Q: A month ago my adult daughter signed a one-year lease for her own apartment. She recently lost her job. Unemployment will cover only about half the rent. The landlord said she will have to pay rent until it is re-rented. What if it takes a long time and my daughter can’t afford to pay? What can happen? –Diane N.
A: These days, your daughter’s situation isn’t unique, by any means. Both residential and commercial landlords are hearing from tenants who have lost their jobs or whose business revenues are drastically off. True, these tenants have leases and are contractually obliged to pay the rent. But in practice, landlords and tenants often work out a way that will keep the tenant in the building and some rent flowing to the landlord.
First, understand that your daughter’s landlord has it right when saying that your daughter will owe rent for the balance of the lease until the apartment re-rents. In most states, landlords are legally required to use reasonable efforts to re-rent when a tenant breaks a lease. This doesn’t mean that the landlord must rent this unit before all others, or take extreme measures to find a tenant, or lower its tenant screening criteria. But the unit must be readied, advertised and shown just as any other unit in the building. Once the unit rents, the original tenant’s obligation to pay ends, and your daughter will owe only for the months that the unit was vacant (some landlords will tack on advertising costs, too). If the market rent for the unit has dropped, your daughter will owe the difference between the old and the new rent (times the number of months left on the lease). Conversely, if the new rent is higher than the old rent, your daughter’s debt for any vacant months should be reduced by the difference between the old and new rent, times the number of months left on her lease. Landlords cannot evade their re-renting obligation by setting an unreasonably high rent, sitting smugly while the unit fails to rent, and expect to collect the balance of the original rent from the original tenant.
Let’s place these rules in today’s economic climate and consider the market for rentals like this one. If the apartment is competitively priced, and if there are many tenants looking for rentals (that is, the market is hot), the landlord should have little difficulty quickly re-renting the unit, and your daughter’s liability for future rent will be low. However, if the market is soft or the unit just isn’t that attractive, this apartment may sit vacant, and your daughter could theoretically be responsible for the entire rent remaining on the lease.
Now, however, comes the time to get real with the landlord. If the unit doesn’t re-rent despite the landlord’s reasonable efforts, the landlord will have to sue in small claims court in order to collect the entire rent for the balance of the term. There’s no guarantee that a judge will award the entire sum, and there’s little victory in obtaining a monetary judgment against someone who has no income. It may make more sense for the landlord to work with your daughter, by reducing the rent for a few months, in hopes that she can find employment and once again pay the original rent. Less rent coming in for a while is more attractive than a vacant unit and the prospect of a chancy lawsuit and judgment-proof ex-tenant.
Q: I recently turned down an interracial couple who applied for an apartment here. They were referred to our community by a current resident. I rejected them because of their poor credit score. Now their friend is accusing us of discrimination, though I haven’t heard from the applicants themselves. Does the friend have any right to complain — after all, he isn’t accusing us of discriminating against him (and besides, he’s not interracial)? –Rosa P.
A: Though few landlords realize it, neighbors and other members of the community may bring discrimination complaints against owners even when those neighbors were not the targets of the claimed discrimination. Under the federal fair housing laws, if someone can prove that he has suffered a "distinct and palpable injury" as a result of discrimination aimed at someone else, he can file a claim. The injury can be as simple as being deprived of the social advantages of living in a housing community that is free of illegal discrimination. People bringing such a claim need not be a member of the same "protected class" as the person discriminated against. So the fact that your tenant is not of the same race as the applicants is legally irrelevant.
If your tenant pursues his claim, you may find yourself answering a phone call from the local HUD office (or your state’s fair housing equivalent). You should be on solid ground if you’ve documented your reasons for the rejection, and can point to pre-established and reasonable screening criteria that sank the chances for this couple — and that you apply to all applicants, regardless of race. But if the same credit score appears on applications for applicants you’ve accepted, and if you have no other solid business reason to justify your decision, you may be in for it.
Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of "Every Landlord’s Legal Guide" and "Every Tenant’s Legal Guide." She can be reached at janet@sandbox.inman.com.
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