Jun 032013
 

Owen Courreges

The Times-Picayune has adopted a new crusade – renter’s rights.

It started with a series of pieces from Times-Pic staff writer Richard Webster regarding the limited rights tenants have in Louisiana.  Webster noted that housing advocates are pushing for Louisiana to adopt the Uniform Residential Landlord and Tenant Act of 1972, which has only been adopted in a minority of states with significant variations (hence, it isn’t very “uniform”).

These articles were followed up by an opinion piece from columnist Jarvis DeBerry, who derided Louisiana law regarding the return of security deposits, the speed of evictions, and housing standards.

There is some truth to Webster’s reports and DeBerry’s column.  Louisiana does not provide many additional rights to tenants to hold landlords’ feet to the flames, and many landlords use their (usually) superior financial position to take advantage of tenants.  There are horror stories of landlords making money off of withholding deposits and including unreasonable (and frequently illegal) provisions in their leases.

However, there is also a great deal of misinformation in these pieces.

First, Webster cites Ben Orzeske, legislative counsel with the Uniform Law Commission based in Chicago, for the proposition that Louisiana is unique insofar as landlord-tenant issues are dealt with under property law as opposed to contract law.  This is simply incorrect.   Residential leases are defined in the Louisiana Civil Code as conventional obligations or contracts in Book 3 of the Civil Code, whereas property law is primarily restricted to Book 2.

Orzeske argues that this supposed quirk in Louisiana law results in a system where a tenant cannot withhold rent due to a breach of the landlord’s obligations.  This is not accurate.  The primary obligation of landlords in a residential lease are normally to deliver and maintain peaceful possession make to make necessary repairs.  If a landlord fails in these obligations, a tenant may sue for damages and dissolution of the lease.  A tenant facing a landlord who refuses to make repairs may also make repairs themselves and charge it against their rent.

A worse error is made by DeBerry, whose column alleges that “the maximum a landlord can be fined [for wrongful failure to return a security deposit] is $200.” This is a minimum, not a maximum, and DeBerry fails to note that Louisiana law also allows for a tenant to recover court costs and attorney’s fees.   Compounding this error, DeBerry proceeds to analogize the $200 fine against landlords to the fines for felony theft.  What DeBerry doesn’t recognize is that a lease is a contract, and breach of a contract is not analogous to criminal theft.  Withholding a security deposit is no more felony theft than is nonpayment of rent.

After all, what’s sauce for the goose is sauce for the gander.  If we want to impose draconian, criminal fines for refusal to release a security deposit relative to a private contract, then surely we should be clapping deadbeat tenants in irons.

This, in my opinion, is the over-arching problem with Webster’s and DeBerry’s pieces.  They lean over so heavily in favor of tenants, selectively characterizing Louisiana law, that they ignore all countervailing considerations.

In truth, good landlords are probably victimized by bad tenants at least as often as bad landlords victimize good tenants.  I’ve been on both sides of this divide.

I personally rent out a one-bedroom apartment, and against my better judgment I rented to an individual with decent income but relatively poor credit.  He later lost his job, told me a sob story, and I allowed him to fall behind on his rent.  He only paid rent sporadically over the next few months, and I insisted that he get current or I would have to terminate his lease.  He then began reciting a novel laundry list of trivial complaints about the apartment in an angry, frenzied manner.  I responded by telling him that I would be evicting him as soon as possible.  The eviction process was expensive and took weeks.

My situation is actually fairly common in New Orleans; people rent out small apartments in their homes or accessory structures.  The idea that evictions should be even more difficult and lengthy, regardless of how much consideration you give tenants, seems like a slap in the face.

Louisiana law may need some minor revisions, but not those being proposed by housing advocates.  The claim that evictions can be executed in as little as 24 hours is deceptive.  In order to evict a tenant, a landlord must file a Petition for Eviction, pay the filing fee, and then pay an additional fee to have the tenant served with the petition.  The tenant must then be served with the petition and the trial date, which can be several weeks in the future depending on the court’s docket.  Accordingly, a tenant facing eviction has typically been aware that the landlord wants them out for weeks.

Moreover, the fee for a tenant to answer a Petition for Eviction is far less than the fee to file and serve the petition, and in my experience,  judges will listen to tenants at trial irrespective of whether they have formally answered.  Showing up to court is enough.

