Effects of Cases Reviewed in This Edition:

• Threat to Kill is License to Vacate

• You May Need to Dig Deeper after an Eviction Withdrawal

• DSS Security Deposit Guarantee: Take it - You Can't Leave it

• Court's Version of "Notice to Quit" puts Landlords on NOTICE

Threat to Kill is License to Vacate

Threats against the landlord made during an angry tirade are a serious nuisance for which a tenant will lose their apartment.  According to a recent Superior Court ruling, a tenant who drove up to the landlord’s office and started screaming expletives, stating that she was going to “blow someone’s f…ing head off,” committed a serious nuisance under Connecticut landlord-tenant laws and was ordered to vacate the unit she occupied.

The court, after hearing testimony, concluded that the tenant arrived at the manager’s office irate because the landlord’s maintenance technician failed to adequately fix her toilet.  She threatened to blow the owner’s head off, informed the manager to tell the owner she was coming to his office, and jumped into her car and sped away.  The property manager contacted police to let them know the situation.  Shortly thereafter, the tenant arrived at the owner’s East Hartford office, but was refused access into the office until police arrived.  Upon their arrival, the police arrested the tenant. 

Connecticut statutes provide that someone “inflicting bodily harm upon another tenant or the landlord or threatening to inflict such harm with the present ability to affect that harm and under circumstances which would lead a reasonable person to believe that such threat will be carried out” has committed a serious nuisance.  Landlords may immediately take legal action to evict such a tenant and regain possession of the unit they occupy.  The court in this recent case upheld this statute concluding that “it is reasonable to conclude that the defendant’s threat to inflict bodily harm, when uttered in a state of anger or rage by a person with no obvious limitation on the ability to carry out the threat, would lead a reasonable person to believe the threat was serious and would be carried out.”  Even though the threat was not made face to face, this judge concluded that the defendant’s conduct set in motion a series of events requiring police intervention that the landlord reasonably feared would be carried out. 

There are a number of important points to be raised here:

• First, and foremost, if a tenant threatens you or someone on your staff, you are not required to just accept that sort of treatment.  You may take aggressive legal action to remove such a tenant from your property. 
   

• Second, if you are faced with this situation, don’t take matters into your own hands.  Contact local law enforcement and get them on the scene as fast as possible.  Prompt police involvement will not only diffuse the immediate situation, it will also provide valuable documentation and possible witnesses when you proceed to regain possession of the threatening tenant’s apartment. 
   

• Third, if a tenant displays the same threatening conduct toward another resident, the same rules apply.  While the recent case dealt directly with a threat to the owner of the property, the exact situation directed at another tenant should conclude with the same results. 

The Connecticut Legislature has determined that inflicting bodily harm or even the threat of doing so, is unacceptable conduct and has provided landlords an excellent array of tools to address the situation aggressively and swiftly.  You have the right to use those tools at your discretion.  So, take advantage of them and stop worrying about whether that “problem tenant” will show up in your office today.  [TOP]

You May Need to Dig Deeper
after an Eviction Withdrawal

On July 14, 2009, in Waterbury Twin, LLC v. Renal Treatment Centers-Northeast, Inc. by a 3-2 decision, the Connecticut Supreme Court announced the seemingly straightforward rule that a landlord’s withdrawal of a summary process (eviction) action in court terminated the underlying notice to quit.  This opinion is bad news for landlords for five (5) different reasons, all of which will increase a landlord’s legal cost to successfully evict a tenant unless the landlord has excellent legal counsel from the beginning of any tenant dispute.

First, as the dissent notes, there was no reason under Connecticut law for the Court to issue this ruling.  As dissected more thoroughly below, we believe that a notice to quit terminates the tenant’s possessory right to the unit and orders the tenant to vacate and return the keys by a date certain – no more, no less.  The status of a summary process case in court is immaterial, as the notice to quit operates independently and can successfully resolve, without further legal work, a disputed tenancy – for example, the landlord-tenant relationship would completely end if the tenant vacates and returns the keys by the date certain.  The summary process case is merely a vehicle for obtaining the necessary court order to force (i.e. evict) the tenant from the premises when the tenant fails to comply with the notice to quit and retains possession of the premises.  Before Waterbury Twin, a notice to quit was a required component for an effective summary process case in court, but a court case was not a required component for an effective notice to quit.  The Court seems to now have turned this concept on its head in Waterbury Twin. 

