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Articles written by Ken Volk

How to Refute Landlord Monetary Claims

by Ken Volk

There are several types of circumstances when landlords (or their agents, such as managers or realtors) tend to make monetary claims upon tenants (you).

A. FOR UPKEEP OR REPAIRS

They may claim you are generally responsible for maintaining the property, including the cost of repairs, or a deductible thereof. Usually such a claim is overreaching, because there are only limited such instances that landlords may legitimately hold a tenant liable, and these are addressed in A.R.S. § 33-1324. In a nutshell, the criteria are:

• The work is not necessary to redress noncompliances with applicable building codes materially affecting health and safety, or making repairs, or putting and keeping the premises in a fit and habitable condition.

• The work performed by the tenant must be supported by adequate consideration. This means either a payment to the tenant for the work, or some kind of discount or other compensation provided to the tenant for the work.

• There must be a written agreement specifying the work to be performed. If the dwelling is a single family residence, the agreement may be part of the lease, but otherwise the agreement must be separate from the lease and signed by the parties.

• The agreement is entered into in good faith, and not for the purpose of evading the landlord's obligations.

Pursuant to A.R.S. § 33-1316, a lease may not permit receipt of rent free from the landlord's obligation to comply with A.R.S. § 33-1324(A). If your landlord is trying to evade his obligations under A.R.S. § 33-1324(A), or is making you do or pay for work that is beyond the scope of A.R.S. § 33-1324, then you may refuse and gird for a battle. Send a letter to the landlord explaining why you should not be held liable. Be sure to note the purpose of all subsequent rent payments on the tendered checks, and obtain a receipt for the rental payments that shows the payment applied to rent. Alternatively, if the payment is refused, send it by certified mail/return receipt requested or by way of process server, with a cover letter noting the amount tendered, how it is being tendered, and for what purpose. An enclosure line should specify the check, money order or cashier's check account and number, as applicable. Also, include a notation line specifying the certified number used, or that the letter was hand-delivered by a messenger. Keep copies of all your documentation. If a certified letter is returned because the landlord refused or did not claim it, do not open the returned envelope; under A.R.S. § 33-1313(B) it is deemed received no later than five days after having been mailed, so retain the letter in its sealed condition, saving it for a judge to open the envelope and examine its contents, should the matter proceed to litigation.

B. DAMAGES BY TENANTS DURING RESIDENCY

Generally, it is expected that a tenant will repair any damages caused by the tenant before returning possession to the landlord at the conclusion of the lease. However, a landlord may insist that a tenant remedy health and safety noncompliances during the period of occupancy. If the tenant does not do so, then the landlord may enter the dwelling and cause the work to be done, requiring reimbursement with the next rental payment, or immediately if the lease has been terminated. All of this is subject to the conditions of A.R.S. § 33-1369, as follow:

• The landlord must provide you advance written notice specifying the breach, except in the case of emergency.

• The notice must allow you fourteen days to remedy the noncompliance, except in the case of emergency.

• The work required is limited to noncompliances with A.R.S. § 33-1341 materially affecting health and safety.

• The noncompliance must be capable of being remedied by repair, replacement of a damaged item, or cleaning.

• The landlord must cause the work to be done in a workmanlike manner.

• The landlord must submit to you an itemized bill for the actual and reasonable cost, or fair and reasonable value of the work that was done.

• The amount owed is to be paid as rent on the next day when periodic rent is due, except it is due immediately in the instance that the rental agreement has terminated.


As with A.R.S. § 33-1324, if your landlord is trying to make you do or pay for work that is beyond the scope of A.R.S. § 33-1369, then you may refuse and gird for a battle. Again, send a letter to the landlord explaining why you should not be held liable. Be sure to note the purpose of all subsequent rent payments on the tendered checks, and obtain a receipt for the rental payments that shows the payment applied to rent. Alternatively, if the payment is refused, send it by certified mail/return receipt requested or by way of process server, with a cover letter noting the amount tendered, how it is being tendered, and for what purpose. An enclosure line should specify the check, money order or cashier's check account and number, as applicable. Also, include a notation line specifying the certified number used, or that the letter was hand-delivered by a messenger. Keep copies of all your documentation. If a certified letter is returned because the landlord refused or did not claim it, do not open the returned envelope; under A.R.S. § 33-1313(B) it is deemed received no later than five days after having been mailed, so retain the letter in its sealed condition, saving it for a judge to open the envelope and examine its contents, should the matter proceed to litigation.

