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Archive for Friday, June 16, 2006

Automatic lease renewal can be costly

Landlords cite convenience, but tenants can overlook fine print

June 16, 2006

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Stephanie Krehbiel is moving into her first home, but her recent rental experience still haunts her.

"The mistakes we made, anybody could make," the Lawrence resident said.

Krehbiel, 30, is trying to sort out a $1,600 mess related to a controversial clause included in many rental contracts. The clause automatically renews leases if tenants don't notify landlords of their wishes to move out once the initial lease period lapses.

Unaware of the clause written into her lease, Krehbiel missed the June 2 deadline to notify her landlord. When she called June 6, her pleas to get out of the automatic renewal fell on unsympathetic ears, she said.

"They have really unscrupulous behavior," Krehbiel said. "They're just trying to get what money they can out of people."

Automatic renewals are either a blessing or a curse, depending on what side of the fence people are on. Some say they're simply an easy way to get things done.

"It's a convenience for the landlord and the tenant both," said Bob Ebey, vice president of Landlords of Lawrence Inc. and legislative liaison for Associated Landlords of Kansas. "If there are no changes, it just saves a lot of paperwork for the landlord and the students."

Stephanie Krehbiel is stuck with an automatic renewal of an apartment lease because she failed to read the fine print in her lease and posted notices on the door of her Lawrence apartment. The mistake could cost her $1,600.

Stephanie Krehbiel is stuck with an automatic renewal of an apartment lease because she failed to read the fine print in her lease and posted notices on the door of her Lawrence apartment. The mistake could cost her $1,600.

But others say they're a way to hook unwitting tenants.

"It may be legal here, but I just find it terribly exploitative," Krehbiel said.

A bit slippery?

Kansas University's student government pressed for changes to the Landlord and Tenant Act during the last legislative session. Their proposal included an attempt to address automatic renewals.

The law currently makes no direct mention of automatic renewals. The students wanted to amend the law to state that leases could not be automatically renewed more than 90 days before the end of the existing lease.

They also wanted landlords to give tenants 30 to 60 days notice of the automatic renewal prior to its taking effect. The bill passed the Senate but died in a House committee.

Sen. John Vratil, R-Leawood, said he thought the proposal was a good compromise between landlords and tenants. As for automatic renewals, Vratil said they're a trap for many people.

"From the landlords' perspective, it's a big advantage," he said. "I think it's a little bit slippery."

Rep. Donald Dahl, R-Hillsboro and chairman of the House Commerce and Labor Committee, which killed the bill, said he thought it was an ill-conceived idea that didn't appear to have much backing beyond the students who pressed for it.

He said at some point, college students must grow up.

"How long are you going to coddle these individuals?" he said. "That's a good lesson in life. Read what you're signing."

A new proposal from students may arise next session, said Josh Bender, KU student government's former legislative director who pressed for the changes.

Ian Staples, the current student legislative director, said the automatic renewals practice needs some standardization.

"Without restriction, this could be an opportunity for abuse in a contract," Staples said. "All people need that standard in their contracts, and it needs to be part of state law."

Unenforceable in Urbana

At least one college town has addressed automatic renewals. Urbana, Ill., home to the University of Illinois at Urbana-Champaign, nixed the practice.

Landlords may put the clause on leases, but they are unenforceable in the city.

Robert Baker of the Housing and Credit Counseling, Inc., gives tips for renters

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"It is an unreasonable burden on the consumer that has too serious a consequence," said Esther Patt, director of The Tenant Union at Urbana-Champaign. "The purpose of the automatic renewal clause is for the landlord to have unfair advantage over the tenant."

But Tim Stultz, who has 250 rental units in Lawrence, said the clause allows renters to secure their spots for another year at the same rate.

"They know they have a place to live," he said. "It takes away the stress of having to look for another place."

He said if you flipped the scenario and dropped renters who didn't say they wanted to stay by a certain deadline, landlords would be made to look bad, like they're throwing people out on the street.

Three days to renew!

Krehbiel and her husband bought a townhouse in April. At the time, they considered breaking their lease, but discovered it would be too costly. So they stayed.

Krehbiel's landlords put multiple signs on her door about renewing her lease. But Krehbiel said she disregarded the notes because they all seemed to be notices about renewing - something she certainly didn't want to do.

Krehbiel kept one of the notes. At the top, it reads: "We don't want to lose you! There are only 3 business days left to renew your lease for next year and we want you to stay!!"

Marked by an asterisk and in smaller print at the bottom of the flier, it reads: "Per your lease agreement, if you are vacating, you must give notice in writing by June 1st."

To break the lease now for an apartment she doesn't live in will cost about $1,600.

"I should have read the small print," she said.

