Q: I’m in a bit of a bind. I own a unique, lovely duplex (we live upstairs) that I easily rented in our town of few rentals and high demand. I signed a one-year lease with the new tenants, then learned that my daughter and her husband lost their jobs and need to move. I want to offer them this unit rent-free, and I’m prepared to pay the new tenants what it takes to find another unit, and even any additional rent for a comparable place. But they insist that they have the right to move in, because "a lease is a lease." Can they force me to go through with the lease? –Arnold S.
A: Your tenants’ starting point is really, "a lease is a contract." You’re announcing that you don’t intend to honor the contract, and the legal question becomes, what is your tenants’ remedy? Is it "damages" (money to compensate them for the consequences to them of your breach, such as application expenses, additional rent for a similar unit, and so on) or an order from the court that you must go ahead and live up to the contract (known in legalese as "specific performance")? Here’s how a judge might think about it.
First, understand that a judge will start by assuming that money damages will suffice. There’s a very practical reason for this preference: Judges like resolutions that don’t require ongoing supervision. For example, if a judge rules that you must pay a certain amount of money, your tenants will have a relatively easy way of getting the money if you don’t follow through (through attachment of your bank accounts or garnishing your wages). Neither of these methods involves going back to court.
But if the court tells you to honor the lease and you drag your heels or make it impossible or difficult for the tenants to move in, their only recourse will be to go back to court and complain to the judge that his order isn’t being honored. This will involve another fact-heavy hearing, followed by a decision (contempt, anyone?), which will take time and effort. You get the picture. But don’t take your checkbook out just yet.
With some broken contracts, specific performance is the right remedy, notably when money damages just won’t make the other party "whole," or satisfied. This typically happens when the object of the contract is unique and not easily replaced. Real estate can be precisely this sort of thing — one house or piece of land, the subject of a sales contract or lease, may be so unique that no amount of money will put the buyer or tenant in a similar position had the other side not breached the contract.
For example, renting a beachfront home in an area that has no other beachfront rentals would put that rental, should the landlord renege, in line for an order from the judge to rent it out as promised, period.
The chances that a judge would order you to honor the contract, rather than pay money damages, will largely depend on the nature of the duplex and the rental market. You have described it as lovely and unique — setting it up for specific performance, if the tenants can show that nothing nearby approaches this rental in features and location.
The state of the market will affect things, too — if it’s a hot market, with few rentals available, it may be even more difficult to find even a close approximation of your unique duplex. The market figures into the equation in another way, too — why can’t your daughter and her husband live elsewhere, in a rental that you pay for?
After all, you were willing to let them live for free in your rental, thus foregoing the rent. It will make little or no difference to you if you collect the rent from your tenants, then channel that to the cost of renting a place for your daughter.
Again, if rentals in general are plentiful, a judge might find that your desire to have your family under your roof, though understandable, should not trump your contractual obligations.
One final factor may affect the remedy your tenants will receive in court. Judges are leery of ordering specific performance if it will mean that the parties, now plenty mad at each other, will have to interact in an ongoing way. For example, in the employment context, specific performance of an employment contract is rare, because the law recognizes that, however unique a worker’s skills may be, it’s generally not a good idea to force someone to work for someone else.
On the other hand, when dealing with a contract for a one-time sale of goods, specific performance might be just the ticket, because it won’t involve future personal interactions. Your situation is more like the former — you will not only be the tenants’ landlord for a year, but will also be living upstairs. Forcing you to honor this lease could be a recipe for unpleasantness all around — something your tenants themselves might want to think about before demanding the keys. …CONTINUED
Q: My landlord has demanded that I reimburse him for the cost of repairing damage that was caused by a fire in my apartment. Here’s what happened: I purchased a hair dryer, used it once, and left it plugged in (but turned off). The dryer’s switch must have been defective, because somehow it turned itself on during the night and ignited. The landlord admits that it wasn’t my fault, but claims I’m responsible, because my lease has a clause that says I’m liable for the results of my acts ("Lessee shall be liable for all damage to the premises and appliances and equipment belonging thereto, in any way caused by the acts of lessee, lessee’s occupants, guests and invitees"). This doesn’t seem right — and besides, doesn’t he have property insurance to cover just this sort of thing? –Wendy C.
A: It’s one thing to make tenants responsible for damage caused by their careless or negligent acts — and certainly for their intentional acts — and landlords do this all the time. Had you carelessly left a pot on the stove, for example, any resulting fire damage could rightly be attributed to you, even if you didn’t mean to burn down the kitchen.
And, at the other end of the spectrum, landlords will be responsible for the consequences of their careless acts — such as performing a repair in a shoddy way that results in damage or injury. Leases and rental agreements routinely remind tenants of the first rule (though they rarely remind them of the second).
Your lease clause goes a lot further, making you responsible for the results of all of your acts, even those that were not intentionally harmful or negligent. Because you did, in fact, plug the hair dryer into the wall, you’ve committed an act that would bring you within this clause. But whether a court would enforce it is another matter.
Many states have comprehensive landlord-tenant laws that apportion the responsibility for repairs and maintenance between landlord and tenant. They typically make owners responsible for repairs and maintenance in general, and also address situations when the damage has not been caused by the tenant.
Consider, for example, the typical rule that makes the landlord responsible for damage that results from the owner’s negligence; the common duty of a landlord to make repairs to a non-negligent tenant’s unit when it’s damaged by a negligent tenant; and the landlord’s duty to repair (and pay for relocation costs) when a fire makes a tenant’s unit unlivable, no matter who started it.
Taken together, these rules point to the landlord as the one who should step up when the property is damaged through no negligence or fault of the tenant. In other words, in these states, a court would not uphold a lease provision like yours, which holds you responsible for even your non-negligent acts.
Your point about property insurance is well taken. Of course, landlords have fire coverage precisely to cover situations like this. The landlord’s insurance company will surely cover the cost of repairs, and then it’s up to them to go after (in insurance lingo, "subrogate") the true cause of the fire — the manufacturer of the hair dryer.
Likewise, your landlord could sue the manufacturer for the deductible that he had to shell out. But looking to you, an innocent consumer who was presumably not misusing the dryer, would be pointless.
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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