My friend gets jammed up a lot. In July it was over his deposit on a residential rental that he shared with some roommates. The landlord stopped by two days before their lease expired to express some very demanding expectations about how her crummy little shack should be returned, otherwise it was coming out of their deposit.
Landlord's list of intended charges included:
- the brown, unwatered sections of lawn
- replacing dead landscaping bushes
- edging and weeding
- professional carpet cleaning in a damp sub-basement!
- scrubbing stains out of 60 year old grout with particular cleaning products
- replacing a stolen freezer
My friend knew this list was going to mean a large chunk of their $1,000 security deposit would be missing when they got it back. The landlord even hired a lawn psychiatrist to come over and pad the bill with exotic plant examinations. So I was asked to be there as a mouthpiece when the landlord returned to check on cleaning progress.
I did, and let her know (in the most helpful and innocent manner) that she really couldn't deduct a thing from the deposit because 1) the property is in the same condition now as it was when she rented it to them, and 2) she never did a written "check-in" sheet documenting the original condition, and without it, the law is not on her side for making deductions from the deposit.
We went back and forth, her pointing out some alleged damage, my saying it was like that when they moved in, her saying it wasn't, and my asking then for the move-in condition of that item on the non-existent "check-in" sheet.
After some tense moments, she left. Then I went to the library to write a pre-emptive letter for my friend to get the landlord to see why I was right and she would have to give back the whole deposit. It's included below, and you may copy it freely for personal use in saving your own security deposit from greedy slumlords.
July 31, 2006
Dear Landlord,
We are surrendering the premises to you at the expiration of our 1 year lease on July 31, 2006. Our forwarding addresses, for the purpose of returning all of our $1000.00 security deposit, and for any other notices are:
[Tenant #1 name, address]
[Tenant #2 name, address]
We would also like to put you on notice that you are not entitled to withhold any amount from our security deposit because as a lessor of residential rental property, and as a lawyer yourself, you have failed to comply with the following law of the State of Montana:
70-25-206. Landlord to furnish statement of condition of premises at beginning of lease. (1) Any person engaged in the rental of property for residential purposes who requires a security deposit shall furnish to each tenant, in conjunction with execution of a lease or creation of a tenancy, a separate written statement as to the present condition of the premises intended to be let. At the written request of the tenant, a copy of the written list of damage and cleaning charges, if any, provided to the tenant of the immediately preceding leasehold agreement for the premises in question must be provided to the tenant.
(2) Each written statement of the present condition of a premises intended to be let shall contain at least the following:
(a) a clear and concise statement of the present condition of the premises known to the landlord or the landlord's agent or which should have been known upon reasonable inspection;
(b) if the premises have never previously been let, a statement indicating the fact; and
(c) the signature of the landlord or the landlord's agent.
(emphasis added).
In Montana, when a landlord fails to provide the written statement of condition as required by law, as you have, then that landlord is barred from retaining any portion of the security deposit for cleaning or damages.
70-25-206. (3) A person engaged in the rental of property for residential purposes who fails to furnish a tenant, in conjunction with the execution of the lease or creation of the tenancy, with a separate written statement of the present condition of the premises intended to be let and, upon the written request of the tenant, a written list of damage and cleaning charges provided to the tenant of the immediately preceding leasehold agreement is barred from recovering any sum for damage to or cleaning of the leasehold premises unless the person can establish by clear and convincing evidence that the damage occurred during the tenancy in question and was caused by the tenant occupying the leasehold premises or the tenant's family, licensees, or invitees.
(emphasis added).
With regard to cleaning as we return the premises, we have restored the property to the exact condition that it was in when it was rented to us. If you still think it is not sufficiently clean, we will clean it further, even though we are not required to, and even though, by law, you cannot deduct any amount from our deposit for additional cleaning.
With regard to the grounds, we did maintain the curtilage in a reasonable manner. Because you did not provide us with the required statement of condition of the premises at the beginning of the lease, you cannot deduct any amount from our deposit for any shrubs, grass, or weeds. The yard is in the exact condition now that it was when you rented it to us, excepting only some backyard grass which has dried out from the 100 degree temperatures that occurred last week, which were not caused by us and also affected most of the neighbors in the area without tree cover. The grass will become green again soon with normal routine watering.