Comments

lunacydetector 8 years, 6 months ago

This comment was removed by the site staff for violation of the usage agreement.

Sigmund 8 years, 6 months ago

The answer, of course, is for the city to raise taxes on landlords! Nevermind the fact that such tax increase will be passed on to renters, the city needs a new library! Many renters are students who are not permanent residents, yet they get full access to city services, including the library. Long term projects like streets, sewers, and libraries take much longer than the 4-6 years these transient residents stay in Lawrence. Further, students have less income which means they generally spend less and thereby pay less sales taxes than those who have full time jobs.

It's time for renters and students to pay their fair share for city services.

justsomewench 8 years, 6 months ago

exploitative? it may just be early for me, but...is that a word?!

thomgreen 8 years, 6 months ago

How many times are we guilty of this? Not reading contracts all the way through and not understanding what we are signing. It's a sad situation, one where it seems like the landlords here in town could step forward and voluntarily send out a notice 30 days before the automatic renewal date stating that it was about to happen. That would at least be a good faith compromise. But, in the end, it's a binding agreement that people need to read.

lunacydetector 8 years, 6 months ago

wow, after 1385 posts i have only had two removed (with one being above). so much for quoting forrest gump.

i completely agree with sigmund above.

make the students pay their fair share of city services and use of our infrastructure. why should we subsidize the students? make them pay a user fee when they move here.

compmd 8 years, 6 months ago

I'm a little rusty on my contracts; hey Jamesaust, can these automatic renewals be considered adhesion contracts?

southdakotan 8 years, 6 months ago

Why is this the headline story?

A 30 yr old doesn't read notices attached to her door and she gets front billet on the ljworld.

just_another_bozo_on_this_bus 8 years, 6 months ago

Sigmund--

That's a huge pile of unsupported (and unsupportable) BS.

craigers 8 years, 6 months ago

Make sure you read your contracts. However, I would think that if the tenants found a home that they would notify their land lord about it and tell them their plans to move. Were they just going to move out and not tell them?

Adrienne Sanders 8 years, 6 months ago

What a bunch of baloney. There are many landlords in town who do many unscrupulous things, but this is not one of them- this is a couple who failed to live up to their responsibilities. Who cares.

Jay_Z 8 years, 6 months ago

I agree with craigers....were they going to move out without telling the landlord?! Have some decency, give your landlord appropriate notice that you are moving out. Read the damn contract. I don't feel too sorry for these people.

just_another_bozo_on_this_bus 8 years, 6 months ago

The lease probably expired at the end of July, so if customary notice was given, it would not have been required before the end of June.

If landlords want automatic renewal clauses, requiring them to give tenants notice shortly before the clause is to be invoked is a very minimal but sensible requirement. The whole "gotcha" mentality has no place in fair business dealings.

common_cents 8 years, 6 months ago

Oh my.....

I've been signing lease contracts since I was 19 years old when I was in college.

Guess what? I used to read the entire thing, line by line and make sure I understood everything I was signing. Why? Because that's MY signature on that line which means that contract was MY responsibility.

Give me a break... are they telling me that we have to hold the hands of people until they are in their 40's?

conservative 8 years, 6 months ago

Bozo, you're not going to believe it but you and I are in complete agreement on this issue.

KsGirl 8 years, 6 months ago

I worked for an apartment complex in St Louis last year, and although I realize that the law regarding this issue may be different in Missouri, most contracts require the lessee to give at least a 30 day notice to vacate. Management is not required to send out "reminders", however we sent them as a courtesy to our renters. It never failed to have at least one renter every month show up in the office ticked off that their lease automatically renewed and they "didn't know". This was after at least 1 mailed notice, several phone calls, and at least 2 notices posted to their front door. The final piece of notification was the automatic renewal letter. Lucky for the renters, the manager at this particular complex was a very kind and generous man, and if they had a good reason, he would usually let them out of the automatic renewal. Point is (took me a while to get here) that it is the renters resposibility to know when their lease expires and what the exact terms and conditions of that lease are.

adky 8 years, 6 months ago

Today's theme for the LJW - try to generate sympathy for society's losers! These people were dumb. End of story.

craigers 8 years, 6 months ago

bozo, I thought the landlord did that with the notices on her door that she threw away and didn't read.

just_another_bozo_on_this_bus 8 years, 6 months ago

The tenants here are certainly guilty of not carefully reading and understanding the provisions in the lease, and deserve minimal sympathy. But the notice from the landlord was not clearly worded, and landlords should be required to give very clear written notice before invoking an automatic renewal clause because there is no reason for misunderstandings such as this.

Landlords usually do dozens of leases like this, and can afford the legal expertise to make sure leases are written in their favor. Tenants have no such "economy of scale."

