Should I Seek Restitution?

By Geoff Roberts, Buildium, Boston, MA

Unfortunately, sometimes tenant-related situations happen that require you to consider restitution: a tenant submits a bad check; causes significant damage and destruction to your property; moves out on the sly; or abandons his possessions on your property, leaving you to clean up the mess. None of these situations are pleasant, particularly because they generally leave you at best out some cash and, even worse, with a mess to clean up in your tenants wake (which, of course, may require even more expenditure). Of course you want to be paid the money you’re owed, but is it always worth pursuing such matters? Let’s take a look at some common scenarios.

Small Claims Court
Small claims court may be a good option in certain circumstances (note that some districts have a specific landlord-tenant court). Small claims complaints may be viable if your tenant does not pay rent, willfully damages or causes destruction to your property, or violates rules and regulations repeatedly after written notice to comply. Generally speaking, small claims courts handle matters under a certain dollar amount—usually $5,000 or less. All of the specifics vary on according to state, so be sure to check the specifics in your area.

In most states, you will have to submit a small fee to file a complaint (generally around $25). If the case goes to court, witnesses may be required to appear in person, and you should be prepared to provide relevant documentation, such as receipts, leases, estimates, bills, check copies, and photographs. Depending upon your complaint, a successful verdict may either result in the right to have the tenant removed from the property or to receive due payment from the tenant.

Selling a Tenant’s Property
Let’s say a tenant has left you high and dry, discarding his belongings on your property. Obviously, you must remove his possessions from the unit before renting it out to another tenant. Laws vary significantly from state to state, but in some states you may be able to file a writ of restitution, which allows you to have the tenant’s abandoned belongings removed from the unit and placed into storage, either at another location on your property or off-site. Subject to varying rules and regulations (again on a state by state basis), some of these abandoned possessions may ultimately be eligible for sale, allowing you to recoup (but not exceed) the costs due to you for storage and removal.

This process can be rather complex and requires adherence to specific laws as they pertain to tenant notification, removal of property, storage regulations, items that are and are not eligible for sale, and how proceeds of the sale must be handled. Make sure to carefully check state laws and to follow them precisely.

Filing Bad Check Complaints
Take heart. In this recent blog post, a Florida landlord explains how the law finally caught up with a flaky tenant two years after he fled his rental unit, leaving a lot of damage and a bad check in his wake. While this landlord didn’t take his tenant to court, he did file paperwork for a bad check with the state attorney’s office. When the tenant was pulled over for a traffic violation some time later, the charge showed up on his paperwork and the tenant was forced to pay up.

If your state offers a similar program (and many do), this is one way to pursue payments due to you. The upside to it is that the process costs you no more than the time required to fill out the necessary forms. The downside is that there are no guarantees such claims will ultimately catch up with your tenant—and, if they do, it may be at some point much later down the line.

While you can’t guard against everything, thorough screenings and credit checks are one of the best ways to ensure you don’t find yourself in a situation where restitution becomes necessary. If restitution does become necessary, be sure you have a thorough understanding of the steps required of you in your state—the guidance of an attorney may be necessary.

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Injured Burglar, Seeking Lawyer . . .

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

America is the greatest country in the world. There. I said it. Here’s why.

There is an urban legend, if you will, that tells of the story of a burglar who sued and recovered after he hurt himself trying to steal from a homeowner. The story goes something like this. The would be burglar is trespassing on the responsible citizen’s property. Since the responsible citizen had the good sense to lock his doors when he left, the would be burglar had to find other means to enter the property. So he went up on the roof and over to a skylight. There was a known defect in the skylight – the property owner knew it was not installed correctly. The would be burglar put some weight on the skylight and (instead of supporting him!) it gave way and he fell right through into the house and onto the brand new kitchen table. He broke several bones and, after he was released from jail, he sued the property owner for premises liability. And won!

Or so they say. Because I’m that kind of guy, I’m going to take the outrageous position of defending the result that is proffered in this urban legend. Wait… what?!? You are going to defend the burglar? No – that’s not what I said. I said I’m going to defend the result that is put forth as true in this legend. I don’t know if the story is true, but I’m prepared to tell you, in the context of California law, how such a result could, possibly, be reached. Not only will I do it, but I will be patriotic about it.

The first thing you have to do to understand how such a result could be reached is to get out of your head distinctions regarding the status of the injured person. California dropped such distinctions way back in the 1960s. In other words, I want you to ignore the fact that this person was a burglar. (How do we know he was a burglar, anyways? Did someone say that? Did he say that? Did he have an empty rucksack with him with a “$” on it and schematics of the house and location of the safe with him?) For purposes of his injury recovery, that does not matter – at least not much. It makes no difference with respect to the recovery to the injured person whether he was invited to the property for social purposes (licensee), whether he was on the premises to buy something (invitee), or whether he was a thief (a trespasser).

Why? There are two main reasons for it. First, in California, although the actions of the defendant are accounted for, the goal of personal injury recovery is to attempt to “make the plaintiff whole.” What this means is that all things being equal, what is important about a personal injury action is that the injured party be put as close as possible back to the position she was before the injury. This is why you hear about such victims seeking a “deep pocket.” There needs to be someone to pay for the injury. If it just so happens that the deep pocket is not as responsible as the small pocketed person, having the injured person recover is slightly more important than attaching responsibility for the harm on the party primarily responsible.

