Just received a small claims court filing against our park. Essentially the resident who is on a rent-to-own agreement found a legal-aid lawyer who says our agreements are in violation of law. The basis of the claim is that the park has shifted the maintenance and repair responsibility to the tenant. Our lease agreements charge residents a “Net Home Rent” plus lot rent, where “Net Home Rent” is the Home Rent minus a “monthly maintenance credit” that the resident receives for agreeing to maintain the home. For example, say the home rents for $350 per month normally with the maintenance credit being $100 per month; thus, the resident gets invoiced for $250 per month plus lot rent. In a separate “lease option” agreement, the resident also gets a credit toward the purchase of the home in the future should they exercise an option to purchase.
Has anyone been involved in a claim such as we are experiencing? Any advice? Strategy suggestions?
By the way, the resident has not paid their home rent nor lot rent for this month. Should we serve them with a 3-Day notice?
(Note: We now are using the rent credit program; yet the above described claim is from a resident that came into the park under our previous rent-to-own program.)
File an eviction. Under no circumstances are tenants allowed to be ‘judge, jury, and executioner’ and decide to not pay the rent because they don’t like the agreement they signed. If they choose to sue you over the legality of your agreement, then that will be decided in court, and that would be a separate agreement. But your tenants can’t just decide to stop paying rent because they don’t feel like it. So go ahead with the eviction, and let the matter of your agreement settle itself out in court.
I’ve never heard of it being illegal to have a tenant agree to maintain their home. But on that matter, you’ll need the advice of your local state’s MHA and an attorney.
Thanks for your comments Jefferson. You are right and we did serve them with the 3-day notice today and will follow up with the eviction filing. We had a similar situation occur several months ago where we filed an eviction and then the tenant got a pro-bono lawyer to file a counter suit saying that we were charging for garbage whereas the state law says the landlord is to provide such service. We replied that we were providing it yet just charging for it. Anyway, the judge got so focused on the garbage issue that he held off on his ruling for 6 weeks which was to dismiss the case; in the mean time the tenant lived in the park rent free (then, once the case was dismissed, the tenant finally paid up and is still in the park). That same judge will most likely hear this case and may delay making judgement on the eviction hearing once (if?) the tenant brings up the rent-to-own/maintenance issue.
Glad it’s working out for you. I come from a family of lawyers and in my honest opinion, the types of lawyers who take these cases are starving hacks. (no offense to the legal community out there) Small claims and the lawyers who spend their time festering there are not something to lose too much sleep over. In any event, Jefferson hit the nail on the head. It’s business as usual until something changes. I’ve been served at least a dozen times and have never set foot inside a court room for any of those or paid a settlement. Call their bluff because that’s usually what it is.
Unfortunately in some states a landlord can’t make a tenant pay for repairs to the unit.
However, is this a case where something broke in the tenant’s home and you wouldn’t repair it, or where his lawyer just poured through the lease contract and found a gotcha?
In the first case you may lose and have to pay a little out at some point, in the second case I would ask the tenant to show damages and how they were hurt by the rule. Even if you violated the law, if you did so in a way that didn’t harm the tenant it can be harder for them to get at you.
As others have said regardless evict them as quickly as possible, and if they’re amenable I would just cut a deal to settle everything and for them moving out as quickly as possible while leaving the home in good condition so you can move on with life.