BARRON & ASSOCIATES -- Landlord-Tenant Law
Landlord/Tenant Law
Our firm represents landlords in both commercial and residential leases. We regularly advise clients
in the management of their property, including lease preparation and review, and resolution of tenant
disputes. The majority of the statutes relating to landlords and tenants can be found in the California
Civil Code, beginning with Title 5, Chapter 1, Section 1925. Below is a quick summary of the many
legal issues facing landlords in both the residential and commercial context.
Residential Landlord/Tenant:
California has enacted several statutes dealing with the landlord/tenant relationship. In addition,
some counties, but not all, have also enacted local ordinances dealing with the same. These statutes
and ordinances address many of the issues facing landlords on a daily basis, such as: the respective
responsibilities of the landlord and tenant; rent control; security deposits; assignments and
subleases; lease terms; unlawful actions by landlords; demand, collection, or increase of rent;
retaliation by landlord; rental application screening fees; termination of lease; abandonment by lessee
and disposition of a tenant’s property remaining on the premises after the lease terminates.
Unfortunately, given the nature of the landlord/tenant relationship, it is not uncommon that landlords
may be required to sue tenants, which may be for a variety of reasons. When the leased premises
have already been vacated, it is usually just about money (e.g., unpaid rent). Damage to the property is
another common claim, although the tenant is entitled to normal wear and tear. If the lease provides,
the prevailing party can also be awarded its attorney’s fees. If the tenant has not yet moved out, the
claim is usually for possession of the property, and the rent is secondary. If the landlord wins, he or
she can be awarded judgment for the rental value, court costs, and attorney’s fees.
Tenants may sue because the owner has not made necessary repairs or similar breach of habitability
claims; has retaliated against them in some manner for exercising their legitimate rights as tenants;
has charged an illegal rent increase; has improperly implemented an eviction; or has attempted a
wrongful eviction. Our lawyers help tenants bring wrongful eviction claims when the former tenant
believes the owner acted in bad faith in order to get tenants to move out; for example, evicting for
reason of an owner-move-in when the owner did not then move in or lived in the building for only a
short time.
People may also sue landlords for rental discrimination on the basis of race, ethnicity, gender, sexual
orientation, or family size. Economic discrimination is allowable to determine who has the ability to pay
rent, but the source of income is not a legitimate basis for excluding an applicant.
In most cities and counties in California, a month-to-month tenancy can be terminated by the landlord
with no reason given. However, a landlord cannot sue to evict a tenant who is still within his lease
term unless the tenant is somehow violating the lease. Examples are when the rent has not been paid
or there is some other serious breach of the rental agreement. The case begins with a three-day
notice to either pay rent (or comply with lease terms) or vacate the premises. But if the landlord wants
to move into the unit, he cannot begin the proceedings until the lease expires. If the tenancy is on a
month-to-month basis, he can serve a thirty-day notice to terminate the tenancy. But regardless of the
reason for the eviction, whether by reason of nonpayment of rent, breach of a lease covenant, or
nuisance, it is the landlord who always bears the burden of proof.
Commercial Landlord/Tenant:
Commercial landlord/tenant law is very different from residential landlord/tenant law. Many rights given
to the residential tenant do not exist for the commercial tenant. Many businesses make serious
mistakes applying laws which work for residences but do not apply with businesses. These mistakes
can be very costly and could result in the loss of one's business. Great care must be taken in these
matters.
With respect to landlord/tenant disputes, most claims brought by landlords against residential tenants
are commonly also brought against commercial tenants. For the most part, the rules are the same.
There is, however, no rent or eviction control in California for commercial tenancies (unless the
landlord knew that the tenant was going to reside on the premises). In addition, in most commercial
situations the courts will uphold the lease, even when it is unfair and/or unreasonable. The general
"automatic" or implied protections found in residential tenancies simply do not exist in these
situations. For example, the tenant may rent a space that is unusable for their business but they will
still be required to pay rent.
In Commercial Tenancies:
Our firm represents landlords in both commercial and residential leases. We regularly advise clients
in the management of their property, including lease preparation and review, and resolution of tenant
disputes. The majority of the statutes relating to landlords and tenants can be found in the California
Civil Code, beginning with Title 5, Chapter 1, Section 1925. Below is a quick summary of the many
legal issues facing landlords in both the residential and commercial context.
