The LandLord Advocate May 2013
Several of our readers have posed the following question:
“Should I change my rules or change the lease?”
Unfortunately, this is not an easy question to answer as it will depend on quite a number of variables – each of which requires consideration. Nonetheless, to get you started, let’s spend a little time discussing the generalities associated with making this decision.
FIRST, lease changes are not enforceable (either to an individual or to a household) unless someone has signed and agreed to those changes. With the original lease, you instituted a written, signed agreement with the resident. By law, you cannot change it unilaterally, which basically means, without their consent. Your lease is a contract to which you and your resident have consented. Your relationship is governed by that contract and you can’t change it – any more than the tenant can – unless both of you agree to that change.
Luckily, such is not necessarily the case when implementing rule changes within your community. State statute provides the landlord protection that allows you to make changes to your community rules without the consent of your residents. You will have to warn them of the pending change, but with proper notice, you can make the change of your own accord.
NOTE: The one – and I might add significant – caveat is that you cannot make lease changes under the guise that they are rule changes. If your rule changes are modifying the fundamental nature of the relationship established in the lease, there is a strong possibility that the changes will not be validated if challenged.
To illustrate this factor, let’s for simplicity sake, consider the following example: You attempt to add a community rule that says the building will be secured at 5:00PM when the management office closes. By implementing this rule, you are in reality, blocking your residents’ access to any units in that building after 5:00PM. While I know this rule change may seem absurd, it’s a simple example of how a community-wide rule, when implemented, can change the basic nature of your arrangement with your residents, making it easily challengeable.
SECOND rule of thumb, because a lease change requires consent, it may take quite some time to implement. Be prepared for the fact that you will likely have both the old lease and the new lease active simultaneously while you either obtain consent from each resident, or allow all current leases to expire – at which time you can offer them the new lease at renewal time.
Luckily, timing is not a factor with community rule changes. Once you’ve given the community notice of an upcoming rule change, along with the timeframe that they will be effective; your process is pretty much complete.
NOTE: This simplicity applies to market properties only. If you are dealing with subsidized properties, there are quite a number of other required steps you must complete prior to implementing a rule change, otherwise, you run great risk of significant liability.
LASTLY, changing your lease usually has a much bigger impact on your overall operations than a simple community rule change. Since the fundamental relationship you have with your residents is being altered, the immediate and further impact of such changes should be considered more thoroughly. After all, if you find you are unhappy with an implemented lease change, correcting the mistake will require a duplication of the same effort and time already displayed.
Lease changes should not be taken lightly and should be completely evaluated before implementation. That’s not to say that community rule changes can be addressed with minimal attention, it’s just that the stakes are a little higher when making changes to your lease. Best to contact your landlord attorney if you’re unsure.
Easy remedy to a tough day.
Spring is in the air. If you are like everyone else I have queried, you’re certainly ready for it. Even severe allergy sufferers seem thrilled about the prospect of sneezing again – all thanks to a warm, sunny breeze.
To me, the best part of spring is not the change in season, but the change in attitude. It seems that as the warmer days return, so do the smiles on people’s faces as they put away their winter clothes and snow boots, and replace them with shorts and flip-flops.
Why is this in any way relevant to you and why is it in a legal newsletter? Simple. Put this newsletter aside for 10 minutes. Go outside and enjoy spring, if only for a few moments. The sun, the flowers, even the histamines, could very well aid in improving your day – and perhaps even your week or month!
What’s that you say – you’re already having a great day? Why not make it better! My guess is that even with all of the kid’s hectic sports schedules and after-school activities, the spring cleaning in the yard, and the unavoidable lawn to be mowed, being outside in the spring just makes for better days.
When’s the last time you got up from your desk, walked away from your computer and let the fresh air improve your day? Well, then maybe you should try it now. The rest of this newsletter will be here when you get back…
Warning: What you say, and when you say it, can destroy your legal case.
Do not over-promise and under-deliver. This business maxim applies equally to both your property management operations and your legal cases. Your actions as landlord are critically important – especially when starting a legal action against a tenant, such as by serving a notice to quit for nonpayment of rent. What you say, and when you say it, can have a dramatic effect on the viability of the legal case and your landlord attorney’s ability to help you in court.
There are two key points worth discussing here:
FIRST, a notice to quit is the initiation of a legal case. By having a notice to quit served on the tenant, you are terminating the tenant’s right to occupy the residential or commercial space and ordering the tenant to vacate and return the keys. These are quintessential legal actions. Serving a notice to quit may seem routine, but it is not.
SECOND, what you say to the tenant after service of the notice to quit is central to the legal case. You cannot do or say things that the law views as “promises” and then act contrary to those promises. For example, when you serve a notice to quit, you are promising the tenant that you will carry out the legal case to its conclusion in court, unless the tenant vacates and returns the keys. Contrary statements, when made after the notice to quit is served, include:
- “We don’t want to evict you.”
- “We can help you.”
- “We can make an agreement.”
