Q: I moved into my current apartment a couple of months ago, after moving out of a building that I later learned had a bedbug problem. The owner of the first building knew that a few apartments were infested, but took ineffective steps and didn’t tell anyone (nor did the affected tenants).
Shortly after I moved to my new place, I noticed bedbugs … and told the landlord. He’s treating the problem, but wants me to pay for it, saying I brought them in. It’s possible I did — but I got them from my former building. Isn’t the landlord at my old building the one who’s really responsible for the second infestation? –Matty R.
A: Your tale of woe is, unfortunately, becoming more and more familiar. Tenants who have a bedbug problem may hesitate to tell the landlord, let alone other tenants, for fear they’ll be labeled a Typhoid Mary (and told to pay for the cost of eradication).
They may try to handle the problem themselves; even if they get the landlord involved, the landlord too may try to keep the problem under wraps while attempting to rid the individual units of the problem, so as not to lose tenants.
But bedbugs are resistant to halfway remedies, and are notoriously mobile. Any response short of a comprehensive treatment is likely to fail, with the result that the critters not only continue to plague the originally afflicted tenants, but also have the time to breed, multiply and travel to other apartments.
It’s quite possible, if the timing is right, for a neighboring tenant to unwittingly carry a bug or two with him in furniture, clothing or books when he leaves the building for unrelated reasons. If those traveling bugs have not yet taken a bite, the departing tenant will not know that he’s introducing the bugs to his next living situation.
Your landlord may have pretty good grounds for expecting you to pay for the exterminator. His case will be stronger if he can show that no one else in the building has the bugs, and that the former tenant in your apartment made no complaints, either. But he won’t be able to conclusively prove that you’re the culprit.
It’s possible that the former tenant introduced a bug or two just before he left, and you were the unlucky recipient of what he left behind. If the apartment was cleaned before you moved in, conceivably the cleaning company used vacuum cleaners that were used in other units or buildings, with unsealed bags that can also transmit the bugs.
If you refuse to pay for the extermination, your landlord may take the cost from your deposit, then demand that you replenish it. Standing your ground will result in a "pay or quit" notice, followed by an eviction lawsuit. In court, you’d have to show that the deduction was improper because there isn’t sufficient proof that you are responsible.
Whether a judge would side with you is impossible to know. And, of course, you’d want to point to the former landlord as the real culprit.
But here is where you’d probably run into a procedural difficulty: In a normal lawsuit, you’d countersue the former landlord, arguing that if anyone’s responsible, it’s him. But chances are that the unlawful detainer process in your state is not set up to allow for this type of expansion of the lawsuit.
These cases are designed to be fast and simple, and the judge may not let you bring in another party. In this event, you’ll be in a very bad position.
If you can’t bring the former landlord into the lawsuit, and you lose, you’ll lose the apartment and have an eviction case on your record. Your next step could be to go to small claims court and sue the former landlord for the monetary consequences to you of his failure to effectively deal with the infestation, but that won’t get you back into your apartment, or get the eviction off your record.
If you are determined to go after the former landlord, consider paying for the extermination and then suing the former landlord in small claims court, asking for the cost of the extermination and perhaps some actual damages if you’ve been bitten. That way, your tenancy won’t be at risk.
Q: I’m just starting out as a property manager. My first client is a homeowner who plans to rent out his home while he sails around the world. He gave me a contract published by an online forms provider. What are some of the issues I need to watch out for? –Tim A.
A: The most important step is to take control of the business relationship, by writing the contract yourself (as the lawyers say, he who writes the contract controls the deal). It may be more convenient for you to just go through the homeowner’s agreement and make a few suggestions.
But that would be a mistake, because almost every contract is written to the advantage of one side. Chances are, your homeowner chose a version that favors him.
But because a contract is already on the table, you may not be able to counteroffer this time around with your own. So if you decide to start with the homeowner’s contract, here are a few issues to watch out for.
First, make sure that the owner agrees to carry a comprehensive general liability policy on the property, and to include you as an additional insured. Although you should by all means have your own liability insurance, being added to the homeowner’s policy may save you from having to call on your own policy in the event of a claim.
Along with insurance, make sure the agreement specifies that the owner will "indemnify, defend and hold (you) harmless" in the event your actions result in a monetary loss to you or the owner (such as a settlement or a verdict). This promise covers you in case you make a mistake in the normal exercise of the duties you have undertaken as the manager.
Note that you’ll not only get reimbursed for any monetary damages you suffer, but the owner will have to defend you as well (lawyers and lawsuits are expensive), and not attempt to hold you responsible for any monetary losses suffered by the owner.
Before we move on to the next issue, let’s make sure no one gets caught up in thinking, "Why shouldn’t the manager be responsible for his own mistakes?" That question is a moral one — and indeed, in many situations, we definitely should be responsible for our behavior. But allocating coverage for mistakes, which happens when parties to a contract negotiate over who’s going to carry the insurance, is not about morality.
Instead, it’s about which side has agreed to assume the risk, that is, carry the insurance, and that comes down to bargaining power and practicality. Most of the time, the most efficient path is the way to go.
Here, the landlord has liability insurance already, and it’s designed to cover accidents that happen on site. Adding the manager, who is an agent of the landlord, adds very little risk compared to the risk factors that are already contemplated.
The language of the indemnity clause can get tricky. I’ve seen one that made all of these promises, but ended with "except when the damage is due to the negligence of the manager."
Wait a minute — didn’t the owner also promise to add you to his insurance policy, which will cover you precisely when you negligently do something that results in damage? What one clause gives, the other takes away. See what I mean about one-sided contracts?
Make sure your duties are clearly spelled out, and pay particular attention to the issue of capital improvements. It’s one thing to supervise or perform routine maintenance; that’s what you’re getting paid for, among other tasks. But supervising a capital improvement is a bigger job.
You’ll want to negotiate that separately, and have the right to either be paid separately or decline the job. You and the owner can decide ahead of time how you’ll characterize any large project. Don’t wait until the work has started to raise the subject of extra compensation.
Finally, because your owner is likely to be unreachable while at sea, consider asking for a larger-than-usual discretionary fund, so that you can respond to an urgent repair without having to wait for approval. For example, suppose the roof is torn off by a windstorm, and you need to hire a roofer pronto.
If your owner is out of touch, you could lose valuable time (and the damage could worsen) while you wait for the OK to spend the thousands of dollars needed for repair. If you have preapproval for repairs costing that much, you can take action right away.
For your next client, you’ll want to come armed with your own contract. Having a lawyer draft one that’s fair and legal — but with your interests in mind — is well worth the investment. You may need to vary its terms a bit when dealing with savvy homeowners, but that’s OK (though you should clear major revisions with your lawyer before signing on the dotted line).