Second, the Court’s opinion continues to use loose-language to describe the effects of a notice to quit as the landlord’s act of “terminating the lease.”  This does not reflect the language or intent of the statute governing notices to quit, which says nothing about lease termination.  Rather, it quite clearly and definitively talks about the landlord taking away the tenant’s right to possession – hence the phrase, “notice to quit possession” - not “notice of lease termination.”  This is important for landlords as it raises the question of whether a notice to quit eliminates the tenant’s obligations under the lease – see the related article in this issue on the Sproviero case.  If that sounds absurd, it is – it cannot be the law (or, at least, should not be the law) that a tenant can violate the lease terms – and obtain the enormous benefit of eliminating all of its lease-based obligations – by forcing the landlord to seek to regain possession of the unit with a notice to quit.  We believe that the drafters of the notice to quit statute knew exactly what they were doing by using the phrase “notice to quit possession” – by focusing only on the possession question, the statute leaves the tenant obligated for all other lease requirements, period, just like any other contract. 

Third, the Court relies on New York law to support its holding, thereby diminishing the importance of Connecticut’s statutes, legislative history, and decades of case law and experience with landlord-tenant matters, or implying – without an evaluation – that New York landlord-tenant law somehow parallels Connecticut’s system.  However, neither the Court’s majority nor the dissent noted any similarity or connections between the two state’s laws.  The Court says that New York also requires a “notice to quit” for a summary process case, but neither the New York statute at issue nor the New York cases that the Court cites actually use that phrase.  Nonetheless,  the Court has introduced a substantial wildcard in Connecticut summary process litigation regarding what New York law says, and how a New York court would rule, in a given situation.  Therefore, Connecticut landlords can now expect to face challenges to long-standing approaches in Connecticut summary process litigation with tenant-advocates arguing New York law.  The issue is not whether the tenants will win these arguments, but the cost to Connecticut landlords to address these arguments and get definitive resolution.  

Fourth, the Court’s opinion has potentially reinforced the argument of a minority of tenant-advocates that a landlord’s withdrawal of a summary process case is equivalent to a tenant’s victory in the case, which is otherwise without merit.  Under well-established Connecticut law, a landlord has the unfettered right to withdraw a case for any reason (or no reason at all) before evidence is heard by the trial court.  This law was designed to promote the litigation of cases only when both parties had "all their ducks-in-a-row" and the trial court could get to its core function of hearing the evidence and issuing a decision applying that evidence to the law and making that a court-enforced judgment.  Why does this potential change matter for landlords?  In the residential setting (by statute), and the commercial setting (by possible lease clause), landlords can now expect an increase in tenant claims for the landlord to pay the tenant’s attorney’s fees and costs for the tenant’s alleged victory (or, as often stated in leases, “prevailing party” status) in the withdrawn case.  If that sounds absurd, it is – victory, or prevailing party status, belongs (or, at least, should belong) only to those parties who actually win at trial and obtain a court judgment. 

Finally, the Court seems to have definitively resolved – in favor of tenants – that the question of the notice to quit’s validity is to be tested by a motion to dismiss the landlord’s case rather than at trial.  Previously, under a decades-old Supreme Court case, a trial court had the ability to hear the summary process case if:

1. The landlord demonstrated good cause to terminate the tenant’s possessory right to the unit and
    

2. Had given the tenant fair notice of that decision, thereby enabling the tenant to effectively defend the case in court.  Now, the Court is stating that a tenant can challenge the notice to quit in a motion before answering the complaint and evidence is heard.  This will increase the costs of litigating a case for landlords if the notice to quit is not bulletproof. 

