Glankler Brown Business Law. Period.

Most residential leases and rental agreements in Tennessee require a security deposit prior to occupancy by the tenant.  The security deposit is intended to cover damage to the premises beyond normal wear and tear and to cushion the financial blow for ownership in the event the tenant skips out early on the lease without paying. 

It is very important for multi-family managers to clearly understand what to expect, and what is  expected of them, when it comes to the security deposit, and to ensure full compliance with the Uniform Residential Landlord Tenant Act.

In Tennessee, there is no statutory limit on the amount of the security deposit as long as the amount required is reasonably related to the property being leased; however, all deposits are to be deposited in a separate account used only for that purpose.

When a tenant vacates the premises with unpaid rent or other amounts due, management may remove the security deposit from the account and apply the money to the unpaid debt.  However, when management seeks to apply the security deposit to damages, Tennessee law provides a very clear process which must be followed by management prior to removing and applying the security deposit.             

Tennessee Code Annotated § 66-28-301, provides the procedure associated with the return by, or retaining of, the security deposit for damages to the premises discovered at the conclusion of a tenant’s occupancy. 

When a tenant vacates the premises, within ten (10) business days of termination of the tenant’s occupancy, but prior to any repairs or cleanup of the premises, management must inspect the premises.  If there are no damages, the security deposit in full is to be returned to the tenant.  If there are damages, management must compile a comprehensive listing of any damage to the unit which is the basis for any charge against the security deposit.  This list should also include the estimated dollar cost of repairing each item of   damage on the list.

Once this list is compiled, management should deliver this report to the tenant, either in person or by mailing the report to the tenant’s last known address.  Upon receipt and review of the damage report, the tenant has the right to inspect the property to ascertain the accuracy of the report. If management and the tenant are in agreement on the damages listed, both should sign the report, and management may withdraw the security deposit to offset the repair expenses.  If the tenant fails to respond within a reasonable amount of time, management may withdraw the deposit absent the agreement.  

If the tenant disputes the accuracy of the report, the tenant should specifically state in writing any items on the report that the tenant disputes and, if so desired, is permitted by law to bring an action in court to recover the portion of the security deposit withheld by management.  

While this process can be a bit confusing, compliance is very important.  Should you have any questions concerning tenant security deposits or the process by which they are to be applied, please do not hesitate to contact me at (901) 576-1701.

The Service Members Civil Relief Act (SCRA) a/k/a H.R. 100, signed into law on December 19, 2003, by then President George W. Bush, includes provisions which protect service members from evictions during the course of their active service.  

If a service member is (1) leasing an apartment, (2) the apartment is in the name of the service member, and (3) the service member has put management on notice of their active status, SCRA protects the service member who's monthly rent is $2,400.00 or less, from being evicted for a period of time if/when the service member has been deployed for active duty.  

SCRA does not absolutely prevent a landlord from serving a termination notice for th non-payment of rent; but if the landlord knows of the military status, the landlord when filing suit must tell the court that the tenant is an active service member and the judge will then decide whether the service member’s status in the military materially affects his or her ability to pay the rent. 

If the judge determines that status in the military materially affects the service member’s ability to pay the rent, the judge may stay the eviction for up to three months. If the judge decides otherwise, the lawsuit will continue and may result in an eviction.

In order for a service member to exercise his/her protection under the SCRA, the service member must demonstrate the following: 

1.         The lease was entered into prior to the commencement of active duty service.

2.         The service member put management on notice of the military status at the time the lease was signed.

3.         The lease was signed by or on behalf of the service member.

4.         The apartment is occupied by either the active duty service member or the service member's dependents.

5.         Military service materially affects his or her ability to pay rent.

6.         The service member is currently in military service or was called to active-duty for a period of 180 days or more. 

The service member must promptly deliver written notice to the landlord any time he/she is called to active duty or receives orders for active duty and must provide a copy of the reassignment or deployment order to management in order to implicate the protection. Oral notice is not sufficient.            

Should you have any questions regarding the Service Members Civil Relief Act or how it might impact a tenant on your property, please do not hesitate to contact me at (901) 576-1701.