Jamesaust 8 years, 6 months ago

Hmmm....seems like a pretty inexpensive way to learn a lesson that will pay back over a lifetime. "Fine Print" is not there for decoration.

Jamesaust 8 years, 6 months ago

compnd -

Adhesion? I don't know.

Adhesion is just another way of saying "boilerplate" or "form" contract, where all the terms are standard and are presented on a take-it-or-leave-it basis because the contract offering party has all the bargaining power and the buying party has none. I suppose an example would be "bargaining" for a sale of a gallon of water to a thirsty, dying person in the desert for say $1000.

I don't know but I suspect that these provisions can be bargained away or modified in general (even if a few individual landlords aren't willing to give them up).

I rented a house years ago in Lawrence. I bargained away lots of things. More importantly, in a lease that went on and on about the tenant's duties there was not one word about the landlord's duties. I fixed that before adding my John Hancock.

Maybe the KU student council should worry less about lobbying the Legislature about this (they correctly -imho - have lobbied on similar but different provisions of the Landlord-Tenant Act) and focus on working with the KU administration to get basic rental advice to students ahead of time.

hipper_than_hip 8 years, 6 months ago

Why wasn't the landlord interviewed for the story? Does anyone know who the landlord is?

Lisia 8 years, 6 months ago

I thought the "tenants can overlook fine print" part of the title was particularly amusing.

I work for a small management company (we have nowhere near 250 houses/apartments!) and tenants don't just overlook fine print. They also overlook things typed in all caps and bold print as well- such as late fees if rent is not postmarked by the 3rd of the month, and the $20 bounced check fee if their rent check doesn't clear.

We don't do an automatic renewal- I guess that's a benefit of being a small business- but we do contact our tenants by phone, then by email, and finally by mail, asking if they do want to renew for the following year. Some are still surprised when they get the notice at the end of June that they will need to move out at the end of July because they did not renew for the following year.

I've been renting since I was 18 years old, first in Rolla, MO and then out here. In all that time, it has never occurred to me to blame someone else for me not reading the fine print, either in my lease or in communications from my landlords.

craigers 8 years, 6 months ago

I see what you are saying bozo and I agree completely.

Godot 8 years, 6 months ago

Bozo wrote: "The lease probably expired at the end of July, so if customary notice was given, it would not have been required before the end of June"

The point of the article is that renters should not make the assumption that there is a "customary notice" provision. One man's customary notice is another man's automatic renewal.

Linda Endicott 8 years, 6 months ago

Ah, for the good old days of renting a house or apartment...

If the rent was so much a month, you contacted the landlord, if he agreed to you, you paid and moved in. No first month's rent, no last month's rent, no deposit. If you continued to pay your rent every month, you got to continue living there. If you didn't, the landlord would tell you to get out. Usually gave you 30 days to do so.

I really don't understand the concept of locking someone into renting for an entire year at a time. A lot of unexpected, unforseen things can happen to people in a year's time. You may think you'll always have that good-paying job. But in a year you might not. You may think you'll always be healthy and have enough money to pay the rent. But in a year you might get sick, and have huge medical bills.

I have an open lease with my landlord. While we both signed it, it's pretty clear about what he's responsible for and what I'm responsible for. But I'm not locked into any time frame. I can leave anytime I choose to, as long as I give him ample notice, even if it's in the middle of a year. If I had to move unexpectedly, it wouldn't be a problem for him.

Why can't more landlords be like that?

Seems to me that if you have a bad tenant, that year at a time lease isn't in the landlord's best interests. But continuing to charge people rent for a place when they're no longer living there, even if you've already rented it out again, seems wrong.

It may be legal, but I still think it's wrong.

Godot 8 years, 6 months ago

crazyks, I agree with you. But, once again, there are now so many rules and laws affecting the landlord/tenant relationship that the old handshake doesn't work so well anymore. Some of the posts on this and other threads about renting will give you some ideas why landlords try to protect themselves with explicit language in their leases.

A positive aspect of a lease for the tenant is that it locks in the rent. The landlord can't surprise you in the middle of the year by saying, "I need another $50 bucks a month, or yer outta here."

dlhj 8 years, 6 months ago

crazyks-

I think it is illegal for the landlord to continue to charge the tenant rent if they have subsequently re-rented the place. I could be wrong but it seems like I encountered this back when I was renting. My impression was they could continue to charge the initial tenant, even if they had moved out, but if they re-rented the unit they couldn't collect double rent. who knows though, so many wierd laws. glad i am now a homeowner.

