Tenant's Remedies - Module 3 of 5

Module 3: Tenant’s Remedies

When a property owner agrees to rent the property to others, a landlord-tenant relationship is created. This relationship is governed by the terms of the lease agreed to between the parties, as well as state and common law obligations which apply to all leases. Over and above the terms of the lease, the law also implies a warranty from landlord to tenant which guarantees that the premises will remain habitable throughout the tenancy. This implied warranty of habitability is materially breached when defects left unrepaired by the landlord affect the health and safety of the tenant, such as inadequate plumbing, heat, or water supply.[1]

In the common law, the obligations of each party to a lease were considered to be independent covenants. This meant that the failure of one party to fulfill his or her obligations did not excuse the other party from their obligations. So, even if a landlord delivered a property with defects in breach of his duty, this would not suffice to allow the tenant to terminate the lease and stop paying rent.  Unless the tenant could demonstrate that the defects amounted to a constructive eviction from the property which forced him to abandon the premises, a tenant’s only remedy would be to sue the landlord for damages, while continuing to pay rent.

Today, however, the law generally views a lease as creating dependent covenants. So, a landlord’s violation of his duties, including breach of the warranty of habitability, may release the tenant from his own responsibilities under the lease, without the expense of a lawsuit.[2] As such, a tenant whose rights under the lease have been violated may unilaterally terminate the agreement, though the law grants the tenant alternative remedies should he prefer to remain in the rental property despite the landlord’s breach.

Termination

If the landlord breaches his duties, one option available to the tenant is to terminate the agreement. Should the tenant choose termination, she may stop paying rent, and vacate the property within a reasonable period of time. Generally, to terminate a lease on the grounds of a breach, the tenant must serve written notice on the landlord, specify the conditions that represent material noncompliance, demand the correction of the conditions within a specified period of time and inform the landlord of the date that the lease will terminate if the conditions are not corrected.

At that point, if the conditions are not remedied, the tenant’s obligation to pay rent ceases, and the tenant must leave the property.[3] Note that terminating the lease does not bar the tenant from seeking damages for harms caused by the landlord’s breach.

Rent Reduction

Another remedy available to a tenant in case of landlord non-compliance with lease obligations is complete or partial rent abatement. This option may be useful for those who are not in a position to find new rental property, and for those who would prefer to temporarily relocate until the defects in the property are remedied without terminating the lease. Unless the tenant is entirely deprived of use of the property, defective conditions do not usually permit the tenant to withhold rent completely. Generally, rent abates to the extent the tenant is deprived of the full normal use of the premises.[4] 

Some courts have permitted reductions based on the fair market rental value of the premises. This means that the rent is reduced from the contract amount to the market value of the property as-is, with the existing defects.[5]

The law generally requires that the tenant inform the landlord and give a reasonable amount of time to allow for repairs before reducing rent payments. Alternatively, in some jurisdictions, if the landlord fails to repair the defective conditions after reasonable notice, the tenant may dedicate a portion of the owed rent to make the repairs on her own. The tenant continues to reside on the rental premises, and deducts the amount used for repairs from future rent payments.[6]

The amount used to conduct repairs must be reasonable.[7] Some states fix the maximum allowable expenditures on repairs to be deducted at a sum total of one month’s rent.[8]  Note that a landlord may respond to a decision to withhold rent by initiating eviction proceedings. If a court determines that the rent was improperly withheld, or that too high an amount was withheld, the tenant may be forced to pay the withheld rent and may face eviction.

A number of means are available to protect the tenant who opts to reduce rental payments rather than terminate the lease and does not wish to face possible eviction for unilateral withholding of rent. A tenant may place the amount of rent withheld in escrow, to demonstrate to the court that the money is available to be paid upon remedy of the defects.[9]

At the governmental level, many states and cities have enacted ordinances establishing procedures for pursuing rent reduction. These may include the right of tenants to apply for rent reduction with governmental agencies, or a mechanism for paying rent to the city or state directly, with the money held in abatement until the landlord repairs the defective conditions.[10]

Finally, a tenant may simply pay the full rent amount despite the defects and sue the landlord for return of rent paid in excess of the value of the rental property in its present condition. This way, the tenant does not risk eviction by being in default of his rental obligations.

Monetary Damages

If a tenant terminates a lease or chooses to continue to inhabit a rental property despite conditions which constitute a breach of the warranty of habitability, the tenant may collect damages for harms associated with the breach. If the tenant relocates to another dwelling, such damages include reasonable relocation costs, plus the difference in rent between the property vacated and the new property the tenant has moved to.[11] Any other expenditures by the tenant which stem from the defective condition of the property may likewise be recoverable as damages.[12]

Courts have also recognized that tenants living in a dwelling with defects substantial enough to breach the warranty of habitability, often suffer a high degree of discomfort and annoyance. As such, some courts have ruled that these tenants may sue to recover damages for emotional distress, over and above the other damages suffered.[13]

Retaliatory Eviction

An important avenue of redress open to tenants who face materially defective conditions on their leased property is the reporting of such violations of state or municipal housing codes to the authorities responsible for enforcing these codes. Landlords who want to avoid the consequences of housing code violations may try to discourage such reporting by seeking to evict tenants who make such reports, or to not renew their leases. This practice frustrates the legislative purpose behind housing code laws, and so the law has developed protections for tenants in such situations.

