Tag Archives: tenants

Real Estate

What is Privity?

Legal speak can sound much like gobbledygook, and many of us simply ignore the terms that are bandied about. What do they even mean? Privity is one such legal term, but if you’re involved in a landlord/tenant relationship, it’s time to take a closer look.

Privity

Privity refers to a direct, close, or successive relationship, which incorporates mutual interests and rights, such as a landlord/tenant relationship. The law that governs landlord/tenant relationships allows both landlords and tenants privity of contract and privity of estate.

Privity of Contract

Privity of contract allows either party in a contract to enforce the promises made by the other party. When you rent from a landlord, for example, you are both in privity of the promises set forth by the contract (or lease). If you’re owed the duty of repairs on the property you rent, you have the right to enforce this repair promise. If your landlord, however, hires a contractor to make the repairs and that contractor fails to comply, you have no privity of contract with the contractor and, thus, have no legal right to seek recovery from the contractor. Both the landlord and the contractor, however, have privity of contract with each other.

Privity of Estate

Privity of estate allows both you and your landlord to enforce those promises that are connected to the substance and the concerns of the premises. These promises must relate directly to the use, occupation, or enjoyment of the premises.

For example, your landlord can sell or pass the property you rent to a successor, and that successor will then have privity of estate with you and will be able to continue to enforce the provisions outlined in your contractual lease – including your obligation to make specified repairs, to pay rent, to purchase insurance, and to pay taxes. As a tenant, on the other hand, you will have the right to enforce the contractual promises of the successor. These include your right to enjoyment of the property, to tenant’s option rights, to rights of exclusivity, and to rights of extension.

Assignment of Lease

If you, as the tenant, go on to assign your lease to someone else, privity can become an important issue. If the assignee doesn’t assume the lease and if your landlord is unaware of this assignment, the landlord and the assignee will have no privity with each other and neither will be able to enforce the contractual promises of the other. Typically, lease contracts include default terms for such occurrences, but that isn’t always the case.

Sublease

If you were to sublease the property you rent – and thus reassign less than the premise’s entirety to an assignee – your landlord and the assignee would have no privity with each other. You and your assignee, however, would have mutual privity, and it would remain your responsibility to enforce any lease provisions against your landlord (and vice versa).

For More Information, Call 201-498-9768 Today

The legal obligations that govern the landlord/tenant relationship are complicated – seek the experienced professional counsel of a landlord tenant lawyer. At John L. Schettino law, we have the skill, knowledge, and commitment to help you efficiently and favorably resolve your landlord/tenant disputes. Please contact or call me at 201-498-9768 for a free consultation today.

Real Estate

FIFO Methods and Landlords

For tenants and landlords who are constantly struggling with late payments of rent, one of the most common issues that can be quite the hurdle is the ‘first in, first out’ method, or FIFO, used by many areas of American business. However, this was recently halted by the State Supreme Court’s ruling that eviction complaints need to be formatted in a specific way which details the unpaid rent payments in detail, and helps to eliminate some of the confusion associated with the FIFO method of accounting.

This is how it works: If a tenant misses payments for two months, but makes them up later, the missing payments would then be counted as the current months for which he is paying, as the money will be credited to the earlier months rather than the most recent. If it comes down to eviction, depending on how the paperwork was recorded under FIFO, it would look like the tenant had missed the past two month’s payments, even though he had actually paid those, but they counted as late payments instead for earlier in the year. So while the tenant’s payments hadn’t been delayed most recently, that is what it would look like on paper, and cause quite a few difficulties in court with discrepancies of their receipts in hand.

These cases got particularly complicated when the tenant would argue that they had no idea of knowing which months’ rent was owed, and could not provide the receipts in their defense in trial. The complaints should be drafted in a way to show which payments were missed, and provide the tenant again with ample opportunity to make up the missed payments in a reasonable period of time. As in all cases, it is important for both tenants and landlords to provide up to date and accurate records of payments and missed payments, to provide as solid evidence in the case. It is also important to make copies of these ledgers in the eviction complaint for the landlords.

Landlord and tenant relationships are often tenuous at best, and they can quickly get nasty when questions of missed rent come up. If landlord’s accounting practices are difficult to understand or outdated, such as in cases of the first in, first out method, this can only exacerbate the problems. Marking fees clearly as well as the dates for which payments were missed or made, even if late, is crucial in navigating these type of rent payment disputes across the board.

If you are a tenant struggling to pay your rent, or a landlord fighting with a tenant over late bills, it is important to have an experienced attorney to counsel you throughout the process. For more information about the services I provide in this arena, call me, John Schettino, today for a free consultation at 201-498-9768.