The second reason is that in imposing the duty on the landlord to maintain a safe premises, it should not matter what category we place the injured person in when she is hurt on your property. In California the general rule is that everyone “is responsible, …, for an injury occasioned to another by his want of ordinary care or skill in the management of his property or person.” California Code of Civil Procedure, §1714. There is nothing in that rule about being a trespasser, an invitee, or a licensee. Drawing distinctions based on the class of person injured isn’t necessarily consistent with this general rule, and in fact, doing so bears the vestiges of those very English and un-American activities of imperialism and feudal rule. These distinctions “were inherited from a culture deeply rooted to the land, a culture which traced many of its standards to a heritage of feudalism.” Rowland v. Christian, 69 Cal. 2d 108, 116 (1968) (citations and internal quotes omitted). Feudalism! Well, I’m American and I don’t like that. In other words, this is America and we do not need to put people in boxes or categories in order to make sure they don’t get hurt as a result of another’s negligence.

Now, this is not to say that the legislature is prohibited from making laws which might deny or limit the recovery of a burglar. California has. It limits the rights of a felon to recover “pain and suffering” damages for injuries sustained during the commission of a felony. There are also comparative negligence principles that come into play which would reduce and potentially eliminate a burglar’s recovery.

So if that urban legend took place in California, after 1968, it’s quite probable that even if he “won” on his negligence claim, he wouldn’t have recovered for his intangible “pain and suffering” and a good lawyer for the land owner would have further reduced the would be burglar’s recovery by proving to the jury that he was negligent in causing his own injuries. Now I wonder if there are any good lawyers out there . . .

This blog submission is only for purposes of disseminating information.  It does not constitute legal advice.  The statements in this blog submissions do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients.  No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto.  If you need legal advice, please hire licensed attorney in your state.

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Worse than Drug Dealers?

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

What do you call 50,000 lawyers at the bottom of the sea? “A good start.” No doubt many of you have heard this joke or a variant. Well I am a lawyer and I am here to tell you that I am also a human being. I have a wife. I have three children. I have the same hopes and dreams for them and myself as you do for you and your family. These jokes are insensitive, unkind, and hurtful. What do you have when a lawyer is buried up to his neck in sand? “Not enough sand.” Hey! Now wait a minute.

No one seems to like lawyers. Especially those who have done well for themselves. Entrepreneurs and business persons, who frequently excel in the world of business often lament the presence of lawyers. “Lawyers only take my hard-earned money,” is a common refrain. “Lawyers add no value, all they do is slow me down,” is another. Why does California have the most lawyers and New Jersey have the most toxic waste dumps? “New Jersey got to pick first.” Why I never.

It is also true that not a lot of people like landlords and real estate developers. Ever hear the one about the tour group in Egypt? The tour guide is describing a crypt within a pyramid. “This crypt is over a 1000 years old. It has not been touched, altered or upgraded in any manner in those 1000 years,” he said. To which a member of the tour replied, “He must have the same landlord as me.” Now to show you how fair I am – being a lawyer and all – I agree that joke was bad, and indeed, offensive. It is well-known that the Egyptian pyramids are way older than a 1000 years. Any amateur historian will be well offended by the lame setup in that joke.

All right, it’s true. There usually aren’t laws which require landlords to upgrade their properties with the latest and greatest technologies. Working electricity, running water, and a structure with minimal integrity are probably universally required, but you as a landlord are not required to supply your tenants with say, Roku. So the joke really does have a bad premise. I only bring it up because, like lawyers, landlords and developers get a bad rap from “the media” and popular culture.

Don’t believe me as that applies to landlords and developers? Like any good lawyer, I’ll cite to an authority. HBO’s “The Wire,” is widely lauded – rightly I might add – as one of the greatest television shows ever to air on the small screen. The reasons for that are many but probably the main reason is that it takes on the extremely challenging issue of the drug trade and its wide-ranging effects from just about every facet involved: the cops, the judges, the lawyers, the drug dealers, the addicts, the politicians, the public schools, and even “the media.” As a result, it’s very well rounded and, like life, not straightforward in its conclusions. Even a show as nuanced and intelligent as this has it in for real estate developers. In season three, two of the police officers are discussing one of their recent drug dealer suspects. The drug dealer is trying to make it in the real world. He’s trying to break free of the drug trade and become “legit.” They don’t buy it. He’s got a printer shop as a front for the drug dealing and they’ve concluded he has removed himself from the drug trade and will be difficult to arrest. “Is he still dealing drugs?” one asks. “Worse,” the other replies. “He’s a real estate developer.”

All right. So what does all of this have to do with us? I guess I just want us to get off on the right foot. You may have pre-conceived notions about me – just because I am a lawyer. How do you know it’s really cold outside? The lawyer has his hands in his own pockets! I may have pre-conceived notions about you – because you are landlords and developers. Why do they bury landlords 600 feet underground when they die? Because deep down, they really are nice. In actual fact, we can get along. We have a common interest and vantage point as scorned members of the business world.

Indeed, I would argue – as I am wont to do – that most people with a few assets, a few different contracts, a company or two and multiple insurance policies should take legal advice now and then. There is an old saying that sometimes it is not a good idea to be pennywise because you will wind up pound-foolish. I have found that to be true in a lot of cases. If you do not do the right legal work up front, you may get involved in expensive and time-consuming litigation later. (Which is great for me. I’m a litigator).

So this blog will focus on legal issues applicable to landlords and developers. I will not be giving legal advice here – I can’t do that absent a signed contract – but I will be highlighting issues of interest for you to think about and to talk to your own lawyer about. Hopefully, it won’t be boring, and you’ll have a chance to think about some things and maybe learn something. Next week, we’ll start with everybody’s favor subject: premises liability lawsuits!

This blog submission is only for purposes of disseminating information.  It does not constitute legal advice.  The statements in this blog submissions do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients.  No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto.  If you need legal advice, please hire licensed attorney in your state.

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