Unfair or Deceptive Trade Practices
Unfair or Deceptive Trade Practices
The Federal Trade Commission regulates unfair or deceptive trade practices that occur nationally. Even local trade practices considered to be unfair or deceptive might be regulated by the FTC if they have an adverse effect on interstate commerce (the “interstate” connection is how the FTC becomes involved)
Federal, State, Local Consumer Protection Statutes
Every state also has consumer protection statutes, which are generally modeled after the FTC statutes. The statutes are administered by states attorney generals, so check your state attorney general’s website to see if they have anything specific in this area.
What the heck is an unfair practice, anyway? According to an online legal dictionary, an unfair practice is one that has substantial injury to consumers. The consumer protection concept of this is that consumers and businesses should be on equal footing in their negotiations and that businesses which have a substantial advantage over consumers are behaving unfairly. The deceptive practices are ones that have a tendency or capacity to deceive and the FTC considers the acts effect on the average consumer. The current definition is that a practice is deceptive if it will likely mislead a consumer, acting reasonably under the circumstances, to the consumer’s detriment.
As a result, unfair or deceptive practices are those where a business uses its inherent advantage as a business to treat a consumer improperly without the consumer being able to negotiate on equal footing. Using this definition, almost any practice where the business has an advantage over the consumer can be considered unfair and any statement that is not completely 100% accurate can be considered misleading to a consumer. That leads to a wide variety of unfair or deceptive practices which you’ll see below.
Landlord Making False or Misleading Statements
The landlord can commit unfair or deceptive practices numerous ways. An easy example is making verbal misstatements that they know to be untrue. Because landlords have owned the property longer than any prospective tenant has been looking for a place to live, the landlords have a basic knowledge about the property that the tenant just doesn’t have. It is very easy for the landlord to make misleading or totally incorrect statements about the property, the individual unit, what will be happening in the future, and the tenant has no realistic way of knowing whether or not the landlord is telling the truth. In addition, because nothing is in writing the landlord can always deny making the statement or say that the tenant is “confused” or “misunderstood.”
Not Giving You All the Information You Need
Another unfair or deceptive practice on the part of landlords is not presenting all the information that the tenant needs to make a decision. This is closely allied with withholding information. For example the prospective tenant has middle school children and the landlord knows that the closest middle school is scheduled to close in four months, merging with another middle school that is 15 miles further away. If this tenant signs the 12 month lease, partway through they will have to start driving a longer distance to get their kids to school. The prospective tenant cannot be expected to know what is going to happen in the neighborhood they don’t even live in yet. However, by withholding that information from the tenant, the landlord gets someone to commit to a lease they wouldn’t have done if they had known what would be happening before long. This could also be considered omission of a material fact. See the section on Property Managers, who are Realtors, and the standards that they are supposed to adhere to.
Including Illegal Provisions and Excessive Charges
Probably the most common unfair or deceptive practice used by landlords is to include illegal provisions and excessive fees in their lease. Landlords know that tenants do not know landlord tenant law. Therefore they salt the lease with all sorts of provisions that would be completely unenforceable if ever challenged. They charge late fees that far exceed the statutory late fees to which they’re entitled. They impose numerous fees that have no basis whatsoever in state statutes. They require the tenant to give them excessive notice before leaving the unit (90 days’ notice when the statute only requires 30, for example). Landlords that have been landlords more than a few years are connoisseurs of provisions of leases that benefit them. Over the years I’ve seen numerous landlords who pull “favorite phrases” from someone else’s lease and insert them into theirs. They do this without regard for whether or not the favorite phrase is legal or not. They are simply relying upon the fact that tenants do not know better and have the belief that “It’s in the lease and I signed it so I have to do it.” In far too many cases, the landlord gets away with one-sided lease contract language and collecting excessive fees for years and years without being challenged. This is because the landlord has been honing the language in the lease for their maximum benefit for a long period of time; despite that they tell the tenant that the lease is “standard.” In residential lease situations, tenants simply do not take a sample lease and have the language reviewed by an attorney to make sure it is reasonable. In 35 years of being a landlord and negotiating 800-1,000 leases, I’ve never had a tenant take the lease to a professional and have it reviewed. Not once.
Another common landlord tactic is to not disclose information. Let’s suppose that the landlord has a problem with people loitering in the parking lot until late at night drinking and carousing. Occasionally some cars get broken into. A tenant applies for an apartment and the landlord signs the tenant up. Once the tenant moves in, they discover the crowds in the parking lot and the disruptive behavior. They are ready to move but the landlord refuses to let them out of the lease. The landlord says, “You had the opportunity to visit the apartment complex before you moved in to verify that it met your needs, therefore you had the opportunity to discover the situation and I’m not responsible for it.” The problem with this logic is that no tenant is going to visit all their perspective landlords’ properties at all hours of night and day for several days prior to making a housing decision. The landlord knows there is a problem but does not disclose it and penalizes the tenant once the tenant discovers the problem and tries to leave.
