In This Issue

• Tenant Issues
  • Recovery for Tenant Damage
  • Liability for Defective Premises
• Security Deposit Increases
• Section 8 Lead Abatement
• Dismissal of Employee
• Low Bidders – Construction Contracts

Tenant Issues

Recovery for Tenant Damage

Lawrence F.
Feheley

In a case not involving a PHA, a landlord sued a tenant for $2,000 in damage allegedly caused to the unit after eviction proceedings had been started. The tenant and her children had moved to a community shelter, leaving their furniture and belongings behind in the unit. However, the tenant did not notify the landlord of her departure. While they were absent, the unit was broken into and substantial damage was done to the unit. The tenant filed a police report. The landlord claimed (but could not prove) that the tenant, or her friends, trashed the apartment because of the eviction.

The lease provided that the tenant would be charged for all damage done to the unit "during the tenancy." In addition, Ohio's Landlord-Tenant Act, at §5321.05(A)(6) of the Revised Code, provides that a tenant shall forbid any person who is on the premises "with his permission" from damaging the rental unit.

The court ruled that the Landlord-Tenant Act establishes tenant liability for the negligent acts of "permitted guests," but not the criminal acts of unpermitted guests. Therefore, a tenant is not liable for the criminal acts of trespassers. As to the lease agreement terms, the court ruled that the tenant had properly vacated the unit when the formal eviction proceedings had begun, and therefore she had no further obligations under the lease. Even so, a lease provision that attempts to impose liability contrary to the Landlord-Tenant law is unenforceable. Jenkins v. Boyce (Akron Mun. Ct., 1998), 94 Ohio Misc. 2d 98.

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Liability for Defective Premises

In another private landlord case, an Ohio appeals court held that a landlord is strictly liable for damages caused by the collapse of a defective deck, even though the landlord had no prior notice of the defect. Sikora v. Wenzel, 1999 WL 335208 (Greene Co. 1999).

The basis of the court's ruling was the statutory duty required by Section 5321.04(A)(1) of the Landlord-Tenant law, which requires landlords to comply with the requirements of housing, safety and health codes that materially affect health and safety. For these violations, the court held, the landlord is strictly liable, and that the landlord does not have to have notice or knowledge of the defect. The court declined to follow rulings of other Ohio appellate courts which have rejected strict liability and required notice even for violations of §5321.04(A)(1). The court stated:

"Regardless of the context, the landlord has a statutory duty to comply with laws designed for the physical safety of others. Moreover, the landlord cannot escape liability by claiming that the injury was caused by the negligent acts of a contractor or by the negligence of the code-enforcing agency."

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Security Deposit Increases

A Washington court has ruled that a PHA cannot increase security deposits by way of unilateral revisions to an existing lease agreement. Parkside Tenant Council v. Housing Authority of the City of Pasco, 1999 WL 155940 (Wash. App. 1999).

The PHA had established tenant security deposits at $150. It then gave a notice to all tenants that the amount of the deposit was to be raised to $250. The PHA stated that current tenants would be required to sign new leases reflecting the new amount of the deposit. Not surprisingly, the tenant council challenged the increase. The argument was that the current leases could not be terminated without "cause," and that a change in a security deposit was not cause. The PHA argued that the HUD Regulations and its lease authorized the increase in the security deposit.

The court first ruled that the specific terms of this lease did not reserve the right to change the amount of the deposit. Moreover, the court held that 24 CFR §966.3 prohibits lease changes unless both parties agree, or if the law or the regulations specifically permit unilateral amendments. None of these conditions existed in this case.

[Source: BNA Housing and Development Reporter, 4/19/99, p. 811]

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Section 8 Lead Abatement

Does a PHA have an obligation to reimburse Section 8 owners who are ordered to abate lead-based paint hazards? No, at least not according to a Connecticut court. La Clair v. East Hartford Housing Authority, 1999 WL 619596 (Conn. Super. 1999).

In this case, the local Health Department notified the PHA of a lead problem in the Section 8 unit after a child was tested with an elevated blood lead level. The PHA then ordered the Section 8 landlord to correct the problem. The landlord then sued the PHA for the $72,000 cost of abatement. The landlord's claims were that the PHA breached the HAP contract and that it was negligent.

The negligence claim was based on the fact that the PHA had inspected and approved the unit. The court found that the PHA did not warrant that the unit was free of lead, nor was the landlord within the group of persons that the lead-based abatement statute was intended to protect. As to the contract claim, the court ruled that the HAP contract did not obligate the PHA to inspect the property for the benefit of the owner.

[Source: BNA Housing and Development Reporter, 9/20/99, p. 314]

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Dismissal of Employee

An employee of the Cuyahoga Metropolitan Housing Authority sued the Authority, alleging that the Authority intentionally inflicted emotional distress. Specifically, the employee claimed that his supervisor was guilty of abusive conduct by verbal abuse laced with profanity, throwing objects at him, and swinging a baseball bat in his direction.

While this is not a particularly noteworthy case for its claims, the ruling of the Cuyahoga County Court of Appeals is significant. The court held that an intentional tort does not arise out of the employment relationship, and therefore the sovereign immunity that is set forth in Revised Code Chapter 2744 applies to immunize the PHA, as a political subdivision, from intentional tort claims. Nielsen-Mayer v. Cuyahoga Metropolitan Housing Authority, 1999 Ohio App. Lexis 4096 (Cuy. Co. 1999).

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Low Bidders - Construction Contracts

Is a PHA obligated to award a construction contract to the low bidder? Stated differently, does the low bidder have a "property interest" in the contract to be awarded? The Sixth Circuit Court of Appeals (which covers Ohio) has emphatically ruled that a low bidder has no such rights or interest. Leo J. Brielmaier Co. v. Newport Housing Authority, 1999 WL 236193 (6th Cir. 1999).

After the PHA entertained bids to build a new community center, the plaintiff was the low bidder. When the PHA checked the contractor's work history, the responses were not glowing. Questions were raised about the contractor's quality and timeliness. As a result, the PHA rejected the bidder as not being "responsible." The bidder then submitted other references which highly praised its work, but the PHA did not change its determination. The bidder then sued.

Fortunately for the PHA, the invitation for bids specifically stated that the PHA was not required to award the contract to a non-responsible bidder, even if they were the low bidder. The court ruled that the contractor would have a property interest in the contract only if the contract had actually been awarded, or if the PHA "abused its discretion" in refusing to award the contract. In this case, neither ground existed. The court ruled that the PHA had a right to reject the bidder based on the information it had obtained about the contractor's prior work.

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