Landlord’s Lease is Illegal

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An Iowa City, Iowa landlord caught in a messy legal battle was dealt another blow when a judge declared that several key sections of the landlord’s standard lease agreement are illegal. In a major victory for the tenants who brought the lawsuit, the judge granted approval of class action status, which means even more tenants who may have signed the same lease agreement can now join in the claim for damages. In addition, the judge invalidated a number of provisions in the landlord’s lease, including one that imposed an automatic carpet cleaning fee, fees related to maintenance, and several paragraphs that served to shift the landlord’s liability. The landlord argued that these provisions were not illegal, and regardless, the tenant bringing the lawsuit was not harmed by the provisions because they were not being enforced. But the judge found that several provisions violated Iowa’s state law on points that are illegal in other states as well. In particular, the “standard” lease included an automatic deduction from the security deposit for carpet cleaning regardless of the condition of the carpet at move-out, indemnity and liability-shifting provisions that included theft, fire, wind, rain, snow or “otherwise”, and affected everything from parking, laundry, security measures, and refrigerators. The lease shifted the burden to tenants to maintain common areas in addition to keeping individual unit habitable, and also provided for liquidated damages in the event of a breach, despite the landlord’s actual damages. The judge declared each of these provisions invalid based on Iowa’s Uniform Residential Landlord and Tenant Law. That law provides that landlords are responsible for habitability, and must exercise due care in avoiding injury to tenants. Those duties, according to the court, cannot be limited or shifted by the lease. The court found that a tenant can only be liable for repairs or damage if deliberate, negligent or knowingly permitted. Additionally, a landlord can never claim more than their actual damages against the tenant. This case will continue while the courts determine whether this landlord has further legal liability for violating consumer protection rules. The tenants’ attorney has asserted that the illegal provisions were included on purpose, and that had the affect of intimidating inexperienced renters. American Apartment Owners Association offers discounts on products and services for all your property management needs. Find out more at www.joinaaoa.org.