LEASE AND LEGAL SEMINAR 2000
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1 LEASE AND LEGAL SEMINAR 2000 I. Evictions in front of a District Justice A. To begin the eviction process, notice must be given in conformance with The Landlord Tenant Act (68 P.S.-250, et seq.) or waived pursuant to a written lease agreement in conformance with law. 1. Notice to Quit (68 P.S ) a. Reason for termination (1.) End of the term of the lease (2.) Forfeiture of the lease for breach of its conditions (3.) Failure of the tenant, upon demand, to satisfy any rent reserved and due (4.) Committing acts related to illegal drugs 68 P.S b. Form of notice-notice must be in writing but no specific form required by lease or statue c. Length of notice required (1.) If waived in valid, written lease, none;1 (2.) For breach of the conditions of the lease and if lease one year or less or indeterminate time must give fifteen (15) days notice (unless lease provides otherwise) (3.) For breach of the conditions of the lease and if lease more than one year, must given thirty (30) days notice (unless lease provides otherwise) (4.) For failure to pay rent or acts related to illegal drugs must give only Ten(10) days notice (unless lease provides otherwise) (5.) For Mobile Home Park Rights Act 68 P.S , et.seq. Eviction (a ) For holdover after expired term or breach of lease conditions, must give thirty (30) days notice of lease for less than one year or for indeterminate time (unless the lease provides otherwise) (b) For holdover after expired term or breach of lease conditions and if Lease for one year or more, must give three (3) months notice (unless lease provides otherwise) (c) For a failure to pay rent from April 1 st to August 1 st, must give fifteen (15) days notice (unless lease provides otherwise) (d) For a failure to pay rent from September 1 st to March 31 st, must give Thirty (30) days notice (unless lease provides otherwise) (e) For acts committed relates to illegal drugs, must give ten (10) Days notice (unless lease provides otherwise)
2 (6) Also note: previously couldn t waive notice requirements of Mobile Home Park rights Act, (68 P.S ); can lease now provide a lesser time or waiver?, 68 P.S (c) and (e) d. Service of Notice to Quit (no change in existing law) (1) Personal service, or (2) Leaving it at the principal building upon the premises, or (3) Posting it conspicuously on the leased premises NOTE: Service by mail has been successfully challenged. Pakyz v. Weuser, 15 Adams L.J. 196 (1974); Patricia Brothers, Inc. v. McKeefrey, 38 D & C.2d 149 (C.P.Del, 1965) 2. Summons and Service by District Justice a. District Justice complaint initiated after expiration of applicable notice to quit period (1) Venue the action may only be brought in the magisterial district where the real property is located Pa. R.C.P.D.J. 502 (2) Form of complaint is filed on a standard form prescribed by the State Court Administrator and available at the District Justice Office Pa. R.C.P.D.J. 503 (3) Service The complaint will be served by the District Justice (by any writ server, constable or sheriff of the county) at least five (5) days before the hearing Pa. R.C.P.D.J (a) Served personally on tenant, or (b) By mail, or (c) By posting conspicuously on the leased premises b. Hearing scheduling Pa. R.C.P.D.J. 504 as amended 3/28/96 (1) Not less than seven (7) or more than fifteen (15) days from date complaint filed (2) Claim by defendant the tenant may file a cross-complaint against the landlord for any claim which arises out of occupancy of the premises and which is within the jurisdiction of the District Justice. There is no fee for filing a cross-complaint since it is in the nature of a responsive pleading. The cross-complaint may be filed at any time before the time set for the hearing and may require the rescheduling of the original hearing, Pa. R.C.P.D.J. 508 ) plaintiff must be served at least five (5) days before the hearing) (a) can result in short postponement of hearing (b) (c) can raise Pugh v. Holmes, supra. Defenses Pa. R.C.P.D.J. 504 as amended 3/28/96 requires notice of right to file claims against the plaintiff in the original complaint
3 3. Judgement Pa. R.C.P.D. J. 514 as amended 3/28/96 a. Nature of the judgement entered by separate entries (1) The amount of rent, if any, which remains due (2) The amount of damages, if any for unjust detention (3) The physical damages, if any to the leasehold premises (4) The costs of the proceedings (5) Identifying the sum of money constituting the monthly rental for the leasehold premises b. Entry of judgement (1) At the conclusion of hearing or within three (3) days thereafter (2) Upon form prescribed by State Court Administrator (3) Given or mailed to all parties or attorney of record instead of party (4) Notice of appeal rights 4. Request for Order of Possession Pa R.C.P.D.J. 515 as amended 3/28/96. a. Non-residential (1) On fifteenth (15 th ) day following date of entry of judgment can file with District Justice al request for Order of Possession on prescribed form b. Residential (1) On tenth (10 th ) day following date of entry of judgment can file with District Justice a request for Order of Possession on Prescribed form c. Service Pa.R.C.P.D.J. 