The LandLord Advocate Oct 2010
We’ve written and given seminars on the issue of bed bugs. Well, I am sorry to say, not only are they showing up in your communities, they’ve made their way to the State Capitol Building. But, not the way you want them to.
Earlier this month, a Senior Attorney from the Office of Legislative Research provided our CT law makers with some background information for them to review. It was a summary of recent bed bug legislation passed in New York. Let me first tell you what’s going on in New York. Then, I will discuss why it is important to know about this “memo” in CT.
New York passed two laws regarding bed bugs. The first required schools to inform families on any bed bug infestation found in the schools. The notice would require the school to tell families of the proper way to prevent further infestations at the school as well as how to prevent the transfer of bed bugs from the school to student residences. The second law requires owners and lessors of real property within New York City to provide bed bug infestation history for the previous year to potential lessees before the property is leased. The infestation history must include the specific premises being rented along with the history for the entire building where the premises are located.
No, this is not the law in CT. At least not yet. However, it is important information for you to have because you need to know what the trends are in surrounding states and, perhaps more importantly, that our legislators are investigating those trends. While CT is not required to do that same thing as other other states and is allowed to have its own public policies on anything (including bed bugs), we are largely influenced by the choices made in other states. So, if you don’t want these or other laws in CT concerning bed bugs, make sure you are taking appropriate action to prevent it. Keep your eyes and ears open and participate in the process, should such laws be proposed in CT, so that you can have an impact on the outcome.
Another reason to stay informed is because we are getting regular reports from landlords fighting this problem – that code enforcers throughout the state take the position that bed bugs are like any other infestation and it is the responsibility of the landlord to take care of them. While this may not be the state’s official position, CT now has a neighbor that is charging head first down that path and may someday want to follow.
As we have previously discussed, there are proactive measures you can take that will put you in the most favorable legal position if you are faced with this situation and you have the authorities demanding action from you [see our May, September and October 2009 editions for more on bed bugs] It is important to discuss with your landlord attorney a proper strategy for your specific community and to participate in landlord organizations that can help spearhead the fight that is coming.
A quick internet search will reveal the impact the bed bugs have had on New York City. New York state has passed some new laws on the issue. You can expect the impact of bed bugs in CT to grow and don’t get caught by surprise if CT tries to pass laws about it.
Bad strategy gone worse – why you should always challenge a tenant’s claim or defenses.
We usually find ourselves in housing courts for clients five (5) days a week and see some remarkably bad decisions by landlords and their attorneys. We often see landlords giving up substantial legal rights in housing cases by failing to challenge the legal basis for the tenant’s claims, apparently out of an interest in “just getting through the case” or “keeping legal fees down.” Unfortunately, landlords taking that position often find themselves paying substantial sums of money to the tenant, or being stuck with a problem tenant, when the trial court resolves the case.
Commercial and residential landlords are required under Connecticut law to have a legal basis for their claims against a tenant, usually grounded in the lease or governing summary process statutes, and prove that the facts line-up with the law to either win damages from a tenant or have the tenant evicted. Do tenants have the same responsibility to ground their claims or defenses in the law? Yes, but only if the landlord demands that the tenant do so with appropriate legal work in the trial court.
For example, we recently represented a landlord who faced a major problem tenant who had been previously jailed for criminal activity (the landlord had not taken action on that conviction with their previous attorneys), had unauthorized occupants in her apartment causing significant problems, and flatly refused to vacate and return the keys at the end of her lease term. We brought a lapse of time case on behalf of the landlord. In defense, the tenant noted that she was “disabled” and that Connecticut law precluded a lapse of time case against disabled tenants.
Most such cases would have ended there – the housing mediator told us that he had never had a landlord challenge such a defendant’s claim if he/she was receiving (as here) social security disability payments. However, our client refused to accept essentially an indefinite lease with this problem tenant, and gave us the authority to research the law and determine whether the tenant had a legal basis for her defense.
In this case, the governing statute allows the landlord to demand that the tenant prove a qualifying disability and limits the disabilities that qualify for the defense. We demanded proof of a qualifying defense under the statute, which the tenant could not meet. Accordingly, we moved the case to trial and won, and a major problem tenant will move-out shortly or the marshal will evict the tenant.