We definitely need better code enforcement.  Nobody likes to hear about landlords charging rent for blighted housing or including illegal, unenforceable in leases.  I’ve personally seen leases where landlords include comical provisions claiming legal authority to perform evictions without legal process, even to the point of physically removing tenants and their belongings (I’ve never heard of a landlord trying this, but if they did, they would be committing a number of serious crimes).  Perhaps we do need additional penalties for this type of conduct.

What we don’t need, however, is to slow the eviction process or bend over backwards in favor of tenants.  Every landlord is not the Snidely Whiplash to their tenants’ Nell Fenwick.  The law should reflect that.

Owen Courrèges, a New Orleans attorney and resident of the Garden District, offers his opinions for UptownMessenger.com on Mondays. He has previously written for the Reason Public Policy Foundation.

  22 Responses to “Owen Courreges: A word in edgewise on behalf of the landlords”

  1. Amen! No landlord wants an eviction. The only time they resort to this is after the tenant has not lived up to their responsibilities. Delaying the inevitable only rewards the tenant for their misdeed. It would be adding insult to the owners I jury to lengthen this process.

  2. I agree that the problems of landlords were ignored by the TP. Personally, I think anyone who rents to the poor is either a saint or insane. From a third party point of view, I think maintenance and upkeep issues need to be given more attention in all leases at every level. Both landlord and tenant are motivated to ignore them as much as possible, to the detriment of neighbors.

    • Deux,

      There are many poor people who pay their bills to the best of their abilities, maintain stable rental histories and frankly deserve some slack. Those people are victimized by the ocean of chronic deadbeats who abuse the system, jumping from one apartment to the next as their landlords force them out for nonpayment. The deadbeats are the reason why most landlords are cold towards anybody who doesn’t pay in full and on time.

      I know I learned my lesson and will never allow rent to go unpaid again. It’s one of those “no good deed goes unpunished” situations.

  3. Many cities outside of Louisiana have Landlord -Tenant mediation opportunities thereby mitigating the expensive process of going to court. The court usually mandates a court-ordered mediation, thereby unclogging the calendar. For some reason, unbeknownst to me, there is pushback from the legal community for such a process.

    • Moses,

      I’d like to see some citation for the proposition that there is a “pushback from the legal community” on mediation in landlord-tenant matters. I’ve certainly never heard of the notion that most local lawyers oppose such programs.

      The problem with mediation, however, is always going to be the expense (i.e., who bears it). Unless there are free options from nonprofits, the cost will fall on the parties or taxpayers. Worse of all, in many if not most landlord-tenant disputes, the relationship between the parties has simply soured and mediation is unlikely to salvage it. Rather, it only prolongs the process and increases costs.

      That said, in some cases voluntary mediation is a good idea, and if nonprofits can get on board and offer free or low-cost mediation services, I could offer support for a local program. I just wouldn’t expect miracles.

      • While I can’t quantify “pushback,” your statement, “mediation is unlikely to salvage it,” would seem to
        indicate that you have little faith in mediation – a small example of
        “pushback.”

        • Moses,

          I still support the general notion (so I’m not pushing back) but in my experience mediation typically works best when the thing at issue is a significant monetary judgment; where the real issue is simple haggling over what is owed. Conversely, where you’re dealing with an ongoing lease for a small monthly amount and one or both sides believe the other has breached, I think any resolution would probably involve the termination of the lease. So we’re not really speaking of repairing the relationship here, but reaching a similar result through a less formal process.

          That said, I suppose while termination might generally be the result in landlord-tenant mediations, the entire process is less costly and acrimonious, leaving both sides happier. However, you just can’t force it.

  4. There is never a need to evict if you assist the tenant in finding another place. We have always strongly worded our “eviction” warnings with a no-nonsense approach that scares the bejeezus out of the undesirables. Along with that “harassment every couple of weeks, we furnish lists of alternative apartments far from the neighborhood. Had only one of four tenants hold over for only three days. We sat on the porch and wandered through the apartment during the entire time they were moving out three days late.

    Have never needed a formal eviction. Act business-like in all your dealings and they get the message early on, maybe even leaving without an order.

    • ultimateliberal,

      I think using “harassment” to get tenants to leave is a risky proposition, especially if you leave letters that exaggerate or simply misstate your legal position. If you do have to resort to a formal eviction later on, you could potentially land yourself in hot water with the judge for your conduct if the tenant sticks to their guns and shows up to the trial.

      Although the filing fees are nothing to sneer at, a formal eviction is the only sure-fire way to force a troublesome tenant to leave.