If a tenant who has previously reported housing code violations faces eviction by a landlord and can show that the motive behind the eviction was retaliation for reporting the violations, the tenant can claim a defense of retaliatory eviction.[14] The defense may extend to cases in which a landlord refuses to renew a lease in retaliation for a tenant’s reporting of violation, even when the landlord would be fully within her rights not to renew the lease for any reason she chooses.

For example, a tenant who enjoys a month to month lease normally may face non-renewal of a lease after 30 days-notice, and eviction proceedings if the tenant remains on the premises thereafter. Under normal circumstances, the landlord can choose not to renew and subsequently to evict for any reason. However, if the tenant can show the reason was retaliatory, this may serve as a defense against eviction.

Retaliatory eviction can also serve as a defense against retaliation by means of a rent increase. If a landlord raises a tenant’s rent in response to the tenant reporting housing code violations, and then seeks to evict the tenant for failing to pay the increased rent, the tenant can defend against eviction by demonstrating the retaliatory nature of the landlord’s actions.[15]

Note that a tenant who has failed to meet his rent obligations may not raise retaliatory eviction as a defense against eviction. However, if the withholding of rent was legal, such as when the conditions of the rental property materially deprived the tenant of full use of the property, then the tenant may assert retaliatory eviction as a defense against a landlord seeking to evict. 

Housing Discrimination Laws

Since a lease is a private agreement between two parties, a property owner may generally choose which tenant he or she prefers to rent a property to, for whatever reason the owner wishes. However, federal law prohibits discrimination in housing if the owner decides not to rent to an otherwise qualified tenant, if the decision is based on discrimination against certain protected classes.

Specifically, it is illegal to refuse to rent or sell property on the basis of the race, color, religion, sex, or national origin of the potential tenant or buyer.[16] Similarly, the law also prohibits discrimination in housing against families with children and the handicapped. In addition to the prohibition on discrimination in renting or selling property, it is illegal to advertise discriminatory preferences for housing on offer.[17]

To prove a violation of federal housing discrimination law, the plaintiff must show that he is a member of a protected class, and that despite being qualified, he was denied the opportunity to rent or buy property which remained available for others.  If the plaintiff can demonstrate these elements, the burden is on the defendant to show that the refusal to rent or sell was motivated by reasons other than discrimination.[18]

If the plaintiff is successful in demonstrating discrimination, the defendant may face civil fines, and the court may award the plaintiff actual and punitive damages and enjoin the defendant from renting the property to individuals other than the plaintiff.[19]

Note that federal law exempts property owners in certain situations from the prohibitions of housing discrimination law. For example, if a housing facility is specifically designed to meet the needs of older populations and is mostly or completely occupied by people of advanced age, the management may restrict or limit admittance to families with children.[20]

The law also exempts single family dwellings, as well as small owner-occupied buildings of four units or less, from housing discrimination laws. However, even under these circumstances it is prohibited to advertise a discriminatory preference.[21]

Some states have enacted statutes which eliminate or narrow the exemption of small owner-occupied buildings from anti-discrimination laws.[22] Conversely, some states have expanded anti-discrimination protections to other marginalized groups and may prohibit discrimination in housing on the basis of marital status, age or sexual orientation.[23]

Rent Control

To ensure affordable housing, some jurisdictions have adopted ordinances which limit rent prices and rent increases for specifically designated properties. Generally, rent control laws were enacted during times of financial instability, freezing or reducing rents for a class of properties. For these rent-controlled properties, rent increases are regulated by a municipal board, and may be set as a fixed percentage of the rent, or may be tied to specific economic indicators.[24]

These laws may also include special obligations on landlords to provide for the maintenance of the property during the lease. Likewise, they may contain provisions guaranteeing the right of renewal of a lease in rent-controlled property, unless the landlord can show just cause for eviction.[25]

Specific rules for which property and which tenants qualify as being subject to rent control regulations differ widely by jurisdiction. Generally, a tenant must have been living continuously on the premises since the time rent control laws went into effect. If a family member of the tenant has lived in a rent-controlled property for a period of time, such as two years, that family member may succeed the tenant upon the latter’s death or decision to move, with the rent regulations remaining in place.[26]

Once the apartment is vacated without a family member succeeding in possession, the rent control rules may be less restrictive or may no longer apply at all.

Newly constructed buildings, and properties whose rent exceeds a certain value, may not be subject to rent control laws.[27]

Finally, while rent control rules are generally determined at the city level, states may nevertheless limit the reach of rent control ordinances set by jurisdictions within the state. For example, while California allows for rent control generally, state legislation excludes certain properties such as single family-dwellings and condominiums from rent control and prohibits cities from preventing or limiting rent increases for new tenants after vacancies.[28]

In the past two modules, we’ve looked at the rights of the tenant and the responsibilities of the landlord. Next, we’ll look at the other side of the coin, turning to the responsibilities of the tenant and remedies of the landlord.