Articles in This Edition:

• Dead tenants – Being next-of-kin does not guarantee access.

• What the Internet is teaching your tenants about your duties as a landlord.

• “Re-upping” a lease when tenant issues still exist from the old lease.

• Don’t get burned with this winter’s heating bills.

Dead tenants – Being next-of-kin
does not guarantee access.

Death and taxes – the two things we’ve been told to always count on in life.  As landlords, you are routinely reminded about the need to think of, and address, your tax issues.  But how often are you faced with a situation where you, as a landlord, must deal with death – specifically the death of one of your tenants? 

Luckily CT law provides a roadmap through such sensitive situations with laws dictating how landlords and property owners must deal with the issues of possession of a unit, and the disposition of the dead tenant’s property and personal effects, upon their death.  However, despite the state’s guidelines, how easily you navigate the process may depend largely on how well and how early you’ve prepared for the situation.

• How does the lease address a tenant’s death?

• Does the prospective tenant application contain a “next-of-kin” section that requests and captures all pertinent information – along with a list of the central players if a will is involved (for example, the names and contact information for the tenant’s executor and attorney)?

• What are the operational policies and procedures for dealing with someone seeking access to the unit to remove the deceased’s possessions and personal property?

• How are any residual rent, damage, and/or storage amounts to be collected?

Unfortunately, there’s more to dealing with the death of a tenant than simply contacting the next-of-kin and giving them the key. One client tried this and learned the hard way that handing over a key is an invitation for the “executor” to move-in. That client called us months later to complain that the deceased’s possessions were still in the unit and that the “executor” had not paid anything toward the rent or rental arrearage since she moved-in. To add insult to injury, she had no plans to remove herself or the dead tenant’s possessions from the premises. It was a long, complicated, and expensive experience to resolve the issues that the landlord had created - an experience that ultimately ended up involving both the housing and probate courts.

Also beware of the next-of-kin who, despite simply stating that she was acting on behalf of the dead tenant and the rest of his/her family, does not actually take up residence in the unit, but simply proceeds to remove the deceased’s personal property from the apartment.  If other family members take the issue to the police department or court, the landlord could face arrest or a civil entry & detainer lawsuit for providing the next-of-kin access to the unit without appropriate legal authority.

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What the Internet is teaching your tenants about your duties as a landlord.

It is fairly safe to say that the majority of all Internet users, have, at one time or another, used “the net” to conduct research on a specific topic.  It is also undeniable that the Internet provides ready access to loads of information. However, while many of you have recognized the potential power that this resource affords you in your efforts to manage and market your communities, the Internet can also present some major drawbacks and potential challenges. 

You see, you are not the only individuals relying on the Internet to gather information on the idiosyncrasies of being a landlord.  Your current tenants (and in all likelihood, potential tenants) are happily clicking away - gathering information that could one day, if the situation presents itself, make your life very difficult as a landlord.

This point can easily be illustrated by looking at the results of a simple Internet search.

• The CT Judicial Branch – who, on their website offers free publications on how tenants can better handle foreclosures, evictions, lead poisoning, discrimination, fair rent commissions, lockouts, rent increases, housing code enforcement, as well as how to handle utility charges with the landlord (which by the way, actually discusses having the landlord arrested). 

• The Office of Legislative Research provides opinions on dealing with unhealthy apartments, evictions and the elderly, evicting disabled residents, as well as relocation assistance.

• The “Tenant Rights, Laws and Protections: Connecticut” section of the CT HUD website identifies numerous resources for tenant assistance - among them the CT Commission on Human Rights and Opportunities (aka “CHRO” – the organization responsible for enforcing fair housing laws), the CT Housing Coalition, the Attorney General’s Office, as well as a number of Legal Assistance agencies.  In addition, the site also provides a link that enables visitors to contact a housing counseling agency to learn about additional local resources available to tenants.

• My Google search also returned a link titled  “Bad Landlord – The Source for Renter’s Rights”, which provided a link to the CT Public Interest Research Group and the Fair Housing Association of CT - additional resources in place to assist tenants and help them expand their rights.

These few examples from my simple Google search highlighted how easy it is for your current and/or potential tenant to educate themselves on your obligations as their landlord - and how to enforce those obligations if you fall short.  While I am in no way suggesting you are not meeting those obligations, many of the organizations listed above have as part of their mission, the expansion of tenants’ rights – giving your tenants more privileges on (and control over) the property you own or manage.  So, not only can they learn how to enforce your already existing obligations, they can also learn how to increase those obligations or push the limits as they exist.

Use of the Internet to gain knowledge is growing daily.  Your tenants are obtaining more information than they ever have before.  While some of it is accurate, much of it may not be.  Good or bad, they will attempt to use whatever information they gather to influence your relationship with them or your operations in their entirety.  Be wary of the tenant who takes a position that sounds a little suspicious.  The information they are espousing may be true, false, or somewhere in between.  When they take such a position, be sure to ask them for the source of their information and then vet that source with your landlord attorney to formulate a proper response that addresses the legal rights and responsibilities of the tenant as well as the legal rights and responsibilities you have as their landlord.

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“Re-upping” a lease when tenant issues
still exist from the old lease.

Landlords and property managers put a great deal of effort into ensuring the right tenant is placed into each empty unit.  Thorough applications processes are completed and histories and backgrounds are (hopefully) well researched.  When the new resident moves in for the first time, a clean, new, legal relationship is created between the owner and the resident with the signing of the lease. 

