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Top Five Ways Landlords Mislead, Deceive and Otherwise Cheat Students

1. SECURITY DEPOSIT FRAUD

2. FAILURE TO MAINTAIN PREMISES

3. CLEANING DEPOSITS, PUNITIVE LATE FEES & ILLEGAL LEASE CLAUSES

4. PRIVACY VIOLATIONS

5. LACK OF HEAT

Students are particularly vulnerable tenants. Undergraduate students are often naïve because it is their first time renting, and they do not have experience with landlords. For many students, their first lease is also their first contract; such students are often awed by the legal jargon of the lease and afraid to challenge any of its provisions. Younger students may think of their landlords as authority figures and hesitate to assert themselves in the landlord-tenant relationship.

Many students who rent housing in Ann Arbor are not native to the area. These students are unlikely to be familiar with local housing laws or to have heard which landlords or complexes to avoid. First-year graduate students are most at risk in this regard, as they often must find housing in the course of a very brief visit to Ann Arbor or immediately upon their arrival in September.

Also, some students are more vulnerable than others. Low-income students face the same abuses as other low-income tenants, such as living in substandard conditions because they are unable to pay the steep market rates for housing in Ann Arbor. Students of color may encounter racism, such as not being shown available apartments by a landlord. International students - particularly those from Asian countries - often meet unscrupulous landlords who use real or contrived language barriers to deprive them of their rights under U.S. and Michigan law. Students with disabilities face the same problems in finding accessible housing as do other people with disabilities. Gay and lesbian students sometimes face landlords who refuse to rent to them - despite Ann Arbor and Ypsilanti ordinances prohibiting such discrimination; this sort of discrimination can be difficult to detect.

So, in the spirit of "forewarned is forearmed", we offer this guide to the most common ways local landlords prey on the vulnerabilities of students. The abuses are arranged in descending order, with #1 representing the most common problem. If you're not a student, you may want to read this anyway, because landlords certainly don't limit their use of these tactics to students!

1. SECURITY DEPOSIT FRAUD

THE PROBLEM: Michigan law strictly defines the reasons for which landlords may keep security deposit money, and provides an inflexible timeline for the return of any money following the termination of tenancy. However, landlords often use various ruses to get around this law and sometimes simply ignore it. Briefly, the law says that security deposit money can be held back ONLY for unpaid rent, unpaid utilities, or "actual damages to the rental unit or any ancillary facility that are the direct result of conduct not reasonably expected in the normal course of habitation of a dwelling" (MCL 554.607).

The law requires landlords to notify tenants of any deductions and return the remaining amount of the deposit within 30 days after the tenant has moved. If the tenant disputes any of the deductions, the landlord must sue the tenant for the right to keep any disputed amount beyond actual rent for the time the tenant was in the unit, or money to satisfy an eviction judgment. Unfortunately, many landlords routinely evade this law by keeping back money for normal "damages" such as routine cleaning and carpet replacement, trusting that students will not know that these things are not covered by the legal definition of damages. Landlords also frequently fail to return deposits (or provide the required list of deductions) on time; in these instances, landlords rely on students' ignorance of the fact that a landlord who misses the 30-day deadline legally loses any claim to the deposit.

When students do dispute deductions, landlords often mislead them into thinking that the landlord has the final say. In reality, if the landlord doesn't return the deposit or sue for the disputed amount within 45 days after the tenant has moved, the landlord has waived any claim of damages, and the tenant has the right to sue his or her landlord for double the disputed amount.

THE SOLUTION: Know your rights and let your landlord know that you know your rights. Read the "Rights and Duties" handbook given to you when you signed the lease. (If you didn't get a copy, call City Hall now and register a complaint!) Browse the tenants rights information posted on MI.LawHelp.org and our web site. When you move out, notify your landlord (in writing) of your forwarding address and include a note stating that you expect him or her to return your money and/or a list of damages within 30 days. If your rights are violated, do not hesitate to sue in Small Claims Court. Call Student Legal Services if you have any suspicion that you are being cheated.

2. FAILURE TO MAINTAIN THE PREMISES

THE PROBLEM: While the 1968 "Warranty of Habitability" (MCL 554.139) requires that rental units be habitable, fit for the use intended, and in compliance with all applicable state and city housing codes, many landlords fail to fulfill their responsibility to maintain the dwellings they rent to students. For example, a landlord may fail to make needed repairs, fail to deal adequately with pest infestation, or fail to provide the security and safety features required by the city housing code. Some landlords even try to convince their tenants that these things are the tenants' responsibility!

THE SOLUTION: Again, know your rights and exercise them appropriately. Notify your landlord in writing of all problems. If the landlord refused to fix the problems in a reasonable amount of time, consider withholding rent until the problems are fixed or fixing the problems yourself and deducting the costs from your rent. Before taking these steps, contact Student Legal Services for advice about your options. If you suspect that your dwelling is in violation of the housing code, call your city Housing Inspection Department and request an inspection.