DRUG DEALER EVICTIONS: 

Administered by the West Tennessee Violent Crime and Drug Task Force, the Drug Dealer Eviction Program seeks to assist property management prosecute the claims necessary to remove drug dealers from neighborhoods and multi-family residential apartment complexes. 

If a drug offense occurs in a rental property and involves drug possession with intent to sell, the violator is now subject not only to criminal prosecution but immediate eviction as well.  If management has not already begun the eviction process, the District Attorney’s Office will send a “Notice of Illegal or Drug Related Activity” to the landlord or management company.  Upon receipt, management must proceed with filing and prosecuting an eviction, or else, the law allows the District Attorney’s Office to proceed with the eviction on management’s behalf. 

The District Attorney’s Office has door-hangers, brochures and signs that can be used by management to encourage citizens to call in tips to Crime Stoppers about drug dealing at multi-family complexes.  

For more information, the District Attorney’s Drug Dealer Evictions Task Force can be reached at 901-545-3433. 

ANTI – TRESPASS INITIATIVE: 

The recently announced Anti-Trespass Initiative is a program sponsored by the District Attorney's Office and executed by the Memphis Police Department and Shelby County Sheriff's Department. The Initiative aims at assisting multi-family owners and management companies in keeping people out of apartment communities unless they are tenants or invited guests. 

Under this program, participating properties allow the Memphis Police Department and the Sheriff’s Department free access to the property, with the ability to arrest for criminal trespass anyone who is not a tenant, a family member of a tenant, or an invited guest. 

In order to enroll in the Anti-Trespass Initiative, property management must contact Jackie Condrey, Investigator for the Shelby County District Attorney's Office, at (901) 222-1397.  Properties will be asked to sign a participant affidavit, place “No Trespass” signs on property, and notify tenants, in writing, of the property’s participation in the anti-trespass initiative. 

Once these steps are accomplished, the property will be considered an active participant in the program and the District Attorney's Office will notify the local police precinct to start inspections for anyone that is not authorized to be on the property. 

Both the Drug Dealer Eviction and Anti-Trespass Initiatives are valuable tools that management can, and should, utilize to help maintain a safe and productive environment on property. 

Should you have any questions regarding either of these initiatives, please do not hesitate to contact me at (901) 576-1701.

Owners and management companies may, at their discretion, decide whether or not to implement no-pet policies at a particular apartment community.  A no pet policy prohibits tenants from keeping pets of any kind in their apartments; however, owners and management companies have certain legal obligations to make accommodations to allow certain specific types of animals to reside with a tenant in an apartment even when those apartments are in communities with clear no pet policies.

The law views service and comfort animals, not as pets, but as day-to-day needs of individuals suffering from physical and/or mental disabilities.  Because of this, management is required to make reasonable accommodations to allow the presence of the animals in the homes of those who can show the requisite need.

Service Animals

A service animal is one which is individually trained to the requirements of an individual with a disability, such as protection, rescue, pulling a wheelchair, or fetching dropped items.  Guide animals for the blind or visually impaired, signal animals for the deaf or hearing impaired, and service animals for other disabled people are  all service animals and not considered pets under the law.  The law (both at the federal and state level) specifically prohibits management from refusing to rent to a disabled person who needs a service animal.   Instead, the law requires that management make reasonable accommodations to allow the disabled individual the use and assistance of the dedicated service animal.

Comfort Animals  

Unlike service animals, there is no law or regulation which specifies that management must allow a disabled person to have a comfort animal. While a service animal is trained to perform physical acts to aid a disabled person, a comfort animal provides love, reassurance, social interaction and other emotional benefits.  Advocates of comfort animals say that they  provide substantial health benefits, particularly to emotionally disabled persons.

While comfort animals are not within the specific protections afforded service animals under federal and state disability and housing laws, disabled tenants are provided rights to keep comfort animals in apartment communities with no pet policies if they can provide documentation which shows that a medical professional believes that the animal is necessary for the individual’s health, use, and enjoyment of the apartment.