Another common unfair landlord tactic is to not disclose prior problems with the rental unit. For example rental units at one end of an apartment complex next to a creek might be prone to seasonal flooding. Every time the seasonal flooding occurs the tenant property is destroyed and they wind up moving out. The landlord repairs the damage and re-rents the unit, failing to tell the new tenant that the prior tenant had been flooded out. When the new seasonal flooding occurs, this tenant gets flooded out also. In one of the states where I rent out property, this practice was so prevalent that the legislature passed a law requiring landlords to notify prospective tenants if the apartment complex had been subject to flooding three times in the last five years.
Landlords Withholding Information Tenants Need
Another common unfair landlord tactic is to not tell prospective tenants about sexual predators in the area, other tenants in the apartment complex who are dealing drugs (and whom the landlord is trying to evict), other tenants playing loud music at 3AM that the landlord is aware of. All of this withheld information could be important to a prospective tenant in reaching a decision as to where to live. This is also omission of a material fact by the property manager, who is a Realtor. See the property manager section for more detail on this tactic.
Another common landlord tactic is to try to push their responsibilities off on the tenant. For example the lease might say “The first $50 of maintenance expense every month belongs to you. You must pay it.” They do this in an attempt to get the tenant not to call in with routine maintenance requests because of the tenant knows that they will pay the first $50 they will not ask the landlord to perform maintenance. The reason this is unfair and deceptive is that the landlord can never make the tenant responsible for maintenance of the unit. Tenants do not have the legal obligation of performing maintenance on rental units. Additionally, in many cases they are not qualified to perform maintenance that should be performed by licensed people.
Another favorite one of landlords, in a single-family home rental situation, is to make the tenant responsible for cleaning out the gutters twice a year. Most tenants do not have ladders to cleanout gutters with, whether the house is one story or two. Additionally, if the landlord would just think through the situation, they would realize that they don’t want tenants up on a ladder on their property. If the tenant fell from the ladder while they were performing maintenance, which the landlord required them to do, it would be an invitation to a huge lawsuit. However, landlords, in their desire to get rid of responsibilities that belong to them, don’t think this far.
Deliberately Not Disclosing Lead Paint Information
Another common landlord tactic, in pre-1978 structures is to do a poor job of the lead paint disclosure deliberately. They are required to disclose any lead paint problems of which they are aware. As a result most landlords never do any testing whatsoever so that no records would be in their possession that indicate the presence of lead. Additionally, the lead based paint disclosure form requires them to tell the prospective tenant that they have a 10-day right to get a lead test done. Landlords typically gloss over this requirement and tell the tenant “There’s no problem with lead here.” Most landlords also do not give out the required federal booklet “Protecting your Family from Lead”
Landlords Bullying Tenants
Another common landlord tactic is to bluster and bully the tenant and pretend to have rights that the lease does not give them. Landlords are used to having the whip hand and using it on the tenant. When the tenant asks the landlord to make a decision on something where the landlord has discretion, the landlord often will take the position that best maximizes them monetarily, whether or not that is the position that is legally correct.
Another unfair landlord tactic is to attempt to collect double rent from the same apartment simultaneously. There are various ways that the landlord can do this. One example is charging triple the daily rent to a tenant that is holding over (living there a few days after the lease ends) The tenant moves out on the 10th by which time they have paid an entire month rent. The new tenant moves in on the 15th and pays half a month prorated rent on the same unit. Another example is charging a tenant a two-month early termination fee if they are breaking the lease. The departing tenant pays the two-month and the landlord re-rents the unit a few weeks later and collects double rent on the same unit.
Another typical unfair tactic on the part of landlords is to give false information to the tenant about what the true situation is. For example the landlord could file an eviction action for unpaid rent. Before the case comes to trial the tenant pays the landlord the back rent in cash the landlord tells the tenant they will cancel the eviction action. Instead they go to court and get an eviction action against the tenant so that they can collect all the penalties and filing fees that the law allowed. This type of treacherous behavior from landlords toward tenants is all too prevalent
Another unfair or deceptive tactic that landlords employ is to sneak into your unit while you are in the process of moving. They want to see if you have fully moved out. When they do this they are violating the tenant’s right to quiet enjoyment. Here’s a typical situation. The landlord files for an eviction and gets a judgment requiring the tenant to leave. The eviction crew is scheduled for next week. The landlord will go to the tenant’s house, make sure they are not there, and then use their key to enter to see whether or not the tenant has left. If the tenant has left they will cancel the eviction and pocket the money they were going to pay the eviction crew. They will also begin re-advertising the property immediately so that they do not lose any more rent. If tenant furniture is still in the unit they will come back periodically until it is all gone.