C. DEDUCTIONS FROM DEPOSITS AND CLAIMS AFTER OCCUPANCY

IT'S YOURS: WHEN AND HOW

It is contrary to A.R.S. § 33-1321(D) for a landlord to deduct from deposits prior to the termination of tenancy, notwithstanding what the lease may say. In accordance with A.R.S. § 33-1315, a lease may not provide that you waive or forego your tenant rights specified in Title 33, Chapter 10, i.e. the main body of the Arizona Residential Landlord & Tenant Act.

Pursuant to A.R.S. § 33-1321, a landlord is required to return a security deposit, including prepaid rent monies due back to the tenant, less deductions specified in an itemized statement provided to the tenant, upon three criteria having been met:

1. Termination of tenancy
2. Delivery of possession
3. Demand

Accordingly, a tenant is due back the deposit, less deductions, even if evicted, so long as the criteria are satisfied.

Return of the security deposit is envisioned beyond mere termination at the natural expiration of a lease or month-to-month tenancy. Specifically, the statutes note that the deposit must be returned if the tenant terminates under:

A.R.S. § 33-1361(B), due to the landlord's breaches.

A.R.S. § 33-1362(A), due to the landlord's failure to deliver physical possession.

A.R.S. § 33-1362(B), as a result of the landlord's failure to deliver constructive possession, and then the tenant terminates pursuant to A.R.S. § 33-1361.

A.R.S. § 33-1366(B), as a result of fire or casualty damage that substantially impairs enjoyment of the dwelling unit.

A.R.S. § 33-1367, due to the landlord's unlawful removal or exclusion of the tenant from the premises, or due to the landlord's willful diminution of essential services to the tenant, or, by reference, due to the landlord's retaliatory conduct against the tenant.

A.R.S. § 33-1376(B), by inference, insofar as the tenant may terminate due to the landlord's abuse of access to the rental dwelling, or makes repeated demands for access that harass the tenant.

A.R.S. § 33-1381, by inference, insofar as the tenant is entitled to remedies provided in A.R.S. § 33-1367, in response to the landlord's retaliatory conduct.

A.R.S. § 33-1902(C), due to the landlord's failure to properly register the rental property with the county assessor.

COVER YOUR ASS

Landlords' wrongful withholding of security and other deposits, as well as making unwarranted claims above and beyond the deposits (even if there were no deposits whatsoever), is a frequent form of landlord abuse. It is theft, plain and simple. Invariably, the courts condone it. I have written a separate article about how to deal with security deposit matters, and I recommend you read it.

To summarize, here are suggestions to limit your exposure to such abuse:

MOVE-IN CONDITIONS. Document the condition of the premises when you first take possession. Notes, records, dated photographs and video. Use a daily newspaper (take a shot of headlines on page one) to corroborate the date of your photos/video, and keep the newspaper.

TO CHECKLIST OR NOT TO CHECKLIST, THAT IS NOT THE QUESTION. If the landlord has not provided you with a move-in checklist, as required under A.R.S. § 33-1321, do not ask for it. You can later claim that the landlord, by not providing you with a move-in checklist, effectively waived the right to claim you initially admitted that the premises were in good condition when you took possession. In fact, you may wish to consider retaining any move-in checklist provided to you, filling it out after you have had sufficient time to properly evaluate the dwelling's condition. A.R.S. § 33-1321 does not require that a tenant return the checklist to the landlord. In any case, never turn in a checklist without keeping a copy for your records.

HISTORY BEFORE YOU. Find out who lived in the dwelling before you. Contact that party and enquire about conditions during his/her tenancy, and what damages, if any, the landlord claimed. Then, determine if the landlord actually made the repairs or replacements billed to the prior tenant(s). These prior tenants could be useful witnesses for you, especially if the landlord charges you for the same damages already assessed against the prior tenants.

HISTORY BY YOU. Keep a photocopy record of all complaints about conditions lodged by you to the landlord. This will support your contention that you did not cause damages that the landlord may later claim, and that he is trying to bill you for damages that he was responsible to remedy during your tenancy, but chose not to.

