Can Tenants Pay Less Rent due to Easement Work? - Posted by Eric Wood

import · September 22, 2008, 12:26pm

Posted by Beachbum on September 24, 2008 at 21:28:51:

I have been responsible for or directly managed, on average, 500 units per year since the mid 90’s. Originally my management was in Nebraska and Iowa, and I also worked closely with, and shared knowledge and strategies with, several large investor’s in Kansas and Missouri as President of a local investment group for two years. For nearly the past 10 years, I have been practicing in Hawaii and obtained my Broker’s license, although I am not involved in sales. I also, early in my career, sat down with my personal attorney and together we developed what was, for my personal investments, a set of documents for renting, buying and selling. I also manage property (here) for investors from California, Washington State, Colorado, Japan, Taiwan, Korea, and China. We have frequent discussions about the differences, and similarities, in Landlord/Tenant laws in many locales. I would not presume to know the laws of every jurisdiction, and I usually offer a disclaimer to check local laws with any posted comments, although I failed to on this particular thread. My apologies for that. I do, in fact, have copies of fairly recent Landlord Tenant law for all 50 States, and a good number of them, including the states I have actively practiced in, do clearly disallow entering a contract with terms outside of the landlord/tenant law. Fundamental contract law applies, to any contract, but you cannot simply draft an arbitrary document that will reduce specific rights provided in the Landlord/Tenant codes, when dealing with a place of residence. As an example, both Nebraska and Hawaii have specific regulations regarding pets and pet deposits. You can not circumvent those limitations. You may, with specificity, modify some aspects, but you do not have free rein. NOT addressing the pet issues in the rental agreement and any addenda will likely leave you in a weak position in the event of a dispute. IMHO, the OP had allowed the pet, and now the pet cannot be contained. That is certainly a loss of use, and a change in the original bargain. If your particular judge/jurisdiction is tenant friendly, I would expect to see the owner responsible for expenses incurred by the tenant to address the situation.

It also seems to be quite common that LL/T laws have specified time frames that come into play for certain actions/inactions. One of these is initiation of repairs. If a tenant gives appropriate notice as local law requires, and the LL fails to undertake repairs, or provide a reason why, the tenant has every right to commence repairs. The key, of course, is the tenant must follow the local requirement, and, if it ends up in court, who is to say what is a reasonable excuse for not starting? Again, it depends if your courts are tenant friendly, or LL friendly.

Residential LL/T relationships are, I dare say, ALWAYS governed by BOTH the LL/T code, AND the written rental agreement which must conform to that code.

Having said that, you can create any kind of agreement you want…that’s exactly what I did with my own attorney many years ago. It IS a 100% legal, binding agreement on both parties…right up until the Judge says it (or some portion of it) is NOT. Even then, it may be perfectly legal…but unenforceable, or perhaps voidable. None of these outcomes helps your position, and the only real winners are the attorneys involved.

I have never lost a security deposit or damage dispute initiated by a tenant, or had an eviction denied, but I can tell you with certainty that in every case it would have been better from a purely financial standpoint to negotiate a “middle ground” agreement instead of playing hardball. Unfortunately some people just refuse to give an inch, and the only decision they will accept is the Judges.

import · September 22, 2008, 12:26pm

Can Tenants Pay Less Rent due to Easement Work? - Posted by Eric Wood

Posted by Eric Wood on September 22, 2008 at 12:26:26:

We own a single family house within a gated community governed by an HOA. We’re renting the house. It has a fenced yard. The utility co. had to install a drainage line adjacent to our house and had to remove part of the backyard fence. Our tenant says she is going to pay less rent because she cannot let her dogs outside in the yard since the fence is partially gone. She says that’s the main reason she rented our house. The utility company said the fence would be rebuilt a couple weeks ago, and now says they’re having trouble getting supplies. I understand my tenant’s frustration, but is is right that she pay less rent due to work that I have absolutely no control over? I’ve asked the util. co. to put in a temp fence in the meantime and and awaiting a return call on this idea. Thanks for you help.