Any shrubs which you allege are in worse condition now than at the beginning of the lease were damaged by the cold weather during winter, which was also not our fault. As for any oral instructions or arrangements that you contend were made, our only obligations as tenants arise solely from the written lease and from applicable statutes, neither of which can be modified by any earlier or later oral agreements. Furthermore, the lease does not specify that tenants are responsible for caring for “special needs” plants or shrubs, nor does it spell out any particular methods for taking care of the grounds. Without such a special obligation in the lease, the reasonable care that we have taken of the grounds, keeping it in the same condition as that of the surrounding neighbors, is legally sufficient.
In our last conversation, you also mentioned an intent to charge against our security deposit for carpet cleaning in the basement when there was no specific damage, spots or stains to the carpet. Carpet cleaning under such conditions is merely normal maintenance and is specifically prohibited by statute.
70-25-201. (3) Cleaning charges may not be imposed for normal maintenance performed on a cyclical basis by the landlord as noted by the landlord at the time that the tenant occupies the space unless the landlord is forced to perform this maintenance because of negligence of the tenant.
(emphasis added).
Because you are not legally entitled to retain any portion of our deposit, and because we have been good, cooperative tenants for the entire lease period, you should consider this a learning experience and make sure that when renting to future tenants, you protect your and your tenants’ rights by complying with all laws applicable to landlords of residential property. Things really can go very smoothly when everyone is obeying the law.
In the case that you do withhold any of our security deposit, in violation of Montana law, we will immediately file a lawsuit claiming all wrongfully withheld amounts, plus court costs and attorneys fees, which are permitted by the Montana Residential Landlord Tenant Act.
70-24-442. Attorney fees -- costs. (1) In an action on a rental agreement or arising under this chapter, reasonable attorney fees, together with costs and necessary disbursements, may be awarded to the prevailing party notwithstanding an agreement to the contrary.
(emphasis added). Our attorney charges $140.00 per hour.
We hope that it will not come to that and that we will be treated fairly and in compliance with Montana law.
Sincerely,
A couple of weeks later, my friend received a refund from the landlord minus just one deduction, $149 for the landlord's freezer that was stolen from the garage earlier in the year. I'm certain that without my first letter laying out the legal analysis, there would have been many more deductions.
That last $149 still bothered him because he believes the thief was the landlord's son, or someone to whom the landlord gave keys, and because they also stole gear from his truck the same night. So it was up to me to secure return of that last amount, and I had reserved some of my ammo for just such an occasion.
Here is my second letter to the landlord, wherein I prove that white is black, and black is white, according as I am paid. You may freely copy it for personal use in recovering your own security deposit.
August 23, 2006
RE: Benton St. security deposit withheld for freezer
Dear Landlord,
This letter is in regard to your itemized statement of withholding $149 from my security deposit for the Benton street rental under a lease which terminated on July 31, 2006.
Your stated reason for the deduction was a damage charge for the freezer that had been stolen from the garage. However, you are not legally entitled to withhold that amount for that reason, and must now return the remainder of the deposit, for several reasons.
A freezer stolen by uninvited trespassers from a locked garage does not constitute "damage" for which a tenant is liable and for which a landlord may withhold any portion of the security deposit. Montana law states this explicitly in the definition of "damage" as it relates to security deposits:
70-25-101. Definitions.
... (2) "Damage" means any and all tangible loss, injury, or deterioration of a leasehold premises caused by the willful or accidental acts of the tenant occupying same or by the tenant's family, licensees, or invitees, as well as any and all tangible loss, injury, or deterioration resulting from the tenant's omissions or failure to perform any duty imposed upon the tenant by law with respect to the leasehold.
Because the loss of the freezer from a locked garage was not damage caused by any of us, our families, invitees, or licensees, but instead by uninvited criminal trespassers, this is not the type of loss for which tenants are responsible and for which a landlord may deduct as "damage" from a rental security deposit.
