8/8/2016

PropertyLawinUnitedStates|RealEstateLaws

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Antidiscriminationlawisprotenant
USlawsandpracticesarePROTENANT.

Rent:CanlandlordandtenantfreelyagreerentsintheUS?
Rentsaregenerallyfreelynegotiatedexceptforcommunitiesinfourstateswithrentcontrol
ordinances.Theserentcontrolordinances,containedinlocallaws,aresometimescalledrent
stabilizationormaximumrentregulations.

2008ALLOWABLERENTINCREASE
STATE
PROVISIONS
California InSanFrancisco,California,theSanFranciscoRentBoardlimitsthe
allowableannualrentincrease.Ifthelandlordadjustsrentsbetween
March1,2008andFebruary28,2009,theAllowableRentIncreaseis
2%,higherthanthe1.5%allowableincreasefromMarch2007to
February2008.Underthelaw,theallowablerentincreaseshouldnot
exceed7%annually.
Washington TheRentStabilizationProgram(OccupancyandRentGuidelines)
D.C.
prescribesmaximumallowablerentsandrentincreases.Formost
units,theallowableannualrentincreaseisCPIplus2percentage
points,butnotmorethan10%.Forelderlyanddisabledtenants,
maximumrentincreaseisequaltotheCPIbutnotmorethan5%.If
theunitisvacated,therentcanbeincreasedbyamaximumof10%.
AlandlordinWashingtonD.C.canalsoaskforaHardshipPetition
whichallowsthelandlordtoincreasetherenttoalevelthatallows
12%rateofreturn.Thereareothermeasuresinplacetoprovide
incentivesfortheconstructionandmaintenanceofrentalunits.
NewJersey LocalgovernmentsinNewJersey,suchasJerseyCityandCamden,
imposemaximumrentincreases.ForJerseyCity,theannual
maximumallowableincreaseis4%ortheConsumerPriceIndex
(CPIW),whicheverisless.AhardshipRentalIncreaseisalso
allowedtogivelandlordsafairreturnontheirinvestments.Fairreturn
isdefinedas6percentagepointsabovethesavingsinterestrate.In
Camden,theannualallowableincreaseistheCPIor6%,whicheveris
less.
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NewYork ForthestateofNewYork,rentcontrolappliestobuildingconstructed
beforeFebruary1947in51municipalitiesincludingNewYorkCity.
Generally,theamountoftenantsunderrentcontrolisgettingsmaller
eachyear.Rentstabilization,ontheotherhand,appliestoapartments
withamonthlyrentoflessthan$2,000.Asanexample,theallowable
rentincreaseforrentstabilizedapartmentsinNewYorkCityis2.75%
forleaseslastingforoneyearwithheatingprovidedbythelandlord.
LandlordscanalsoapplyforComparativeHardshiporAlternative
Hardshipwheretheycanbeallowedtoincreaserentsupto6%
annually.
Source:eachcityorstatesrentalauthority

Deposits

Outof51states,24statesdonothavestatutorylimitsonsecuritydeposits.The
remaining27stateslimitthesecuritydeposittoarangefromonemonthsrentto3monthsrent.All
statesrequirethatthesecuritydepositbereturnedafterthetenantleaves.Deductionsforunpaidbillsand
repairareallowedaslongastheyareitemized.
Moststatesrequirethatthedepositmustbeplacedinabankaccount,separatefromthelandlords
account.Therearedifferencesbetweenstatesastowhetherthedepositmustbereturnedwithinterest.If
requiredtopayinterest,bankinterestratesortheFederalFundsratearetypicallyused.Insomestates,
landlordsaregivenanoptiononwhethertheywanttoputthemoneyinspecialinterestornoninterest
bearingaccounts.Mostlandlordselectthenoninterestbearingoptionifgiventhechoice.
Therearealsodifferencesontheamountoftimerequiredforthelandlordtoreturnthesecuritydeposit.
ThestatesofAlabama,Tennessee,WestVirginia,Wisconsin,andWyominghavenostatutorydeadline
forthereturnofsecuritydeposit.Formoststates,thedeadlineisonemonth.Theearliestdeadlineis14
daysforArizona,Hawaii,SouthDakota,VermontandWashington.Themostlenientis45daysfor
Mississippi.Kentuckygives30to60daysdependingonwhetherthetenantdisputesthedeductionsor
doesnot.NewYorkisambiguouswithitslegislatedreasonabletimedeadline,inpracticeitisabout
onemonth.