import · September 22, 2008, 2:27pm

Its your call not theirs - Posted by Rich-CA

Posted by Rich-CA on September 22, 2008 at 14:27:06:

This is one of those things where you, not the tenant, get to make the call. Here is what I would do:

(1) The rent is for staying. Pay less, you need to move out. I send the late notice when the lease says its late unless I have the full amount.
(2) if they come to me and ask for a reduction because of the loss of use, I will decide what I think the use is worth. For example, on a $500 per months rent in a 1500 sq ft house with a small yard, the yard might be worth $50 per month because almost all of what a person rents is the building and not the dirt
(3) if they did not say that was the main reason for renting in the app, then like the person who buys a car and signs a statement that nothing said verbally matters, I would tell them if it was so important why did they not put it in writing up front like I (the landlord) did for everything important to me.

But if they said they wanted a reduction in advance, I would ALWAYS work with them unless they were being unreasonable. If, instead, they shorted the rent, then out they go and the file goes to collections to boot.

import · September 23, 2008, 9:42pm

Re: Its your call not theirs - Posted by Beachbum

Posted by Beachbum on September 23, 2008 at 21:42:06:

If you did not notify the tenant about the easement prior to renting, I believe the problem is all yours. The agreement or move-in condition form, or your ads when you had it on the market probably said something about the “fenced yard”…now it’s not fenced. The tenant is rightfully due a reduction in rent, regardless of who decided to do the work.

As to #1, in most jurisdictions the tenant has the right to make repairs up to X amount and deduct it from the rent. They could simply choose to put up their own temporary fencing.

Regarding #2 above, if they need to board the dog because they normally leave the dog out while they are at work, that also becomes your problem. It doesn’t matter what YOU think the value is. They can prove their actual expenses easily (assuming they DO have out-of-pocket).

Your #3 above is simply ludicrous.

As an alternate scenario, what if they decide to consider this a “constructive eviction”? Then you immediately have a vacant house, no income, and a yard with a big hole in the fence.

Landlord/Tenant relations are a TWO-WAY street. If you have a “good” tenant, it will pay you much more in the long run to be fair, but firm, rather than completely autocratic.

import · September 24, 2008, 10:27am

May be true in your area BUT - Posted by Rich-CA

Posted by Rich-CA on September 24, 2008 at 10:27:26:

Your response was absurd. There is not a subdivision around that has no easements. These are a fact of life and it is disingenuous to assume ignorance on the part of anyone living in a subdivision is any kind of excuse for shorting the rent.

(1) In most jurisdictions? In how many do you manage rental properties? I have managed in CA, AZ, CO and TX. This broad brush statement is simply not true. In all cases this is determined by what the lease says and in AZ the landlord-tenant act says the tenant has to talk to the owner (or their agent) first.
(2) In MOST jurisdictions things like pets are handled under contract law and are not usually addressed by the landlord-tenant act or the collections of laws that serves that purpose. Under contract law, if there is a written agreement, then the only terms of the agreement are the ones in writing. In CA the law recognizes verbal agreements but case law has made these unenforceable since both parties have to not only agree that such an agreement exists but also substantially to what the agreement was.

(3) you response here betrays ignorance. Under contract law if the lease says that it is the sole agreement, then that is exactly what both parties agreed to. The keys here hinge on what the lease says, whether or not the tenant contacted the landlord before shorting the rent, and so on.

It may be a two way street, about the only agreeable thing in your post, but the tenant does not get to unilaterally decide how much a particular change is worth, so if they short the rent then they have made a unilateral decision which the landlord can accept of evict.

My leases all specify that if the tenant does not get approval for any expense in advance, its their bill to pay. It also states that if the rent is short its grounds for immediate eviction action. This has been cleared by attorneys in each state where we do business.

If a tenant shorts the rent with no other communications that is completely autocratic, so the landlord’s response needs to be based on how the tenant set the stage. There are plenty of posts here and case histories in Leigh Robinson’s excellent book “What’s a Landlord to Do” that talk about accommodating landlords getting screwed by tenants playing them for patsies.