Under Connecticut law, these kinds of statements are allowable only before the notice to quit is served. Saying them after the service of a notice to quit destroys your legal case.
In a corresponding Quick Tip this month, we recommend that you read and revisit your rent collection policy. During your reading, you may find that the policy requires you to have those precursory conversations before serving a notice to quit. That’s fine, just be sure you follow-up with the notice to quit, and carry the case all the way to court, if the tenant fails to pay the back rent by a certain date. There’s no need to contemplate what language to use after serving the notice to quit — simply state the policy – that the issue will be resolved in court.
If you find that your rent collection policy calls for you to give the tenant “one more chance” to pay the back rent, legal fees, and marshal fees by a certain date, even after the notice to quit is served, you are obligated to try to “help” the tenant “make an agreement” – all without having to verbally say so. While this seems like a straightforward concept, it’s not one that is easily executed.
Contact your landlord attorney for assistance in deciding which path your rent collection policy will take. Moreover, if you choose the “one more chance after a notice to quit” approach, your landlord attorney can help you outline a policy that allows you to collect the rent without eliminating your legal rights to force the issue in court if the tenant does not pay.
“Spring” into projects in the office.
Hopefully you took my advice in the other Quick Tip. If you haven’t read it, start there first.
Now that you’re back, another way to make for a good day, week, or even month is to get yourself organized with what you’d like to get accomplished. I’ve seen many people staring through their computer screens, simply overwhelmed by what they’ve got on their plate. Are you one of these people?
Medical studies have shown that the mere mass of tasks, projects, phone calls and emails can easily have a negative physical impact on our health and sanity. And, that when faced with such a huge challenge, many can feel completely paralyzed, resulting in little, if anything ever getting accomplished.
To help attack such an insurmountable challenge, we suggest you take a few minutes to first create a quick list of items needing to be accomplished, and then draft a brief plan for logically tackling each items – breaking it into clearly defined, manageable phases.
While not specific to the office, I had this experience just this morning while at the gym. Today’s posted workout included a series of various exercises, first starting in repetitions of 100, then in reps of 90, 80, etc – working all the way down to 10 of each exercise. Needless to say, the initial thought of doing a total of 550 of each exercise was staggering! But, with a little guidance from our coach, tackling this “project” in small pieces made it much easier to endure and complete. It made me realize that the same strategy, when implemented correctly, should work in any environment – especially in the office.
Hey, it’s worth a try. Start with the list. Decide what your first exercise will be. And, then start knocking it out in small pieces. You’ll be done before you know it!
The power of a simple read – Part III.
As you can tell, we at LLF are ecstatic that spring is finally here. With this change in season, we suggest you find a quiet, outdoor spot to read and renew your familiarity with your rent collection policy. You may have drafted it yourself; it may have come from the corporate office, or your third party management company. It may be dry, in small type, and buried in a policy manual that has not been touched for months or years. Nonetheless, borrow some of nature’s energy, break it out and read the entire document.
In past editions, we have talked about the power of reading key documents, specifically the lease and insurance policies. Your rent collection policy is a natural progression of revisiting and reconnecting with a key part of your business.
Remember, the fundamental of the landlord-tenant relationship is the tenant’s payment of rent in exchange for keys to a valuable place to live (residential) or work (commercial). The rent collection policy is a central part of this relationship as it identifies and explains how that process works, particularly when a tenant fails to pay the rent in full and on time.
While integral in importance, clients often tell us that their rent collection policy is “old” or “outdated,” and that they avoid it because it does not reflect how they currently handle (or want to handle) their property. This is problematic for two reasons:
FIRST, rent collection policies should be well structured and thought-out. Unfortunately, that this is not always the case. We’re often told of rent collection procedures that are drafted during times of stress, when operations were not going as well as planned and the rent account receivable was growing or seemed insurmountable. This reactionary approach to policy drafting will undoubtedly lead to problems down the road. Time and effort should be given to ensure your rent collection policy outlines a predictable, standardized process, which values the property manager’s time by minimizing the efforts required to collect the rent. This structured and uniformed approach will ultimately create certainty for both the property manager and the tenant alike.
Indeed, the property manager who defines and follows a standard rent collection policy exhibits empowered, predictable, and definitive actions, which the tenant will then experience directly. This pattern usually results in the tenant paying the overdue rent amount quickly (and then getting back to paying on time and in full) or facing an escalation to the landlord’s attorney to address the issue.
SECOND, consistently enforcing a single, strong rent collection policy, allows the positive benefits to propagate throughout all of your various properties.
As you sit and read your rent collection policy, be sure to take some notes, capturing any questions you may have about what it says or means, along with what you like and do not like about it. Then contact your landlord attorney to discuss any changes considered, along with what you can or can not do under the law.
The reading of this newsletter does not form an attorney-client relationship. The contents of this newsletter are for informational purposes only and do not constitute legal advice. Nothing in this newsletter is intended to imply or predict the outcome of any legal matter that you may be considering or be involved in. The Landlord Law Firm makes no warranties of any kind regarding the information contained in this newsletter.