Residential Landlord/Tenant:
California has enacted several statutes dealing with the landlord/tenant relationship. In addition,
some counties, but not all, have also enacted local ordinances dealing with the same. These statutes
and ordinances address many of the issues facing landlords on a daily basis, such as: the respective
responsibilities of the landlord and tenant; rent control; security deposits; assignments and
subleases; lease terms; unlawful actions by landlords; demand, collection, or increase of rent;
retaliation by landlord; rental application screening fees; termination of lease; abandonment by lessee
and disposition of a tenant’s property remaining on the premises after the lease terminates.
Unfortunately, given the nature of the landlord/tenant relationship, it is not uncommon that landlords
may be required to sue tenants, which may be for a variety of reasons. When the leased premises
have already been vacated, it is usually just about money (e.g., unpaid rent). Damage to the property is
another common claim, although the tenant is entitled to normal wear and tear. If the lease provides,
the prevailing party can also be awarded its attorney’s fees. If the tenant has not yet moved out, the
claim is usually for possession of the property, and the rent is secondary. If the landlord wins, he or
she can be awarded judgment for the rental value, court costs, and attorney’s fees.
Tenants may sue because the owner has not made necessary repairs or similar breach of habitability
claims; has retaliated against them in some manner for exercising their legitimate rights as tenants;
has charged an illegal rent increase; has improperly implemented an eviction; or has attempted a
wrongful eviction. Our lawyers help tenants bring wrongful eviction claims when the former tenant
believes the owner acted in bad faith in order to get tenants to move out; for example, evicting for
reason of an owner-move-in when the owner did not then move in or lived in the building for only a
short time.
People may also sue landlords for rental discrimination on the basis of race, ethnicity, gender, sexual
orientation, or family size. Economic discrimination is allowable to determine who has the ability to pay
rent, but the source of income is not a legitimate basis for excluding an applicant.
In most cities and counties in California, a month-to-month tenancy can be terminated by the landlord
with no reason given. However, a landlord cannot sue to evict a tenant who is still within his lease
term unless the tenant is somehow violating the lease. Examples are when the rent has not been paid
or there is some other serious breach of the rental agreement. The case begins with a three-day
notice to either pay rent (or comply with lease terms) or vacate the premises. But if the landlord wants
to move into the unit, he cannot begin the proceedings until the lease expires. If the tenancy is on a
month-to-month basis, he can serve a thirty-day notice to terminate the tenancy. But regardless of the
reason for the eviction, whether by reason of nonpayment of rent, breach of a lease covenant, or
nuisance, it is the landlord who always bears the burden of proof.
Commercial Landlord/Tenant:
Commercial landlord/tenant law is very different from residential landlord/tenant law. Many rights given
to the residential tenant do not exist for the commercial tenant. Many businesses make serious
mistakes applying laws which work for residences but do not apply with businesses. These mistakes
can be very costly and could result in the loss of one's business. Great care must be taken in these
matters.
With respect to landlord/tenant disputes, most claims brought by landlords against residential tenants
are commonly also brought against commercial tenants. For the most part, the rules are the same.
There is, however, no rent or eviction control in California for commercial tenancies (unless the
landlord knew that the tenant was going to reside on the premises). In addition, in most commercial
situations the courts will uphold the lease, even when it is unfair and/or unreasonable. The general
"automatic" or implied protections found in residential tenancies simply do not exist in these
situations. For example, the tenant may rent a space that is unusable for their business but they will
still be required to pay rent.
In Commercial Tenancies:
 | Contrary to what some landlords/agents say, there is no single "standard" commercial lease. | |
| There is no implied right of habitability. | |
| There is no statutory right to "repair and deduct" for property defects. | |
| The 10% 60 day rent raise rule does not apply. | |
| Statutory penalties for turning off utilities or changing locks (CC 789.3) do not apply. | |
| There is no limit to the amount of security deposit charged. | |
| The privacy protections of entry by landlord laws (CC 1954) do not apply. | |
| Landlords can accept a partial rent payment during an eviction and still successfully proceed | |
| with that eviction. | ||
| Landlords can ask for too much rent in a 3 day notice to pay rent or quit and still successfully | |
| proceed with the eviction. | ||
| Late charges which are excessive in residential tenancies may be acceptable for commercial | |
| ones. | ||
| Landlords may shift maintenance responsibilities to the tenant. | |
| Many unwaivable rights in residential tenancies may be waived in commercial ones. | |
| Tenants may waive litigation rights including a trial by jury. | |
| Assignments and subleases may be prohibited. | |
| Landlords may restrict the tenant's use of the property even if it is an unreasonable. | |
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Barron & Associates
1600 South Main Plaza, Suite 195
Walnut Creek, CA 94596
info@barronlawoffice.com
P: (925) 937-4400
F: (925) 937-4450
1600 South Main Plaza, Suite 195
Walnut Creek, CA 94596
info@barronlawoffice.com
P: (925) 937-4400
F: (925) 937-4450
These materials have been prepared by Barron & Associates for informational purposes only and are not legal advice. You should not act upon this information without seeking professional legal counsel. © Copyright 2007 Barron & Associates. All rights reserved. |
********************************************************************************************
The Commercial Lease: What You Should Know
Know what you’re getting yourself into when you rent space for your business.