517 as amended 3/28/96 (1) By Plaintiff mailing a copy to defendant by first class mail, and (2) Deliver copy for service to sheriff or constable (a) must be served by officer within forty-eight (48) hours (b) by handing a copy to defendant or adult person in charge for the time Being of the premises subject to Possession Order (c) or by posting it conspicuously on those premises (3) Must contain notice to vacate (a) non-residential vacate in fifteen (15) days or use of necessary force (b) residential vacate in ten (10) days or use of necessary force d. Forcible entry and ejectment Pa. R.C.P.D.J. 519 as amended 3/28/96 (1) Non-residential on or after sixteenth (16 Th ) day following service of Order of Possession (2) Residential on or after eleventh (11 th ) day following service of Order of Possession (3) Shall use such force as may be necessary (a) Breaking in of any door or other (b) Eject defendant and any unauthorized occupants (c) Deliver possession to plaintiff or agent
4 (4) No execution on or after sixty (60) days following issuance but may be reinstated one time for additional sixty (60) days (5) Return of service by officer in five (5) business days Pa. R.C.P.D.J. 520 as amended 3/28/96 e. Pay and stay (1) If only a judgment for possession, tenant can terminate execution proceedings by paying all a mounts of rent actually in arrears and costs (2) If judgment is for breach or lease (after proper applicable notice Periods) or end of term, cannot pay and stay C. Appeals from Judgment of District Justice (1) Appeal from District Justice Pa. R.C.P.D.J as amended 3/28/96 a. Time Frame (1) Judgment for money or non-residential lease or victim of domestic violence must appeal within thirty (30) days after entry of judgment (2) Judgment for delivery of possession residential lease must appeal with ten (10) days after entry of judgment (exception for victim of domestic violence) b. File notice of appeal form at Prothonotary together with a copy of notice if judgment issued by District Justice and filing fee c. If District Justice judgment for both possession and unpaid rent can still appeal judgment after tenth (10 th ) day but only the money judgment part of award and no supersedeas on execution for possession 2. Appeal as supersedeas Pa. R.C.P.D.J as amended 3/28/96 a. Appeal from Judgment of Possession (1) Requirement must file with Prothonotary at time of appeal a sum of money (or bond approved by Prothonotary) equal to lesser of three (3) months rent or the rent actually in arrears on date of filing based on District Justice Judgment Order (2) Continuing bond requirement every thirty (30) days must deposit all monthly rents as they become due (3) Landlord right to bond proceeds upon application to the Court can obtain release of a mount to compensate landlord for tenants actual possession (4) Tenant right to bond proceeds 68 P.S. Section upon application to the Court can obtain release of amounts to directly compensate those providers of habitable services which landlord is required to provide under law (Pugh v. Holmes, supra.) or under the lease
5 (5) Failure to make required deposits Prothonotary upon Praecipe shall terminate the supersedeas with notice mailed to all parties or attorney of record instead of party b. Appeal from Judgment for Trespass and Assumpsit normal bond requirement filing of appeal acts as supersedeas. Local practice requires bond equal to total amount of judgment issued by District Justice 3. Writ of Certiorari as Supersedeas Pa. R.C.P.D.J as amended 3/28/96 same bond requirements as appeal as supersedeas 4. Proceedings on Appeal a. De Novo hearing b. Normally within arbitration limits (under $30,000.00) D. Act No Attachment Personal Earnings, 68 P.S a effective 2/23/96 1. Wage Garnishment (wages, salaries and commissions) a. For Damages awarded to a judgment creditor landlord arising out of a residential lease upon which the Court has rendered judgment which is final (1) Damages defined as abuse of the physical makeup of the leasehold premises including but not limited to abuse or walls, floors, ceiling or any other physical makeup of the leasehold premises b. Must deduct security deposit from amount of judgment unless it was applied to payment of rent due on same premises (1) Most landlords will be sophisticated enough to so apply it, leaving the maximum available to wage garnishment (2) Burden of proof of application of security deposit is on the landlord c. Limited to 10% of net wages per pay period or poverty income guidelines as provided annually by Federal Office of Management and budge whichever is less (1) Net Wages is defined as all wages paid less (a) Federal, State and Local Income Taxes (b) F.I.C.A. payments and non-voluntary retirement payments (c) Union Dues (d) Health Insurance payments