Deductions from security deposits can only be made for reasons explicitly enumerated in the statutes (cleaning and statutorily defined damage) concerning security deposits and for no other reasons. Because this freezer line item qualifies as neither cleaning, nor damage, the $149.00 that you have withheld from our deposit is wrongfully withheld according to Montana law:
70-25-204. Wrongful withholding of security deposit -- action. (1) A person who wrongfully withholds a residential property security deposit or any portion of the deposit is liable in damages to the tenant in a civil action for an amount equal to the sum determined to have been wrongfully withheld or deducted. The attorney fees may be awarded the prevailing party at the discretion of the court. The burden of proof of damages caused by the tenant to the leasehold premises is on the landlord.
The above statute permits our filing an action for the wrongfully withheld amount of $149, plus attorney fees for filing the action.
Technically, the theft of the freezer by trespassers is a casualty. In case of serious casualty, the law provides that the tenant does not pay for casualty damage, but that the landlord reduces the rent in proportion to the diminution in value after the casualty:
70-24-409. Fire or casualty damage -- rights of tenant. (1) If the dwelling unit or premises are damaged or destroyed by fire or casualty to an extent that enjoyment of the dwelling unit is substantially impaired, the tenant may:
...
(b) if continued occupancy is lawful, vacate any part of the dwelling unit rendered unusable by the fire or casualty, in which case the tenant's liability for rent is reduced in proportion to the diminution in the fair rental value of the dwelling unit.
Although we did not need to vacate any portion of the premises after the theft of our freezer, this law shows that tenants are not charged for casualty damages not caused by the tenant, and that the landlord or the landlord's insurance company is instead responsible for this type of casualty damage.
An additional reason why you are not entitled to withhold this amount, even without application of the legal definition of "damage," as it is used in the context of residential rental security deposits is because of another Montana statute:
70-24-401. The aggrieved party has a duty to mitigate damages.
In this case, you have not mitigated your damages before making deductions from our security deposit. Before we surrendered the premises, we provided you with a replacement freezer in good working order, with similar capacity to the one that was stolen. During the last two days of our tenancy, you entered the property and told me in person that you wanted that new freezer removed from the premises. Not wanting you to charge us for handling abandoned property, we complied with your request to remove the replacement freezer from the premises.
Because it was your own request that the replacement freezer, provided at no cost to you, be removed from the premises, you are now estopped from charging our deposit for another freezer. By ordering us to remove the replacement freezer, you created the extra expense of securing yet another freezer, violating your legal duty to mitigate damages. Because you failed to mitigate damages by accepting the working freezer that we provided, you are not entitled to deduct any amount from our deposit for replacing it again later.
By law, I may not file an action to recover the wrongfully withheld security deposit until after September 1st.
70-25-204(2) An action may not be maintained by a tenant for any amount wrongfully withheld or deducted prior to: ...
(b) the expiration of a 30-day period after the termination of a tenancy;
However, if you return the wrongfully withheld amount of $149.00 prior to September 9th, I will not file my planned lawsuit against you. Otherwise, if I have not received our $149.00 by September 9th, then I will file an action against you in Missoula County on Monday, September 11th to recover that amount, plus attorney fees and court costs as permitted by MCA 70-24-442.
In the case that I must file suit, I will add another count to the complaint that will entitle us to additional damages in the amount of up to 3 times the monthly rental amount. This last count will allege your inclusion of provisions in our rental agreement which are prohibited by law.
The prohibited items that you included in our rental agreement dated July 29, 2005 were paragraph 11, which states:
"I will not remove any furniture, fixtures or personal property until all rent and charges are fully paid and grant the owner a lien on the same."
The other provision that you require your tenants to agree to, despite being legally prohibited, is paragraph 2, which is explicitly contrary to Montana law on the subject of security deposits, breach, and mitigation of damages:
"I agree to place a security deposit of $1,000.00, to be forfeited as liquidated damages in the event of any default or breach of any part of this agreement."
The above provisions are patently illegal and unenforceable. Landlords are not entitled to file liens against tenants' personal property as a function of tenancy, and the law of security deposits in Montana forbids landlords from keeping arbitrary amounts of a security deposit.
