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How tenants with verbal agreements can protect themselves

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Jul. 16, 2010

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How tenants with verbal agreements can protect themselves

Robert Griswold
Inman News

Q: I am having problems with my landlord and I am hoping that you can offer some suggestions. I rented a house about three years ago. When I interviewed with the landlord, I explained that I was paid only twice a month and the days were always different and that I would sometimes be late on rent but never more than three or four days. The landlord said that was OK.

I signed a lease and all was well the first year as I was late a few times but always paid in full within a few days of the first.

Then the landlord started demanding rent on or before the first only and said he would charge late fees. Is this not a breach of contract? And then he said the late fees were $75 per day. That seems really high. Is this legal? I paid them reluctantly but now every month or so I get a "change of rules" letter taped to my door with threats of eviction if not followed.

And the landlord quit doing the things that are required by law -- i.e., extermination for bugs, and he never finished the things that needed repairs at the home.

I finally sent a certified letter requesting that these things be taken care of and now he is threatening to evict me again. What kind of recourse do I have other than moving? I happen to be very happy with the rental and the neighborhood and really cannot afford to move.

A: It certainly seems that your landlord has changed his original agreement with you to accept your rent in a way that allowed you some flexibility in the timing of your payment. The requirement to insist on the rent payment no later than the first of the month is fairly standard, but you made it clear from day one that you would not be able to meet those terms and he agreed.

Your problem is that you apparently didn't reduce your understanding to writing; even if you did, the landlord has the ability to modify the terms upon proper written notice, which would be when your lease expires or upon a 30-day notice if you were on a month-to-month rental agreement.

You should have made an agreement in writing with the landlord that the timing of your rental payment could not be a term of the lease or rental agreement that could be changed, and that is the only way to protect yourself for the duration of your tenancy.

Since this was just a verbal agreement, the landlord can modify it and give you a written notice of the change in terms to require payment of the full rent on or before the first of the month.

Q: We own a rental property in another town that was being poorly managed by a property manager. It took several months for the property manager to forward us the tenant's monthly rent payments, and there were bills that were claimed to be paid but were not, etc. As a result, we terminated their contract a few months ago and hired a new property manager.

Despite our numerous requests, the former property manager refused to forward the tenant's security deposit as well as the tenant's April rent to our new management company. Finally, last week we received a check for less than the full amount along with a letter indicating that the property manager had deducted charges for unpaid rental late fees.

The property manager will not give us any further explanations when we call and we can't afford to fly there for this matter. Do we have any recourse other than contacting an attorney where we can lodge a formal complaint against this property manager?

A: Yes, you have recourse. Property management companies that manage properties they do not own are required to be licensed. You need to contact the state agency where your rental property is located and file a complaint.

I would also suggest you try to determine if your former management company has membership in certain industry groups such as the National Association of Realtors or a state or local Realtors group, as these groups have a Code of Ethics that members are required to adhere to in their client and business relationships.

The Institute of Real Estate Management (IREM) also has the ability to process complaints for clients of their members. I have also found that other organizations such as the Chamber of Commerce or Better Business Bureau may be able to investigate and contact the former management company.

Before you make any calls you should carefully review the property management agreement to see if there is any language that discusses the procedures for handling of funds at the termination of the management agreement.

I point this out because you may have expected that the former management company would immediately turn over the funds, but often the language found in management agreements provides that a final accounting of the client's funds will be provided in 60-90 days along with a check for the surplus funds.

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