I frequently consult with clients about landlord-tenant and real estate issues. Whenever a person or company is in the business of investing in residential real estate, there is always the possibility that a tenant will fail to pay rent. You can find more information on our website (www.ryanbk.com)
About the Landlord-Tenant Act
The State of Alabama passed a version of the Uniform Residential Landlord Tenant Act in January, 2007 (“the Act”). ( Ala. Code, Section 35-9A-163(b). The Act only applies to the residential landlord tenant relationship. It does not create or deprive anyone of any tort claim or legal duties under other areas of statutory or common law. The Act applies to any residential rental dwelling located within the territorial limits of State of Alabama.
This blog post is limited to a situation where a tenant fails to pay rent. Rent is defined as all payments due to the landlord under a rental agreement. If there is no rental agreement, the tenant is obligated under the Act to pay the landlord the “fair value of the use and occupancy of the rental unit.” (Ala. Code Section 35-9A-161(b) ). Rent must be paid by the tenant in accordance with the rental agreement.
In the absence of a rental agreement, the tenant is required to comply with Ala. Code Section 35-9A-161(b), which states: “Rent is payable without demand or notice at the time and place agreed upon by the parties. Unless otherwise agreed, rent is payable at the dwelling unit and periodic rent is payable at the beginning of any term of one month or less and otherwise in equal monthly installment at the beginning of each month. Unless otherwise agreed, rent is uniformly apportionable from day to day.”
What Happens When a Tenant Breaches the Rental Agreement?
Whenever a tenant has “materially breached” the rental agreement, the landlord becomes entitled to exercise certain remedies. It is important that the landlord reviews the requirements of the rental agreement (tenant's contractual obligations) and Ala. Code Section 35-9A-301 ( the tenant's statutory obligations). Ala. Code Section 35-9A-421(a) sets out the notice requirements and the right of the tenant to remedy any breach and is a prerequisite to the filing of any legal action by the landlord against the tenant. It states:
“Except as provided in this chapter, if there is a material non-compliance by the tenant with the rental agreement or a noncompliance with Section 35-9A-301 materially affecting health and safety, the landlord may deliver a written notice to terminate the lease to the tenant specifying the acts and omissions constituting the breach and that the rental agreement will terminate upon a date not less than 14 days after receipt of the notice. If the breach is not remedied within the 14 days after receipt of the notice to terminate the lease, the rental agreement shall terminate on the date provided in the notice to terminate the lease unless the tenant adequately remedies the breach before the date specified in the notice, in which case the rental agreement shall not terminate.”
The foregoing provision applies in situations where the tenant has not met one of the duties specified in the lease agreement ( such as failing to maintain the property in a clean and habitable condition) or a duty listed under Ala. Code Section 35-9A-301 ( which states the tenant's statutory duties).
If the tenant fails to pay rent timely, the landlord must give the tenant seven (7) days notice and a right to remedy the breach. In other words, the tenant must be provided an opportunity to bring the past-due rental payments current. A landlord should, therefore, require every tenant to sign a Lease Agreement that sets out the amount of rent, the due date, the required manner of payment, the payment address, the entity required to be paid ( this can be the owner of the property such as an LLC, or the landlord personally). An experienced real estate attorney should be consulted for the purpose of drafting a standard Rental Agreement. A real estate attorney can tailor the Rental Agreement to fit the landlord's unique situation.
Once the landlord has complied with the foregoing notice requirements, the lease is effectively terminated. Once the lease is terminated, the landlord may file a civil action against the tenant for possession of the property and for “damages.” The landlord may also request an order from the court which provides for reimbursement and/or payment of the landlord's attorney fees.
The landlord should always be conscious of the tenant's right to file a counterclaim against the landlord for breach of the rental agreement ( or “lease agreement”). The Act ( Ala. Code Section 35-9A-405(a) states that “In an action for possession or in an action for rent when the tenant is in possession, the tenant may counterclaim for any amount the tenant may recover under the rental agreement or this chapter. It is in the court's discretion whether the tenant is to remain in possession. The tenant shall pay into court rent accrued and thereafter accruing as it becomes due. The court shall also determine the amount due to each party. The party to whom a net amount is owed shall be paid first from the money paid into court, and the balance by the other party. If no rent remains due after application of this section, judgment shall be entered for the tenant in the action for possession. If the defense or counterclaim by the tenant is without merit and is not raised in good faith, the landlord may recover reasonable attorney fees.” ( a tenant can file a counterclaim and not pay any rent to the court if the tenant is not in possession of the property).
Have a Landlord-Tenant Matter? Call Ryan Legal Services, Inc (251) 241-5234.
This post does not cover all of the ins and outs of landlord-tenant law in Alabama. Future posts will cover other issues involved with the eviction process and other areas of landlord-tenant law. Please feel free to contact Attorney Kevin M. Ryan at Ryan Legal Services, Inc. for a free consultation. Services include evictions, real estate matters, landlord-tenant law, document preparation and review, collections and bankruptcy litigation. Kevin Ryan represents both landlords and tenants in Mobile and Baldwin County, Alabama. He can be reached at (251) 241-5234 and online ( mailing address: 209 N. Joachim Street, Mobile, AL 36603) website: www.ryanbk.com.