WhatrightsdolandlordsandtenantshaveintheUS,especiallyastodurationof
contract,andeviction?
Therearetwomaintenancyagreements,aleaseandarentalagreement.Unlessotherwisestatedinthe
contract,thetenantmustleavetherentalunitaftertheexpirationofthecontractorafterthespecified
noticeisgiven.Nojustificationisneededforrefusingtorenewthecontract.
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Rentalagreementsprovideforatenancyofashortperiod(often30days)thatis
renewedautomaticallyattheendoftheperiodunlessthetenantorlandlord(sometimesthelawstates
whoshouldgivethenotice)endsitbygivingwrittennoticeandthetenantmustcomply.Thewritten
noticeisusuallyonerentalperiodoronemonthformonthtomonthrentals.Thelandlordcanalso
changethetermsoftheagreementliketheamountofrent(unlesslocalrentcontrolordinancesprohibit
it)withproperwrittennotice(typicallyonemonthalso).
Awrittenlease,ontheotherhand,givesatenanttherighttooccupyarentalunitforafixedterm
typically6monthsor1yearbutcanbelongerifthetenantpaystherentandcomplieswithotherlease
provisions.Thelandlordcannotadjusttherentorchangeothertermsofthetenancyduringthelease,
unlessthetenantagrees.Unlikearentalagreement,whenaleaseexpiresitdoesnotusually
automaticallyrenewitselfandthetenantmustleave.Thecontractusuallyprovidesaprovisionfora
renewalandtheamountofnoticerequired.
Atenantwhostaysonwiththelandlordsconsentafteraleaseendsbecomesamonthtomonthtenant,
subjecttotherentaltermsthatwereinthelease.
Theevictionprocedurediffersineachstate,intermsofhowterminationnoticesandevictionpapers
mustbewrittenandserved,butthebasicprinciplesaresimilar.Alandlordmaybringasummarynon
paymentcourtproceedingtoevictatenantaftergivingoneofthesethreenotices:
PayRentorQuitnotices:usedwhenthetenanthasnotpaidtherent.Theygivethetenantafew
days(threetofiveinmoststates)topayormoveout(quit).
CureorQuitnotices:givenafteraviolationofatermorconditionoftheleaseorrental
agreement,suchasanopetsclause.Thetenant,usually,hasasetamountoftimeinwhichto
correct,orcure,theviolation.Atenantwhofailstodosomustmoveorfaceanevictionlawsuit.
UnconditionalQuitnoticesorderthetenanttovacatethepremiseswithnochancetopaytherent
orcorrecttheleaseorrentalagreementviolation.Inmoststates,unconditionalquitnoticesare
allowedonlywhenthetenanthas:
repeatedlyviolatedasignificantleaseorrentalagreementclause
beenlatewiththerentonmorethanoneoccasion(insomestates,thelawdefinesthe
numberofdaysbeforetherentisconsideredlate)
seriouslydamagedthepremises
engagedinseriousillegalactivity,suchasprostitutiononthepremises.

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TheprocessofevictionshouldbehandledwithcautionintheUS.Onlya
sheriff,marshalorconstablecanactuallycarryoutacourtorderedwarranttoevictatenant.Anevicted
tenantcanevenfileacaseforintentionalinflictionofemotionaldistressagainstthelandlord.Insome
states,thetenantcancollectdamagesandstillremaininthepremises.Whenatenantisevicted,the
landlordmaynotretainthetenantspersonalbelongingsorfurniture.

