Chapter 16 Problems with Tenants: How to Resolve Disputes Without a Lawyer

• Library: Every Landlord's Legal Guide (Nolo) (2020 Ed.)

CHAPTER 16 Problems With Tenants: How to Resolve Disputes Without a Lawyer

Negotiating a Settlement: Start by Talking

When Warning Notices Are Appropriate

Understanding Mediation

Using Arbitration

Representing Yourself in Small Claims Court

Learning the Rules

Meeting the Jurisdictional Limits

How to Avoid Charges of Retaliation

FORMS IN THIS CHAPTER

Chapter 16 includes instructions for and a sample of the following form:

• Warning Letter for Lease or Rental Agreement Violation

The Nolo website includes a downloadable copy of this form. See Appendix B for the link to the forms in this book.

Legal disputes—actual and potential—come in all shapes and sizes when you're a landlord. Here are some of the more common ones:

• Rent. You and your tenant disagree about the validity, timing, or procedure of a rent increase.
• Habitability. Tenants threaten to withhold rent because they claim a leaky roof or some other defect has made the living room unusable.
• Access to the premises. Tenants won't let you show their apartment to prospective new tenants or enter for some other good reason. You feel it's your legal right to do so, and your tenants claim that your legal reason for invading their privacy is bogus.
• Security deposits. You and a departing tenant disagree about how much security deposit you owe the tenant based on your claim that the unit is dirty or damaged or both.
• Lease or rental agreement violations. Your tenant (or former tenant) failed to pay rent, moved in a new roommate (or a pet) without your permission, hosted a series of loud parties, or in some other way violated your lease or rental agreement.

How you handle such disputes can have a profound effect on your bottom line, not to mention your mental health. In some cases, such as a tenant's nonpayment of rent, your only option might be to terminate the tenancy. Rarely should lawyers and litigation be your first choice. Instead, you will usually want to consider alternatives that can give you better control over your time, energy, and money.

This chapter discusses four commonly available options to resolve a legal dispute without a lawyer:

• negotiation
• mediation
• arbitration, and
• small claims court.

While we focus here on disputes with tenants, much of this advice is useful for resolving all types of business disputes—for example, with your manager, insurance company, or repairperson.

This chapter also explains how to avoid charges of retaliation in your dealings with tenants.

RELATED TOPIC

How to terminate a tenancy based on nonpayment of rent and illegal acts is discussed in Chapter 17.

Put It in Writing
To help avoid legal problems in the first place, and minimize those that can't be avoided, try to adopt efficient, easy-to-follow systems to document important facts of your relationship with your tenants. Throughout this book, we recommend many forms and record-keeping systems that will help you do this, including move-in and move-out letters, a landlord-tenant checklist, and a maintenance/repair request form. The goal is to establish a good paper trail for each tenancy, beginning with the rental application and lease or rental agreement through a termination notice and security deposit itemization. Such documentation will be extremely valuable if attempts at resolving your dispute fail and you end up evicting or suing a tenant, or being sued by a tenant. Also, you'll want to keep copies of any correspondence and notes of your conversations with tenants. Chapter 7 recommends a system for organizing tenant information, including records of repair requests.

Negotiating a Settlement: Start by Talking

If you have a conflict with your tenant over rent, repairs, your access to the rental unit, noise, or some other issue that doesn't immediately warrant an eviction, a sensible first step is to meet with the tenant—even one you consider to be a hopeless troublemaker—to attempt to resolve the problem. Unless you have the legal grounds (and the determination) to evict a tenant, it's almost always better to try to negotiate a settlement rather than let the dispute escalate into a court fight. This is doubly true if you are convinced your case is just. Given the cost and delays built into the arthritic American legal system, the more you rely on it, the more you are likely to regret going to court.

So forget about suing, except possibly in small claims court (discussed below), and try to evaluate the legal and financial realities objectively. Your goal should be to achieve the best result at the lowest cost. If instead you act on the conviction that your rights are being trampled by the other side (whether you're right or wrong makes no difference), chances are you'll end up spending far too much time and money fighting over the principle involved. Over time, a landlord who is controlled by this sort of emotional reaction is almost sure to be emotionally and financially poorer than one who focuses on the overall objective: to make a good living and enjoy doing it.

Your first step in working toward a compromise is to call the tenant and arrange a time to meet. Dropping over unannounced to talk might work in some circumstances but is generally a bad idea—your tenant might feel threatened and become defensive. Write a letter first, offering to meet with the tenant to work something out. (See, for example, the sample letter in Chapter 9 in which the landlord suggests a compromise with a tenant who withholds rent because of defective conditions in his apartment.)

Here are some helpful pointers for negotiating with tenants:

• Solicit the tenant's point of view. Once the tenant starts talking, listen closely and don't interrupt, even if you don't like what you're hearing. Show you're listening—even if you disagree. Sometimes it's even a good idea to repeat the tenant's concerns to show you're listening.
• Avoid personal attacks. This only raises the level of hostility and makes settlement more difficult. Equally important, don't react impulsively or emotionally to the tenant's remarks.
• Be courteous, but don't be weak. If you have a good case, let the tenant know you have the resources and evidence to fight and win if you can't reach a reasonable settlement.
• Before the negotiation goes too far, try and determine whether the tenant is a truly an unbearable jerk whom you really want to be rid of or just another slightly annoying person. If a tenant falls into the first category, your strategy should be to terminate the tenancy as soon as legally and practically possible.
• If possible, structure the negotiation as a mutual attempt to solve a problem. For example, if a tenant's guests have been disturbing the neighbors, jointly seek solutions that recognize the interests of both parties.
• Try to figure out the tenant's priorities. Maybe dollars are less important than pride, in which case a formula for future relations that meets the needs of a thin-skinned tenant to be treated with respect might solve the problem.
• Put yourself in the tenant's shoes. What resolution would you want? Your answer might be something like "a sense that I've won." That's a perfectly reasonable desire—the best settlements are often those in which both sides feel they've won (or at least not given up anything fundamental). So, your goal is to let the tenant have at least a partial sense of victory on one or more of the issues in dispute.
• When you propose a specific settlement, make it clear that you're attempting to compromise. Offers of settlement (clearly labeled as such) can't be introduced against you if you ever end up in court.
• Money is a powerful incentive to settlement. If you are going to have to pay something eventually, or spend a lot of time and money on a costly eviction lawsuit or preparing a small claims case, it makes financial sense to come to

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