Q: I teach piano lessons in my rented duplex. When I told my landlord about it, he said OK, but insisted that the presence of my students would increase his exposure to lawsuits. So now he’s asking me to pay an additional deposit. Can he do that? –Jane C.

A: To answer your question, we’d need to know first whether your state regulates the amount of the security deposit a landlord may require. Many states set a maximum as a multiple of the monthly rent (twice the rent is common). But some set no limits — Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana, Minnesota, Mississippi, Montana, New York (nonregulated rentals only), Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Utah, Vermont, Washington, Wisconsin and Wyoming.

If you live in a state that doesn’t limit the deposit size, your landlord can raise the deposit in a month-to-month tenancy for any reason, as long as he gives proper notice. Tenants with leases cannot be required to increase the deposit until the lease term is up and another lease, with the new deposit amount, is offered.

If you live in a state that does regulate the maximum size of the deposit, and your current deposit is below that ceiling, your landlord can increase it, up to the maximum amount, by giving proper notice to month-to-month tenants or, for lease-holding tenants, waiting until lease renewal time. But if your deposit is already at the max, it can’t be increased in most situations.

"Most situations?" Yes, at least one state has a creative exception for landlords who are otherwise limited in what they can collect but who think their tenants or properties generate more risk than the security deposit limit would cover.

In South Dakota, the upper limit for a deposit of one month’s rent may be exceeded if "special conditions pose a danger to maintenance of the premises." And in Alabama, the one month’s rent limit may be exceeded by requiring an additional pet deposit, a deposit to cover the cost to undo a tenant’s alterations, or a deposit to cover tenant activities that pose increased liability risks.

If you live in Alabama, your landlord’s theory that your commercial piano lessons pose extra risk for him might support his attempt to require more than the normal limit for deposits. He’d argue that because more people will be on his property, the chances that he may be sued go up.

Suppose, for example, that there’s a loose front step. If the resident plus her students equals six people per day using the steps, the chances that someone will be hurt are much higher than if only the resident alone were using the steps. To say that it’s the landlord’s responsibility to fix the step is beside the point — the reason he has insurance is to protect him in case he is negligent.

He will, indeed, suffer the consequences if there’s a successful claim, in the form of a dropped policy or perhaps higher premiums. Those are the consequences that the higher deposit is intended to cover.

Instead of asking for a relatively small additional deposit, your landlord should consider requiring you to obtain your own insurance policy, which will cover the landlord in the event that disruptions from your business activities result in financial loss to him.

Contact your agent (you can start with your renters’ policy agent, or your car insurance company) and discuss it. Such a policy will have the added benefit of protecting you, too. …CONTINUED

Q: I’m renovating my rental duplex, and doing the work myself, which involved removing some asbestos tile and ceiling matter. The tenants didn’t complain at the time, but now they claim that they’re suffering the ill-effects of exposure to asbestos. They’ve asked for a major rent reduction so that they can deal with their medical issues. What should I do? –Ron L.

A: What you need to do now depends on what you’ve already done when removing the asbestos. Under federal law (and the laws of many states), contractors must follow specified procedures for removing and disposing of asbestos and materials that contain asbestos (unless the job is very small).

Typically, the contractor must give the state Environmental Protection Agency notice of the intended work; must wet down the "friable," or loose, asbestos while working (this reduces the chances that the fibers will become airborne); and must dispose of the material at a landfill licensed to accept waste that contains asbestos. Contractors who don’t follow the rules are liable to lose their licenses, so there’s a real incentive to do things right.

Nothing can stop your tenants from complaining or even filing a lawsuit, even a groundless one. But when a professional does the job, his insurance company steps up to defend against such claims. If the property owner is also named, his carrier also defends him. Unless the owner did something really dumb (like interfering with the job), however, the real argument will be between the contractor and the resident.

Unfortunately, the fact that you did the work yourself, even if you followed safe procedures, means that your insurance company is the only one on the scene to defend you. Insurance companies routinely step in to defend claims resulting from a landlord’s or homeowner’s botched repair job, because those kinds of careless or negligent actions are exactly what insurance is supposed to cover.

Just as an insurance company defends you when your careless driving causes a car accident, it defends you when your mistaken failure to properly secure a stair railing results in a slip-and-fall accident. The game changes, however, when you venture into high-risk activities, where the harm that could be caused by a simple mistake is significant.

The insurance industry isn’t prepared to cover the risk of having an amateur undertake, for example, the removal of a large tree, because that activity is simply too risky and should be done by a licensed professional.

The same analysis extends to your asbestos removal work. Although it may have been easy to rip out the tiles and ceiling, the risk of a claim against you is high, both because this type of work is supposed to be done by professionals and because asbestos exposure can lead to costly medical problems — and costly lawsuits. Your liability insurance carrier may not cover you here.

You’d be well advised to call your carrier and explain the situation. They may at least deal with the tenants on your behalf even if they don’t pay out on a claim. It’s probably not a good idea to strike a deal with the tenants in the form of reduced rent for medical care. At worst, these tenants are shaking you down; if they are sincere, and your work did cause a problem, reduced rent is not going to cover it. You need a professional at this point in the job, at least.

Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of "Every Landlord’s Legal Guide" and "Every Tenant’s Legal Guide." She can be reached at janet@inman.com.


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