REQUIRED NOTICES. Carefully read your lease to determine what advance notice of intent to not renew or to vacate, if any, is required by you to the landlord. Either get the landlord to acknowledge receipt of your notice, in writing (e.g. make an extra copy of your notice, and have the landlord sign the copy, noting the date it is signed), or send by certified mail/return receipt requested at least five days before the notice is due. If you are on a month-to-month tenancy, give written notice in compliance with A.R.S. § 33-1375(B), which is 30 days prior to the date of the month that rent is supposed to be periodically paid. Take into account that February is a short month.

VACATING, AND MOVE-OUT INSPECTION REQUEST. Your notice to vacate should specify a date prior to the end of the month. Actually, it is a good idea to vacate several days prior to the end of the month, so keys can be returned before the next rent would be due. In accordance with A.R.S. § 33-1321, in writing request that the landlord notify you when the move-out inspection will occur, subsequent to your vacating, so you can be present at the inspection and address any concerns brought to your attention at that time. Also, inform the landlord that you will return the keys to him/her at the joint move-out inspection. If the landlord thereupon fails to conduct a joint move-out inspection with you despite your request, that is a good thing, because you can then argue that the landlord failed to mitigate his/her alleged damages by bringing them to your attention and allowing you the chance to fix them. The duty to mitigate damages is addressed in A.R.S. §§ 33-1305(A), 33-1321(D) and 33-1370(C).

READYING THE PREMISES. Thoroughly clean and repair the premises before vacating. The place should be pristine, better than when you moved in. You will pay far more to a landlord to repair or replace than if you do it yourself, so you are only hurting yourself if you leave the place a mess. Remember, the best revenge is success, which in this case means constraining the landlord's ability to charge you for damages. Particularly, landlords love to replace carpets and charge the tenants, and the cost will eat up your deposits in the blink of an eye. It is worth the investment to use professionals to conduct repairs or cleaning, especially carpets. Get a receipt for the work performed, and note the name of the individual who did the work. Thoroughly photograph or video the premises, again using a daily newspaper to corroborate the date. Take broad expansive shots, interior shots of, for example, oven, refrigerator and cupboards, and also shots next to and behind things.

NO. NO. NO. NO. Do not sign anything that the landlord presents to you at the move-out inspection. Be satisfied with your own records, or whatever the landlord gives you. It is my experience that almost every time tenants disregard this advice, they are screwed by the landlord. Repeat: DO NOT SIGN ANYTHING THE LANDLORD PRESENTS TO YOU AT THE MOVE-OUT INSPECTION. If you think you are smarter than me, then why are you reading this?

HANDLING THE MOVE-OUT INSPECTION. If the landlord does conduct a joint move-out inspection with you, and at the inspection claims you are responsible for damages, you should respond. If you did not cause the conditions by your actions or negligence, explain why you are not liable. If indeed you caused the conditions, offer to immediately remedy them, and do so. Once you have remedied the conditions, if applicable, or at the conclusion of the move-out inspection (whichever occurs first), then hand the keys to the landlord along with a written demand to the landlord for the return of all your deposits, fees and prepaid rent held by the landlord. In the demand letter, be sure to give the landlord your new address. Keep a copy of the demand letter for your records.

RETURN POSSESSION ANYWAY, AND DEMAND DEPOSIT. If the landlord does not conduct a move-out inspection with you, send to the landlord a cover letter enclosing your keys, remotes and cards (photocopy them) by certified mail/return receipt requested, and a separate letter demanding the return of your deposits. If time is short, deliver by using a process server, so as to get everything in the landlord's hands before the turn of the month.

Note: Demand for deposits should be made even if you have no deposits. The reason is to trigger the landlord's obligation, under A.R.S. § 33-1321(D), to respond within fourteen business days from receipt of the demand. If the landlord does not respond in that time frame, you can make the argument the landlord has waived the right to claim any damages or charges. If you did have deposits or rent due back to you, then not only has the landlord waived the right to claim damages or charges, but also you now have a claim for statutory damages under A.R.S. § 33-1321(E), above and beyond the amount wrongfully withheld.