Kornphlake 8 years, 6 months ago

Stuff like this is the reason that judges in this town usually side with the tenants. Thank God I found a landlord who cares about his tenants and not his bottom line!

compmd 8 years, 6 months ago

While the individual landlords in Lawrence may be amenable to some negotiation, most of the large property management firms are not from what I have encountered lately. The apartment complex I live in right now is strict about compliance with lease terms. One of my cars was in a fenderbender, and they towed it away, deeming it "unsightly" and citing a clause in the lease that cars could not be stored in a parking space. Isn't that the definition of a parking space? I fought it as much as I could until they played the "breach of lease" card without bluffing. I didn't feel like being evicted. The terms were dictated to me, as they are to many tenants renting in this town. If a tenant doesn't like the terms and does not comply with them, not only will they be forced to leave, but they will likely pay a penalty (remainder of lease). From what I have seen, "rental agreements" are contracts where the tenant agrees to everything the landlord states as required in the document. I haven't seen any play in those requirements in Lawrence with the management firms.

I'm not worried about mom and pop landlords in this town. Its the management companies and their armies of lawyers that worry me. In a dispute, even if a tenant is right, they could be tied up in court for months.

KsTwister 8 years, 6 months ago

I always gave my renters a copy of the Kansas Landlord and Tenant Act, told them as long as they gave me 30 days notice IN Writing they could go anytime. Automatically renewed and sent a 60 day reminder. You know what=you can't educate stupid.Had some good renters and didn't raise the rent for 5 years,then because of prop taxes and fees I then asked for a $15 dollar increase per month-they were infuriated and moved. The rent then increased $225 dollars a month for the next 3 years and was rented within 30 days. Returned their deposit and decided to sell it 2 years ago and invest in another city,there is intelligence life out there.

james bush 8 years, 6 months ago

90 days and no more.............sounds reasonable,even 60 would be enough. Landlords can be greedy just like everyone else. But students are probably more likely to try and screw the landlord.

egypt 8 years, 6 months ago

On top of you should always read the fine print normally your landlord will tell you about the renewal date, I think at the age of 30 you should know to always read the fine print.

Iwanttosaythis 8 years, 6 months ago

Lady who is dumb or dumber you or your husband hell I was 18 in my first apt. and I knew this grow the F up

misspeachy 8 years, 6 months ago

People should always read their contracts. Would you sign for a mortgage without reading the contract or buy a car without reading your contract? Always read and ask questions if you don't understand the rental agreement. I agree that KU Legal Services would be serving their students better by offering a seminar on rental contracts and how to understand them. I work for a property management company in town and we do not have the automatic renewal in our leases. We will call and post notices to see if you want to renew. Read your lease carefully, when looking for a new place live ask if they have the automatic renewal in their lease, if so don't lease there. There are plenty of places in Lawrence to rent that do not have that in their contracts.

Nikki May 8 years, 6 months ago

Leases are there to protect BOTH parties. Even when I was younger, I read everything was handed to me to sign. People laugh at me, guess what, never had trouble with this crap. Many of the leases I've seen only renew month to month after the lease expires. Anyway, I don't feel sorry for these people. I'm just over 30 and consider myself liberal, but dang, I know how to read.

When we were looking to buy our house, we looked at the lease we had and decided what type of closing date we were interested in. We went with it, gave notice, moved out. (we did have both places for a month, but that's ok, we KNEW about it).

Paul Soyland 8 years, 6 months ago

Those auto renewals are crap.....screw em dont pay...Let the pace sit empty and the land lord doesnt get squat......

misspeachy 8 years, 6 months ago

dlhj

You are correct, you cannot be charged for rent IF the landlord has re-rented the place for the same lease term and is collecting rent on the place. If your lease was for say August - July and you moved out in June you would be liable for any rents due until the unit was re-leased. If they leased to someone else in July then you would not be liable for any other rents other than the June rent.

I have not heard of anyone doing that and believe the landlords here know the kansas tenant landlord act well enough to avoid something like that.

This couple could have tried to sublet their current place so they leave if that was an option in their rental agreement. Although subleasing does require work on the actual tenants part that might have been a problem for them since they didn't read their contract to begin with I doubt they could have successfully sublet their place.

misspeachy 8 years, 6 months ago

I should clarify that you also cannot be charged for rent past the lease term of your contract. Above I mention that you would be liable for any rents due until the units was re-leased but of course in the example above the most they could get you for would be two months rent since the contract would have expired the end of July. But if re-rented for July they could only hit you with the June rental payment.

matahari 8 years, 6 months ago

And where did she go to school again?? ops! KU!? heh, and the sad part is she'll probably stay here instead of trying to sublease, or hire an attourney, in which case..well, there is no case...ah well, maybe they'll offer a course in reading contracts next year. Someone, please advise her, to keep paying the rent, no matter what....she will definately lose in court if she withholds moneys owed...

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