  5. A word of wisdom for all the landlords who will be posting here about how wonderful they are to their ungrateful tenants: if all your tenants think you are a jerk, you are indeed a jerk.

    • Yet another,

      True, if *all* of your tenants think you are a jerk, there is probably some truth to it. However, there are a lot of problem tenants out there, and oftentimes bad tenants make bad landlords (and vice-versa).

  6. Important, too, to draw distinctions – as I believe New Orleans/Louisiana laws do – between the rules of eviction as they pertain to landlords who live in the same building with tenants, versus those who don’t. I recall the provisions for the former group are a LOT less stringent.

    • TimGNO,

      I’m not familiar with any laws that raise that distinction. In the end, even a resident landlord has to go through the same eviction process (and that’s a good thing; these matters need to be adjudicated because the alternative would involve unilateral decisions by landlords, which would bend too far in the other direction).

      • Not having reviewed any of the applicable law in ages, I may be mistaken. Indeed, the distinction may lie not with eviction proceedings, but instead the added flexibility a resident-landlord may have with certain “fair housing” considerations.

        • TimGNO,

          I think that’s correct, as Drew mentions above. I think it’s relative to the notion that owner-occupied housing is more analogous to a roommate situation and thus a landlord there has wider room to discriminate based upon categorizations that are otherwise protected under fair housing laws. I’m not sure of the extent of that, however.

      • There are some differences but I’m not sure it has anything to do with rental amounts or evictions.

        I know that because I live in one home that also has a rental unit, and because I work from home, that I’m allowed to refuse tenants with children and such as it would negatively affect my ability to enjoy my own residence. That would be illegal under fair housing regulations otherwise, so there is some leeway given to resident landlords, but I don’t think there is a lot.

  7. Thank you for writing this piece; both TP articles were very poorly written in my opinion and I’m glad someone is pointing that out. Further, they cite a very poor example by using the properties on the 2100 block of Burgundy, which is one block off of Frenchmen (river side of St. Claude). This area is highly desirable and properties in the vicinity have shown a steady increase in value over the past few years, which translates into higher rents for all living there. I realize that those poor tenants shown in the accompanying TP video probably aren’t really well versed in economics. However, the $400/month that they were paying to live in that dump could get them into a much higher level of housing (beyond adequate) in a neighborhood such as Kenner project (near the airport, generally low-income, some subsidized). Really, several adequate places in Jefferson Parish would be available for that amount, that’s just one example that comes to mind. I assure you Kenner project lets people live there that have well below pristine credit so that’s no excuse. I understand that some quoted in the article are musicians and I sympathize with those to an extent (I’d love to be closer to my office too), but you simply have to make that trade off when you’re in this situation to have adequate housing. I really just thought that both articles were poorly written and this is one reason that isn’t being mentioned that I thought was worth pointing out. Simple supply and demand dynamics of the neighborhood are being completely ignored.

    • Uptowner,

      Not mentioned is the fact that insurance has been skyrocketing and the city has been raising assessments while refusing to lower property tax rates. Higher rents are not due to a cabal of evil landlords; they’re due to insurance going up more than a third over the course of a few years.

  8. As the TP is on it’s last legs….where will DeBerry go ? The Advocate passed him by. Thanks for the actual law Owen.

    • I don’t always dislike DeBerry, but two of his recent columns had pretty glaring errors (which I pointed out), the type that could have been checked quite easily. The first lesson of being a professional columnist should always be to check the best source you can. This, if you have a brief AP blurb from another city, don’t rely on that; check the story from the local affiliate.

      Likewise, if you’re commenting on a law or proposed legislation, read the law or read the bill. Don’t rely on secondary sources, and certainly don’t make blind assumptions based on cursory readings of secondary sources.

      Mistakes will happen (I’m sure I’ve made some) but DeBerry is in the big leagues and shouldn’t be repeatedly making the same major mistakes over and over.

  9. Owen,

    Thanks for taking the time to write this. I’ve been annoyed with every article popping up in that TP series. It’s very true that here in New Orleans we have some serious issues with a few trouble slum lords who in many cases such as Uptown, may be the owners of a near critical mass of rental units overall. They buy properties at sheriff’s sale for cheap, never put another dollar into them, and make their money off of volume and lawyers whilst making it difficult for all the rest of us to offer a fair deal.

    The TP articles ignore the reality of the New Orleans rental market — and these, are realities most tenants also seem convinced are not the case either:

    –Most landlords in New Orleans are not wealthy; they are in fact not well-off enough to afford the very high cost of real estate in our city on their own. Thus, to help cover the costs of mortgages, insurance, and maintenance, they rent out part of their homes.