DSS Security Deposit Guarantee:
Take it - You Can't Leave it

Last month, a Connecticut Superior Court Judge, citing no specific authority, extended the “lawful source of income” protections to those applicants who tender a security deposit guarantee (“guarantee”) issued by the State of Connecticut Department of Social Services (“DSS”).  The landlord originally agreed to accept the guarantee and arranged a move-in date with the applicant.  When the applicant appeared on the move-in date, the landlord refused access to the unit because the tenant did not have the security deposit in cash.  The applicant filed a complaint with the Connecticut Commission on Human Rights and Opportunities (“CHRO”) which subsequently sued the landlord based on the landlord’s conduct.  The Superior Court Judge concluded that DSS security deposit guarantees issued for the purpose of housing assistance meet the definition of “lawful source of income.”  Thus, refusal to accept the guarantee, per this Judge, is illegal discrimination under fair housing laws in Connecticut. 

While the court has not rendered its final decision on the penalty the landlord faces, the Judge certainly telegraphed her intent with “the State of Connecticut would be entitled to a civil penalty to vindicate the public interest in an amount not exceeding $10,000…”.  Thus, the landlord may be facing a penalty of as much as $10,000.00.

The law in Connecticut makes it illegal to discriminate against someone based on their lawful source of income.  That law has been interpreted to mean that a landlord may not refuse to rent an apartment to someone simply because they receive a government-sponsored rental subsidy.  The practical application with which most landlords are familiar and with which many struggle arises when an applicant for an apartment receives or will receive Section 8 assistance.  The landlord, if the applicant is otherwise qualified, cannot refuse to accept the applicant simply because of the subsidy.  This oversimplifies the issues surrounding this topic and the judge’s recent decision makes things even more complicated.

The obvious first lesson from this case is that if you don’t know what a DSS security deposit guarantee is and how it works, be sure you find out soon.  They are becoming more common and their use is likely to grow in the foreseeable future.

The second lesson in this case is that there is at least one judge (and you should expect others to follow), who believes DSS security deposit guarantees are a protected “lawful source of income.”  If you are offered one, this judge says you have to take it.  However, the important point is, make sure it is what you believe it to be.  If the guarantee is not signed by DSS, it is not a guarantee – it is merely a piece of paper.  Unless DSS has signed the guarantee, they have not agreed to cover the security deposit you are demanding.  Thus, you have not been offered a “lawful source of income.”

The last lesson, not specifically from the case, is that landlords need to know how to properly handle the “security deposit” for the units where a guarantee is in place.  You will want to research how to record any damage to the unit in a way that will support your claim with DSS when you invoke the guarantee they provided to you.  A client recently made a claim for the security deposit under the guarantee and was forced to present evidence at a hearing to see his claim paid out.

The operations for your company around security deposit guarantees are something to evaluate.  As DSS issues more and more guarantees, you are likely to see them more frequently.  And, since the trial judges say you must take them, you must take them – at least until you are able to get the law changed.   [TOP]

Court's Version of "Notice to Quit"
puts Landlords on NOTICE

In its July 2009 Waterbury Twin case (described in a related article in this issue), the Connecticut Supreme Court favorably cited the Connecticut Appellate Court’s June 2008 decision in Sproviero v. J.M. Scott Associates, Inc. that should dispel once and for all any notion that serving a tenant with a notice to quit in Connecticut does not carry significant legal, operational, and practical consequences for landlords.   

In Sproviero, the commercial tenant’s lease obligated it to maintain the septic system, which it did not do after the landlord served the tenant with a notice to quit possession for lapse of time, lease violations, and nuisance.  While the case was pending, the septic system failed repeatedly and cost the landlord $125,000.00 to pump it to prevent breakouts.  The landlord sued the tenant for this amount in damages under the lease.  The trial court held – and the Appellate Court affirmed – that the landlord was not entitled to collect anything from the tenant.  It held that the notice to quit terminated the lease and the tenant’s obligation to maintain the septic system. 

