Law pg 11,12.qxp_Layout 1 1/19/22 2:34 PM Page 1
It’s the Law
By HOWARD BOOKSTAFF, Hoover Slovacek LLP , HAA General Counsel
WHAT CAN YOU CHARGE? To a delinquent resident who skipped, according to the new TAA lease
IT’S THE BEST day ever! You just signed up your first resident on the new TAA lease. You will now get rent of a $1,000 per month for a 12-month term. Then, after only two weeks, your worst nightmare occurs. (Maybe that’s a little dramatic.) While you were enjoying your morning coffee, you read your delinquency report. It’s the fourth day of the month and you discover the resident you just leased to only days ago has failed to pay rent. While making your rounds to deliver your notices to vacate, you realize the resident skipped. Now comes the job of filling out a moveout statement. You have to itemize what the resident owes, but since you have never filled out a statement for amounts owed under the new lease, you have a number of questions. What can you charge? Reletting Charge – Yes (LEASE DETAILS paragraph I and paragraph 7.1) The amount of the reletting fee is identified on the first page in the “LEASE DETAILS” section. As with the prior TAA lease, the reletting fee is not to exceed 85% of the highest monthly rent during the lease term. It is important that this blank is filled in. If not, you won’t have the right to charge a reletting fee. Pursuant to paragraph 7.1, the resident is liable for the reletting charge if the resident: (A) fails to move in, or fails to give written moveout notice as required by the lease; (B) moves out without paying rent in full for the entire lease term or renewal period; (C) moves out at the owner’s demand because of the resident’s default; or (D) is judicially evicted. Keep in mind, the reletting charge does not compensate the owner for unpaid rent. The reletting charge is a liquidated amount covering only part of the owner’s damages for the owner’s time, effort and expense in finding and processing a replacement resident. The reletting charge is not a termination, www.haaonline.org
cancellation or buyout fee and does not release the resident from obligations under the lease, including liability for future or past-due rent, charges for damages or other sums due.
Now comes the job of filling out a move-out statement. You have to itemize what the resident owes, but since you have never filled out a statement for amounts owed under the new lease, you have a number of questions. What can you charge?
Accelerated Rent – Yes (paragraph 23.3) Similar to the old lease, the new lease provides that unless the owner has elected not to accelerate rent, all monthly rent for the rest of the lease term or renewal period will be accelerated automatically without notice or demand and will be immediately due if, without the owner’s consent: (A) the resident moves out, removes property in preparing to move out, or the resident or any occupant gives oral or written notice of intent to move out before the lease term or renewal period ends; and (B) the resident hasn’t paid all rent for the entire lease term or renewal period. Remaining rent is also accelerated if the resident is judicially evicted or moves out when the owner demands because the resident has defaulted. Paying Back Concessions – Yes (paragraph 23.5) Like the old lease, the new lease provides that if the resident defaults, the resident will pay, in addition to other sums due, any rental discounts or concessions agreed to in writing that have been applied to the resident’s account. Consequently, any rent discounts or concessions that have already been given through the date the resident skips are required to be reimbursed. Attorney’s Fees and Eviction Costs – Yes (paragraph 23.5) The lease states that the owner may recover attorney's fees in connection with enforcing the owner’s rights under the lease. The lease
also provides that the resident is liable for a charge (not to exceed $150) to cover the owner’s time, costs and expense for an eviction proceeding against the resident, plus the owner’s attorney’s fees and expenses, court costs and filing fees actually paid. Of course, attorney’s fees and eviction costs will only be recoverable if the owner actually incurs these fees and costs. If no attorney was involved or no eviction was filed, these fees and costs should not be assessed. Damages, Charges and Fees – Yes (paragraph 9 and other provisions throughout the lease) Paragraph 9 provides that the resident must promptly pay or reimburse the owner for loss, damage, consequential damages, government fines or charges or costs of repair or service in the apartment community because of a lease or community policy violation, improper use, negligence or other conduct by the resident, the resident’s invitees, occupants or guests; or any other cause not due the owner’s negligence or fault as allowed by law, except for damages by acts of God to the extent they couldn’t be mitigated by the resident’s action or inaction. There are also a number of other provisions in the lease that place the responsibility on the resident to pay damages, charges and fees. The key to being able to charge damages, charges and fees is to identify the provision that makes it the resident’s responsibility to February 2022
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