If our client had not challenged the tenant’s legal right to the claimed defense, the landlord would have had that problem tenant in their complex indefinitely (or until they could prove future lease violation or nuisance behavior with a timely summary process action). Such problem tenants absorb a tremendous amount of staff time, energy, and expense, and often negatively impact the landlord’s marketing in seeking new tenants and retaining current tenants.
In sharp contrast, a residential landlord and its attorney recently faced a tenant’s motion for attorney’s fees after the landlord withdrew its summary process action (for reasons unknown), yet they inexplicably failed to demand that the tenant provide the legal basis for her claim. As discussed in the accompanying Quick Tip , as long as trial had not yet begun, there is no legal basis for a tenant to make such a claim (in our opinion). Nonetheless, the landlord and its attorney failed to do two (2) basic things:
file a written objection to the tenant’s motion; and
oppose with legal arguments the tenant’s entitlement to an attorney’s fees award in the objection and at the motion hearing.
For her part, the trial judge did not ignore these critical missteps in ruling for the tenant and ordering the landlord to pay $3,840.00 in attorney’s fees to legal aid for a case that did not even go to trial. After establishing the reason for the ruling in her first sentence (the tenant’s motion for attorney’s fees), the Court pointedly stated in the second sentence: “The landlord did not file a written objection and at the hearing held on the motion [did not] oppose . . . the [tenant’s] entitlement to an award [of attorney’s fees] . . . .” Moreover, the Court’s footnote to the third sentence of her ruling summarily rejected one of the landlord’s peripheral arguments at the hearing: “Because this argument was made without the benefit of evidence or legal authority, the court does not consider it.”
In that case, the landlord and its attorney certainly seemed focused on just getting through the case and motion hearing, without considering its broader implications. In the court’s final hit to the landlord, the judge even awarded the tenant attorney’s fees for prosecuting her motion for attorney’s fees. Thus, the landlord had to pay for its own attorney and the tenant’s attorney to argue about a subject that it tried to avoid by not filing an objection or making a legal argument to the court. In other words, by not fighting the tenant’s legal basis for the motion, the landlord even paid the legal aid attorney to develop arguments in favor of such motions for use against the landlord (and other landlords).
Landlords should remember to think about the big picture when faced with a tenant’s challenge to the landlord’s legal actions, and engage with their landlord attorney before giving up a demand that the court enforce the landlord’s rights because of a tenant’s claim or defense.
It is not enough that conventional wisdom, most cases, or even other trial courts have handled a case a certain way – the law is there, but only for those landlords who demand its involvement.
Keeping yourself clear of the fox / hen house dilemma
The phrase “Like a fox guarding the hen house” has been traced as far back as the year 1589, where even then, there was a fear of assigning a task to someone who would then exploit it for their own ends. Why, you may ask, is LLF writing about it in The Landlord Advocate? Simple…we are seeing lots of landlords making this mistake in their operations and training.
Let me start with a disclaimer. LLF represents only landlords, advocates only for landlords and their rights, and supports only landlord organizations throughout the state. LLF does not represent tenants, does not advocate for tenants and tenant rights, and does not support tenant organization throughout the state. Thus, we stay ever alert to those things which may have the most profound effect on landlords’ businesses.
Now, if you are a landlord or know one (which is likely if you are reading this), making effective choices about where you get your education and training can have a huge impact on your operations and your bottom line. Knowing what the law is, what your rights are, and what options you have when faced with a business decision, is an invaluable tool for making good choices. It does not make the decisions any easier, but they are well informed. The good news is that landlords (at least the ones we represent), are regularly seeking this information so they can make informed choices. The bad news is that we have recently observed that many landlords are seeking this information not from trusted advisors like their landlord attorney, but from tenant advocacy groups. This is a classic “fox guarding the hen house” scenario.
Getting information from tenant advocates has its purpose. Knowing what these groups are focused on and where they intend to spend their energy is valuable intelligence in a landlord’s fight to protect their operation and revenue stream. For example, if tenant advocates are focused on children in multifamily communities, knowing that will be useful information to the landlord. Getting this information from tenant advocates may also be attractive. Many of them will provide the information they want you to hear at little or no cost. Who wouldn’t want to spend less money to get the continuing legal education credits they need?
