Bar News - May 18, 2012
Real Property Law: A Primer on Leases and Evictions
By: Steven Slovenski
The landlord-tenant relationship is one of the most storied in the world of real property. Since the days of kings, knights and serfs, landlords and tenants have been defining and redefining their relationship.
In feudal times and early America, leasing real property was considered a conveyance of a real estate interest known as a "leasehold" interest. Today, leasing real property is considered less of a real estate conveyance than a matter of contract. As the New Hampshire Supreme Court noted in the landmark landlord-tenant case of Kline v. Burns, 111 NH 87 (1971), "the legal rules for leases should not be tied strictly to common law principles that were ‘remnants of an ancient feudal system and anachronisms in our present society."
Based on the perceived abuses and imbalance in power and money between landlord and tenants, legislatures in New Hampshire and elsewhere began to pass laws in the 1970’s and 80’s which were more favorable to tenants. Those laws, enforced by the Courts, created due process procedures and placed limits on landlord evictions and provided tenants with new tools to require landlords to improve housing quality. The days when landlords could change the locks on a cold January night when a tenant did not pay their rent are long gone.
Unless the landlord and tenant enter into an agreement governing the essential terms of the tenancy, all tenancies or occupancies in New Hampshire are "deemed to be at will." RSA 540:1. Since a lease conveys an interest in real property, it must be in writing to be enforceable pursuant to the Statute of Frauds. RSA 506:1. The Statute’s purpose is to promote certainty and to protect from fraud and perjuries in land transactions. Halstead v. Murray, 130 NH 560 (1988).
Although the intent of the parties is the key factor when courts interpret a lease, certain essential features are important to a well-drafted residential or commercial lease, including the names of the parties, description of the leased premises, the lease term (dates), the financial terms (including rent and utilities) and default provisions. Commercial leases should also include more specificity as to use of the premises, square footage, fit up costs, rent particulars and extensions. Regardless of whether the laws favor the landlord or tenant, the law must be obeyed and since modern landlord-tenant law in New Hampshire is primarily statutory, the law is strictly construed. Buatti v. Prentice, 162 NH 228, (2011). In New Hampshire, landlords can terminate a tenant’s written or verbal lease for many reasons, but the most common are breach of a lease term, non-payment of rent, substantial damage to the premises, or good cause. If the landlord decides to evict the tenant, the landlord must follow the state law, RSA 540, which makes a distinction in tenancies between "Restricted property" and "Non-restricted property". RSA 540:1-a defines "Restricted property" as "all real property rented for residential purposes, except those properties listed in paragraph 1." The exceptions cited in Paragraph 1 include single family houses (if owner doesn’t own more than three single-family houses), rental units in an owner-occupied building with fewer than four dwelling units and single family houses acquired through foreclosure.
The owner of non-restricted property pursuant to RSA 540:2 may commence termination of the tenancy by giving the tenant or occupant a written notice to quit. See RSA 540:3, Eviction Notice and RSA 540: 5, Service of Demand and Eviction Notice. However, the owner of restricted property may only commence eviction proceedings for one of the reasons cited in RSA 540:2, II,(a)-(f), including non-payment of rent, substantial damage to the premises, breach of a lease term, adverse tenant behavior or "other good cause", which includes "business reasons".
RSA 540:5 requires the landlord to serve a Demand for Rent on the tenant if the tenant has not paid the rent, prior to or simultaneously serving the Eviction Notice. The tenant can escape eviction by paying the past due rent within the demand period up to three times in a 12 month period. The Eviction Notice (formerly known as a Notice to Quit) shall include the same information as is requested and provided on the forms available from the Circuit/District Court clerks. Once the Eviction Notice is served on the tenant, and the notice periods have lapsed, the landlord can file a landlord—tenant Writ with the Court and a trial will be scheduled. If the tenant defaults or the landlord prevails at trial, the Court will then issue a Writ of Possession which will entitle the landlord, after the 7 day appeal period, to regain possession of the premises. If the tenant prevails, sometimes based on statutory defenses such as Retaliation (RSA 540:13-a) or Violation of Fitness (RSA 540:13-d), then the tenant will be entitled to remain in the premises. A landlord in a residential or commercial eviction, may be awarded up to $1,500 in a "money judgment", but will usually have to file a separate action in court to collect the balance of any money owed.
Landlord–tenant law, evictions and real property leases are relatively complex matters that are fraught with risk. For instance, there are significant penalties if a landlord commits a "prohibited act" as defined in RSA 540-A:3, or does not account or return the security deposit within the statutory time frame. This is one area of law where preventative lawyering is highly recommended.
Other landlord-tenant related topics beyond the scope of this article include the New Hampshire Security Deposit law (RSA 540-A:5-8), the Manufactured Housing "Bill of Rights" (RSA 205-A), and common law covenants, such as the covenant of quiet enjoyment.
Steven Slovenski manages the Portsmouth office of Mesmer & Deleault. He focuses his practice on business, collections, real estate, mediation, litigation and administrative law matters. He is a former chair of the NHBA Business, Banking and Corporation Section and of the Real Property, Trust and Probate Section. He may be reached at 603-766-1910.