70-24-202. Prohibited provisions in rental agreements. A rental agreement may not provide that a party:
(1) agrees to waive or forego rights or remedies under this chapter;
Since you are also an attorney, it should be clear to you that both of those illegal lease lease provisions require tenants to forego rights guaranteed to them under the Montana Residential Landlord Tenant Act. For this, Montana law also provides tenants a statutory remedy, even without a showing of actual damage arising from those illegal provisions:
70-24-403. Prohibited provision in rental agreement -- unenforceability -- damages. (1) A provision prohibited by 70-24-202 included in a rental agreement is unenforceable.
(2) If a party purposefully uses a rental agreement containing provisions known by him to be prohibited, the other party may recover, in addition to his actual damages, an amount up to 3 months' periodic rent.
So, in the case that I must file a suit to recover our actual damages of $149, I will also claim the above statutory damages totaling $2,850 ($950/month rent * 3 months), plus recoverable court costs and attorneys fees as permitted by statute.
It would be to your advantage, however, to resolve this prior to September 11th, by remitting the wrongfully withheld $149.00.
Sincerely,
[Tenant]
(I should also metion that between these two letters, I laid a small trap for the landlord should she have made any deductions for cleaning. Montana law states that before any cleaning charges can be deducted from a deposit, the landlord must give the tenant 24 hours to perform that cleaning himself, in order to avoid charges. I knew that she had already promised the house to another tenant on the same day my friend's lease was to expire, and that even if she knew about that statute, she would not have wanted to go through the inconvenience of following it. If she didn't follow it, then any charges for cleaning would have been easy to recover in court, plus additional damages for intentionaly disobeying the law. In any case, this landlord never made a deduction for cleaning charges.)
The day before my deadline given in the second letter, my friend received this from the landlord, along with a check for $149.00.
I am in receipt of your letter dated August 23, 2006 stating that the freezer was taken from a locked garage, yet you stated to me last fall that the garage door was not locked and that you did not report the freezer theft to the police. Therefore, the freezer theft was due to your failure to lock the garage, and amounts to damage. The refrigerator you offered to leave behind did not include a freezer with similar capacity to the lost freezer. A judge with common sense would agree that you are responsible for the replacement freezer cost. Be that as it may, it is not worth my time to further address this matter, and am enclosing a check for $149.00, the cost of the freezer which was withheld from the deposit.
It's clear from her letter that the landlord still thinks she's right about the freezer, but probably sees that she is wrong about everything else and therefore won't take her chances in court.
Granted, my friend should not have told the landlord that he left the garage wide open, and I wish my friends would consult me by cellphone before making damaging public statements. However, even allowing that he might have left the door open, we would need to debate whether that consituted any comparative negligence in a quiet Missoula neighborhood, and even if it did, my friend's omission was not the proximate cause of the freezer being stolen. The superceding and intervening cause of it's loss was solely the intentional act of an uninvited trespasser. Such a criminal act would break any chain of causation caused by acts or omissions of my client, and render my client not legally responsible for the loss.
An uninvited trespasser could have just as easily set the whole garage on fire, and by the same reasoning, the landlord would not be able to charge the smoking pile of debris against my friend's deposit.
Though there's a small chance she's right about the freezer (very small, don't bet on it), she's almost certainly wrong on the other items mentioned in my second letter which could cause her losses upwards of $3,000.00. That's why it's good to have many arguments, as long as each is strong.
Since this landlord also happened to be a (non-practicing) lawyer, she could recognize her risk, and also her disadvantage in being held to a higher standard regarding knowledge of landlord-tenant law.
If your landlord is just some old codger who doesn't consult lawyers and goes on just as he did in feudal times before tenant protection laws existed, then you might really have to sue him. And you should. It will help improve the quality of landlords and their business practices in your area.
Actually, I am sad that Landlord did not take us on. I was looking forward to splitting the take with my friend, 90% for me and 10% for him.
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I'm sure the landlord does very well on those who aren't prepared to agressively defend their rights.
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