Quick Tip: Utilize your lease (oral or written) to help define tenant fines or charges.

This months video topic

Announcement:

LLF chosen as a Platinum Sponsor for this year’s CTAA tradeshow.

The Landlord Law Firm has once again been named a Platinum sponsor for this years CTAA Tradeshow & Education Conference to be held at:

Foxwoods Resort and Casino – Friday, November 13, 2015.

FYI, it’s not too late to register. Just jump over to the tradeshow website to learn more.

DON’T FORGET, although free, registration for Thursday night’s Pre-Show Party is once again required (failure to pre-register will result in a $25 cover charge at the door). Like last year, it will be a red carpet affair at Foxwood’s High Rollers Luxury Lanes that you don’t want to miss. Be sure to check that you will be attending when you complete your online registration.

Once again, it ought to be quite an event. Hope to see you at Foxwoods!

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Lead Article:

Late is late – don’t accommodate “stip” tenants.

When this article first appeared in the Landlord Advocate, we were facing tough economic times for landlords and tenants alike. Many commercial and residential
landlords were experiencing increased vacancies. While commercial tenants were experiencing declining business revenues, many residential tenants were losing
hours at work (or their job entirely) – undermining both groups ability to deal with unexpected expenses when it’s time to pay the landlord. This situation lead to a clash of business objectives – a clash that caused the landlord to ask – do you evict the tenant or allow him/her extra time to pay?

Well, it is safe to say that the residential landlord market has taken a turn for the better with occupancy rates improving and rents continuing to increase. Unfortunately, commercial landlords cannot say the same thing. Interestingly enough, the relevance of this article has not changed since it was originally published,
attesting to the resilience and professional management of the real estate industry.

The question of whether or not to evict is particularly acute for landlords who have already been to court with a tenant on a nonpayment of rent case, and the
tenant is now under a stipulated judgment (commonly referred to as a “stip”) requiring monthly use & occupancy and/or arrearage payments on-time and in-full. We continuously receive the following questions from landlords regarding whether they can be flexible in enforcing the stip’s payment terms without losing the stip’s long-term benefits:

• QUESTION: Do I “amend” the stip if I allow the tenant an extra day or two to make the payment required?
  ANSWER: NO, You are simply giving the tenant the chance to remain in their apartment and get back into compliance with the stip, rather than face an affidavit of noncompliance and possible eviction.
• QUESTION: Can I still pursue an affidavit of noncompliance and seek to evict if the tenants do not make their next payment on time and in full.
  ANSWER: YES, You do not void the stip by allowing the tenant extra time to make a previous payment due.
• QUESTION: If I allow extra time to make a payment, does the tenant gain the ability toreopen the case and go back to court.
  ANSWER: NO, Keep in mind that a tenant can always file a motion to open judgment, regardless of what you do or do not do, so do not let that worry you. While possible, the tenant faces slim odds for getting the judgment opened due to their failure to comply with it. Either way, if you have a solid, broad legal fees clause in your lease, the tenant will be responsible for all of your attorney’s fees and costs experienced in dealing with the motion to open
  judgment, which will also act as a deterrent to the tenant pursuing this route.

A landlord can face risk in this situation by consistently failing to act against the tenant for stip violations over an extended period. For example, if the
landlord allows the tenant to pay late every month of the stip, the landlord will probably face challenges in court if the landlord seeks to enforce the stip against a tenant for late payment in the stip’s final month. In theory, it should not matter. However, as with any situation involving judges at the trial court level, there is an element of practicality that the landlord must consider, because the only option to address an adverse ruling from the trial court judge is an expensive and time-consuming appeal.

In summary, landlords retain their flexibility to enforce the stip just as they have the flexibility to enforce the lease against the tenant. Nonetheless,
landlords should save their flexibility under a stip for the “good” tenants – those who have historically paid on time and in full, and ran into some unexpected problem that led them to court and, later, led to a delay in a stip-required payment.

For residential property managers, the question of evicting someone who is violating their stip is a little more nuanced these days, with rents rising and occupancy
rates so high. In this scenario, your tolerance for failed stip compliance by a tenant may decrease significantly and going through the process of actually
evicting someone may prove to be a long-term positive when you get a compliant tenant moved in and paying on time. There are many business factors in your
operation that will influence your final decision, and the flexibility that you can exercise in this situation gives you many options you haven’t enjoyed even
in the recent past.

When in doubt, landlords should contact their attorney to evaluate their options and determine what path makes the most sense to accomplish their business goals and objectives

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Quick Tip:

Utilize your lease (oral or written) to help define tenant fines or charges

We are often asked by clients whether a particular fine or charge against a tenant is permitted. Our response – before we even look to any statutes or case law is -it depends on the lease. The lease repeatedly holds the answer, as it is the key document between a landlord and tenant, one that defines their contractual relationship.

As a contract, the lease provides a binding legal basis for enforcing the landlord’s and tenant’s respective rights and responsibilities. In addition, it is a vehicle that allows greater detail, specificity, and customization to be applied to the particular situation at hand – much more than the state statutes would. Indeed, the Connecticut statutes governing landlord-tenant relationships set forth the minimum requirements for a landlord and tenant, and – importantly for this subject – permit the use of leases to further define the relationship.

For those who may be wondering, no it does not matter whether the lease is oral or written. Oral leases are just as enforceable as written leases in Connecticut. And like a written lease, an oral lease can also define whether a particular fine or charge is permitted, as long as the parties addressed the situation upon initiating their lease. The biggest challenge with oral leases is that they are only imprinted in someone’s memory and so when two people’s memory of the “agreement” are incompatible, you lease is nonexistent. If you are going to discuss all of the terms of the lease, a good next step is to actually write them down.

Be advised the lease is not always the final answer, as governing statutes or case law may prohibit certain action by the landlord. Contact your landlord attorney if you have questions regarding imposing fines or charges on your tenants through your lease

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DISCLAIMER:

 

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.