Q: We listed our rental on craigslist, which listed key terms, including a provision that the pet and cleaning deposits were nonrefundable. A couple contacted us and visited the rental, and we agreed orally, (and) with a handshake, to lease to them. It was clear to everyone that the deal was premised on the terms described in the craigslist ad.
Now our tenants are leaving, and they claim that the pet and cleaning deposits should be refundable. The ad is archived, it cannot be edited, and it plainly says they are not. If we do not return these deposits and our ex-tenants take us to court, will we win based on the clarity of the ad? –Charles and Angie G.
A: No lawyer in her right mind would predict a win for someone who’s headed off to court. No matter how much the law and the facts appear to be in someone’s favor, it’s impossible to predict the outcome. A lot depends on how the case is presented and, of course, the sensibilities of the judge. That’s why the most common answer to questions like yours is, "It depends."
So, on what does the answer depend? When you base a landlord-tenant relationship on an oral lease, the key terms are whatever the two of you agreed to. The trouble is, if you have differing memories, the case boils down to "he says" vs. "she says." When that happens, judges look for other evidence of the deal.
For example, if you own 20 rental units and all of them have written leases that include this provision, that’s some indication that, more likely than not, you explained the nonrefundable issues to these tenants, too.
Ads are also useful; they at least show what you intended when you listed the rental. And therein lies the rub.
The ad by itself doesn’t prove what you ultimately agreed to, because as we all know, landlords and tenants often vary the terms that were outlined in the ad. For instance, an applicant who has excellent credit and rental history may be able to convince a landlord to lower the security deposit. It would be preposterous for that tenant to demand the return of the advertised deposit, and to bring in the ad as proof of his claim.
Similarly, tenants with dogs often respond to ads that specify no pets, confident that once the landlord meets their beautiful, well-behaved and college-educated mutt, the landlord will relent (it sometimes actually works). If these folks don’t sign a lease, and the landlord later tries to evict because of the pet, the ad will not defeat the tenants’ stronger evidence — that they’ve lived in the rental with the dog for some time without the landlord’s objections, which indicates that the oral lease did in fact permit pets. …CONTINUED
If your tenants take you to court over your retention of the cleaning and pet deposits, you’ll have the ad to back you up — but it won’t necessarily win the case for you. Expect your tenants to argue that those terms were put aside during rental discussions. Who knows how the judge will rule?
Incidentally, a few states forbid landlords from requiring nonrefundable fees, including California and Montana. Some states specifically allow them, but the majority of states don’t regulate this issue one way or the other. You’ll need to do some legal research to find out if you’re even permitted to impose nonrefundable fees.
Q: We have a two-year lease that has 18 months left on it. The home was foreclosed last month and for a time the bank was our landlord. The bank just sold our "bank owned" home to an individual who says he wants to move in. He claims he can ask us to leave with 90 days’ notice. Is this correct? I thought the new law gave tenants with leases protection from such evictions? –Dave B.
A: The new law you’re referring to, signed by President Obama in May 2009, does indeed give tenants with leases some protections when their home is foreclosed. When the bank forecloses, and it becomes the new owner, it must honor your lease, just as any new buyer would have to do if your landlord simply sold the property. But if an individual buys at the foreclosure or trustee’s sale, and that buyer intends to occupy the property, you can be told to leave with 90 days’ notice.
Your situation presents an interesting but common wrinkle on the foreclosure process. Your home was taken over by the bank upon foreclosure, making the bank the first new owner. Consistent with the rule described above, the bank had to honor your lease. Then, in a second sale, the bank sold to an individual. Even though that buyer wants to occupy the home, he cannot get you out with a 90-day notice, because he has bought from the bank-as-owner, not at a foreclosure or trustee sale from the bank-as-lender.
In other words, a would-be occupying buyer gets to hand you a 90-day notice only if he buys at the foreclosure or trustee sale — not when he buys later. The second owner will get the property subject to any existing leases, just as he would if he had bought from a regular seller whose property is occupied by a lease-holding tenant.
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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