However, tenant advocacy groups exist to expand the rights of tenants. Thus, while they may not be intentionally trying to limit landlord rights, they are, by default, limiting your rights if they are expanding the tenant’s rights. The information they are going to provide you is pro-tenant, anti-landlord. That doesn’t mean to say they bash landlords and tell them how poorly they operate when presenting to a landlord group. It just means that their purpose, their mission, is to limit what you can and can’t do as a landlord, no matter how large or small the issue. It seems ill advised to ask a group whose purpose is to limit your rights, what those rights are in the first place. You may not be getting the full range of options from those advisors.
I recently attended a landlord organization function where the lunch speaker was from a tenant advocacy group. I watched a very informed crowd of attendees asking important, intricate questions about what landlords could expect in certain situations on their property. I watched the crowd inquire of policy positions that advocacy group might take under certain scenarios. And, I watched the speaker continually avoid the questions, provide stock responses that did not pertain to the questions, and then invite the landlords to act without guidance so the advocacy group could “litigate” the issue about which the landlord inquired. As a landlord advocate, the most I got out of the presentation was some not-so-surprising statistics about successful suits against landlords, and an open invitation to the landlords to become defendants on an array of issues landlords face each day.
Second disclaimer. We have no personal animosity toward any tenant advocates. They have their agenda and they pursue it vigorously. We have chosen, however, to represent the landlord perspective in an ever increasingly lopsided discussion about property owners and property borrowers. And, when the owners seek advice from the borrowers’ advocates, the playing field gets even more uneven.
The simple point is that you want to be well informed when you make decisions for your company. If your most prevalent source of information is the other team’s propaganda, you may not be getting all that you expected. While you may think you are getting a glimpse into their playbook and thus some really important intelligence, make sure you vet that information like you would any other. You don’t want to base decisions that affect your bottom line and cost you lots of money, on information that the other side wants you to believe is accurate. Use advisors who have your best interest as an owner or a manager as their primary focus and your “informed decisions” will have the correct information.
The secret to effective settlements and the recovery of expenses.
In our “Get the Rent, or Get Them Out” seminar on rent collection processes and strategies, we emphasize the importance of having a broad legal fees clause in your commercial and residential leases. Specifically, a strong legal fees clause makes the tenant responsible for paying the landlord’s legal fees incurred to enforce the landlord’s rights under the lease.
Clients often engage us to review their leases and provide feedback for improving them, and we usually report one of two problems regarding the subject of legal fees:
First, the lease does not have a legal fees clause. We are currently engaged in a residential summary process case for a client in this situation. Despite obvious lease violation and nuisance conduct by the tenant, her attorney is refusing to settle the case on the standard terms that we have established for our clients and settled thousands of cases. Why? Because the tenant has no financial risk (i.e. exposure to legal fees) under extended litigation.
The tenant and her attorney are taking a substantial risk here, because the landlord may simply order us to take the case to trial and evict the tenant (even though the landlord is otherwise willing to settle with the tenant under a reinstatement agreement that allows the tenant to remain in the premises). It is the classic game of “chicken,” and the tenant’s attorney is betting that the landlord will not want to stomach the legal expense of discovery and taking the case to trial, particularly where the landlord indicates an early interest in settlement. Therefore, the tenant’s attorney is seeking to alter the settlement terms for this landlord’s cases in a way that is advantageous to his tenant-clients (and disadvantageous for the landlord). However, if the landlord’s lease contained a legal fees clause, this entire situation would be reversed and the case would have long ago settled, because the tenant would not want to increase her burden to pay the legal fees by litigating the case or engaging in protracted settlement negotiations.
Second, if the lease does have a legal fees clause, we often find it unnecessarily limited to “bringing an eviction action” or “obtaining judgment against the tenant.” The Connecticut Appellate Court recently confirmed the power of a broad legal fees clause in a case where a former tenant sued the landlord for withholding its legal fees from the tenant’s security deposit.
