What is a Breach of Rental Agreement?
A breach of rental contract may take the form of a failure of either party to fully perform their obligations as set out in the contract. As a starting point therefore, it is of utmost importance that the parties carefully consider the terms of the rental contract before signing it in order to avoid a dispute later arising as a result of ambiguity in the terms themselves. A failure to comply with the terms of a rental contract may take the form of one party:
If the landlord fails to afford a tenant exclusive possession, then the tenant has no claim against the landlord for a breach of contract as such a term is to be inferred by law. In other words, the landlord may, notwithstanding an agreement to the contrary and in the absence of any express removal of the implied term, enter the premises if circumstances demand such an act (see Guttman v Saller (1897) 15 SC 369 at 372 and City v Harmse 1979 (1) SA 1046 (T)). If the landlord negligently allows a third party access to the property, then the landlord may be liable to the tenant for damages, but only if the tenant can prove that they had suffered damages as a result of the breach (see Van Dyk v Law Society of the Transvaal 1989 (4) SA 552 (T)). As a general rule of thumb , the tenant has no recourse against the landlord if a third party cuts off the tenant’s electricity supply or disconnects the water supply. No damages can be claimed by the tenant if the third party acted in good faith and on reasonable grounds. For example, a third party billing department under the impression that the tenants have vacated the premises can act in good faith (see Knysna Caravan Park CC v Lake Trading 88 (Pty) Ltd 1991 (1) SA 51 (A)). It is important to note that should a partner in a partnership vacate the premises, a tenant cannot claim against the landlord if the lease agreement was signed by all partners in the partnership. Also, if a tenant is aware of a defect at the commencement of the contract, the defect is expressly excluded from the contract and/or the defect is patent (visible and obvious), then a tenant cannot claim against the landlord for damages. The tenant is aware of the defect and is entitled to inspect the property before moving in and taking occupation, thus excluding the right to claim damages for which they are aware.
Tenant’s Breach of Rental Agreement
A breach occurs where a tenant fails to comply with conditions contained in the lease. This could arise by failure to pay rental or non-payment of utilities. However, non-payment of utilities is only a breach if the landlord has the right to attach the non-payment of utility charges to the rental payment. A breach may also involve damage caused to the premises.
There are innumerable situations which could give rise to a tenant breach. If the lease is for a unit in a block of units, damages may arise through non-compliance with fire safety requirements.
A tenant may be guilty of a breach of contract if it uses the premises for an illegal purpose. If a lease contains a clause prohibiting illegal use of the premises, whether the tenant is guilty of a breach will be assessed by the facts of the particular case.
A tenant may also be in breach of contract if it fails to pay deposit money owed to the landlord. A landlord may refuse to hand the keys to a tenant until full occupancy deposit has been paid.
If a tenant is guilty of a breach of lease in respect of the occupation of the premises where there is a blocking off of the main entry to the premises, it could result in discussions being held with law enforcement authorities.
Although tenants are entitled to complain to the Rental Housing Tribunal regarding the rental amount, if the rental is based on the Consumer Protection Act, such tenants could face the possibility of eviction. Tenants also make illegal deductions from rental for repairs to the premises.
Landlord’s Breach of Rental Agreement
Several different situations could potentially lead to a landlord being held to be in breach of the rental contract. These include: Failure to repair and maintain the property The rental contract generally imposes upon the landlord the duty to ensure that the property in question is maintained and properly looked after. This means that the property needs to be in a habitable state, and that defects should be addressed within a reasonable time frame. Should a landlord fail to repair a defect or damage that was not caused by the tenant, this may amount to a breach of the rental contract. Unlawful evictions and issuing prohibited instructions If a landlord removes a tenant from the premises without a court order, the tenant will have a claim against the landlord for damages. The tenant can also approach the Rental Housing Tribunal where the tenant can request that the Tribunal prosecute the landlord. This is so even if the premises has been returned to the tenant after a personal eviction. This is because what is at issue is the act of removal and the prohibition on eviction without an order of the court. The Renting Housing Act placed a ban on landlords instructing tenants from sub-letting the premises, even if the rental agreement provides for it.
Legal Options for Breach of Rental Agreement
In the event of a breach of rental contract, legal remedies are available to both landlords and tenants. The key is determining which course of action suits your particular circumstances best, and acting on it in a timely manner to get the relief you seek.
