Property management revolves around legal contracts – purchase agreements, loans, leases – so, the law is integral to every aspect of the rental business. Usually, after the rental property is purchased, most “contract time” will be spent on writing strong leases. A good lease that meets state laws provides protection from tenants who mistreat the rental, fail to pay utility bills or stop paying rent.
However, even the very best leases get tested. Maybe a tenant gets a new job one month into a yearlong lease and wants to move. Or a departing tenant insists that the carpet was stained when he moved in and demands the return of his full security deposit. Perhaps roommates have a fight, one moves out and the remaining roommate invites in a new roommate without mentioning it to the landlord.
Those cases can be unsettling because they call for action and many landlords struggle with deciding which action is the right one to take. Should they send the tenant a notice saying he or she is violating the lease? Should they sit tight and see what the tenant's next move is?
Or, is it time to call a lawyer?
When is it 'time'?
If the lease spells out how to handle a situation that comes up, it may be best to send a notice to tenants reminding them of consequences that are described in the lease.
For instance, many leases include Early Termination clauses stating that if the tenant moves out before the end of the lease, they will be expected to pay a specific fee. The tenant who got a new job can be reminded of that clause. If the lease described the carpets as stain-free at the start of the lease and the tenant signed off on that description, but those carpets are now covered in dark splotches, the landlord can send a Security Deposit accounting statement that shows a deduction for carpet cleaning.
And roommates who have disagreements are on the hook for the full rental term as long as they are listed in the lease. If they vow they can't live together any longer, the landlord has the option of allowing one to move out and a new roommate to move in; but, the landlord isn't obligated to accommodate bickering tenants.
But when a lease doesn't address a problem that comes up, or it's apparent the issue could be difficult to resolve, it may be time to seek advice. Many landlords have an informal network of friends and other property investors who can share their experiences and offer one another guidance. It also doesn't hurt to learn as much as you can about your options by reading your state's Landlord Tenant Law.
However, professional advice from a paid attorney can spare a landlord costly wrong turns and unnecessary delays in resolving a difficult or complicated issue with a tenant.
Lawyers spend at least three years beyond their four-year degree studying statutes and case law. They learn the law – but they are also taught how to problem-solve and offer guidance. They become experts at organizing and preparing as they ready themselves for bar exams.
In other words, they are trained to handle a legal dilemma.
Seeing a lawyer
For someone who has never sought legal advice for their rentals, visiting a lawyer can be intimidating. So, we tossed Harrisburg, Pa. lawyer Doug Marsico some basic questions that landlords may have.
Q: What kind of lawyer should I go to?
A: A lawyer who advertises as a real estate lawyer and/or specifically landlord/tenant law.
Q: What kinds of things will the lawyer ask me?
A: A lawyer will ask you a variety of questions to help understand your legal issues and provide the proper advice.
Q: What should I take with me?
A: A copy of your lease, photographs depicting damage, eviction notice, relevant emails/texts from or to tenant, any court papers if action is already filed.
Q: How much time will the lawyer want to spend talking to me?
A: Most lawyers will do a 30 minute consultation.
Q: Should I write down everything the lawyer says?
A: It’s not a bad idea to take notes regarding the lawyer’s advice so you won’t forget it or can refer to it later.
Q: Will I have to pay the lawyer at the appointment?
A: Yes, most lawyers work on an hourly rate or may have a flat fee for a consultation. Prices vary based upon locale.
What will it end up costing?
It's tough enough to confront a difficult tenant situation without the additional worry of not knowing if taking legal action will drain your bank account and require you to spend hours in court. Then again, inaction isn't really an option when a tenant stops paying rent.
Attorneys aren't cheap. The median hourly rate for Pennsylvania lawyers is $325, according to a survey conducted two years ago by the National Consumer Law Center. Yet, some tasks will be handed off to the lawyer's paralegal or secretary, who earns considerably less. And your lawyer will strive to find the fastest, most effective solution.
In fact, attorneys typically attempt to keep landlord tenant cases out of court completely by proposing settlements. According to The Milwaukee Area Renters Study, which polled 1,100 renters from 2009 to 2011, the majority of eviction cases never even reach a courtroom. Thirteen percent of tenants who were polled had been forced to move out of rental housing. Of those, about half left through informal evictions, while 24 percent were formally evicted. The remaining evictions were the result of property foreclosure and the rental property bring condemned.
A fair question to ask during that first consultation with a lawyer is how much time they think your case will take and what the estimated total cost will be. Even if your rental dilemma requires you to hire an attorney, nothing says you can't ask what the price tag is likely to be.
When a lawyer isn't the answer
Good attorneys will tell you how best to approach your rental problem. They should also counsel you to handle a tenant matter on your own if that makes the most sense, because there are times when using a lawyer isn't necessary or wise. Those times include when the landlord is angry, or embarrassed or humiliated by a tenant, or just wants to make a point.
Seattle attorney Wendy S. Goffe, writing for Forbes, said that she has turned away clients who want to sue over principles or because they're offended.
Goffe said that “the bottom line is, weigh your options and the potential costs – financial and emotional – before hiring a lawyer. Fighting over principles is unsatisfying for everyone involved. Putting money that might have been spent on a lawyer to a different use, or simply socking it away for the education of your kids or grandkids – or your retirement – may ultimately bring you much greater satisfaction.”
Sometimes, just talking over the issue with a tenant can help lead to a satisfying conclusion for both parties.
For example a tenant who is adamant about breaking the lease by moving out may agree to a Mutual Termination of Tenancy agreement. That agreement lets the renter move out early in return for certain concessions to the landlord, such as a fee or forgoing the security deposit.
If it seems that seeking legal advice is necessary, try to let the lawyer do most of the talking. Clients sometimes mistakenly believe they must be prepared to tell their lawyer what to do. A lawyer's job is to listen to the facts, tell the client what can be done and then the client decide how to proceed.