THE LANDLORD'S ITEMIZED DEDUCTIONS AND CLAIMS

You asked for it, so you should expect the landlord to send you an itemized list of deductions from the deposit, if any, and any claims above and beyond the deposit. If the landlord does not respond within the fourteen business days, send a certified letter/return receipt requested, demanding the net amount due back to you, and statutory damages of twice the amount wrongfully withheld. Give the landlord a deadline to pay, perhaps ten days or so.

If a partial, but insufficient, refund is sent back to you, it is okay to cash the check, so long as there is no statement - either on a cover letter, the deduction itemization sheet, or on the check itself - that by negotiating the check and receiving the funds you accept the payment in settlement of all monies due. The wording could be something different, but to the same effect, such as, acceptance by you waives any and all claims against the landlord. Do not accept such funds that are conditionally tendered, but otherwise, take the money and proceed to dispute the amount that is wrongfully withheld.

Once you have the itemized list in hand, in all likelihood it will confuse you. There are no standards in Arizona for how to list deductions, and landlords take advantage of this to obscure the nature of the charges. Your first step is to make a photocopy of the list, to use as a working copy. Then, take a variety of colors of highlighters to categorize the charges. For example, debits and credits of all rent charges, late charges, associated rent charges, and taxes on all of these, would be grouped together by highlighting yellow. Or, claims for utilities would be grouped together with another color. Or, physical damages claims. And so on. This way you can figure out what the landlord is actually claiming in totality, for instance, for the rent.

Now you need to respond. There are two general manners in which to respond. The first is to the specific claims, and how they are invalid. The next is legal arguments about why you are not liable.

As to the specific claims, make sure that you "dispute" them, using any and all of these applicable arguments as to why you are not liable:

1. The conditions were pre-existing to your tenancy.
2. The claims are untrue or invalid, for a variety of applicable reasons.
3. The charges, although based on actual damages, are excessive, and you should indicate what are the appropriate charges.
4. The damages were caused by the landlord, either by action, omission or negligence.
5. The issues were already repaired by you.
6. The dollar value of the claims were not identified by the landlord.
7. The claims are unclear because they are vague, not itemized.
8. The damages reflect normal wear and tear.

Additionally, you can assert the claims are invalid for a number of other reasons.

First, the landlord's claims were sent after the fourteen days from his/her receipt of your demand, which is the time limit required under A.R.S. § 33-1321. The argument is that the landlord waived the right to claim damages by not complying with the law. If you sent the letter by certified mail, you should have a return receipt, but you can also confirm when it was received by punching in the certified number at the Track & Confirm button of the postal service website, www.usps.com. Remember, even if the landlord refused or did not claim the letter, if you sent it by certified mail it is deemed received five days after you sent it.

Second, you can claim that the landlord did not conduct a move-out inspection with you, despite your request to be notified of its occurrence so you could attend. This constitutes a waiver of claims, because the landlord thereby deprived you of the opportunity to correct the conditions so as to mitigate the landlord's alleged damages. Similarly, you can make that argument even if the landlord did conduct such a joint move-out inspection, but failed to bring the specific damages to your attention at the inspection.

Third, if the landlord did not provide you with copies of records documenting that the repair or replacement work was actually performed for the amounts claimed, you can argue that the charges are fabricated for the purpose of wrongfully taking your money. Some landlords repeatedly claim the same "damages" against tenants sequentially occupying particular premises, and intentionally do not perform the work for which the tenants are billed, for the purpose of continuing the scam against subsequent tenants. This is why it is a valuable exercise to contact prior residents of the same dwelling, to see what they were billed and if the work was thereafter actually done by the landlord.

Sometimes landlords claim that the deposit has been forfeited by the tenant. Throughout the entire landlord-tenant act, forfeiture of the security deposit is contemplated only in A.R.S. § 33-1370(B), which relates to tenant abandonment of the rental premises. You can respond that, except for abandonment, withholding of the deposit based on a forfeiture argument exceeds the authority of the applicable governing statutes, and that you have neither abandoned the premises nor forfeited the deposit, but rather it is due back to you, and you demand its return.

