Fair Contract Case 2

Logan Rental Contract Dispute

You rent a house in the Logan neighborhood with six of your friends in the Fall of 2020. It’s an old house, that could really use some care, but you are a college student, and it’s really cheap to live there. You sign the lease on behalf of the group in May based on pictures of the rooms only. In addition to rent, you pay a $3000 security deposit. Two of the previous tenants, Alec and Mary, sublet through the summer from people in your group, and a couple of people from your group stay through the summer. The rest of you move in in September.

The lease requires you (and your group) to remove all personal property at the end of your stay, but you were never very formal with the sublets and it is already unclear who's stuff is being left behind. There is a lot of junk in the garage from years of rentals. Some new stuff might have been added by the summer subletters, and, over the course of the year, your group added some stuff as well. Before you move in, you mention to the landlord, Mike, that there seems to be stuff from previous tenants in the house. He tells you not to worry about it, use anything you find, but don't add to add it. There is also some damage that did not show up in the pictures your friends took when you leased the house. The landlord kind of shrugs about that and implies that "that's kind of the deal." He doesn’t seem interested in doing a “walk-through” to document what’s there.

Another lease requirement is that you report all damage to the landlord promptly, whether it is cause by your group or not. Mike is pretty serious about this rule because, he explains, sometimes it is less costly to fix something sooner than to wait until it leads to further damage. This requirement is not written in the lease, but it sounds reasonable, so you agree to it. He warns you against making your own repairs for damage you caused as he has had bad experiences with this.

After about six months of living in the house, you renew the lease with Mike. But then things get complicated because Mike sells the house to another landlord, Darth. You never really meet the new landlord. You suggest a meeting, but Darth doesn’t get around to it. Consequently, there is no walk through or discussion about the stuff left behind by years of students and Mike's laid back (or negligent) approach to things. With the changes of tenants over the summer and signing the lease based on some pictures, you are not really sure exactly which stuff is from your group, though some of it clearly isn’t.

Your experience with the new landlord is not great. He’s just pretty cold and business like when he does show up, and he doesn't show up often. Mike was flexible about late rent, but Darth assesses fees by the day. He just doesn’t seem interested in the problems with the house, so you stop reporting some problems to him. In a couple of instances, he has let you fix something and deduct it from the rent, which Mike never did.

May rolls around, and, when you prepare to move out, the new landlord, Darth, demands that you remove all the junk in the house, even though most of it does not belong to you or your group. He’s not very interested in hearing about Mike’s approach to the junk. The rental agreement does not make any distinction about previous vs current tenants’ junk.

He also claims that you were negligent by either causing or not reporting problems or existing damage and that has led to further damages. Three problems stand out in particular. First, some gutters were clogged with leaves and then ice. This resulted in water coming in and staining an interior wall. He claims that if you had reported the original problem with the gutters, it could have been addressed before the water damage occurred. Second, the railing on the stairs was loose and, during a party, someone leaned on it a bit too hard and it shattered. You never thought it was serious enough to report, but in hindsight, if it had been repaired, it would not have failed completely. Third, some water always leaked behind the kitchen sink counter, but your group used the kitchen a lot and now there is mold under the sink and some damage to the counter and lower cupboard. You had this in mind once when you mentioned to Darth that some things “needed attention,” but he never followed up, so you didn’t either. Now he claims that this should have been mentioned specifically. The cost of the junk removal, the banister repair, and the kitchen repair amount to more than your security deposit, which Darth now plans to keep.

You are about to meet the landlord to discuss this issue. What position will you take? What is a fair outcome for this situation? How do you assess the obligations and duties of the various parties? Be sure to use some of the concepts we have developed for discussing fairness and justice in contracts: fairness, autonomy, reciprocity, benefits, reliance, implicit and explicit agreements and understandings.