3. CLEANING DEPOSITS, PUNITIVE LATE FEES & ILLEGAL LEASE CLAUSES

THE PROBLEM: Despite the Truth in Renting Act (which prohibits certain types of lease clauses) and the Consumer Protection Act (which prohibits deceptive trade practices), many landlords use unenforceable and/or misleading lease clauses in order to collect more money from students. For example, many -perhaps most - landlords who rent to students now utilize "non-refundable cleaning fees" as a means of circumventing the provisions of the security deposit law (described above). Refundable deposits for cleaning are probably illegal (see our handouts on security deposits and cleaning scams for more information.) But many courts have decided that cleaning fees are legal and enforceable. Regardless of whether or not such fees are legal, they are clearly inequitable and you should negotiate with your landlord to reduce the fee. It is your landlord's responsibility, under the law, to provide each new tenant with a clean dwelling. Cleaning fees mislead tenants into paying the landlord's cost of doing business.

Less legally ambiguous is the common practice of specifying punitive late fees in the rental contract. For a late fee to be legal, it must approximate the actual damages suffered by the landlord because rent is paid late. Late fees are meant to compensate; they should not be set high to punish the tenant for being late. Nonetheless, some landlords use leases which specify late fees as high as $100. Other unenforceable lease clauses include those which waive the tenant's rights, those which are deliberately misleading, and those which contradict the terms of the lease itself. For example, a lease clause which requires a tenant to give 30 days written notice of their intent to move out at the end of the lease, or else pay additional, holdover rent, directly contradicts the lease itself - which specifies the length of the rental period. Even though our courts have held that such clauses are unenforceable, many landlords routinely include these clauses and use them to confuse tenants into paying money they do not owe.

THE SOLUTION: Don't assume that "if it's written in the lease, it must be legal." Don't fall into the trap of thinking, "I agreed to it so I must abide by it." The Truth in Renting and Consumer Protection Acts provide specific remedies for illegal and unenforceable contract clauses. Read our information on Illegal Lease Clauses, which has links to online copies of the legislation. If you suspect that you have signed an illegal lease, contact Student Legal Services. Before signing your next lease, read it very carefully and ask that any questionable clauses be stricken. Remember that you have something the landlord wants - namely, your money. Don't be afraid to negotiate the terms of the lease in the same way that you would negotiate any other purchase. Don't agree to pay anything that doesn't seem fair. You wouldn't agree to pay a non-refundable grill-cleaning fee along with a hamburger, would you?

4. PRIVACY VIOLATIONS

THE PROBLEM: Landlords violate the privacy rights of their tenants by entering the rental unit too frequently, without permission, and/or for spurious reasons. Because the landlord "owns" the property, tenants sometimes do not realize that the tenant is the legal possessor of the rental unit during the lease term. Student tenants, who are often accustomed to a lack of privacy from living at home or in dorms, are particularly unlikely to know and assert their privacy rights.

THE SOLUTION: Both Ann Arbor and Ypsilanti have privacy ordinances which regulate landlords' entry into rental units. Briefly, the Ann Arbor ordinance has two tiers, or levels, the first of which applies automatically and the second of which must be initiated by the tenants. In a non-emergency situation, if the tenant has not refused to permit entry, tier one requires only that landlords make a "good faith effort" to notify the tenant, knock, and identify themselves before entering. Tier two requires the landlord to give written notice within a specified time frame. In either case, the tenant always has the right to refuse the request and negotiate an alternative time. The Ypsilanti code always requires written notice or the permission of a tenant. For more information about the privacy ordinance that applies to you, read our Privacy handouts or contact Student Legal Services. In any case, remember that (except in the event of an emergency) landlords who enter without giving the appropriate notice and/or receiving permission are trespassing. If your landlord is in your home illegally and refuses to leave, do not hesitate to call the police. If your landlord repeatedly violates your privacy rights, you may wish to sue for damages.

5. LACK OF HEAT

THE PROBLEM: Despite a state law which mandates the minimum level of heat to be provided by the landlord, many tenants go without adequate heat. Despite a strong Ann Arbor ordinance requiring landlords to weatherize all units in which tenants pay their own heating costs, many tenants pay more for heat than they should due to inadequate weatherization.

THE SOLUTION: If you are not getting enough heat (your heating system should be capable of heating every room to 68 degrees) or if you're paying too much for heat because of poor weatherization, use the steps outlined for problem #2 above. You can find out more information on this topic in our Heat & Weatherization, Housing Inspections, and Housing Code Violations handouts.

In summary, there are many ways that landlords try to take advantage of students, but there are even more ways that students can fight back. The solutions above represent only a partial list of remedies available in each case. But, whatever the problem, taking such steps by yourself is usually not as effective as working together with other tenants who are facing the same problem. For example, if you are not getting enough heat, chances are that other tenants in the same building or complex are having the same problem. Together, you can present a united front to the landlord and use collective bargaining to gain a settlement that benefits everyone.

To return to the Michigan Tenants Counseling Program web site, click here.

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