Landlord Retaliation Against Tenants
Landlords are also notorious for retaliating against tenants. If a tenant files a complaint with a government agency, organizes a tenant union, or does anything else the landlord does not agree with, the landlord typically will find a way to get rid of the tenant by ways that are usually very devious. They will scrutinize tenant behavior for lease violations against which they can evict (while simultaneously letting others get by with those same lease violations). They will refuse to renew a lease and ask the tenant to vacate at the end of the lease. And on and on. The retaliation is completely improper and in many states if the retaliation occurs within six months of the tenant filing a complaint against the landlord, it is presumed that the landlord is retaliating. Refusing to make repairs after being notified is a subtle form of retaliation. The landlord hopes that the tenant will get disgusted and just leave.
Another unfair and deceptive practice among unscrupulous landlords is to load up their end of lease accounting with spurious charges. If the tenant does not pay them, landlords then turn the “bill” over to a collection agency.
Another unfair and deceptive trade practice among landlords is to refuse to make repairs after being notified by tenants of a problem. It is a violation of the landlord’s duty to provide a habitable rental unit. While tenants have the ability to take legal action against the landlord if the landlord refuses to repair the rental unit, that is an extreme issue that is more expensive and more confrontational than tenants should have to be in a routine situation where the landlord has the obligation to maintain the structure.
Just like the previous example, violations of the state or local building codes or the state’s minimum habitability codes is unfair and deceptive trade practice because of the landlord’s obligation to provide a habitable structure. This is particularly egregious when the landlord has been cited multiple times by the building code department.
Another particularly nasty tactic among landlords is to find creative ways to keep the tenant security deposit. They will often claim the damage was worse than it was in an attempt to minimize the amount they have to return. Or they will net past-due charges that they never attempted to collect against the deposit. Or they will bill replacement items at several times the actual cost. The creative techniques that landlords use know no bounds.
Refusing to make repairs after being notified is another way that landlords treat tenants improperly.
Breaching the implied warranty of habitability is also an unfair and deceptive trade practice because the landlord has an obligation to maintain a habitable structure under the terms of the lease. When they do not, the tenant is not able to live in a habitable structure and has to move. When the tenant signed the lease they thought they were getting a habitable structure and that is the unfair and deceptive practice.
If the landlord refuses to accept paperwork from you (such as a notice of lease termination) so that they can send you some alternative paperwork that will maximize their revenue, that is an unfair and deceptive trade practice. They are not allowed to refuse to accept paperwork.
Landlords are also not able to send you misleading paperwork that pretends to come from another party supporting their position. For example if they sent you a document that appeared to be a court paper telling you to leave your rental (when in fact they had not filed any paperwork with the court at all) that would be an unfair and deceptive practice.
Landlords have also been known to leave blank places in a lease when you both signed them. Later they add in sentences that benefit them in blank lines on the lease. Often times they will then not give you a copy of the lease so that you do not discover their duplicity. The first you know of the added language is when they use it against you somehow.
Not giving you a proper way to contact them is an unfair and deceptive trade practice. You must have an official address to which to send notifications, rent checks, and any other official communication.
Not treating tenants equally is an unfair and deceptive trade practice. Landlords must bend over backwards to treat all tenants exactly the same in terms of their actions, policies and procedures, and behavior. Most do not. When you can document that the same tenant behavior is met by different responses from the landlord you will be able to prove an unfair and deceptive trade practice.
Not being consistent in policies is a unfair and deceptive trade practice on the part of landlords. Here is an example. The lease calls for all maintenance requests to be put in writing before the landlord has to act on them. The landlord does not enforce that provision and takes verbal requests and acts on them. Later the tenant and the landlord have a disagreement. The landlord then begins requiring all maintenance requests to be in writing. Since they earlier acted upon verbal requests, that is an unfair and deceptive trade practice.
I’ve given numerous examples of unfair and deceptive trade practices but the list is nearly endless. Any time the landlord is not treating all tenants equally fairly, is messing with your money, is verbally abusive, is lying about lease terms in an attempt to extract money or concessions from you, that is an unfair and deceptive trade practice.
How do you document it and what do you do about it?
First, look back through all the situations and see which ones apply specifically to you. If they do not apply to you but do apply to other people in your apartment complex go ahead and write them down as well.
Document the situation. If it happened to you, write it down and gather any written documentation that illustrates what occurred. If others were witnesses or have knowledge of the circumstances, get them to write it down as well.
See how many people in total were affected by the landlord’s actions and if there is commonality to the cases (the same thing happened to everyone). If so, this has the makings of a class-action lawsuit against the landlord. See the separate chapter on class actions and how to set them up.
If you are the only one affected and just need to take action against the landlord yourself, you can take a couple of actions:
1) Send the landlord a demand letter and tell them how they have violated the law and what they must do to cure the situation. Give them 30 days to cure the problem.
2) If they do not cure the problem in that period of time you can then go ahead and file suit. If they do not respond to you at all, that is an indication that their intention to violate the statute was deliberate. If you can document that they refuse to comply with your request to cease the bad behavior, you can sometimes recover several times the amount that you are demanding.
Make sure that you take action within the appropriate time period. You have a limited time to file your lawsuit; if you wait too late you will not be able to recover any damages.
Many of the same issues interrelate with constructive eviction and wrongful eviction as reasons for civil lawsuits.