Congress regularly enacts laws that regulate real estate transactions, specifically the rental of commercial and residential property in the United States. In turn, states may choose to set their property law based on federal laws, such as the Uniform Residential Landlord And Tenant Act (URLTA) and the Model Residential Landlord-Tenant Code.
For the most part, however, the laws that guide renting residential and commercial real estate in most states are based on statutes and the body of common law in that state. These are mostly independent of federal laws. Still, federal laws take precedence during national or regional emergencies and in cases of discrimination.
One thing federal and state property laws have in common, however, is that they regulate the relationship and common issues involving tenants and landlords of commercial and residential real estate.
Common Landlord-Tenant Issues & Applicable Laws
A landlord is an individual, private or public business that owns a piece of real estate. A tenant is an individual, private or public business that holds temporary interest in the real estate.
The tenant uses the residential or commercial property for a predetermined period, i.e., tenancy. Often, the tenancy period is unestablished, and the relationship continues for as long as is comfortable for both parties. Either way, both entities have contractual rights and responsibilities towards one another based on enforceable contract and property laws in that state.
- Transferring Tenancy
Subject to state laws and regulations, tenants may transfer their tenancy to a third party via assignment and subleasing. Assignment refers to when the tenant transfers their exclusive rights and responsibilities to the third party.
This effectively makes the third party the new tenant. On the other hand, subleasing is when the original tenant transfers most rights and responsibilities to a third party. Still, the original tenant reserves the right to revise the third party’s “sub-tenancy” under certain conditions. This effectively makes the original tenant a landlord of sorts.
Meanwhile, states enact regulations on transferring tenancy through assignment and sub-leasing. Thus, the transfer of tenancy is subject to privity, limitation clauses, and commercial reasonability.
Eviction refers to when a landlord revokes the tenant’s access to the residential or commercial property before the period of tenancy expires. Generally, eviction occurs because the tenant violated the lease terms. Common causes of eviction include non-payment of rent, habitual late payment, damage to property, nuisance, and holdover.
Eviction is a civil matter that is subject to statutory regulations. For one, a landlord may not evict a tenant in retaliation for perceived slight. Furthermore, the landlord must use acceptable means to remove the tenant viz-a-viz self-help eviction, filing a complaint in court, and constructive eviction. Self-help eviction is when the landlord uses a reasonable amount of force to remove the tenant from the residential or commercial property. Most states, however, bar forceful eviction.
Where forceful removal fails or is not allowed in a state, the landlord must file a complaint in court seeking a court-ordered eviction of the tenant. However, this is subject to a trial and judicial review to determine whether the tenant violated the lease term and thus subject to eviction. If the court petition is successful, a law enforcement officer will enforce the eviction judgment.
- Constructive Eviction
Court-ordered eviction is the most common type of eviction but often uses a third illegal method – constructive eviction. Constructive eviction is when the landlord causes the residential or commercial property to become uninhabitable for the tenant. So, rather than directly force the tenant out – as in self-help eviction, the landlord employs measures that make the tenant uncomfortable in that property. Common examples include failing to make repairs on the structure, air conditioning, heater, sewage system, water, pest, or bug problem.
Generally, constructive eviction is illegal, and the tenant may file a civil case against the landlord. However, the tenant has the burden of proof and must prove the landlord made the property unfit for human habitation. This requirement makes constructive eviction a grey area.
Abandonment refers to when a tenant leaves a residential or commercial property without informing the landlord. The statutory qualification for abandonment varies with states. Most states also require that the landlord prove or show that the tenant has no intention of returning to the property, e.g., defaulting on rent. A landlord with an abandoned property may terminate the lease, sue the tenant for damages, or lease to a new tenant.
- Security Deposits
Security deposits refer to the amount estimated to cover minor damage to the property during the tenant’s occupancy. In most states, the security deposit is equivalent to one month’s rent, which the landlord keeps in an escrow account until the lease is over. When the tenant leaves after their tenancy expires, the landlord shall inspect the property and list the damages and cost of repair.
The tenant shall also review the list with the landlord and may agree or dispute the list’s accuracy. If the list and cost basis is accurate, the landlord shall use the security deposit as intended. Otherwise, if the property remains in pristine conditions, the landlord must return the security deposit to the former tenant within a reasonable period. Besides fixing the damage, a security deposit also helps the landlord cushion the financial blow from the tenant’s early termination of the lease without paying.
The Federal Fair Housing Act prohibits landlords from discriminating against intending tenants based on race, color, national origin, religion, sex, familial status, and disability. The Fair Housing Act also expands to include persons with criminal records. While a landlord may deny housing to a former offender if their criminal history suggests they pose a threat to the community, the landlord may not:
- Deny housing based on arrest records only (since these records do not show definitive proof of guilt
- Place bans on anyone with a criminal history
- Discriminate by inconsistently conducting background checks on prospective tenants based on demographic stereotypes
The Act requires landlords to consider prospective tenants with a criminal history on a case‐by‐case basis. A landlord must consider the crime, its severity, the duration of incarceration, and the condition of release in their evaluation. Furthermore, a landlord may not deny housing based on a perceived threat but must decide based on facts and evidence.
In a case of unlawful discrimination, the burden of proof is on the plaintiff, i.e., the prospective tenant. They must prove the landlord violated the Fair Housing Act based on the following empirical facts:
- The plaintiff is protected under the Fair Housing Act
- The landlord knew or suspected the prospective tenant was protected under the Act;
- The prospective tenant qualified to rent the property in question and duly submitted a valid application
- The landlord rejected the plaintiff’s application based on the landlord’s knowledge
- The landlord failed to rent the property to another tenant for a specified period (subject to state laws)
- Housing Codes
Housing codes refer to state or municipal regulations that set the minimum standards on all residential and commercial property in that jurisdiction regardless of the property’s age. These rules and regulations vary with state and among counties within a state. Municipalities within a county can even set their housing code. Regardless, housing codes in the United States have a common goal – to protect the occupants’ health and safety per standards in a community.
Resolving Landlord-Tenant Matters
Besides complying with all state laws on renting residential or commercial property, a landlord is also subject to federal laws on housing and discrimination. Leasing a property gives the tenant temporary ownership of a property based on the terms of the contract. The property owner also has rights under state laws. When a dispute arises on the rights, responsibilities, or terms of a lease contract, the parties involved typically file a landlord-tenant case in court.
Unless it is a small claims case, either party may hire an attorney with experience in landlord-tenant disputes. The attorney provides legal advice and represents the clients’ best interests in court. A landlord who prefers to go pro se may use free resources regarding landlord-tenant laws and resolving common disputes from the American Apartment Owners Association.