It’s The Law – Navigating the new TAA lease.

NAVIGATING THE NEW LEASE

Learning the new lease’s provisions and where they are located will help you understand your rights and responsibilities.

It’s the Law By HOWARD BOOKSTAFF, Hoover Slovacek LLP , HAA General Counsel

THE MOST IMPORTANT document between you and resident is the lease. The lease explains the rights and responsibilities of each party and can answer many of the questions that arise in the day-to-day operations of an apartment community.

In February, the new TAA lease became available. If you use the TAA lease, you will be using the new form whenever you sign new leases. Much of the content from the old lease is incorporated into the new lease. The lease is shorter, six pages rather than eight pages. Some of the content from the old lease has been incorporated into the “Community Policies.” The first page of the lease has “Lease Details,” which outlines many of the amounts the resident will be expected to pay throughout the term.

It is important that you know the provisions of the new lease, as you did the old lease. Let's take a look at some of the most important provisions you will be using on a day-to-day basis.

Rent (Lease Details, Section C, Paragraph 3)

Section C of the Lease Details provides a blank where the “Monthly Base Rent” is filled in. Paragraph three outlines the same provisions as paragraph six of the old lease. The resident must pay rent on or before the first day of each month without demand, there are no exceptions regarding the payment of rent. Not paying rent on or before the first day of each month is a material breach of the lease.

Late Fees (Lease Details, Section G, Paragraph 3.3)

Section G of the Lease Details provides blanks for you to fill in the amount of the late fees. As in the old lease, the late fees can be identified by a percentage of one month’s monthly base rent or by a dollar amount. Section 3.3 provides that if the resident doesn't pay monthly base rent in full when it's due, the resident will pay the late fee outlined in the Lease Details.

Lease Changes (Paragraph 3.6)

As with the old lease, the lease allows the owner to increase the rent at the end of the lease term or renewal period. At or after the end of the initial lease term, rent increases will become effective with at least five days plus the number of days’ advance notice contained in the lease. The new lease, which may include increased rent or lease changes, will begin on the date stated in any advance notice the owner provides (without the need for the resident’s signature) unless the resident gives timely written move-out notice.

Reletting Charge (Lease Details, Section I, Paragraph 7.1)

The amount of the reletting charge is identified in the Lease Details, Section I. As with the previous lease, the reletting charge is not to exceed 85% of the highest monthly rent during the lease term. Additionally, Section I confirms that the reletting charge may be charged in certain default situations.

Paragraph 7.1 outlines the same authority to assess the reletting charge as in the previous lease. The resident is liable for a reletting charge if the resident: (A) fails to move or fails to give written move-out notice as required in 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; (D) is judicially evicted.

Early Termination Option (Lease Details, Section J, Paragraph 7.2)

The new lease incorporates the early termination option into the lease, rather than by separate addendum. Section J allows you and the resident to agree on the termination fee and the number of days’ notice that would be required for the resident to exercise the option. It is important to note that if the blanks in Section J are not filled in the section does not apply. Paragraph 7.2 outlines the early lease termination procedures. Once again, this section confirms that if the resident is in default, the lease remedies apply. The resident cannot exercise the early termination option if the resident is in default.

Community Policies (Paragraph 10)

The Community Policies is a separate document that can be used to address any issues not contained in the lease. Paragraph 10 provides that the Community Policies become part of the lease and must be followed. Paragraph 10 also provides that the owner can make changes, including additions, to written community policies and those changes can become effective immediately if the community policies are distributed and applicable to all units in the apartment community and do not change the dollar amounts in the Lease Details. The Community Policies paragraph contains a photo video release, certain provisions regarding the disclosure of information, issues regarding guests that may be violating the lease and causing problems, a requirement that the resident provide notice of convictions and registration and an agreement regarding odors and noise.

Conduct (Paragraph 11)

Paragraph 11 contains many of the conduct provisions that were previously in paragraph 20 of the old lease. Additionally, this paragraph provides that the resident agrees to communicate and conduct himself or herself in a lawful, courteous and reasonable manner at all times when interacting with the owner, the owner’s representatives or other residents or occupants. Any acts of unlawful, discourteous or unreasonable communication or conduct by the resident, occupants or guests is a breach of the lease.

