2006 Summer, 24. NHBJ EDITOR'S AWARD: AIMCO Properties v. Dziewisz.

AuthorBy: Scott D. Kumpf

New Hampshire Bar Journal

2006.

2006 Summer, 24.

NHBJ EDITOR'S AWARD: AIMCO Properties v. Dziewisz

New Hampshire Bar Journal Volume 47, No. 2, Pg. 24Summer 2006NHBJ EDITOR'S AWARD: AIMCO Properties v. DziewiszBy: Scott D. KumpfTipping the Balance Toward Tenant Rights...or Has It?

Introduction

If you were selling drugs out of your apartment, your landlord would have the right to evict you. If you refused to pay your rent, your landlord would also have the right to evict you. If pets are forbidden in your apartment, but you have a Great Dane living with you, your landlord would again have the right to evict you. Common sense dictates that you will be bound to do, or refrain from doing, what you agreed to in a lease. However, if you signed a one-year lease for an apartment, would your landlord be able to ask you to leave after 12 months?

Prior to the New Hampshire Supreme Court's recent decision in AIMCO Properties v. Kasha Dziewisz,1 the expiration of the lease meant the end of the relationship between the landlord and tenant. Many believed that the owner of the property had the right to regain sole possession of the premises and the tenant had to seek alternative housing. This notion is even reflected in the New Hampshire Practice Series on Real Estate, which states that "most leases expire on a date designated by the lease, and no action of either party is necessary to end the tenant's occupancy rights on such a date."2

After AIMCO, however, the relationship between landlords and their tenants has changed. It would now seem that tenants have greater control over the premises than the legal owner. In an effort to further protect tenants from arbitrary and discriminatory eviction, however, the Supreme Court has created a quagmire for both landlords and tenants as each scramble to adjust to this "new" standard. Whether the decision will effectuate the majority's stated intent is yet to be determined.3

This article discusses AIMCO and its effects on relationships between landlords and tenants. First, it seeks to analyze the provisions of the applicable statute and clarify its applicability to particular properties. Second, it will consider the relatively specialized area of landlord-tenant law and its influence on the Court's seemingly anomalous conclusion that a tenant need not vacate the premises upon expiration of the agreed lease term. Third, it will address the Court's analysis regarding the ability of landlords to limit their commitment when renting certain residential properties and the degree to which AIMCO will affect the security of renters statewide. Finally, it will analyze the state of landlord-tenant law in New Hampshire, including issues the AIMCO Court left unresolved.

RSA 540:1-a and 24

A tenant is a person5 that has the temporary use and right of occupancy of real property owned by another, generally under the terms of a lease.6 As this interest in real property does not rise to the level of fee ownership, there will eventually be a point at which the possessory interest in the property is severed.7 In New Hampshire, like most states, the termination of any tenancy is expressly regulated by statute.8 However, this statutory right of termination is not applied in the same way to all types of property in New Hampshire. The principal distinction can be found in RSA 540:1-a, which classifies properties as being either restricted9 or nonrestricted10 for purposes of eviction. The AIMCO decision pertains only to restricted properties.11 This aspect of the decision has caused considerable confusion; therefore, I will explain the significance of the distinction before proceeding further.

Nonrestricted properties are properties in which a landlord's right to evict a tenant is essentially unfettered.12 RSA 540:2, I allows landlords of nonrestricted properties to terminate a tenancy at any time, so long as the proscribed notice requirements are followed.13 Such properties include the following:

"...all real property rented for nonresidential purposes and the following real property rented for residential purposes: (a) single-family houses, if the owner of such a house does not own more than 3 single-family houses at any one time; (b) rental units in an owner occupied building containing a total of 4 dwelling units or fewer; (c) rental units in a vacation or recreational dwelling, rented during the off season for purposes which are not vacation purposes or which are non-recreational; and (d) single-family houses acquired by banks or other mortgagees through foreclosure."14

In essence, the statute pertains to properties that are being used in the furtherance of a business purpose.15 For instance, a few units rented out of an owner's large house or a summer home rented out during the winter so the pipes do not freeze would not fall under this category. While profit may derive from such rentals, the landlord's activity does not rise to the level of a primary or substantial business venture.

Restricted properties, on the other hand, include all "...real property rented for residential purposes, except those properties listed . . . " as nonrestricted.16 For instance, the typical apartment complex would be a restricted property, as would a house rented from a landlord holding several houses to rent out simultaneously. The subject property in AIMCO falls within the ambit of "restricted properties" and as such, the ramifications of this decision are limited to the same: AIMCO will have no effect on nonrestricted properties.17 RSA 540:2, II, the particular subsection at issue here, further constrains landlords of restricted properties to a relatively short list of pre-determined reasons for eviction.18 That list includes neglect or refusal to pay rent,19 substantial damage to the premises,20 failure to comply with a material term of the lease,21 behavior that endangers other tenants,22 various lead paint issues23 and the catchall, for "other good cause."24

In addition to the qualified reasons listed above, RSA 540:2 provides one further directive for the interpretation of the statute. Paragraph V provides that "other good cause" would include "...any legitimate business or economic reason and need not be based on the action or inaction of the tenant, members of his family, or guests."25 Because this is the only indication as to what actually constitutes "other good cause," it is commonly relied upon by landlords wishing to effect an eviction. It is particularly applicable because restricted properties, as stated above, are those being used for business purposes. As I will discuss further below, this distinction was the foundation for the AIMCO Court's ultimate decision to "favor" renters of units falling within this relatively narrow class of restricted properties.

New Hampshire Landlord-Tenant Law

One reason why this decision has caused such a stir among members of the bar as well as the general public is the mistaken assumption that landlord-tenant law operates under principles of general contract law. Historically, an owner's lease of property to another was treated the same as an actual conveyance.26 However, recognizing the temporary nature of tenancies, the landlord tenant relationship gradually took on more aspects of general contract law.27 This should not come as a surprise to many, even if not trained in the legal profession. A lease is in many ways a contract for the use of another's property, rather than a transfer of ownership.28 Common understanding among the general public is also often consistent with the view that a standard lease is a 12-month contract. However, the legislature, and most recently, the court, has approached the subject with a more pro-tenant stance. As a result...

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