Sometimes landlords claim that certain fees or charges or deposits are non-refundable. Pursuant to A.R.S. § 33-1321(B), the purpose of all nonrefundable fees or deposits must be stated in writing. Merely calling a certain deposit or fee nonrefundable, without explaining its purpose, fails to qualify it as nonrefundable. It must be returned to you. Also, unless it is clearly labeled in the lease or attached addenda as nonrefundable, then it cannot be arbitrarily so designated by the landlord at a later time.

Even if a certain charge is legitimately nonrefundable, still it must be applied against damages claimed. For example, should a landlord impose a nonrefundable cleaning or pet charge under the lease, although you have no claim for its return, the landlord must apply the nonrefundable deposit/fee to offset cleaning or pet-related damages billed to you, rather than deducting the charges first from your refundable deposits. The application of the nonrefundables, by reducing the deductions from your refundables, in turn increases the amount of refundables due back to you.

Upon these issues having been addressed, you should summarize how much the landlord can legitimately deduct or claim for which alleged damages. Then, specify the aggregate dollar value of your deposits and excess rent monies paid by you and held by the landlord, add in any damages already due to you for wrongful withholding of deposits and rent, add in any other damages due to you (based on applicable statutes, if any), deduct how much the landlord can legitimately assess for which alleged damages, and total how much is therefore due to you. If you previously demanded the return of your deposits, you may want to delay sending your response letter until the fourteen business days have elapsed from when the landlord received the demand, so you can add in the statutory damages for wrongful withholding. Then demand all the money due within a reasonable time frame, such as ten days. If you did not previously demand the return of your security deposit, incorporate such a demand into your letter, also advising the landlord that he/she will face statutory damages for wrongful withholding after fourteen business days.

In closing, you should advise the landlord that there is no basis for collection of its claims, and that should the landlord refer the account to a credit-reporting agency you will commence an action under the Fair Credit Reporting Act, the Fair and Accurate Credit Transactions Act (FACTA) of 2003 and the Fair Debt Collection Practices Act against the landlord, any collection agency or agent, for placing a negative record on your credit report without justification. Further advise the landlord that if he/she nevertheless intends or decides to report any claim against you to a credit-reporting agency, or if any agent or assign of his/hers intends or decides to do so, you demand that the landlord notify you prior to the occurrence. Tell the landlord that if he/she refers the account to a credit-reporting agency you shall commence an action against the landlord and the aforementioned parties for defamation of credit.

YOUR ASS IS PROBABLY GRASS ANYWAY, BUT IT IS A GOOD EFFORT

Should you follow this process, you will have created a paper trail for refuting the landlord's claims, asserting yours, and protecting your credit rating. This is a good preliminary step prior to filing legal action for return of your deposit. Thankfully, Arizona case law supports the imposition of statutory damages for wrongful withholding, as set forth in A.R.S. § 33-1321(E). So, with a decent record at a lower court hearing, at least you stand a fair chance of recovering not only the deposit but also the damages due to you, by overturning an adverse ruling on appeal. In other words, it may be worth your while to proceed with an appeal.

Unfortunately, tenants must contend with the landlord-friendly bias of the courts, particularly the justice courts. This is reflected in the courts' failures to abide by the laws, for example, by requiring that the demand for return of the security deposit must be in writing, despite the fact that A.R.S. § 33-1321(D) fails to mandate written demand. Also, if you walk into court without legal representation, as a tenant you are at a decided disadvantage. The justices of the peace (JPs) will frequently not listen to you or even allow you to speak, and often you will be prevented from presenting your evidence. Conversely, if you do retain legal representation, be aware that JPs rarely award attorney's fees to tenants - even when mandated under A.R.S. § 12-1178(B) - yet, attorney's fees are invariably awarded to landlords. So you may win the case and obtain a judgment for your deposit and rent monies, but still end up paying more than that to your attorney.

Basically, the laws are complex and hard to fathom, politicians generally favor landlords and write laws that don't benefit tenants, landlords have the resources to get their way, the courts favor landlords, and those who potentially could help the mass of tenants are dissuaded or prohibited from doing so (or they are loyal to their patrons who hold the purse strings).

So what else is new? Those in power oppose me for telling all this to you, and are constantly trying to figure out ways to stop me, including changing the laws. Perhaps you should print out this article, for your personal use only, before I am forced to remove it. But you may neither disseminate nor reproduce it, because it is...

© 2008-2012 by Kenneth A. Volk. All rights reserved.

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