Stiffing Tenants as a Landlord Business Model

ACORN ACORN International Canada Citizen Wealth

New Orleans   Active ACORN campaigns in Canada, Scotland, and Italy focusing on tenant rights and landlord abuses, found me reading in detail a rare report in the New Orleans Times-Picayune about tenant rights, or really the lack of them, in Louisiana and most other states in the USA.

The Uniform Landlord and Tenant Act in the United States only covers 21 states, one-third of which are surprisingly in the South, including Virginia, Florida, South Carolina, Kentucky, Tennessee, Alabama and Mississippi, with the other clump in the Midwest in Iowa, Nebraska, Kansas, and Oklahoma.  Tenants don’t have a world of rights under the Act, but at least have some including minimum standards of habitability, prohibitions against leases with onerous fines or waivers of legal rights, seriously stiff penalties for welching on return of security deposits, and some limited protection against landlord retaliation for tenants making complaints.  ACORN Canada has campaigned for similar basic tenant rights in several Canadian cities with some success.

Take deposits and administrative fees, which are huge issues now for us in Scotland.  The interviews with tenants and landlords in New Orleans largely revealed this area to be typical of an abusive relationship.  In Louisiana, if a landlord illegally withholds a security deposit theoretically the fine imposed on the landlord would be $200.   The kicker is that the key word there is “illegally,” which in plain language means that a tenant would need to be willing and able to get the issue into a judge’s court, which for most tenants being screwed by their landlords is a little bit like saying they can catch the next flight to Mars. Landlord representatives interviewed were pretty blatant in figuring the odds that the vast majority of their tenants would never pay a lawyer and go to court to collect the $1000 or so that would rightfully be owed.  Similar to Scotland, coming revisions in the Uniform Landlord Tenant Act where it prevails would be that the landlord would be fined double the amount of the deposit plus the landlord would have to pay the tenant’s attorney fees.  In Scotland, the penalty is three times the deposit if the deposit is not placed with a third party and, unfortunately, no legal fee reimbursement, which is an issue in Scotland.

Fines and administrative fees that are now outlawed in Scotland seem more common in Louisiana than I had realized.  One story in the Times-Picayune detailed the eviction of some tenants who had complained about a landlord’s failures, and in retaliation he claimed she hadn’t paid a mysterious “administrative fee” of $250 and evicted them.

Is any of this fair anywhere?  Hardly!

The Southeast Louisiana Legal Services offered a multi-step procedure for how legally a tenant might force repairs through a repair-and-deduct procedure against their monthly rent.  The tenant would have to take bids, keep receipts, and still take a chance that if the landlord sued them they could prove the repairs were just or they would face eviction.  Hard to recommend someone trying that procedure by themselves at home in Louisiana or any other state without the Uniform Landlord and Tenant Act, unless they have a strong organization.  A lawyer is not likely, given the huge cutbacks now in legal services.

Tenants in Scotland, Italy, and Canada seem to understand that they have to build an organization.  Given how few rights most tenants have in the US, maybe that’s the next step here too.

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