Renting commercial space is a big responsibility -- the success or failure of your business may ride
on certain terms of the lease. Before you approach a landlord, you should understand how
commercial leases differ from the more common residential variety, and before you sign anything,
make sure you understand and agree with the basic terms of the lease, such as the amount of rent,
the length of the lease and the configuration of the physical space.
How Commercial Leases Differ From Residential Leases
It's crucial to understand from the get-go that, practically and legally speaking, commercial leases and
residential leases are quite different. Here are the main distinctions between them:
Fewer consumer protection laws. Commercial leases are not subject to most consumer protection
laws that govern residential leases -- for example, there are no caps on security deposits or rules
protecting a tenant's privacy.
No standard forms. Many commercial leases are not based on a standard form or agreement; each
commercial lease is customized to the landlord's needs. As a result, you need to carefully examine
every commercial lease agreement offered to you.
Long-term and binding. You cannot easily break or change a commercial lease. It is a legally binding
contract, and a good deal of money is usually at stake.
Negotiability and flexibility. Commercial leases are generally subject to much more negotiation
between the business owners and the landlord, since businesses often need special features in their
spaces, and landlords are often eager for tenants and willing to extend special offers.
Making Sure the Lease Will Fit Your Business
Before you sign a lease agreement, you should carefully investigate its terms to make sure the lease
meets your business's needs.
First, consider the amount of rent -- make sure you can afford it -- and the length of the lease. You
probably don't want to tie yourself to a five- or ten-year lease if you can help it; your business may grow
faster than you expect or the location might not work out for you. A short-term lease with renewal
options is usually safer.
Also think about the physical space. If your business requires modifications to the existing space -- for
example, adding cubicles, raising a loading dock, or rewiring for better communications -- make sure
that you (or the landlord) will be able to make the necessary changes.
Other, less conspicuous items spelled out in the lease may be just as crucial to your business's
success. For instance, if you expect your camera repair business to depend largely on walk-in
customers, be sure that your lease gives you the right to put up a sign that's visible from the street. Or,
if you are counting on being the only sandwich shop inside a new commercial complex, make sure
your lease prevents the landlord from leasing space to a competitor.
Critical Lease Terms
The following list includes many items that are often addressed in commercial leases. Pay attention to
terms regarding:
The Americans with Disabilities Act. The Americans with Disabilities Act (ADA) requires all businesses
that are open to the public or that employ more than 15 people to have premises that are accessible to
disabled people. Make sure that you and your landlord are in agreement about who will pay for any
needed modifications, such as adding a ramp or widening doorways to accommodate wheelchairs.
© 2008 Nolo
The Commercial Lease: What You Should Know
Know what you’re getting yourself into when you rent space for your business.
Renting commercial space is a big responsibility -- the success or failure of your business may ride
on certain terms of the lease. Before you approach a landlord, you should understand how
commercial leases differ from the more common residential variety, and before you sign anything,
make sure you understand and agree with the basic terms of the lease, such as the amount of rent,
the length of the lease and the configuration of the physical space.
How Commercial Leases Differ From Residential Leases
It's crucial to understand from the get-go that, practically and legally speaking, commercial leases and
residential leases are quite different. Here are the main distinctions between them:
Fewer consumer protection laws. Commercial leases are not subject to most consumer protection
laws that govern residential leases -- for example, there are no caps on security deposits or rules
protecting a tenant's privacy.
No standard forms. Many commercial leases are not based on a standard form or agreement; each
commercial lease is customized to the landlord's needs. As a result, you need to carefully examine
every commercial lease agreement offered to you.
Long-term and binding. You cannot easily break or change a commercial lease. It is a legally binding
contract, and a good deal of money is usually at stake.
Negotiability and flexibility. Commercial leases are generally subject to much more negotiation
between the business owners and the landlord, since businesses often need special features in their
spaces, and landlords are often eager for tenants and willing to extend special offers.
