Articles in This Edition:

• The heat is on:  Dealing with belligerent tenants.

• Who ever said fair housing was fair?

• Fair rent - Who gets to decide what's "fair"?

• Early lease termination clauses - Protecting what happens after the first year.

The heat is on:  Dealing with belligerent tenants.

These are uncertain and, for some, stressful economic times.  The news cycle is relentless – there is story after story about the unavailability of credit or loans, the stunning drop in the stock market, an uncertain job market, a Connecticut state budget crisis, and massive borrowing and spending by the federal government – many within the context of “the government” stepping-in to “solve” the problems.  Landlords and tenants can be real life examples of some of these hardships, or their behavior may reflect the underlying concern that many have about the state of the economy and the desire for the government to save the day. 

Landlords should expect to have, particularly within this environment, a verbally or physically aggressive tenant spouting about a problem involving the property (or property management staff) – a belligerent tenant.  How do you manage this situation?

The key rules to follow when dealing with a belligerent tenant are:

1.       Treat the tenant with the same respect and courtesy you expect from the tenant;

2.       Demand that the tenant behave in the same manner; and

3.       Recognize that the tenant (even a belligerent tenant) may have a legitimate complaint.

This tone should be set as early as possible, beginning with the person who first greets the tenant who (if possible) should not be the ultimate decision maker (e.g, the property manager).  This approach demonstrates to the tenant that the landlord is genuinely interested in learning about the tenant’s needs or concerns, and creates that all-important buffer between the tenant and the ultimate decision maker to facilitate productive responses and decisions. 

The landlord should make the first contact person responsible for identifying the tenant’s needs or concerns.  Train this individual in the use of open-ended questions – those that begin with who, what, where, when, how, and why – and to take notes, so that the first contact person can adequately report the issue(s) to the decision maker.  Generally speaking, it is not acceptable for the first contact person to report to the decision maker that the tenant wants to address something generic like “rent,” “maintenance,” or “property condition.”

In the absence of a first contact person in the office, landlords can use the amenities to their advantage.  If there is a water cooler or coffee maker, a terrific way to disarm the belligerent tenant is to offer – and then get for the tenant – something to drink.  This gives the landlord a chance to process the issue(s) that the tenant raised, and gives the tenant a chance to reset his/her own thermostat.

What if the tenant does not calm down?  If, at any point, the tenant verbally or physically threatens or assaults anyone, the landlord’s simple rule should be to call the police immediately and the landlord attorney next to start a summary process case – no ifs, ands, or buts.  This does not mean that you have to have the tenant arrested or evicted (although either may be necessary and appropriate), but you will have indelibly established for the community that such behavior will bring swift and certain action by the landlord.

Short of that situation, landlords should train their staff to deal with continued tenant belligerence – staying calm, identifying the tenant’s behavior aloud, asking the tenant to change his/her conduct, and identifying the next step if the tenant does not change behavior.  That next step can be calling the police or referring the tenant to your landlord attorney for a summary process case –  you are running a business, and tenants may not behave in such a way as to interfere with that business.

At this point, you will have resolved the tenant’s belligerence either through excellent interpersonal and meeting skills, or through the involvement of the police, and you can turn toward resolving the underlying issue(s).

 Special situations arise with the tenant who chooses to involve a government entity like the Mayor’s Office, Governor’s Office, Police or Fire Department, and Building or Health Inspector – or, with Project-Based Section 8 properties, the U.S. Department of Housing and Urban Development (“HUD”) – rather than (or the same time as) notifying the landlord of their complaint.  Often, government agencies will demand that the landlord investigate the complaint and issue a report to the government of the situation and its resolution, no matter how illegitimate or small the issue may be.  Think about the situation from the government agency’s perspective: they may not know whether an issue is legitimate or illegitimate, large or insignificant, and will not want to expose themselves to the tenant’s (their constituent) claim that they did nothing.  Therefore, they will naturally demand that you address it – if for no other reason than to create a paper trail that they “did something” and for you to educate them about it.

In an effort to reduce the time consumption and expense of dealing with this type of situation, many landlords will simply resolve it and confirm the resolution to the government agency (often verbally) without providing any details about the issue such as who caused it, whether the tenant notified the landlord about it, whether it was legitimate or illegitimate, whether it was large or small, and whether the tenant is in good standing or subject to a summary process (eviction) case.  Often, this creates longer-term issues for the landlord, because the government may (and often will) treat the landlord’s straightforward response as an “admission of liability for a legitimate and large issue that the tenant in good standing previously raised with the landlord,” which likely could not be further from the truth.

Unless it is an emergency, a landlord is not expected or obligated to provide all of the information or an answer to the complaint right away.  As a landlord, use this plan of attack:  Call the government representative by phone and simply acknowledge receiving the tenant’s complaint and describe your plan to address it, and then follow-up in writing by email or letter about that plan.  Meet your commitments to investigate the issue and report back to the government.  Show them that they can count on your word to resolve the situation and educate them about what is happening.  If the issue is real and the landlord’s responsibility, resolve it completely and comprehensively.  If not, say so in writing to the government.  Take the opportunity to develop your reputation with them as a straight-shooter.

The key rule here is documentation and detail.  Moreover, if the tenant is a repeat-offender with complaints that have no grounds, the landlord should involve its attorney to assist in delivering that message to the government and concurrently starting a summary process (eviction) action against the tenant for adversely affecting the community’s operations and finances.   [TOP]
 

Who ever said fair housing was fair?