It noted that the landlord continued to accept the last-agreed upon monthly rent of $806.00 as use and occupancy payments, then increased the amount due monthly to $940.00 during the case, which the tenant paid.  The Appellate Court held that the landlord had thus been fully compensated for all costs associated with the tenant’s occupancy of the unit, even though it would have taken over eleven (11) years of monthly use and occupancy payments at the $940.00 per month level to match the repair bills for the septic system alone (not to mention the cost of any other lease-related obligations, including possessing the space to the exclusion of the landlord or other potential tenants). 

As a matter of law, the Appellate Court held in Sproviero that when a notice to quit ceases to be effective – for example, when the landlord revokes it, withdraws a summary process case in court based on the notice to quit (see the related article on the Waterbury Twin case), or loses at trial – “revival of lease obligations at ‘square one’ . . . operates prospectively only and does not require ‘retroactive revival’ of [the] tenant’s obligations under [the] lease ‘because the landlord is compensated for assuming a tenant’s obligations through use and occupancy payments.’”  This means that a notice to quit terminates a tenant’s obligations under a lease, which do not resume back to the date that the marshal served the notice to quit when the notice to quit ceases to be effective.  Thus, the period of time between service of the notice to quit and the end of its effectiveness means that the tenant is governed by nothing more than applicable statutes and a “use and occupancy” payment obligation.  And, as if that were not enough, the tenant’s lease-based obligations will never exist for that period of time, even if the notice to quit goes away. 

This was not the common understanding of a prior long-standing Appellate Court case called Hird, which held that a judgment for the tenant after trial meant that “the parties were returned to their status quo before [the date the notice to quit was served],” and that the landlord and tenant were “‘back to square one,’ and the continuance of their lease . . . was restored.”  If that seems to be common sense, it is – if the landlord loses the summary process case or revokes the notice to quit, the parties return to their original lease status (i.e. the tenant has an unequivocal right to use and occupy the premises with all the related lease-based obligations) as if the notice to quit were never served.  However, the Sproviero court has now thrown this understanding out and replaced it with an unfavorable rule for landlords. 

This begs the practical question: Who is responsible for all the expenses the tenant agreed to pay for or handle under the lease during this period of time?  The Appellate Court says that the landlord is responsible and must address these additional responsibilities in the “use and occupancy” charge to the tenant.  So, according to the Appellate Court, this means that the landlord cannot simply use the last-agreed upon rent to govern the tenant’s use and occupancy obligation.  Rather, the landlord must engage in a comprehensive evaluation and determination of the monthly cost to the landlord for the tenant’s continued presence in the premises as if no lease existed, and then charge (or seek to charge) that amount for “use and occupancy” from the tenant.  Otherwise, the landlord will forever lose the right to make such a claim for monies “owed” under the lease. 

Now, more than ever, speed in summary process litigation will be critical to reduce the landlord’s exposure to this law and any potential miscalculation by the landlord of the monthly use and occupancy amount.  Indeed, the Appellate Court noted its dissatisfaction with the lack of “summary,” or fast, summary process case resolution in Sproviero and implicitly blamed the landlord and its lawyer(s) for the delay (the case involved commercial parties represented by counsel and took almost seven (7) years to conclude at the trial level).  The Appellate Court believes that the summary process statute provides an “expeditious remedy” for landlords to “secure a prompt hearing” and obtain possession of the premises “without suffering the delay, loss, and expense to which, [under the pre-summary process statute cases], they might be subjected by tenants wrongfully holding over their terms.” 

Finally, the Appellate Court observed multiple times in its opinion that the landlord could have replaced the entire septic system for $30,000.00, which would have been 25% of the total maintenance and repair costs that it incurred.  While this carried no legal significance, it certainly seemed to have affected the judges negatively toward the landlord, which is exactly opposite what the landlord wanted in litigation.  The judges seemed to want to remind landlords to continue the application of sound, practical business judgment to all of their landlord-tenant relations, even when a case has gone to litigation. 

The implications for the Sproviero case are large for Connecticut landlords – aside from the guidelines established in this case and discussed above for landlords, including the calculation of use and occupancy charge(s), see the Key points to remember section of this issue for other ways a landlord can avoid potentially having to face such a situation. [TOP]
 

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