Making Sure the Lease Will Fit Your Business
Before you sign a lease agreement, you should carefully investigate its terms to make sure the lease
meets your business's needs.
First, consider the amount of rent -- make sure you can afford it -- and the length of the lease. You
probably don't want to tie yourself to a five- or ten-year lease if you can help it; your business may grow
faster than you expect or the location might not work out for you. A short-term lease with renewal
options is usually safer.
Also think about the physical space. If your business requires modifications to the existing space -- for
example, adding cubicles, raising a loading dock, or rewiring for better communications -- make sure
that you (or the landlord) will be able to make the necessary changes.
Other, less conspicuous items spelled out in the lease may be just as crucial to your business's
success. For instance, if you expect your camera repair business to depend largely on walk-in
customers, be sure that your lease gives you the right to put up a sign that's visible from the street. Or,
if you are counting on being the only sandwich shop inside a new commercial complex, make sure
your lease prevents the landlord from leasing space to a competitor.
Critical Lease Terms
The following list includes many items that are often addressed in commercial leases. Pay attention to
terms regarding:
- the length of lease (also called the lease term), when it begins and whether there are renewal
options - rent, including allowable increases (also called escalations) and how they will be computed
- whether the rent you pay includes insurance, property taxes, and maintenance costs (called a
gross lease); or whether you will be charged for these items separately (called a net lease) - the security deposit and conditions for its return
- exactly what space you are renting (including common areas such as hallways, rest rooms,
and elevators) and how the landlord measures the space (some measurement practices
include the thickness of the walls) - whether there will be improvements, modifications (called build outs when new space is being
finished to your specifications), or fixtures added to the space; who will pay for them, and who
will own them after the lease ends (generally, the landlord does) - specifications for signs, including where you may put them
- who will maintain and repair the premises, including the heating and air conditioning systems
- whether the lease may be assigned or subleased to another tenant
- whether there's an option to renew the lease or expand the space you are renting
- if and how the lease may be terminated, including notice requirements, and whether there are
penalties for early termination, and - whether disputes must be mediated or arbitrated as an alternative to court.
The Americans with Disabilities Act. The Americans with Disabilities Act (ADA) requires all businesses
that are open to the public or that employ more than 15 people to have premises that are accessible to
disabled people. Make sure that you and your landlord are in agreement about who will pay for any
needed modifications, such as adding a ramp or widening doorways to accommodate wheelchairs.
© 2008 Nolo
*******************************************************************************************
Top Ten Legal Mistakes That Can Sink Your Landlord Business
Know the laws in your state before you rent out space.
Being a successful landlord requires lots of practical know-how, business moxie, and familiarity with
the market. Until about 30 years ago, the law didn’t have much to do with it. Now, however, federal law
and most states closely regulate nearly every aspect of your business. Not knowing the rules can
land you in lots of legal hot water.
1. Using Generic or Outdated Lease Forms
Most landlords know it’s important to have a written lease or rental agreement. But using the wrong
form can get you into trouble. So-called “standard” forms that are sold everywhere probably aren't
compliant with the laws in your state. If you use a stationery store lease that short-cuts tenants’ rights,
you could find yourself at the losing end of a lawsuit because of an unenforceable lease clause. On
the other hand, some standard forms actually impose greater obligations and restrictions on you than
your state’s law does! (My favorite requires landlords to return security deposits within ten days, which
no state requires.)
2. Asking the Wrong Questions During Applicant Screening
Thorough tenant screening is the most important part of your business -- if you choose poorly, you’re
in for nothing but headaches, with tenants who don’t pay the rent, trash your place, or worse. But there
are limits to what you can ask. Many landlords don’t realize that even well-meaning questions (such
as asking a disabled person about his disability or asking if a couple is married) can be illegal forms
of discrimination. If the applicant doesn’t get the rental, even though your rejection had nothing to do
with the offending question, that disappointed tenant has ammunition for a fair housing complaint
(which fair housing watch-dog groups are eager to pursue).
3. Setting Policies that Discriminate Against Families
Although it’s been illegal to discriminate against families for over 20 years, many owners’ practices
are far from family-friendly -- and are downright illegal. Excluding families because you feel children
cause more wear and tear and you prefer a “mature, quiet” environment is illegal. And while you’re
permitted to limit the number of residents in a unit (in most situations, two occupants per bedroom),
you may not apply that standard differently when dealing with families. The cost of this mistake can be
another trip to your lawyer’s office, to deal with a fair housing complaint.