We are all part of a “protected class” of people under the federal Fair Housing Act and Connecticut’s Discriminatory Housing Practices Act (“CDHPA”) – and these aren’t the only laws that apply .  That’s right, all of us.  Don’t believe me? 

The CDHPA prohibits discrimination in housing based on:

1. Race or color

2. National origin

3. Ancestry

4. Religion

5. Sex

6. Marital Status

7. Age

8. Familial Status

9. Disability

10. Lawful source of income

11. Sexual orientation

I bet you fit into at least ten of these categories.  And, so does everyone else.  Exactly what it means to discriminate against someone based on one of these eleven categories is not nearly as straight forward as you might think.  There are subtleties to negotiate with each one and having sound training, policies, and enforcement is the best way to ensure that you and your company are not faced with the prospect of defending against a claim for discrimination.

Even then, you are not guaranteed that someone won’t make a claim.  Recently, we have seen an increase in fair housing complaints against management companies and their employees.  These complaints have highlighted two important things. 

1. You must thoroughly document your processes and your communications with your applicants/residents; and

2. With proper, thorough documentation, it is possible to defend yourself and your company, and protect your business operations as you have designed them, when the complaint made against you is frivolous.

The concept of “fair housing” and the possibility of violating it has become a paralyzing force for many multi-family professionals.  The prospect of defending discrimination claims and the cost of doing so - both the economics and the staff interruption - make avoidance a common approach.  However, despite the long list of “protected classes” of people, you need not live if fear that every decision you make could fun afoul of “fair housing.”  What you need to know is how to spot a potential situation so that when faced with a question, you can contact your landlord attorney and verify that your intended act does not create unintended consequences.  Then, with your proper procedures and documentation in place, take the actions you know are appropriate and stop worrying. 

Fair rent - Who gets to decide what's "fair"?

Since we are discussing all things “fair” this month, I figured the Fair Rent Commission (“FRC”) should get some airtime as well.  While not as active as places like New York City, the FRC is Connecticut’s version of “rent control.”  And, since most of you are doing regular market surveys so that you remain attractive and competitive to potential renters, the likelihood of ever having a run in with the FRC is hopefully, relatively low.  However, those of you with “market rent” properties fall within the jurisdiction of these volunteer bodies and should know something about them before you get your first letter or phone call.

FRC’s are municipal organizations whose responsibilities include handling complaints by tenants who claim, among other things, that they are paying too much money to live in their apartment.  One of the first things you should know is that there is an extensive list of items a FRC must evaluate in determining whether the rental charge or increase your tenant is complaining of is excessive to the point of being “harsh and unconscionable.”  You can see the list of criteria here.  Only after all of these criteria have been considered can the FRC make such a determination.

Beware of the FRC commissioner who claims there is a list somewhere that states what the fair rent is for your property.  No such list exists.  Even the list someone send you attached to the letter claiming you must abide by it is not the final answer on the fair rent for your apartment.  Don’t let them convince you otherwise.

Another important fact for you to consider is that many fair rent commissions advocate for tenants.  While they are supposed to be a neutral entity, determining fairness against all of the proper criteria, such is not always the case.

Early lease termination clauses - Protecting what happens after the first year.

Residential leases often contain an early lease termination clause obligating tenants, who want to break the lease early, to give notice and pay to the landlord a certain amount of money, usually identified as one or more month’s rent, to end their obligations under the lease.  Landlords include these clauses in an effort to discourage early lease termination and/or to provide clarity regarding the landlord’s demands from tenants in the event of early termination.  But are early lease termination clauses more trouble than they are worth?

First, many tenants would not even consider early lease termination as an option were it not described to them in such a lease clause.  Most tenants that enter a one year lease understand and behave in a manner consistent with a one year obligation.  If they need to leave early, they will either approach the landlord for permission or simply leave.  In either case, they know that they are on the hook for the balance of the rent (unless and until the landlord leases the space to a new tenant).  There is no confusion about the lease term or its financial obligations.  In contrast, a one-year lease with an early termination clause is not really for one year – it is merely as long as the early lease termination clause conditions that the tenant can invoke at any time.   

Second, the practical application of these clauses raises questions for which there are no clear answers, which often means the landlord may face tenant claims or litigation when trying to take back possession of the unit, account for the departing tenant’s financial obligations, and rent the unit to a new tenant.  For example, what is sufficient notice from the tenant?  Similarly, can the landlord charge an extra month’s rent when the tenant is one-day late with the required early lease termination notice?  If the landlord collects two months rent from a departing tenant under an early lease termination clause and then enters a lease with a new tenant one month later, is that landlord collecting rent from different people for the same space at the same time?

Third, what happens if the departing tenant fully complies with the early lease termination clause, and then sues the landlord for property damage, personal injury, or unsatisfactory (from the tenant’s perspective) security deposit accounting?  If the early lease termination clause does not address these issues, the landlord may face tenant claims or litigation without the normal counterclaim items, such as lost rent and re-leasing expenses.

Alternatively, landlords can completely ignore the concept of early termination in the lease.  If the tenant seeks an early termination, the landlord (if, and only if, it wants to do so) can engage in standard settlement negotiations with the tenant to terminate the lease under a separate agreement.  In that “lease termination agreement,” the landlord and tenant can agree on the terms under which they will end their relationship, which are often much clearer (particularly for the landlord) when the tenant wants to terminate the lease than when the parties first enter the lease.  Landlords can include these items in such an agreement:

• What the tenant will pay;

• When the tenant will vacate and return the keys;

• Whether the tenant releases all (or some) claims against the landlord; and

• What happens if the tenant violates any of those provision(s). 

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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.