In that case, the landlord brought a valid nonpayment of rent summary process action against the tenant, who had a history of paying rent late. For some reason, the landlord withdrew the action, and the tenant later vacated and returned the keys, albeit prior to the expiration of the initial lease term. Nonetheless, the landlord withheld $1,637.00 in legal fees from the tenant’s security deposit without any accounting or itemization of those fees.
The appeal focused on the question whether the landlord was restricted to recovering its legal fees only if it successfully prosecuted the summary process action. The Appellate Court limited the case to this issue, because (surprisingly) the tenant’s attorney did not conduct discovery or ask the landlord questions at trial to establish the source or reasons for the attorney’s fees that the landlord deducted from the security deposit. Indeed, the landlord simply argued (at trial and on appeal) that its legal expenses were related to enforcing its rights under the lease, without specifying or identifying the rights to which it was referring.
The Appellate Court turned directly to the lease itself, and identified that its legal fees clause was broad and covered all fees incurred by the landlord in enforcing its rights under the lease. Accordingly, it did not matter whether the landlord had withdrawn the summary process action before the tenant vacated the premises – the landlord’s failure to win that case was irrelevant. The trial court had found that the tenants had habitually paid rent late, and that was more than sufficient for the Appellate Court to rule that the tenants had failed to prove that the landlord had not incurred legal fees for anything other than the summary process case.
Landlords certainly should not hope that tenants and their attorneys fail to ask such basic questions as for what the legal fees were deducted in future cases. However, there is now appellate case law that validates the power of a broad legal fees clause, and the process of withholding those fees from the security deposit.
Contact your landlord attorney to determine whether you have a well-drafted legal fees clause, or – if your lease does not have such a clause – to draft a comprehensively broad legal fees clause.
Challenging tenant motions for attorney fees.
Landlords are seeing a dramatic increase in legal aid attorneys bringing motions for attorney’s fees in summary process cases that the landlords withdraw before trial, and landlords should decide now to draw a line in the sand about such motions.
If the landlord has a valid reason to bring a summary process action against a tenant (for example, nonpayment of rent, lease violations, or nuisance behavior), it should not have to face a motion for attorney’s fees if it withdraws the action prior to the trial court hearing evidence in the case.
Landlords withdraw summary process actions before trial for all sorts of reasons, including:
- a landlord’s mistake in the notice to quit form that it uses (this is often a problem for landlords that do not engage an attorney to handle this part of the case);
- a landlord unintentionally equivocating (or undermining) the notice to quit by accepting rent or negotiating a new lease with the tenant after having the tenant served with the notice to quit;
- if the landlord’s attorney is not well versed in landlord-tenant law, because of the attorney’s procedural mistake(s); or
- the tenant vacates and returns the keys after the landlord serves the tenant with the summary process action.
Withdrawals in these circumstances are appropriate because they help conserve scarce judicial resources. They minimize the burden on the tenant to further defend a case called into question by the landlord’s (or its attorney’s) actions, and eliminate cases from the court’s docket that the tenants render moot by vacating the premises before trial.
Accordingly, the system should not award attorney’s fees to a tenant in these situations, because the tenant has not successfully challenged or defended against the valid grounds for the landlord’s case, particularly when they vacate prior to trial. Unfortunately, there are some trial court rulings awarding attorney’s fees to tenants in these situations, because the landlords (or their attorneys) failed to challenge the factual and/or legal basis for the tenant’s claim, as discussed in the accompanying article .
If you face a tenant’s motion for attorney’s fees in one of these situations, and your current attorney says that you cannot win, contact a landlord attorney who focuses on the rights of landlords to bring an end to these motions.
Fearing cabin fever? Get a winter project.
I know! Nobody wants to talk about it, but fall has arrived and winter’s just around the corner. Here’s a great way to side-step winter a little bit. Plan a winter project.
Whether it’s something at work you’ve been putting off or something at home, find that project that will take some time to complete (which may be why you haven’t started it yet) and plan to get it done over the winter. I mean really plan.
Figure out how long it will take. Set aside time on your calendar (even make appointments with yourself if you need to). And, tackle it. When spring arrives you will have something else to cheer about other than just the flowers, green grass, and warm weather. That project will be done. You will have the time to enjoy the fruits of your effort. And, next year, you won’t dread the fact that you still haven’t done “that project.”
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.