4. Making Promises That You Don’t Deliver On
It’s fine to be enthusiastic about the benefits of your property, and it’s necessary to do so in
competitive markets, but understand that your enthusiastic promises will become binding if
applicants rely on them when deciding to rent. For example, you may have to deliver the goods if you
assure an applicant of a parking space, satellite service, or a new paint job. A tenant who feels ripped
off may legally break the lease or sue you for the difference in value between what he was promised
and what you delivered. Whether the tenant will win is hardly the point -- you’ll have to respond, which
will cost time and money.
5. Charging Excessive Late Fees
Late fees can be a powerful tool to motivate tenants to pay the rent on time. And while a higher fee can
be a better motivator, some landlords cross the line, by setting fees that bear little resemblance to the
actual damages they suffer when tenants pay late. Courts are increasingly invalidating excessive late
fees that can’t be justified with hard evidence. You’re better off setting a modest fee that reflects your
true damages, and dealing with chronic late-payers with pay-or-quit notices.
6. Violating Tenants’ Rights to Privacy
Most states have detailed rules on when, for what reasons, and with how much notice you may enter
a tenant’s home. Yet many landlords stop by unannounced, asking to check things over, perform an
on-the-spot repair, or show the place to prospective tenants. Repeated violations of a tenant’s privacy
(or even one outrageous violation) can excuse a tenant from any further obligations under the lease
and may also result in court-ordered money damages against the landlord.
7. Using Security Deposits for the Wrong Projects
The most frequent types of cases heard in small claims court are arguments over security deposit
retentions. Yet the basic rule -- that deposits should be used only to cover damage beyond wear and
tear, needed cleaning, and unpaid rent -- isn’t hard to understand. Still, landlords routinely use the
deposit to cover appliance upgrades, cosmetic improvements and other refurbishing, not repairs. Not
surprisingly, many of these landlords lose these cases in small claims court.
8. Ignoring Dangerous Conditions In and Around the Rental
Landlords in virtually every state are required to offer and maintain housing that meets basic health
and safety standards, such as those set by state and local building codes, health ordinances, and
landlord-tenant laws. If you fail to take care of important repairs, deal with environmental hazards, or
respond when your property has become an easy mark for criminals, tenants may break the lease
and, in many states, withhold the rent or make the repair themselves and deduct the expense from
the rent.
Landlords who have failed to make their properties reasonably secure in the face of repeated on-site
crime are often ordered to compensate the tenant-victim when yet another criminal intrudes. These
are expensive ways to learn the law.
9. Keeping Security Deposits When Tenants Break a Lease
When tenants break a lease and leave early, landlords often keep the entire deposit, reasoning that
the tenant’s bad behavior justifies doing so, and that they’ll ultimately need it anyway to cover rent. In
many states, this is illegal -- you must take reasonably prompt steps to re-rent, and credit any new
rent toward the tenant’s obligation for the rest of the lease. Keeping a two months’ rent deposit and
re-renting within a month is not legal.
10. Failing to Return Security Deposits According to Law
This list wouldn’t be complete without another reference to security deposits. Not only are they used
improperly, they’re often not returned according to state law, either. Many states have deadlines by
which landlords must itemize their use of the deposit and return any balance. It’s not uncommon for
tenants to wait many weeks or months for this accounting. In some states, the deliberate or “bad
faith” retention of the deposit will result in harsh penalties against the landlord, such as an order that
the landlord pay two or three times the deposit to the tenant.
© 2008 Nolo
Top Ten Legal Mistakes That Can Sink Your Landlord Business
Know the laws in your state before you rent out space.
Being a successful landlord requires lots of practical know-how, business moxie, and familiarity with
the market. Until about 30 years ago, the law didn’t have much to do with it. Now, however, federal law
and most states closely regulate nearly every aspect of your business. Not knowing the rules can
land you in lots of legal hot water.
1. Using Generic or Outdated Lease Forms
Most landlords know it’s important to have a written lease or rental agreement. But using the wrong
form can get you into trouble. So-called “standard” forms that are sold everywhere probably aren't
compliant with the laws in your state. If you use a stationery store lease that short-cuts tenants’ rights,
you could find yourself at the losing end of a lawsuit because of an unenforceable lease clause. On
the other hand, some standard forms actually impose greater obligations and restrictions on you than
your state’s law does! (My favorite requires landlords to return security deposits within ten days, which
no state requires.)