HoweffectiveistheAmericanlegalsystem?
Despitethecountrysfreemarketorientation,USlawsonlandlordandtenanttendgenerallytobe
orientedtowardsthetenant.Thegeneralpositionisthatlandlordshavemoreresponsibilities,andtenants
havemorerights.Intheabsenceofspecificprovisionsintheselaws,thecourtsusuallyleaninfavorof
tenants.
Examplesoflawswhichmaydisadvantagetheunwarylandlordincludethestrongantidiscrimination
provisionsoftheFairHousingActasAmended(Title8)andotherstatelaws.Soonerousaretheselaws,
thatlandlordsareadvisedtoaskprospectivetenantstosubmitwrittenapplicationscompletewith
historiesandreferences.Toavoidlawsuits,itisbestifalandlordwritesareportgivingspecificreasons
whyoneprospectivetenanthasbeenchosenovertheothers,suchascreditstandingandjobstability.The
USDepartmentofHousingandUrbanDevelopmentisthemainimplementeroftheFairHousingAct.
UndertheResidentialLeadBasedPaintHazardReductionActof1992,thelandlordmustdiscloseany
knownleadbasedpaintorhazardsintheproperty.Ifthelandlordfailedtoinformhistenantsandthe
tenantswerediagnosedwithleadinducedinjuries,thelandlordcanfaceafineof$10,000plusthree
timesofwhatthetenantsufferedindamages.IftheunitwasconstructedafterJanuary1,1978,most
likelyitisleadfree.

EVICTIONFORNONPAYMENT
OFRENT
Durationuntilcompletionofserviceof
process
Durationoftrial
Durationofenforcement
TotalDaystoEvictTenant
Courts:TheLexMundiProject

6
33
10
49

Mostlandlordandtenantdisputesarearbitratedinhousingtribunals,mediationboardsandsuch.If
mediationfailsandmoneyisinvolved,suchasreturnofsecuritydeposit,casescanbeforwardedtoa
smallclaimscourt.Formoststatestheamountcoveredbysmallclaimscourtsrangefrom$3,000to
$7,500.
Evictionproceedingsarehandledbylocalcourts.Evictionproceduresarerelativelyveryfast,itis
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expectedtoberesolvedwithinafewweeks.However,ifthetenantdecidestomountalegaldefense,it
mayaddweeksormonthstotheprocess.

Legislation
Allstateshavelandlordtenantstatutes,andsometimesnotallprovisionspertainingtotenantsare
containedinasinglelaw.AUniformResidentialLandlordandTenantActwasdraftedbytheNational
ConferenceofCommissionersonUniformStateLawstobeenactedinallstates.Itwasadoptedinpartor
inwholebythefollowingstates:
Alaska
Arizona
Florida
Hawaii
Iowa
Kansas
Kentucky
Montana
Nebraska
NewMexico
Oregon
RhodeIsland
SouthCarolina
Tennessee
Virginia

MoststatesandlocalgovernmentsalsofollowedtheModelResidentialLandlordTenantCodeforthe
antidiscriminationprovisionsoftheirlaw.Cityandcountycouncilsalsopasstheirownregulations.
Thereareinstancesthatthestatedoesnotimposesecuritydepositlimitsbutthecityhasstricterrules.
Thegeneralruleisthatlocalcouncilscannotgoagainststateandfederallegislationbuttheycanimpose
stricterrulesifthegenerallawissilent.

History:RecentchangesinAmerican
landlordandtenantlaw
Rentcontrolisslowlybeingphasedoutinthecountry.Inrecentyears,severalcitiessuchasBostonand
Cambridge,Massachusettshaveendedrentcontrol.Inmostcommunitieswithrentcontrol,suchasNew
YorkCity,rentcontrolledpropertiescompriseaverysmallpartoftheentirerentalmarket.Provisionsfor
hardshiprentincreasepetitionsalsominimizetheeffectofrentcontrolorrentstabilization.
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MARKETPRACTICE:
Brokerstypicallychargethetenant15%ofthefirstyearsrentincommission.Allstatesallowlandlords
tocollectsecuritydeposit.Halfofthestateslimittheamountofthesecuritydeposit,usuallynotmore
thanamonthortwoworthoftherent.ForNewYork,theamountisonemonthsrent.Therulesforthe
returnofthedepositalsodifferbetweenstatesusuallyitis14to30daysafterthetenantmovesout.Rent
isusuallypaidmonthly,inadvance.Oftenrentisdueonthefirstdayofthemonth,butitcouldbe
collectedonanotherdatedependingonthecontract.Receiptsmustalwaysbeissued.

UnitedStatesmoredataandinformation
HowhighareestatedutiesintheUS?

1,018,750

3,500

3,700

57,990

1,550

1,595

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