Council Must Plug Fixed-Term Loophole
Thursday, March 3, 2016
Around 1 a.m. at the Feb. 16 City Council meeting, Mayor Trish Spencer revealed that fixed-term leases can be used by landlords to avoid paying relocation costs.
Once word spreads about this loophole, fixed-term leases will proliferate, and stable, community-minded tenants will be replaced by transient, nomadic individuals with little or no interest in building a community.
Most rental agreements have an “evergreen” provision for automatic renewal or reversion to month-to-month status. A fixed-term lease has no such provision. Spencer argued that it is not an eviction when a fixed-term lease expires.
The right to tenancy simply terminates and, under the proposed new ordinance, relocation benefits don’t apply because there’s been no eviction. If a landlord wants to avoid the relocation costs, this can be accomplished by simply switching tenants to fixed-term leases at every opportunity.
The mayor argued that the residential lease is an “arms-length” (attorney-speak for equally-balanced) transaction, and a renter should know what he/she’s getting into. But in a majority of cases this is not true because of the fundamentally weak and subordinate position of the typical residential tenant versus a landlord.
Very few tenants have $400 for an attorney to read and advise them on a rental contract, whereas the landlord has had the lease prepared by an attorney with caveats and protections in his/her favor. In a tight market like today’s, tenants will feel pressured to sign anything that keeps them in their homes. In many cases, a lease isn’t even shown to the tenant until their goods are packed in a van.
Unless the tenant herself is an attorney, an arms-length lease negotiation is rarely possible in a residential setting.
Renters in a month-to-month status are highly at risk in the proposed ordinance. Month-to-month leases are covered under sub-paragraph C, Section 6-58.35. “Offer of a One Year Lease,” which requires landlords to offer a one-year lease, yet is silent about whether that lease can be a fixed-term lease.
The renter may have resided there for 10 years, been a deacon in the church, taught school all those years, but if they sign a fixed-term lease those years go out the window in terms of relocation credit.
To plug the fixed-term lease loophole, all that’s needed is to add language under Section 6-58.150 “Relocation Fee” stating that after two years of tenancy, the right to relocation benefits accrues with the duration of tenancy irrespective of the form of rental contract.
This simple provision fosters community stability and prevents abuse, yet allows wiggle room for sabbaticals, house swaps, and other legitimate reasons for fixed-term leases.
If all a landlord has to do to escape relocation costs is switch tenants to a fixed-term lease many will do so. Fixed-term leases will become the norm, leading to a major shift in the type of renters the city attracts, people with little or no desire to build a community. Please, plug the loophole before signing the new rent ordinance.”