What Management Should Do

Prior to accepting a service or comfort pet in an apartment community with a no pet policy, the tenant should be asked to provide proof of the disability and of the need for the animal. The tenant is not required to provide any particular kind of proof, but must present some evidence that an accommodation by management is necessary. If the animal has an official tag or license showing that it is a service animal, management can probably rely on that as evidence.  However, since comfort animals are not eligible for such tags or licenses, tenants who need a comfort animal must show it is necessary by order of a physician or mental health professional.

Interestingly and importantly, in communities where pets are allowed with a pet deposit, pet deposits should not be charged for tenants with service or comfort animals as they are not considered pets.

A landlord who receives a request to allow a service or comfort animal is best served seeking legal counsel. Each situation is unique and the ever changing law and particular tenant's circumstance may alter management’s ultimate decision.

Should you have any questions regarding service or comfort pets or the applicable law, please do not hesitate to contact me at (901) 576-1701.

A tenant bankruptcy filing will impede a landlord's ability to proceed with filing an eviction proceeding or carrying out the court-ordered eviction process.   A tenant can stop an eviction by filing for a Chapter 7 (Liquidation) or Chapter 13 (Wage Earner) bankruptcy.  Once the tenant files for bankruptcy, federal law, under 11 U.S.C. §362(a)-(b), imposes an "automatic stay" which     prevents all creditors, including landlords, from pursuing repayment of debt and/or eviction. 

The “automatic stay” serves as a protective shield which will prevent the landlord from giving the tenant a termination     notice or from beginning the eviction process indefinitely.  In order for a landlord to proceed with the eviction proceeding, he or she must ask the federal bankruptcy court to “lift” or remove the stay.  This request may take one of two primary forms: 

(1) Consent Order between the Parties (a/k/a The Pay and Stay); or

(2) Motion to Lift Stay.

Consent Order:  A Landlord who is willing to allow a tenant in bankruptcy to assume and retain the lease and continue occupying the apartment, may enter into a Consent Order which places all rental arrearage due to the landlord from the first instance of non-payment until the date of the bankruptcy filing (known as Pre-Petition Rent) plus attorney's fees into the tenant’s bankruptcy repayment plan but requires that ongoing rent (known as Post-Petition Rent) be due and payable on or before an agreed upon designated date each month. After the Consent Order is signed by the attorneys for the landlord and tenant, and signed by the Bankruptcy Court Judge, any failure by the tenant to make Post-Petition rental payments will result in the automatic removal of the stay, and the landlord  will be permitted to proceed with eviction proceedings outside of the bankruptcy “stay”, without any further leave of the court. As long as monthly Post-Petition payments are timely made by the tenant, each and every month, the tenant may continue occupancy of the apartment and will maintain the protection of the bankruptcy court .

Motion to Lift Stay:   A Landlord who is un-willing to allow a tenant in bankruptcy to assume and retain the lease, but   instead, wishes to proceed with eviction, will need to file a Motion to Lift Stay with the Court.  In Shelby County, it typically takes between 30 and 45 days for the Motion to be heard by the Court. 

In order to prevail on the Motion, the landlord will need to demonstrate that the tenant has continued to breach the lease agreement, through Post-Petition non-payment, or other circumstances which render the continued tenancy of the debtor problematic (e.g. violence by the tenant on the property, drug use or distribution, and/or other criminal behavior).  In most cases, upon the presentment of this proof, the bankruptcy judge will “lift the stay” and grant permission for the landlord to proceed with eviction.   

In either course of action, and preferably at the time that the landlord first learns of the bankruptcy filing, the landlord must also file a Proof of Claim which documents the amount of money owed to the landlord by the tenant as of the date of the bankruptcy filing.  If not objected to, the  claim will become part of the tenant's bankruptcy plan and will establish the amount to be re-paid to the landlord  through the bankruptcy court.     

Most importantly, without the landlord’s prompt and effective action, a tenant in bankruptcy may continue occupancy in an apartment, without paying rent, for a considerable period of time.  It is critical that landlords, with the assistance of their lawyers, be vigilant and take immediate action when tenants file bankruptcy to ensure that properties are well protected.   

I have significant experience representing multi-family and commercial owners and managers in quickly and effectively handling tenant bankruptcy filings.  For specific questions or if you need help, please do not hesitate to contact me.