This paragraph also provides for all the prohibited conduct that was previously in the lease, including prohibitions against criminal conduct, behaving in a loud, obnoxious or dangerous manner, disturbing or threatening others, or disrupting owner’s business operations.

Animals (Paragraph 12)

Paragraph 12 provides that no living creatures of any kind are allowed, even temporarily, anywhere in the apartment or apartment community, unless the owner gives its written permission. As with the old lease, the new lease provides that if the owner allows an animal, the resident must sign a separate Animal Addendum and pay an animal deposit and applicable fees and additional monthly rent, as applicable. The animal deposit is considered a general security deposit.

Entry (Paragraph 14)

As with the old lease, the new lease provides for when the owner and the owner's representatives can enter the unit. If the resident is present, repair or service persons, contractors, law officers, government representatives, lenders, appraisers, prospective residents or buyers, insurance agents, persons authorized to enter under the rental application or the owner’s representatives may peacefully enter the apartment at reasonable times for reasonable business purposes. If no one is in the apartment, such persons may enter peacefully and at reasonable times for reasonable business purposes if written notice of the entry is left in a conspicuous place in the apartment immediately after entry. As stated in the previous lease, the owner is under no obligation to enter only when the resident is present, and may, but is not obligated to, give prior notice or make appointments.

Right to Terminate for Community Damage or Closure (Paragraph 16)

Similar to the old lease, if in the owner's judgment, damages to the unit or building are significant or performance of needed repairs poses a danger to the resident, the owner may terminate the lease by giving at least seven days written notice. Pursuant to Section 16.1, the owner also has the right to terminate the lease by giving at least 30 days written notice if the owner is demolishing the apartment or closing it, and it will no longer be used for residential purposes for at least six months.

Assignment or Subletting (Paragraph 17)

Similar to the old lease, the resident is not permitted to assign the lease or sublet the apartment. The resident agrees that they won't rent or offer to rent or license all or any part of the apartment to anyone else unless otherwise agreed to in advance by the owner, won't accept anything of value from anyone else for the use of any part of the apartment and won’t list any part of the apartment on any lodging or short-term rental website or with any person or service that advertises dwellings for rent.

Default (Paragraph 23)

The default provisions of paragraph 32 of the old lease are now contained in paragraph 23 of the new lease. As before, if the resident defaults, the owner can give at least 24 hour written notice to vacate. Although the methods of delivering a notice to vacate are no longer in this provision, the methods of delivery are set by statute, not by the lease. With one exception, the notice to vacate must be given in person or by mail at the apartment.

Providing notice in person may be done by personal delivery to the resident or any person residing in the apartment who is 16 years of age or older or by personal delivery to the apartment and affixing the notice to the inside of the main entry door. Providing notice by mail may be made by registered mail or by certified mail, with return receipt requested, to the apartment.

As an alternative to delivering the notice in person or by mail, the law allows, in certain exceptional circumstances, to deliver the notice to vacate by securely affixing the notice to the outside of the main entry door. However, if this method of delivery is used: (i) the notice must be in a sealed envelope on which is written the resident’s name, address and, in all capital letters, the words “IMPORTANT DOCUMENT” or substantially similar language; and (ii) not later than 5 p.m. on the same day, the notice must be deposited in the mail in the same county in which the apartment is located.

Additionally, in order to serve the notice on the outside of the door, the owner has to reasonably believe that harm to any person would result from personal delivery to the resident or a person residing in the apartment or from personal delivery to the apartment by affixing the notice to the inside of the main entry door. Alternatively, if the notice meets the posting and mailing requirements, the notice can be on the outside in certain limited circumstances when the apartment has no mailbox and has a keyless bolting device, alarm system or dangerous animal that prevents the owner from entering the apartment to affix the notice to vacate to the inside of the main entry door.

The new lease is here! Knowing the provisions and where they are placed in the new lease will help you and the resident understand your rights and responsibilities.