The Rights of Tenants
A lease agreement is a legal document that binds both the tenant and the landlord. For tenants, the lease lays out all of a tenant’s rights and obligations when occupying the property. Many of these rights (sometimes referred to as "implied rights") will be granted to tenants by law regardless of whether the specific rights are stated in the lease. But it’s important for tenants to know and understand their rights when entering into a lease.
If the lease does not specifically grant the tenant certain rights, the tenant might not realize that they are entitled to those rights. This is especially likely because tenants are often young adults with little to no experience with leases or living away from home, and they will look to the terms of the lease for all of their rights and obligations as a tenant .
For instance, the law generally grants tenants the right to habitable premises, lawful entry by the landlord, proper notice before rent increases and before entry by the landlord, and the right to timely return of the security deposit. Unless the lease expressly modifies these rights, each of these rights will apply to each rental unit, and tenants can seek recourse if their rights are violated. Recourse can include legal compensation or injunctive relief.
Tenants also have the right to materially modify any lease term provided that both parties agree to the modification in writing. Tenants should always seek to clarify and modify terms of the lease that they do not understand, that are absent from the lease but are expected, or that are inconsistent with what the landlord orally represented.
Lease agreements, whether long or short-term, can often be complex documents. Since leases are legally binding, it’s important for both parties—especially tenants—to understand their respective obligations under the lease.
The Protection of Security Deposits
Security deposits can be a make or break item when it comes to leasing commercial space. Landlords must be careful not to keep too much, while tenants want as much as possible returned at the end of the lease.
There are several lease clauses that can protect tenant security deposits:
Security deposit regulations. A landlord may require a security deposit, consistent with state law, when entering into a lease. Some regulations control what landlords should charge for a security deposit. There may also be specific requirements related to the deadline by which the landlord must refund the deposit, if at all.
Holding interest in trust. A landlord may be required to hold a tenant’s security deposit in a separate interest bearing account for the tenant’s benefit, particularly with respect to the interest on the deposit. The landlord may be required to pay the interest earned on the account to the tenant.
Return of deposit within a certain time period. A landlord may be required to return a tenant’s security deposit within a specific time period of the expiration of the lease or termination of the lease.
Maintenance and Repair Obligations
A lease should clearly define who is responsible for maintenance and repairs in the space to not only prevent disputes between landlords and tenants, but also to protect tenants from unexpected repair costs. Freestanding tenants of retail space may be responsible for keeping the premises in good order (including firing code/life safety inspections) and repairing or replacing the roof or other major building systems (including HVAC systems). In addition, tenants typically are responsible for all casualty/fire insurance deductibles, repairing damage to the premises and compliance with applicable laws (to the extent such laws were not applicable at the time the tenant first leased the space). For example, tenants are typically responsible for obtaining a license to use in-line storage rooms or customer restrooms that become gender-neutral under the State Department of Human Rights Act. Tenants are generally also responsible for maintaining insurance and destruction provisions that are more favorable than the landlord’s general form of lease. Tenants, particularly national retailers, usually agree to indemnify the landlord for personal injuries to its employees and non-employees arising from the tenant’s use of the premises.
Landlords are responsible for itemizing any repair or maintenance obligations in the lease. Landlords may also want to negotiate the right to enter the space to make repairs after providing notice to the tenant. Although landlords typically reserve such a right, they are not always permitted to take possession of the premises or alter the tenant’s work in order to make such repairs. In addition, a number of landlords use the right to inspect the premises. The Illinois Retailers’ Occupancy Expense Law (ILEO) amended the Code of Civil Procedure to allow a first mortgage lender (mortgagee) to enter into the premises to inspect any repair progress on behalf of the landlord. The ILEO requires a mortgagor to advise the tenant of the mortgagee’s right to inspect the premises and gives the tenant the right to review a copy of the mortgage. In addition, the ILEO does not limit the obligation of a tenant to pay rent on the premises in the even that the lien for the mortgage is foreclosed, however, a tenant may be entitled to an offset for expenses related to making repairs to the mortgaged premises.
In either case, landlords should make sure that access provisions are not overly burdensome on other tenants in the center.
Early Lease Termination Provisions
If your job relocation is in the cards, you want to be sure your lease has an early termination clause that frees you from the agreement early if you can show that a relocation is pending. We have had several clients come to our office after they received a transfer order and find that their lease does not have such a clause or that the lease was poorly written so as to not meet their needs.
Similarly, it is not uncommon for personal emergencies to arise that would leave your lease a burden. Whether it is an aging family member, an unexpected pregnancy or changes in employment, you will want to be released from the agreement. Without a clear and well-drafted early termination clause, these obligations just become restrictions on your freedom.
Your lease should provide a clear cut way for you to secure an early termination so that you are not stuck with the obligation down the road.
Tenant Privacy and Access Rights
As important as it is to have a well drafted property lease, it is equally important to ensure that the operational policies put in place by the landlord do not go against the governing rental contract. Rental laws in many provinces require rental agreements to contain clauses regulating landlord access to the property. It is important for such clauses to be present because the landlord may have a right of inspection and maintenance, but there should clearly be a limit to this right.
Privacy and access rights clauses typically outline the notice period required prior to landlord access, as well as the times at which access is allowed or not. Depending on the circumstances, the right of inspection and maintenance may only be exercised during working hours on business days, unless there is an emergency situation. The clause may also determine how much notice is required before a tenant has to allow access.
A well drafted clause will balance the competing interests of landlords and tenants, while also giving effect to the protections afforded to tenants by our provincial rental legislation.
Rules Regarding Rent Increases
Regulations Relating to Rent Increases
Clauses that influence the increase in rental amount are an essential part of any lease agreement. New legislation severely limits the acceptable circumstances under which a lessor may increase rent and also limits the available increases to either 10% or CPI-related increases, whichever is lower. Tenants must always ensure that these clauses are present in their lease.