    –Most landlords are not ‘making huge profits’ on the backs of their tenants. In most cities, it’s the norm for the owner of a duplex/double to cover two thirds to 100 percent of his mortgage via his tenant’s rent. Here in New Orleans however, most everyone I know who is a resident landlord (living on a property and renting part of it out) expects his rental property to cover a much more modest and fair 50% of so.

    –Rental prices are based on home prices. The nationally recognised formula for setting minimum rents for properties is to take the higher of either the purchase price of property or home’s resale value, to then generate 1% of that number each month, add in recurring costs (maintenance, insurance, utilities, taxes, etc.), and to then divide that number by the percent of the living space allocated to each unit, thus determining the rent.

    Before whiny tenants and annoyed freelance reporters who probably are just upset that they can’t afford New Orleans as easily as they’d expected complain about the local rental market, they should consider these numbers. Here’s an example with a property uptown:

    A double shotgun owner occupied plus rental half in Carrollton priced around $350-400,000. That means the property owner needs to generate (let’s go with the low end) $3,500 per month as a base number. That same property is going to require payment of another $250 per month or so in property taxes to the city. The owner’s mortgage will require flood, homeowner’s, and liability insurance which likely comes out to another $300 or so per month. That owner shall then have to fork out another $50 for pest control, another $100 or so for termites and such, another $50 or so for lawn and landscaping maintenance, and likely a further $250 or so each month in general maintenance and repairs.

    Now, before covering marketing of the apartment, damage from tenants, times when it’s vacant because tenants just decided to leave after their semester ended or once they realised New Orleans has black folks, the basic amount that landlord has to cover each month for this ‘basic apartment’ is $4,500. You can’t be in business to lose money, so at least try to get half that back and your minimum rent you can charge for half your home is $2,750 per month.

    Find those prices being charged in Carrollton. You won’t. In fact, this same apartment actually is rented for $1,500 per month WITH all utilities (water, sewerage, trash, electricity, gas, internet, satellite) included. That makes the effective ‘rent’ portion of what the tenants pay each month around $900 which means they’re only paying 1/3 of what the national real estate market says they should be paying.

    Yes, it’s expensive to live here, but reality is reality.

    As you’ve pointed out, it’s not an ‘easy’ 24-hour eviction process here. It can take up to a month, and the bad part is that if it comes down to that point, you can be sure that the landlord will be out a month if not 2 or 3 in rent by that point, that he’ll have to spend many times that renovating and repairing the mess he’ll be left with, and that the apartment shall sit empty in the meantime.

    Landlords don’t have it that easy here. The rental market here is very tight. Generally if you don’t get your place rented on a 12-month lease for June 1, it’ll sit empty all summer. If you’re lucky, you may be able to rent it for September 1 to some law student who didn’t do his homework and showed up a week before his semester thinking he’d have the pick of places to live. If not, it’ll likely sit empty till the end of December. And even then, you’ve basically got the chance to get a 6 month tenant in January, and if not, you’ll be without income again until the June-to-June cycle comes around again.

    No matter how long evictions take, no matter how long it takes to rent a place out, and no matter how long a landlord gives his tenant to catch up before finally booting him, that landlords monthly costs for that unit never quit coming in. The idea that it should be made even more difficult for landlords to get rid of problem tenants is an insult not only to those who provide housing far cheaper than it should be here, but is an insult to basic intellect as proponents of such tenant protections are asking for untenable irrealities.

    There’s always more to every story and when it comes to this one, the parts that have been left out far outweigh what’s been included.

  10. There used to be a Tenant-Landlord Relations person in the Mayor’s Office at City Hall who could answer questions about repairs, evictions, leases and various things. It would be nice if that were again available. The Times-Picayune articles were so poorly researched and so filled with errors in fact, that, while there are villains in this story, from the TP coverage you can not pinpoint them. And, no useful or workable solutions were offered. Actually, the judges at City Court and their staffs, plus the clerk’s and constable’s offices, are very knowledgeable. Have patience: government workers have hard, tiring jobs and they get grumpy like the rest of us. Tenants should always show up if they get a notice to go to court. The judge will be sure they are heard. They may not always win, but they will be heard. And, the judges really try to strike a balance when rights are in conflict. The most broken part of the system is actually code enforcement — decrepit buildings have no place in our neighborhoods. New Orleans is still a city of renters, and they deserve better from their city government.

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