For landlords, the most common legal remedy for breach of rental contract is to seek either possession of the unit if non-payment is involved or compensation for unpaid rent, damages, or both. In situations where the tenant is still in possession of the unit, the landlord must rely on the applicable state-specific procedure for obtaining possession through court action. Possession may be gained by "self-help" (depriving the tenant of access to the unit by changing the locks) if allowed by state law, as long as the tenant is not still in possession of the premises at the time, thus avoiding a tort claim by the tenant for wrongful eviction. In some states, self-help is allowed, but may entail certain procedural safeguards or restrictions. Whatever the procedure for obtaining possession, the landlord should understand that the eviction process can be lengthy, with multiple steps that must be completed before the landlord is allowed to recover possession of the rental premises, potentially leaving the tenant in the property for several weeks to months.
If the tenant has completely vacated the unit and retaliatory eviction isn’t an issue, the landlord’s remedy is usually to file a complaint in small claims court for the amount of back and future rent owed, plus any damages for unpaid rent, units left abandoned in violation of the lease, damages to the property, or other related claims under the rental contract. The case is taken before a judge who makes a decision, and usually there is some opportunity to appeal that decision, although some courts differ in the extent of the appeal process permitted. If successful, the landlord is entitled to a money judgment that is served on the tenant and enforced in accordance with the procedures in the applicable jurisdiction, such as garnishment of wages, attachment of property, or other legal methods.
In situations involving personal property that was abandoned or damaged during or after the breach of rental contract, the landlord may have additional remedies. These include (1) sale of the property, with an accounting of the sale proceeds to the tenant, against which the landlord can collect the amount of any unpaid rent, (2) disposal of the property if the value is less than $500, and (3) collection of damages from the security deposit .
A landlord should be aware of the statute of limitations for claims based on breach of rental contract. Failing to timely file an action can forfeit the right to collect on those claims. In California, the statute of limitations for breach of rental contract is four years, while in New York, it is six years. For landlords pursuing an action for breach of a fixed-term lease where the expiration of the lease term is more than four years out, the statute of limitations is four years from the time the breach occurred. If the rental term was month-to-month or week-to-week, the statute of limitations is whatever the period is for the state, but the previous interpretation of the rent due at the time of breach should not apply, as the period is deemed to be one that simply is in line with the regular rental payment period.
Tenants have a variety of remedies available to them, depending on whether the breach by the landlord was through allowing retaliation to occur and interfering with the tenant’s quiet enjoyment of the premises or merely violating the terms of the lease. Once again, the timing of the tenant’s actions can be critical. Taking advantage of statutes that protect the tenant’s rights to quiet enjoyment of the property requires that the tenant act quickly to avoid being barred from recovering damages. Tenants also may be permitted to continue occupying the unit for the duration of the lease even if the lease were otherwise terminated by the actions of the landlord. Tenants can be ordered reinstated to prior residential units or awarded damages for constructive eviction to the extent permitted by applicable state law.
Once again, the tenant should be aware of the applicable statute of limitations. For example, in California, the statute of limitations is four years for damages claims for breach of rental contract. However, as soon as the tenant vacates the premises, the statute of limitations begins to run against that tenant with respect to his or her claim for damages against the landlord, although the tenant’s actual claims are essentially just collection actions for the amount owed by the former tenant as backed by a favorable court judgment. Therefore, these damages actions are subject to a four-year statute of limitations as of the date of breach, and although a number of actions can be brought against the landlord under various causes of action, the primary way to collect is through the damages award and many of the other claims available to tenants are shorter in their statute of limitations, so it is important to act in a timely manner.
Avoiding Breach of Rental Agreements
Both landlords and tenants can take steps to prevent a breach of the rental contract from occurring. A well drafted lease agreement can help spell out the parties’ rights and obligations in great detail to help avoid any potential problems. Landlords should always perform a thorough and comprehensive background check on all prospective tenants before entering into a lease. This should include a credit check, background check for criminal activity, and prior visits to see the prospective tenant’s current residence. This will allow the landlord to understand if the prospective tenant may be a problem showing future behavior that may result in a breach of the rental contract.
Once a tenancy is entered into, landlords often conduct additional monthly inspections of the property to ensure that the tenant is following all rules and obligations under the rental agreement. Take pictures to document the current condition of the property . Any violations can be addressed as needed and can allow the landlord to begin creating a record of the tenant’s violation of the rental contract for a housing or non-payment eviction if needed.
Landlords should also ensure that the lease agreement has sufficient language to notify the tenant of their rights and obligations including: Tenants can also take steps to prevent a breach of lease by maintaining clear communications with their landlord. The most important factor is paying your rent on time. Tenants should communicate with their landlord if they are going to be late with the rent or have other issues with payment. Maintaining a clear history of payments is vital in showing that you are a reliable tenant. Tenants should alert the landlord if they will have overnight guests coming to stay for extended periods of time or if there is any other violation of the rental agreement. Tenants should inspect the property regularly and immediately report any issues to their landlord.