However, a great deal of time passes during the length of that lease. How does the landlord address a situation where they wish to renew an individual’s tenancy, but issues still exist from the original lease term?

Let’s review the leasing process of both the new and existing tenant to help us understand the situation better... 

A potential, new resident applies for an apartment and provides you an assortment of information to evaluate their eligibility to rent from you.  A review of their past tenant behaviors help you make an appropriate decision on offering them a lease.  Once you do offer them a lease, and they accept, their past is no longer important to you.  Who they owe money to, what kind of tenant they were elsewhere, whether they violated rules at their previous apartment, all becomes useless pieces of information to you.   Whatever is past is past.  Their slate is “wiped clean” as your new lease takes effect.  Their prior transgressions are forgiven by you when you sign the new lease.

Now, let’s look at the existing resident.  The situation is only slightly different.  Once a tenant “re-ups” - or accepts your new lease offer, their past is of limited importance to you - EVEN their past history on YOUR property.  As said at the outset, a new lease creates a “new” legal relationship with your resident.  Their slate is “wiped clean” as their new lease takes effect. 

Well, for the most part… 

The primary difference between new residents and existing residents is that existing residents have a previous legal relationship with you that does not disappear.  While they may be afforded a “new” slate with you, they also have an “old” one that does not go away.  While you cannot use your new lease and new relationship to address past issues, depending upon the circumstances, you may still have remedies available to you to address those past concerns.

One way you can address old issues is to be sure to carry them forward into your new relationship.  How?  Include the remedy to the PAST situation as a provision of the resident’s NEW lease.  In that way, you can use your “new” relationship to resolve “old” concerns.  If the problem continues, you can rely on the wording in the “new” lease to further address the “old” issue. 

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Don’t get burned with this winter’s heating bills.

It is once again time to start prepping ourselves for the cold.  As property owners and managers, the onset of cooler temperatures carries with it some unique challenges and requirements.   While the issues that arrive with the winter chill are many, managing heating and utility costs are probably right at the top of your list. 

To help identify whether you are prepared to deal with winter’s heating challenges, we must first identify the type of arrangement you have with your tenants. 

1. Your residents are fully responsible for their utility consumption and pay the utility companies directly. 

2. You pay for the utilities used to heat the unit and incorporate that into the rent payment you receive each month. 

3. You are some combination of the two.

NOTE:  If you feel you fall into a fourth category where you pay for the utilities and somehow pass that cost through to your residents separate from their rent, we recommend you consider consulting with your landlord attorney about how Connecticut currently views Ratio Utility Billing Systems or submetering arrangements. 

Now, back to the topic at hand…  Since it’s starting to once again get cold outside, now is the time to review your property’s energy policy, and more importantly, how to ensure you are in the best position to enforce it with your residents.

As a landlord or property manger, one of your responsibilities is to protect the asset that produces revenues.  While we all agree that fire can have a catastrophic effect on a property, we sometimes forget the truly destructive force that water can have on that same physical building.  And, unlike fire, water problems can fester for a long period before you become aware that it even exists - all the while destroying the building that you are responsible to protect.  So as winter approaches, we’re here to remind you of a well-known fact - frozen pipes are your enemy. 

• If you are in category one (where your residents directly pay the utility company) one of your biggest concerns is a resident who fails to pay their utility bills and has their utilities ultimately shut off [see our May 2009 edition for more on this subject].  For you, your focus should be on how your lease allows you to address this situation with the resident.
  
  If your lease says nothing more than the resident is responsible for initiating and maintaining utilities at the property, are you providing yourself with the most effective means to address a resident’s shortcoming?  The resident is putting your property at significant risk.  For that reason, you may want the significance of that situation more completely described in your lease - along with the consequences to the resident if they fail to adhere to those requirements.  With this approach, your lease language will support your efforts should you need to take formal action to address the resident’s conduct. 

• As for category two (where the utilities are included in the cost of the rent) your primary concern is not the resident who freezes a pipe, but the resident who takes advantage of the fact that you are paying the utilities and uses them irresponsibly.  You know the type - the one who, despite your requests to change their behavior, continues to run the heat at 76 degrees – all while their unit windows are wide open.  Despite the fact that they may find their unit comfortable - and your pipes are very likely safe - their behavior is driving your heating costs through the roof. 
  
  You are not required to allow your residents to heat the neighborhood at your expense.  Consider lease language that encourages - or even demands - energy conservation, while providing you a remedy for the resident who commits energy waste through their lifestyle choices. 

• If you are in category three (some mix of the first two) make sure you provide for both situations so that you are not faced with a problem to which you can’t respond.  Your lease needs to be specific to your situation - else be prepared to make operational adjustments that reflect your desired policies and procedures.  For example, if you don’t want to keep heating the neighborhood, consider a plan where your next capital improvement involves separately metered utilities for which the resident is responsible. 
  
  Also as part of such a plan, make sure you review your lease to ensure it reflects the recent change and that you have the management tools in place to address residents who don’t comply with that change.  Your lease must reflect your operational policies and procedures.  If your residents must pay their utilities directly, but your lease makes no reference to that, you are going to be in trouble should you need to take action against the resident who lets their pipes freeze -destroying your entire building.

Just like you should now be planning for the possibility of snow, you should also be planning for the possibility of turning up the heat on your residents and demanding performance under their lease this winter.  

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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.