Before You Sign on the Dotted Line

A case before the state Supreme Court could outlaw many common fees found in lease agreements.

When students drop by Carrie Showalter’s basement office in WVU’s Elizabeth Moore Hall for a lease review, sometimes the document is just a few pages long. Other times, the stack is 60 pages high. There’s not much that surprises Showalter, though. As managing attorney for WVU Student Legal Services, she’s seen lease agreements from just about every landlord in town—she even maintains a library of them, just in case she needs one for reference.

“We try to make sure students understand what they’re agreeing to,” she says. It’s important, because West Virginia has relatively few rules governing landlord-tenant relationships. As a result, many landlords stuff lease agreements with hidden costs and fees—it’s not uncommon to find one requiring tenants to repaint the walls or clean carpets before moving out. Showalter has seen agreements charging convenience fees if tenants request receipts for their rent payments, fees on roommates who pay rent with more than one check, and compounding late fees that quickly surpass the actual rent payment. She’s even seen landlords charge tenants $25 if their parents call the office.

“It’s kind of like the Wild West. People can do what they want, and if you can challenge them, you can challenge them,” Showalter says. Tenants usually do not have much room to argue, though. State law doesn’t have much to say about renters’ rights, and most lawsuits between landlords and renters are settled in magistrate court, which does not establish precedent for other cases. “It’s very gray. There’s no case law that interprets it. We’re making these arguments based on a case from 1979,” Showalter says.

But that could soon change. There’s a case pending before the West Virginia Supreme Court of Appeals that, depending on the justices’ decision, could set strict limits on kinds of fees landlords can charge.

Setting Precedent

In 2015, West Virginia Attorney General Patrick Morrisey’s office filed a lawsuit in Kanawha County Circuit Court against Copper Beech Townhomes in Morgantown for charging nonrefundable “redecoration fees” in addition to the standard, legal damage deposit typically required by landlords. The attorney general alleged those fees violate the state’s Consumer Credit and Protection Act by passing on maintenance costs to tenants.

On March 3 of this year, Kanawha Circuit Judge Jennifer Bailey granted Copper Beech’s request to send the case to the state Supreme Court of Appeals. But Bailey’s order boils the case down to one question: “Does the West Virginia Consumer Credit and Protection Act apply to the relationship between a landlord and tenant under a lease for residential rental property?” Her answer was “yes.”

State Supreme Court justices have a few options: either agree or disagree with Bailey’s answer, or opt not to rule, which would also serve to affirm Bailey’s ruling. Morrisey is confident the Supreme Court, like Bailey, will side with him. “We strongly believe the outcome of these cases will solidify our long-held belief that the state’s Consumer Credit and Protection Act gives our office ample authority to pursue landlord and tenant claims,” he said in a prepared statement. “We look forward to the certainty this case provides, once and for all clarifying any question about our authority to continue protecting consumers and holding landlords accountable if they violate the law.” Showalter says a “yes” from the Supreme Court would be “a win for consumers.” If lease agreements were covered under the state Consumer Credit and Protection Act, landlords could not charge tenants redecorating fees, for example. And late fees would also be limited to $30 per month, doing away with the compounding late fees found in many lease agreements.

Not everyone agrees with Morrisey’s interpretation of the law. “It’s amazing the attorney general is asking a judge to decide if it’s right or wrong,” says David Biafora, co-owner of Metro Property Management, the state’s largest residential landlord with apartments, condominiums, and townhomes around Morgantown.

In January 2017, Morrisey’s office filed a suit against Metro, accusing the company of violating the state’s Consumer Credit and Protection Act through the use of a non-refundable redecorating fee similar to the one charged by Copper Beech. The suit also lists additional fees—including convenience and processing fees, returned check and late fees, an abandonment fee, and an hourly late fee for those who do not move by a set deadline—that also violate the law, in Morrisey’s eyes. If the Supreme Court upholds Bailey’s ruling on the Copper Beech case, it would establish a precedent that, more than likely, would also guide the outcome of the Metro lawsuit.

Metro co-owner Richard Biafora says the fees in the lease agreements are standard practice for landlords around the country. In 2002, Metro sent its standard lease to then- Pennsylvania Attorney General D. Michael Fisher for approval. Fisher, who is now a federal judge with the U.S. Court of Appeals’ Third Circuit, approved the lease “in every way,” Richard says.

But do the fees violate West Virginia law? David Biafora says no, since the state Consumer Credit and Protection Act is written for consumed goods, not real estate. Richard Biafora says if the state wants to restrict fees, it should be done by the Legislature—“not try to do it in court and set precedent.”

Copper Beech’s parent company, the Illinois-based Harrison Street Real Estate Capital, did not respond to emails and calls requesting comment about the litigation.

Your Rights, Right Now

It’s unclear when the Supreme Court will rule on the Copper Beech case. But no matter the outcome, state law already provides some important protections for tenants. Landlords are required to provide a “fit and habitable” dwelling in accordance with health, safety, fire, and housing codes. The law also requires that housing units provide working electricity, plumbing, running water, heating, ventilation, air conditioning, and other such basics. In multiple housing units, landlords are required to provide for removal of ashes, garbage, and other waste. Landlords also are prohibited from entering rental properties without consent of the tenant or reasonable advance notice, except in emergency situations.

A law passed in 2011 requires landlords to return security deposits within 60 days from the time tenants move out or within 45 days of a new tenant moving in, whichever is shorter. If landlords take deductions from those deposits, they are required to itemize each alleged damage.

State law also requires landlords to provide renters with written notification of eviction, unless renters have fallen behind on payments or have otherwise violated their lease agreements. But even if that happens, tenants cannot be forcibly evicted from their residence without court order.

Local authorities also wield some protective power for tenants. For example, multiple housing units within Morgantown city limits are subject to inspection by the city’s code enforcement department. This does not apply to the many housing units located outside city limits, though.

Showalter says the best way for tenants to protect themselves is to read and understand their lease agreements before signing on the dotted lines. Renters sometimes feel pressured to move quickly, but there are more properties around town than people who want to rent them, so tenants are in a good place to negotiate. Sometimes it’s possible to convince landlords to strike certain provisions in lease agreements. Other times, it’s best to just find another landlord. “When you live somewhere, it should be your sanctuary,” Showalter says. “You shouldn’t have to worry about a landlord who’s taking advantage of you.

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