Recieved letter today from landlord saying I owe a 250 late charge, and 18% interest after today for not paying my rent to them, saying its in breach of the lease.
I spoke with them 8-12-2014 about infestation of mold below us in their property, and specialist that had said it needs to be cleaned and our heating and air ducts need to be looked at by a professional before it spreads itself into our business above this basement.
Nothing was done by 9-1-2014 , So i put the money for rent into escrow and wrote a certified letter stating it was in escrow (Showing the rents availability) until the basement was proven safe for us upstairs. They have still not done anything with the mold and now sending these letters.
The letter is also asking me to provide business insurance with their name and corporation on it that was due when the lease was signed 3 years ago which we didn't provide then and still don't have to provide now.
What is your question?
Your Landlord is correct. You did not pay your rent on-time therefor (being it a breach of your contract via your lease) you are responsible for the outstanding rent balance plus any additional late fees in which should be described in your lease terms.
Regarding the mold- You stated a specialist has inspected the property and have found levels of mold requiring remediation. Was this someone you hired? Are they truly a specialist in this field? Where s the source of moisture that is causing this mold? Is it caused by you, the landlord or is it the environment itself?
If you hired a specialist who is qualified to assert that there is presence of mold requiring mediation then they should provide you with a letterhead letter stating their findings and recommendation on remediation. You can then send this to the landlord.
If you truly feel that you are being taken advantage of you should explore your options to break your lease or hold it out until our lease terms end... Is this really something that you want to deal with routinely?
When you say "Rent Escrow" is this a legal process in your area or is this just something you did on your own? In MD there is a legal process called rent escrow and if you followed it the landlord would be clearly wrong in your situation.
Next what does the lease say about late fees? If it is not in the lease he may not legally be allowed to charge the fees and / or interest. Also even if it is in the lease, what is allowed by state and local law.
Also you mention your business. Is this a residential rental or is this a commercial rental? Generally laws to protect residential tenants do not apply to commercial leases. It makes it even more important to go back and see what the lease says.
Citizens Bank in Pennsylvania holds the Business Escrow account. I put the funds in there to show the landlords in good faith that the rent has not been spent elsewhere but the rent is indeed ready for them when the issues at hand are fixed.
The place of establishment is Commercial, we run a tattoo studio and do to customers with open skin abrasions mold is a very SERIOUS concern, which the landlords seemed to not think so.
Late fee of rent is in the lease for the $250.00 if not paid in full by today. The 18% i have to reread the lease, I am unsure of that, but a lot of what I heard that is very high, and could not be legal.
We are out of the lease on December 1st, and moving to a new location, so yes it is not worth this hassle, and I understand just pay it and forget all this, but that just makes whats wrong right, and whats safe and reasonable not a concern and not fair.
I Appreciate your time and your responses in this matter , I am trying to see where I stand in this matter, and what I can do.
You need to read your lease , if it is similar to ones I have read in the past , the commercial tenant is responsible for the problems you described . you may also be out much faster than you think , you dont have the same protections as a residential lease.
The landlord should serve eviction's papers now.
I told my brother to come on here and ask for some advice. Seeing as we are all real estate investors we often don't see it from the other end. The landlords that rent to him are total slumlords that have let the property fall into disrepair.
The basement is actually not his space in his lease, it is the landlords space and the landlord stores items there along with the mechanical systems. So, I will also ask, why would this be the responsibility of Chris?
Is there not some type of commercial tenant protection to prevent landlords from letting their properties fall apart without repercussion?
Originally posted by @David R.:
If the mold was found in the property below, why would it be the responsibility of @Chris Pincus ?
How would the tenants inspector find mold in a area the tenant wasnt renting ?
I've never been on either side of the commercial lease situation. That said, I suggest you pay the rent on time every time, unless you have already reported the situation to authorities and you are in a jurisdiction that allows you to withhold rent, in the manner you describe.
Then focus on the issue of the mold. If it is significant, get the health department involved. Of paramount concern should be the health of the customers and the health of your employees. If the health department determines the place unfit, they may condemn it and you may be able to get out of your lease early.
About your communications with the landlord on 8/12/2014, were those communications in writing? Hope so. Stick to writing and stick to facts. Document, document, document. If you are renting NNN (triple net) then you will be responsible for maintenance and repairs for the space you lease. Pay for the what you need to do to make your space safe, and keep the receipts. That would mean pay to have your heating and air ducts inspected/cleaned and the root cause of any problems documented. If the landlord's actions or lack of action causes you, your employees, your customers and/or your business harm, you may be able to pursue legal action against him for damages at some point. Be sure to have sufficient insurance of your own.
Code violations may be a factor. If the landlord is not following code requirements for his building, especially in his own space that is adjacent to yours, contact the city and see what support their code enforcement team might be able to provide for you.
That said, you have three months to go before you can be free and clear of this "slumlord". Negotiations are easy with good landlords and almost impossible with slumlords. You may not want to fight it anymore while you are still in the unit. But after your lease is up and you have moved on, you can do the community good by pursuing the landlord for building code violations. Report him. You may also pursue justice for significant damages that you sustain. See an attorney for that.
Commercial leases are quite different than residential leases and have much less protection than for tenants. Landlords can and do just change locks or chain the doors and keep the tenants out of their property.
The circumstances where a tenant can withhold rent for repairs are state specific. But are typically very limited. I found this document related to PA:
Two paragraphs appear to relate to this situation:
Under the new "implied warranty of habitability" law, the tenant's obligation to pay rent and the landlord's obligation to maintain habitable (safe, sanitary and fit) premises depend upon each other. If the landlord breaks his obligation to keep the premises in a reasonable fit condition, this may relieve the tenant from his obligation to pay part or all of his rent until the landlord makes all necessary repairs. The landlord must be given notice of defects and a reasonable opportunity to make repairs, but he does not have to promise to repair before the tenant withholds rent. The warranty of habitability is required by law in all leases (oral and written). The repair need not be necessary to prevent further in jury to the property to justify the use of the warranty; generally, substantial housing code violations are sufficient. In the above example, Ms. Adams could not be evicted for non-payment of rent it she used the warranty to justify a rent payment of only $50.00.
It is important that the tenant inform the landlord in writing of his/her intention to stop paying all or part of the rent if necessary repairs are not made in a reasonable amount of time. The tenant should keep a copy of the letter and copies of all receipts for repairs. If the landlord decides to sue the tenant for that portion of the rent which was withheld, the tenant will need these records as part of his/her defense.
Notice the first sentence of the second paragraph: It is important that the tenant inform the landlord in writing of his/her intention to stop paying all or part of the rent if necessary repairs are not made in a reasonable amount of time. That implies to me (not an attorney) that the tenant must give the landlord written notice before withholding the rent.
Its not clear if this applies to commercial situations or just residential. The law is very often much more protective of residential tenants than commercial ones.
I would recommend speaking with an attorney about this matter.
MRRS Pincus - The best thing you can do is move to a better building. That's what brothers do; they help each other. Sending him here is ducking the problem.
Don't go to a hardware store to buy a banana. If it's a legal problem, hire an attorney. If it's a crappy building, find a better building. Let the attorney mitigate the issues.
I'd talk to the landlord about moving out of the building/seeing what you can work out about the mold. While paying rent on time.
This is commercial not residential. Landlord has A LOT more power than in a residential situation.
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