Fight retaliation over 'repair and deduct'

Rent it Right

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Mar. 24, 2011

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Rent it Right

Janet Portman
Inman News™

Q: I'm having rent hassles with my landlord. When he refused to replace a cracked window, claiming that I broke it, I had it fixed and deducted the cost from the next month's rent (I think it broke during a recent windstorm). Now he's shut off my cable TV access, which was part of the deal when I rented the place. Is he allowed to do this? --Hiram B.

A: If your landlord had responded by shutting off the gas, electricity or water, the answer would have been simple: Cutting off utility services in response to a tenant's exercise of a legal right (such as the right to repair and deduct) is considered illegal retaliation in most states. Even when tenants improperly use "repair and deduct," landlords may not resort to pressure tactics like changing the locks, shutting off gas or electricity, or interrupting other utilities that they control.

The correct response to a tenant's improper use of repair and deduct is to respond to the short rent check that the tenant thinks is justified. Landlords should send a notice to pay rent or quit, and then file for eviction if the tenant does not leave or pay the entire rent within the time specified in the notice.

These days, however, tenants get cable TV in addition to other services. The issue posed by your situation is whether cable access is considered a utility within the meaning of your state's statute. A quick check of some typical retaliation statutes shows that in many states, the illegal retaliatory measure of withdrawing services is defined quite broadly. Many states, including Arizona, California, Florida and Texas, prohibit landlords from "decreasing services." In those states, cutting off cable TV that's supplied by the landlord would probably come within the definition of "decreasing services" provided by the landlord.

One state is considering exempting cable TV from the host of services that landlords may not decrease. In New Hampshire, HB0141 will make it clear that a landlord may cut off cable TV without running afoul of the anti-retaliation statute. However, cable Internet service would remain protected because tenants often use their Internet connection as their phone service by using Skype.

Landlords in New Hampshire will have to remember, however, that even if they can avoid a charge of retaliation when they cut off cable TV, they are still at risk of a tenant claim for rent abatement based on the diminished value of the rental. The tenant could argue that access to cable TV, just like the second bedroom or a parking space, is something their rent is supposed to cover. If the landlord were to suddenly take away the parking place, for example, the value of the rental would go down (particularly when parking is scarce and expensive).

Tenants in this situation can go to court and sue for "the benefit of their bargain." In other words, they're not getting what they're paying for, and they want the judge to order a reduction of rent to realistically reflect what a rental without parking is worth on the rental market. It's no different with cutting off cable: The tenant could point to the cost of paying for it himself, and ask the judge to reduce the rent accordingly.

Q: We've owned a mid-size apartment building in a great area of town for many years. We have long-term, steady tenants, and our resident manager has been there for a long time (it's a sweet job -- good tenants, great location and reasonable owners, if we say so ourselves). Our manager is moving, and he suggested a good candidate (a friend) to take the job and apartment, whom we interviewed and are about to hire.

But, we are thinking about selling soon, and it's likely that the property will become condos. That would mean that the new manager would have to move -- and we're afraid that if we tell him, he won't take the job. Because we haven't sold or even advertised the property, I think we're not obligated to tell him about our plans. Is this correct? --Bob D.

A: You're asking both a moral question and a legal one. Let's tackle the legal issue first.

Unlike, say, the federal law requiring landlords to disclose the known presence of lead paint dust, no law explicitly requires that you share with potential hires the details of any business plan of yours that might result in the loss of the manager's job. If you don't share your plans, no government agency is going to fine you, and the cops won't arrest you. But that's not the same as saying that there will never be consequences for you if, in certain situations, you decide not to disclose.

Depending on how certain your plans are, when you intend to put them into effect, and how important those facts might be to someone considering whether to take the job, your failure to disclose could open you to a claim of fraudulent inducement. If you know you will sell, and soon, failing to reveal those facts to potential applicants is legally risky. This is the type of information that applicants would want to know before taking a job, and your failure to mention it could be seen as an intentional misrepresentation of your plans.

A successful ex-manager could claim the cost of moving, finding another job, and even the difference in pay between his replacement job and yours, if yours was more lucrative. He might even obtain special, punitive damages, if the judge or jury thought your conduct was reprehensible enough. So the question becomes, under what kinds of circumstances would an ex-manager have a good claim?

Fraud involves knowingly making a misrepresentation (which includes not just making false statements, but also concealing or failing to disclose facts), with the intent to induce reliance. The listener must have reasonably relied on the statement or omission, and have been damaged as a result.

Fraudulent inducement to take a job involves the employer communicating a falsity (or concealing facts) that a reasonable job seeker would consider important in making the decision to accept an offer; and the applicant relying on those statements (or nonstatements) in deciding to take the job.

You have explained that for many years, your resident manager stayed employed in a "sweet" situation, surrounded by stable tenants, in a nice neighborhood, with the blessing of a responsible employer and landlord. Doubtless the manager has conveyed these benefits to his friend, who is probably hoping that if he performs as well as his predecessor, the same sweet deal will be his for many years, too.

He may be willing to work harder, commute further, or even earn less, in exchange for the reasonable expectation that the living and working environment will make the trade-offs worthwhile.

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