Rights and Remedies of a Landlord - Module 5 of 5

Module 5: Rights and Remedies of a Landlord

Pre-Lease Protections

When a tenant materially breaches obligations under a lease agreement, such as by failing to pay rent, the landlord may terminate the agreement after notice and after allowing reasonable time to remedy the breach. However, terminating a lease agreement may involve initiating an eviction proceeding, which can be a lengthy and costly process. Also, tenants may abandon the premises while still owing rent, making recovery difficult. Finally, tenants may leave behind significant damage and waste in the leased premises, which can represent a substantial cost to the landlord, which may be difficult to recover. For these reasons, many lease agreements include mechanisms which protect the landlord from future costs due to a tenant’s misconduct.

One very common form of such protections is the security deposit. This money is given as a security at the outset of the lease and is considered to be a debt assumed by the landlord to the tenant, or, alternatively, it can be placed into escrow until the termination of the lease.[1] At that point, the deposit must be returned to the tenant, minus any portion the landlord may retain in case of rent default or damage to the property. To protect the tenant, some states require that the deposit be held in escrow in a local bank for the duration of the tenancy.[2]

A standard security deposit is one- or two-months’ rent, though the amount is up to the landlord. Some states, however, do place limits on the total amount that can be asked as a security deposit, such as capping deposits at two month’s rent.[3]

In addition to requiring a security deposit, a lease agreement will often include a rent acceleration clause. Under the terms of such clauses, should the tenant fail to pay rent and fall into default, the balance of rent owed for the entire term of the tenancy immediately becomes payable in full. The landlord may demand the unpaid rent in one lump sum.[4]

Note, however, that a landlord may not invoke the rent acceleration clause, demanding immediate payment in full, and then terminate the lease. Rent acceleration is a means of protecting the landlord by rearranging the schedule of payment so that rent for the entire term is paid in advance.[5] So, in case of rent default, the landlord must choose between terminating the lease and seeking to recover past rent owed, or continuing the lease while demanding full payment in advance for the balance of rent for the remainder of the term.

Termination of the lease and eviction

If a tenant fails to pay rent, that is considered a material breach of the terms of the lease agreement, and the landlord may terminate the lease without waiting until the lease term has come to an end.  First, the landlord must notify the tenant that he has defaulted and provide time for the tenant to pay the outstanding rent. Should the tenant fail to submit rent payments that are owed, the landlord may terminate the lease.[6]

Note that lease termination is not automatic upon default and breach of the lease. The landlord may elect to continue the lease and use judicial remedies to seek damages for the costs incurred by the tenant’s breach, in the form of backpay of rent and any attendant costs.[7] Should the landlord choose to terminate the lease, the tenant will be informed, and must vacate the premises, as she no longer enjoys the right of possession and occupation.

If the tenant does not vacate the leased premises, the landlord may initiate eviction proceedings. A similar eviction procedure would be initiated when a tenant remains on a property after the lease term has come to an end. Eviction proceedings commence when a landlord files a formal claim in court, known as a forcible entry and detainer or an unlawful detainer. This is a request for the court to remove the tenant who is now in unlawful possession of the landlord’s property.[8] Upon filing of an eviction claim, the tenant will receive a summons, and may present defenses to eviction, such as claiming retaliatory eviction, discrimination, proof of payment of rent or evidence of the landlord’s failure to properly maintain the rental unit.  

If the court rules in favor of the landlord, the judge will issue an order for the tenant to vacate within a short time, usually several days. If the tenant has not vacated by the date specified in the order, the designated law enforcement official can enforce the order, and may remove the tenant and the tenant’s possessions and change the locks to prevent re-entry by the tenant.[9]

Self-Help Repossession

Under the common law, if a tenant remained in possession of a property when he no longer has the lawful right of possession, the landlord was permitted to use reasonable force to evict the tenant. Today, many states prohibit such a self-help remedy, in particular when it comes to residential leases, and require all evictions to be conducted through the courts and law enforcement.

Some jurisdictions do permit limited self-help, which allows the landlord to re-enter the premises through peaceable means.[10] However, courts have often interpreted peaceable means very broadly to discourage self-help.[11] Remedies such as terminating utilities, changing the locks, removing doors or windows, or removing the tenant’s property, in order to end the tenant’s occupancy, are also often prohibited.[12] Even those states which preserve the right of self-help in recovering possession may allow for civil liability actions against the landlord, if self-help crosses the line into the use of excessive force.[13]

Surrender and Abandonment

Tenants may wish to terminate a rental agreement prior the end of the term agreed upon in the lease agreement. In such a situation, the tenant may seek to come to an agreement with the landlord. If the landlord agrees to end lease obligations, the tenant is considered to have surrendered the lease. At that point, the lease is terminated, and the tenant must vacate the property. The tenant is then no longer liable to pay rent.[14]

However, the landlord is not obliged to accept the surrender, and may hold the tenant to the original lease terms. Under such circumstances, if the tenant nevertheless abandons the property and ceases to pay rent without rightful grounds for abandonment, the tenant who does so is in violation of his obligation to pay rent under the lease.

