The landlord-tenant relationship works best when both sides know and play by the rules. But we all know that isn't always the case. Some tenants game landlords by using the rental property for illegal activity or by not paying rent and skipping town. And some landlords take advantage of tenants by having lease terms that contradict state or federal law.
If you're a landlord, make sure what you put in your lease is legal by running your lease by an attorney or by looking up landlord-tenant laws for your state. Otherwise, you might signal watchdog groups who want nothing more than to take away a landlord's right to issue their own lease. Here's one such attempt.
The Philadelphia study
A study conducted by two university professors, David A. Hoffman from the University of Pennsylvania and Anton Strezhnev from Harvard, studied lots of Philadelphia residential leases-- around 170,000 of them. They found leases that contained unenforceable clauses such as:
- Clauses that disclaim liability for negligence: What's probably illegal about this clause is that landlords, under federal law, must provide premises in good condition. So for example, if the deck railing isn't up to code and the tenant falls and is hurt, this clause tries to get the landlord off the hook for something for which landlords are normally responsible.
- As-is clauses: The problem with as-is clauses is that they go against the warranty of habitability, a federal law, which says landlords must provide a livable unit with basics such as hot water, doors and windows that lock, no pests, and a sound structure.
- Holdover tenant penalty clauses: When the lease ends, tenants must leave unless the landlord allows them to stay, either by renewing the lease or as a month-to-month tenant. If the landlord doesn't want them to stay but the tenant stays anyway, they're a holdover tenant and are trespassing. Landlords can evict when this happens. The problem the professors found were holdover penalty clauses, such as requiring the tenant to pay three times the monthly rent and expenses the landlord incurs if they don't leave on time. Landlord-issued penalties may or may not be legal in Pennsylvania.
- Waivers of notice: With this, landlords are trying to waive the 15- to 30-day move-out notice they must give a tenant if the tenant breaches the lease.
Those findings clearly indicate that some landlords are acting shady, but this study might be overreaching in another area.
Can landlords put in a crime-free clause?
The professors also have a problem with landlords including what they call "crime-free/drug-free" clauses, clauses that specify illegal activity on the premises is grounds for eviction. (I have that clause in my own lease.) The professors think Philadelphia landlords might be using this clause more in certain neighborhoods or with certain groups of people more than others, namely minority groups.
Even if some landlords are doing that (which is inexcusable), it doesn't really matter. For one, landlords in almost every jurisdiction can evict if the tenant is breaking the law. For another, because of the Fair Housing Act, landlords cannot harass or evict a tenant just because they're part of a protected class. This means there already exists a remedy for tenants, if, say, a minority tenant makes a case in court that the landlord's white tenants get to deal drugs, but they can't.
Federal lease regulations?
A PennLaw article about the study says the professors will continue their research "with an eye toward proposing better regulatory strategies." Further, Hoffman told Axios, "We don't have federal lease regulations like some countries do, and the result is that you're at the mercy of your landlords."
Those sentiments indicate this study could be using data to make assumptions designed to bolster an argument for federal leases. This one is for residential landlords to watch.
The Millionacres bottom line
It's good to have watchdog groups that help ensure landlords play by the rules and aren't taking advantage of tenants who don't know the law. But it may not be good if groups try to take control from mom-and-pop residential landlords by advocating for a federal lease all landlords must use. That would mean less freedom for all landlords, most of whom run honest businesses.