2. Asking the Wrong Questions During Applicant Screening
Thorough tenant screening is the most important part of your business -- if you choose poorly, you’re
in for nothing but headaches, with tenants who don’t pay the rent, trash your place, or worse. But there
are limits to what you can ask. Many landlords don’t realize that even well-meaning questions (such
as asking a disabled person about his disability or asking if a couple is married) can be illegal forms
of discrimination. If the applicant doesn’t get the rental, even though your rejection had nothing to do
with the offending question, that disappointed tenant has ammunition for a fair housing complaint
(which fair housing watch-dog groups are eager to pursue).
3. Setting Policies that Discriminate Against Families
Although it’s been illegal to discriminate against families for over 20 years, many owners’ practices
are far from family-friendly -- and are downright illegal. Excluding families because you feel children
cause more wear and tear and you prefer a “mature, quiet” environment is illegal. And while you’re
permitted to limit the number of residents in a unit (in most situations, two occupants per bedroom),
you may not apply that standard differently when dealing with families. The cost of this mistake can be
another trip to your lawyer’s office, to deal with a fair housing complaint.
4. Making Promises That You Don’t Deliver On
It’s fine to be enthusiastic about the benefits of your property, and it’s necessary to do so in
competitive markets, but understand that your enthusiastic promises will become binding if
applicants rely on them when deciding to rent. For example, you may have to deliver the goods if you
assure an applicant of a parking space, satellite service, or a new paint job. A tenant who feels ripped
off may legally break the lease or sue you for the difference in value between what he was promised
and what you delivered. Whether the tenant will win is hardly the point -- you’ll have to respond, which
will cost time and money.
5. Charging Excessive Late Fees
Late fees can be a powerful tool to motivate tenants to pay the rent on time. And while a higher fee can
be a better motivator, some landlords cross the line, by setting fees that bear little resemblance to the
actual damages they suffer when tenants pay late. Courts are increasingly invalidating excessive late
fees that can’t be justified with hard evidence. You’re better off setting a modest fee that reflects your
true damages, and dealing with chronic late-payers with pay-or-quit notices.
6. Violating Tenants’ Rights to Privacy
Most states have detailed rules on when, for what reasons, and with how much notice you may enter
a tenant’s home. Yet many landlords stop by unannounced, asking to check things over, perform an
on-the-spot repair, or show the place to prospective tenants. Repeated violations of a tenant’s privacy
(or even one outrageous violation) can excuse a tenant from any further obligations under the lease
and may also result in court-ordered money damages against the landlord.
7. Using Security Deposits for the Wrong Projects
The most frequent types of cases heard in small claims court are arguments over security deposit
retentions. Yet the basic rule -- that deposits should be used only to cover damage beyond wear and
tear, needed cleaning, and unpaid rent -- isn’t hard to understand. Still, landlords routinely use the
deposit to cover appliance upgrades, cosmetic improvements and other refurbishing, not repairs. Not
surprisingly, many of these landlords lose these cases in small claims court.
8. Ignoring Dangerous Conditions In and Around the Rental
Landlords in virtually every state are required to offer and maintain housing that meets basic health
and safety standards, such as those set by state and local building codes, health ordinances, and
landlord-tenant laws. If you fail to take care of important repairs, deal with environmental hazards, or
respond when your property has become an easy mark for criminals, tenants may break the lease
and, in many states, withhold the rent or make the repair themselves and deduct the expense from
the rent.
Landlords who have failed to make their properties reasonably secure in the face of repeated on-site
crime are often ordered to compensate the tenant-victim when yet another criminal intrudes. These
are expensive ways to learn the law.
9. Keeping Security Deposits When Tenants Break a Lease
When tenants break a lease and leave early, landlords often keep the entire deposit, reasoning that
the tenant’s bad behavior justifies doing so, and that they’ll ultimately need it anyway to cover rent. In
many states, this is illegal -- you must take reasonably prompt steps to re-rent, and credit any new
rent toward the tenant’s obligation for the rest of the lease. Keeping a two months’ rent deposit and
re-renting within a month is not legal.
10. Failing to Return Security Deposits According to Law
This list wouldn’t be complete without another reference to security deposits. Not only are they used
improperly, they’re often not returned according to state law, either. Many states have deadlines by
which landlords must itemize their use of the deposit and return any balance. It’s not uncommon for
tenants to wait many weeks or months for this accounting. In some states, the deliberate or “bad
faith” retention of the deposit will result in harsh penalties against the landlord, such as an order that
the landlord pay two or three times the deposit to the tenant.
© 2008 Nolo