Since the tenant no longer claims possession of the property, there is no need to evict the tenant. Instead, a landlord whose tenant has abandoned the property has several options.

The landlord may effectively accept the tenant’s abandonment and terminate the lease, which creates a situation of surrender. This can happen, for example, if the landlord notifies the tenant that he intends to re-let the property that the tenant has abandoned. This terminates the lease and frees the tenant from ongoing liability to pay rent.[15]

If the landlord accepts the abandonment, the tenant is liable for any outstanding rent at the point of abandonment, and any damages caused by the abandonment.  

In some states, if the tenant vacates and makes it clear that he will not pay further rent, the landlord need not wait until the rent comes due to terminate the lease and seek to recover losses. Instead, the landlord may retake possession and sue for damages in anticipation of the breach.[16]

Another alternative available to the landlord is to refrain from terminating the lease or retaking possession. Under this approach, the lease continues to the end of its term, and the tenant continues to accrue rent obligations despite having vacated the property.

                As the rent comes due in successive periods, the landlord may sue the tenant for damages, as in his continued absence, he continues to be bound by the terms of the lease. There is no obligation on the part of the landlord to try to re-let the property so as to mitigate damages for the tenant, unless such an obligation is specified in the lease.[17]

However, in some jurisdictions, the landlord may not simply bide his time and do nothing as the tenant becomes liable for increasing rents. Instead, the landlord has a duty to mitigate the damages owed by the tenant by seeking to rent the abandoned property to other prospective tenants for the remainder of the lease. In these states, the landlord must make reasonable efforts to secure a replacement tenant for the duration of the original tenant’s lease.[18] Until a new tenant is found, however, the original tenant’s obligation to pay rent remains in effect.

Note that even if the landlord succeeds in finding a replacement tenant, the original tenant may not be entirely free from any monetary liability. If the rental rate agreed to with the new tenant is lower than that agreed to in the original lease, the tenant who abandoned the property remains liable to the landlord for the difference in the rent. In addition, the tenant may be responsible to bear the costs associating with seeking a new tenant, such as advertising the vacancy.[19] 

Housing Courts

Housing courts, also sometimes called landlord-tenant courts, are special courts set up in certain jurisdictions, particularly in larger cities, to deal specifically with legal issues arising from landlord-tenant disputes. Typically, cases in housing courts involve tenants seeking court intervention to obtain repairs from landlords or to stop harassment by a landlord, and landlords seeking to collect rent from a tenant in default or to evict a tenant whom the landlord believes has breached obligations under a lease agreement.[20] However, such courts may also have jurisdiction over all matters arising from legal matters concerning residential housing, including tort actions and criminal proceedings.[21]

When a party files a petition against the other party in housing court, the other party will receive notice of the petition, and the date scheduled for a hearing. Failure to respond to the notice, or being absent from the hearing, may result in a default judgment being entered against the absent party.[22]

Housing courts are generally considered to be protective of the rights of tenants. Since many tenants are not represented by legal counsel, judges and court appointed mediators will often act to ensure that tenants understand their rights under the law.

In addition, since there is usually a disparity of power between landlord and tenant, and eviction can have serious consequences for the life and well-being of tenants, housing court judges will often seek to give tenants further opportunity to remedy a default, and to ensure that the landlord’s claim has been properly filed before enforcing it. The housing court may also have a Resource Center which can assist tenants who need help responding to petitions against them, and to seek further information on housing court processes and the options available to them.[23]

Generally, the parties will meet with a judge, court attorney or mediator appointed by the court, to attempt to settle the dispute between the parties. Such appointees are specialists in housing law, and they will inform the parties of applicable state and local law and may be tasked by the judge to investigate and make determinations regarding the issues in dispute.[24]

If the parties come to an agreement, called a “stipulation of settlement”, the judge will review the terms of the agreement to ensure that both parties understand what they are agreeing to. The stipulation will detail what the parties agree to and specify the legal consequences of a party’s failure to adhere to the settlement agreement.[25] Most disputes which reach housing courts end with a settlement.

If the dispute does not settle, the case will go to trial before the housing court judge. The trial may include testimony from witnesses and cross-examination, as well as admission of evidence, such as copies of the lease agreements, letters written by the landlords or tenants to the other party, relevant photographs, housing inspection reports and papers from government agencies.[26]

After hearing the evidence, the judge will issue a final judgment which will contain an order resolving the dispute, whether it be a determination regarding the payment of rent, the lawfulness of eviction or an obligation to repair. It can also include a timeframe for when the order must be implemented.  

Following the trial, a party may seek further redress from the court or an alteration to the judgment, by filing a request for an order to show cause. The order to show cause can be used to compel a party  to do what she was ordered to do or agreed to do, for a party to ask for more time to comply with the judgment or settlement terms, to present an explanation for missing a court date in order to overturn a default judgment or to bring to the court’s attention another reason the judgment should be re-examined by the court.[27]

Thank you for participating on the LawShelf course on landlord-tenant law. We hope that you now have a better understanding of the many legal issues involved in the relationship between tenants and landlords. We also hope you’ll take advantage of the other courses we have available in this area. Best of luck and please let us know if you have any questions or feedback.