteen days. That fact, while helpful in a consideration of whether the premises have been abandoned, should not be viewed as conclusive.

Why Proper Notice Matters

2009-09-04T13:48:00.000-07:00

I'm going to spend a few minutes today talking about one of the few ways a landlord can lose an unlawful detainer action under Alabama law - using an improper "Notice of Material Non-Compliance" or "7 Day Notice". A proper 7 Day Notice is condition precedent to filing an action and cannot be corrected once the action is filed.

Some things to consider when examining your current Notice:

1. The Notice must specifically state that it is being given pursuant to 35-9A-421(b) of the Code of Alabama.

2. The Notice must specifically state that the tenant is in breach, or material non-compliance, with the lease agreement by virtue of failing to pay rent.

3. The Notice must specifically state that the tenant has right to "cure" the breach.

4. The Notice must specifically state the AMOUNT OF MONEY the tenant must pay in order to cure the breach. If you have late fees that accumulate daily, you can include in the Notice a schedule of those late fees. THIS IS A NEW REQUIREMENT.

Some other considerations:

1. The 7 Day Notice must be the LAST notice that you give a tenant. Consider this from an academic perspective. The 7 Day Notice states that if the tenant fails to pay the full amount within seven days, the lease agreement will terminate. Therefore, continuing to give the tenant notices can be deemed an act that reaffirms the lease agreement. Also, there is a line of cases that says that a subsequent Notice invalidates a previous Notice. As you will see, my Notice specifically states that it is the LAST notice a tenant will receive.

2. The 7 Day Notice must be "clean". That means you cannot have accepted any payments during that 7 Day period, or at any point thereafter. If you wish to accept partial payments, that is fine, just be sure that you give them a new 7 Day Notice. For example, if the tenant owes you $1000 and comes into your office after you have placed a Notice on his door with $500, you can accept the $500 and deposit it. Just make sure that you hand him another 7 Day Notice stating that he now must pay $500 within the 7 calendar day period or the lease will terminate.

3. The 7 Day Notice does not have to be notarized. It needs to be posted on the door of the property (or handed to the tenant directly).

I hope that this clears up some questions. Please note that there are additional requirements that must be included with your 7 Day Notice if this is a Section 8 or tax credit property.

What is an "unlawful detainer" anyway?

2009-08-27T14:00:00.000-07:00

Property managers often call and ask why we call it an “unlawful detainer” action when we file an “eviction”. This week, I’m going to explain the types of entries that can be made onto land. I’m also going to explain the reason why a landlord who accepts a partial payment from a tenant during an unlawful detainer proceeding always loses the case.

There are two types of entry onto land: lawful entry and unlawful entry. A tenant makes a “lawful” entry onto property when he takes possession pursuant to a lease agreement with the owner of the property. The tenant's guests make “lawful” entries onto the property when they visit at the tenant's request. An “unlawful” entry, in contrast, would be a thief, trespasser, or squatter, who enters the property without the knowledge or consent of the owner. An “unlawful detainer action” - which most of you are familiar with – is a court action which deals with a person whose original lawful entry onto / legal possession of the property is now unlawful. This contrasts to a trespass action or a forcible entry and seizure, where there was no original lawful entry/ legal possession.

Therefore, in order to maintain an “unlawful detainer action” a landlord must first render the tenant's occupancy of the property “unlawful”. A tenant's “lawful” entry becomes “unlawful” after the tenant fails to cure his or her material default under a lease agreement.

Alabama law allows a landlord to terminate a lease agreement with a 7 Day Cure notice. Some of you call this a “Notice of Nonpayment” while others call it a “Notice of Rental Agreement Noncompliance” - it means, in essence, that a tenant has breached a covenant of the lease (namely, their obligation to pay rent on time and in full) and that if they fail to fix or “cure” their default within seven days the lease is null and void. After the expiration of the 7 Day Cure period, the tenant's “lawful” entry becomes an “unlawful” holding of the property and you can maintain an action in District Court. Keep in mind, though, that if you accept a partial payment from a tenant, your 7 Day Cure notice is no longer valid because you have failed to render their entry “unlawful”. This is one of the simplest ways a Landlord can lose an unlawful detainer action - that is going to be the subject of my next post.