Some other considerations regarding rental increases are set out below.
A landlord may not, except in the case of a lease of not more than 10 years, increase the rent by more than 10% or CPI, whichever is the lower percentage, without the written consent of the tenant. Clause 8.5 of the standard lease created by the Rental Housing Act, 1999 supports this concept. In a long lease, this is a very important provision for a tenant. By setting this limit the tenant is ensured predictable increases during the period of the lease. In a short lease , a tenant can ensure that the rent will not increase substantially during the course of the lease, since the increase cannot exceed 10 percent or CPI, whichever is the lower number. Again, the tenant is guaranteed a rental amount that will not be increased above the agreed amount for a maximum period of 6 months. It is critical that tenants pay close attention to the payment terms that they may be agreeing to. Some landlords demand payment in advance or include clauses obligating tenants to pay interest on overdue amounts at a high rate of interest that far exceeds that provided for in the Act. The Human Society International v Minister of Justice decision demonstrates that the non-enforcement of these provisions will always result in a successful defence of a claim based on the contracts.
Term Provisions Against Illegal Eviction
If you’re a residential tenant, you may have heard the phrase "self-help" eviction before. This term is used to describe a landlord’s attempt to remove a tenant not by going through the legal process, but by changing the locks or taking other steps to unlawfully remove the tenant. Most states have very strict laws and procedures that must be followed if a landlord wishes to evict a tenant, including providing a tenant with proper notice and following the proper court procedures to obtain an eviction order. In fact, as a landlord, trying to remove a tenant yourself or refusing to allow the tenant to move out is very dangerous territory. However, not every state has the appropriate remedies in place, meaning you might get stuck with a difficult tenant for longer than you hoped.
SHADE supports tenants having protection against unlawful eviction, so we have drafted this sample clause that would give the tenant a cause of action against a landlord while giving the landlord the tools necessary to remove a tenant through proper means.
REMEDIES Renter’s Remedies. It is the intent of the parties that should any of the provisions of this Lease be held invalid or unenforceable, the remainder of the term and covenants within the term shall remain in full force and effect. Timing and Notice Requirements. In order for Landlord to use self-help to assist with an unlawful eviction, Landlord will first file a complaint for unlawful entry into or detainer of real property in the district court of Jordan, Delaware County, Ohio. Renter has a right to a hearing to contest Landlord’s allegations. Hearing shall be held within seven days of the issuance of a judgment, unless a jury trial is requested, in which case hearing shall be held within thirty days of the issuance of a judgment. If Renter does not appear at the hearing, judgment will be entered for Landlord. Without Bond. To avoid any harm to Renter, no bond shall be required and the hearing shall be obtained in an ex parte manner, on notice of one hour, without notice to Renter, without requiring bonding, or other safeguards before the Court. Costs and Fees. In the event Landlord prevails at hearing, Landlord may recover from Renter the costs and reasonable attorney’s fees associated with the proceeding. If the Renter prevails, Renter may recover from Landlord the costs and reasonable attorney’s fees associated with the proceeding. Recovery of Loss. In the event of an unlawful eviction, the Renter may procure possession of the Premises for himself or eligible persons, or his or theirs damages, in an action in the District Court of Jordan, Delaware County, Ohio, against the landlord or lessor, or his or their sureties, in a sum not to exceed three (3) times the actual damages. The Renter may also recover reasonable attorney’s fees if successful. Notice of Rights. The Renter acknowledges that He/She has received a copy of these provisions and has read and understood them before signing a copy of this Lease.
Pet Policy and Agreement Terms
A lease can contain policies regarding very specific issues, including pet ownership. We have seen a significant increase in the number of tenants obtaining pets, including large dogs, during the past decade. For this reason, securing clear confirmation in the lease of your position on pets is critical in the event you obtain an unwanted pet tenant.
Allowing pets can come with protections for both you and your tenant. While you may be willing to allow you tenant to have a pet in the apartment, you may want to ensure that you have the right to approve the type of pet. Some landlords have an approved list of pets that they permit and do not approve others. Some give the landlord broad permission to reject any proposed pet.
If you require a pet to be vacuumed, groomed and/or desalted every day, there is a clause for that. A clause permitting the landlord to charge a nonrefundable pet fee, such as a security deposit of $200.00 per pet is also helpful. If your community has a weight limit for pets (say 75 pounds), getting it in writing will give you the security you need to take action if a tenant brings in a 200 pound Mastiff.
Utilities and Building Services
With regard to shared amenities, tenants have a right to use all areas and facilities that are intended for the common benefit of all tenants. Accordingly, there should be no ambiguity as to who has access to which facilities. Therefore, lease provisions should address any limitations with respect to the use of common areas and facilities. Such limitations will not necessarily be objectionable by the tenant, so long as they are clearly spelled out in the lease. For example, a landlord may have the right to establish reasonable use rules for the shared facilities located on the premises. The key here: all conditions and provisions upon which the tenant may use the shared facilities and amenities must be expressly addressed in the lease so that there can be no misunderstanding when the tenant actually begins to use the facilities. With respect to utilities , the parties to a sublease may wish to allocate the payment of utilities among the tenant, sublandlord or third party. While the allocation is, again, subject to negotiation, if there is any uncertainty, subtenants may choose to have the landlord initially pay a portion of the utilities, with the subtenant reimbursing the landlord, as necessary. Alternatively, the subtenant may have the responsibility to pay utilities directly to the utility companies within a certain period of time after the receipt of invoices, or provide the sublandlord with proof of timely payments made to the utility provider. Whatever the case, the parties must be clear as to their respective obligations with respect to the payment of utilities.