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More re: Pending Legislation to Change Attorneys Fees/Residential Leases in Alabama

Posted by 15789465 on

After corresponding with Representative Greg Wren, and speaking to the Alabama Association of Realtors, and to landlord attorney Sarah Taggart, I now have more insights into legislation sponsored by Representative Wren. As discussed in an earlier post, Representative Wren has proposed an amendment to the Alabama Residential Landlord Tenant Act (ARLTA). He would like to allow legal fees clauses in residential leases if the landlord is a corporation or other entity required by law to have an attorney when appearing in court.  Individuals MAY represent themselves in court, or MAY hire an attorney.  Except for small claims court, corporations and LLCs MUST hire an attorney for any court action. My question was, "Why do you want to let corporations have a legal fees clause in their leases, but not individuals?"  I think the answer is: "It was not intentional, just an accidental drafting mistake." My next question was, "Why do we even need such an amendment, because ARLTA lets the court impose legal fees against a tenant. You just can't have that clause in your lease, but the court can do it anyway."  Thanks to insights from Sarah Taggart, the answer is:

A court can award legal fees if it finds that the tenant's behavior was "willful."  Different judges have different personal definitions of willful. Some say that if you don't pay your rent because you don't have the money, and you don't vacate the premises upon demand because you can't afford to move someplace else, then your actions are not willful. Other judges say that if you refuse to vacate after not paying your rent and after the landlord demands that you leave, then the tenant's actions are willful and forced the landlord to hire an attorney for an eviction.

If a lease could say that the tenant is responsible for legal fees if it defaults, then individual judges can't impose their own personal opinions on the subject.  Tenants will know that if they default, and don't vacate, and the landlord must hire an attorney, then the tenant WILL be responsible for the legal fees.

I think this is a good reason for changing the law. I would just like it to apply to individual and corporate landlords, but only if they actually hire an attorney. BUT, I do not want to return to the "bad old days" when some landlords had very harsh legal fees clauses in their leases. Often, such clauses allowed the landlord to charge legal fees every time they asked their lawyer a question about anything to do with the tenant. This is how those conversations used to go:

Tenant:  "I paid my rent on time last month but you charged a late fee. It's not my fault your secretary closed the office early and I had to slide the check under the door and it wasn't posted to my account until Monday.  Please reverse the late fee."

Landlord:  "I'm not sure about the law on that subject.  I'll check with my attorney. He charges $350 an hour and usually takes 1 to 2 hours to answer my questions. The lease makes you responsible for my legal fees. So, I'll ask my lawyer this question, and might end up reversing the $75 late fee, but it will cost you $700 in legal fees one way or the other."

Tenant:  "I can't afford $700 for a lawyer! Just keep my $75 late fee."

Because late fee clauses were often used as "hammers" for unfairly beating on tenants, something had to be done to change that situation.  It is fair, I think, to make the tenant responsible for legal fees if it is in default and if the landlord files a lawsuit. The requirement that the landlord file a lawsuit before being able to collect legal fees will, I think, avoid many past abuses. What do you think?

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  • never had a defaulting tenant that didn’t have someplace to go – but have had plenty of tenants who wouldn’t go until forced out at the barrel of the sheriff’s gun.

    have never known a landlord in madison county who filed an eviction against a tenant who was not in default of the lease.

    i would like to see an administrative agency, rather than a court, that can encourage a defaulting tenant to leave. I would be willing to pay/bribe a defaulting tenant to leave without a resort to court and the associated costs and fees

    howard ross on
  • would like to know what policies and checks for problems you suggest for (residential) rentals

    i only require a one month security deposit.

    what about checks on court records (via alacourt), last landlord, current residence condition, employer?

    what types of references do you check?

    do you recommend a particular credit and criminal check service?

    is there a lease form that you can recommend?

    how bout them dogs. several months into a lease i found the tenant got a dog without permission. tenant was told that was a breaach and to get rid of dog. the damage is already done. do you evict in that type of situation?

    howard ross on
  • don’t know how i’ve become perceived as an expert considering i have far more questions (and bad experiences)than answers

    am writing to get other’s experiences/opinions

    am interested in knowing the details of how you have “bribed” tenants to leave

    did you have to pay the tenant before they vacated the property – if so, did you have a written agreement? is such a written agreement any easier to enforce than an eviction in district court? would creating an agency or outside third party that can handle such a transaction make it easier to enforce?

    howard ross on
  • I’ve always made it a policy to decline anything other than two months rent in advance. My radar just seemed to go off, and caused me to be concerned the tenant might be a problem.

    deniselevans on
  • Howard Ross is held up by many locally as the top mind on landlording and tax sales, however we have had eviction actions for other than breach of lease, for example, when an owner has to move back into a property that is presently tenant occupied.

    And I have had to evict when the tenant has paid the rent, I had one who prepaid a year but who was so argumentative with the other tenants of a multi-family building I had to evict her before I lost all the other tenants.

    And I have paid bribes to tenants to leave in 2 days, next weekend, etc. Cheaper and far faster than monkeying around with courts. I get the keys, the departing tenant gets cash. Beats losing better tenants because I or someone else made a rental mistake.

    Robert Taylor on

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