6 d. Procedure (1) Applicable Pa. Rules of Civil Procedure and Local Rules (non-exist yet) (2) Local Prothonotary (a) Will accept Motion and Court Order (b) Will accept Writ of Execution (Praecipe and Writ of Attachment) e. Duty of Employer (1) Send to Prothonotary within fifteen (15) days from close of last pay period in each month (2) Can deduct five ($5.00) dollars from amounts collected (3) If multiple garnishments against same individual first priority is attachment for support residential lease garnishments satisfied in order served (4) Employer cannot discharge employee on basis of wage attachment no adverse action f. Payment by Prothonotary upon receipt to creditor-landlord g. Duty of Judgment Creditor-Landlord (1) Must enter satisfaction upon final payment within thirty (30) days (2) If failure to satisfy shall pay as liquidated damages to the tenant 1% of the original judgment for each day beyond thirty (3) days but not more than 50% of original amount h. Exceptions (1) No wage garnishment for abused person or victim as defined in 23 Pa. C.S. Section 6102 or who has Civil Protection Order pursuant to 23 Pa. C.S. Secation 6101, et. Seq. Or Protective Order pursuant to 18 Pa. C.S. Section 4951 (2) Must be determined by Court that the damages were caused by the offending family or household member as defined in 23 Pa. C.S. Section 6102 i. Application applies to all judgements which remain unsatisfied or arise after the effective date of Act (2/23/96)
7 Query before judgments were itemized by District Justice, how do you determine amount of judgment representing abuse of physical makeup of leasehold premises? II. Evictions in common Please A. Highlights 1. Venue Must be brought in county where realty is located 2. Jurisdiction unlimited trial court jurisdiction; may consider this avenue if claim for more than $ ; can proceed in front of District Justice for claims in excess of $ , but are waiving the right to claim the excess *Check local rules Erie, County, Pennsylvania has mandatory arbitration rule for claims less than $30,000.00; currently, Erie County Civil Rules Committee considering increasing limit to $50, Must serve notice to quit in conformance with the rules 4. Action is commenced by filing a complaint with Prothonotary and having it served by the Sheriff; filing fees Anywhere form $ to $ (one defendant); out of state Defendants can be served by registered mail, return receipt; service Must be perfected within 30 days of issuance of writ if summons 5. Responsive pleading to complaint due 20 days after Service perfected if personally served; 30 days if service by mail 6. If the matter is arbitrated, arbitration panel consists of three Attorneys in Erie County, Pennsylvania with at least three years Experience; panel of 5 selected (one plaintiff one defendant), Each party gets to strike on member III Lead Based Paint Issues A. Applicability: Applies to housing built before 1978 B. Obligations of a Landlord 1. Landlord must disclose presence of known lead base paint and lead based paint hazards in a dwelling prior to renting it and provide copies of all available records and reports pertaining to the lead based paint or lead based paint hazards in the affected housing
8 (a) attempts have been made to equate knowledge that the building was built before 1978 with actual knowledge of the presence of lead based paint which have been unsuccessful 2. Obligation extends to Landlord s agent 3. Landlord must give out the pamphlet on lead based paint Hazards to tenants renting affected housing 4. Landlord must receive back the completed disclosure of information form from Tenant when renting C. Renovations Any renovations involving housing with led based paint must be conducted by certified contractors and the debris properly disposed of D. Let sleeping dogs lie IV Tax Deferred Exchanges If completed correctly and by utilizing proper estate planning, the capital Gain on all your realty can be avoided entirely. A of the Internal Revenue Code: 1. No gain or loss shall be recognized on the exchange of property held for investment if such property is exchanged solely for property of like kind which is to be held for investment. 2. Rule applicable to property used in trade or business 3. Rule does not apply to property used as the owners Residence. See 1034 for transaction to qualify for rollover. B. Highlights of the Rules for the transaction to qualify as a like kind exchange: 1. Replacement property must be identified by investor within the identification period (45 day period beginning on the date the relinquished property is transferred) 2. Replacement property must be received by investor within the exchange period (180 day period on the date the
9 investor transfers the relinquished property) 3. Taxpayer cannot have access to the funds and utilize a qualified intermediary pursuant to a written agreement to complete the transaction; direct deeding allowable to save one layer of transfer taxes 4. Limits: More than one replacement property can be indentified without regard to air market value, subject to the following: a. Up to 3 properties may be identified without regard to the fair market value b. Any number of properties may be identified so long As their aggregate fair market value does not exceed 200% of the fair market value of the relinquished property c. If more than 3 properties are identified and their fair market value exceeds 200% of the fair market value of the relinquished property, then the investor must receive at least 95% of the aggregate fair market value of all the indentified properties within the exchange period.
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