INDIANA LEGAL SERVICES INC Indiana LandlordTenant Law Brandon

INDIANA LEGAL SERVICES, INC. Indiana Landlord-Tenant Law Brandon Beeler Lead Housing Attorney, Indiana Legal Services, Inc.

Overview of Topics • The Eviction Process • Tenant Claims Against Landlords – The Warranty of Habitability – Emergency Possessory Orders • Other Tenant Protections – Reasonable Accommodations and Reasonable Modifications – Special Protections for Victims of Domestic Violence INDIANA LEGAL SERVICES, INC.

Indiana Landlord/Tenant Law • Possession Hearing v. Damages Hearing – “Eviction” is a two-step process: (1) Possession hearing – where the Court determines if landlord is entitled to possession – If so, then a Writ of Possession is issued, and will be executed to remove the tenant (2) Damages hearing – Approximately three months after the possession hearing, the Court will hear landlord’s arguments regarding any money owed by the tenant due to damages of the property • No automatically renewing lease – A landlord can choose not to renew the lease for any reason, or no reason at all – For written leases the lease expires at the end of the lease term • If tenancy continues after lease term, then lease is deemed renewed on the same rental term – For non-written leases the landlord must give notice of termination that is the same as the rental term INDIANA LEGAL SERVICES, INC.

Evictions in Indiana • Most common reason = failure to pay rent • Most courts view nonpayment of rent as an automatic basis to evict a tenant • Notice requirements before filing to evict • Written lease – Look to the lease; many leases will have a clause defining notice terms – If the lease is silent – Indiana law requires that a landlord give 10 day notice to the tenant before filing to evict • Notice does not have to be in writing • Landlord must allow an opportunity to cure the defect during the 10 day period • A lease term can do away with this requirement • No written lease – Must provide notice that is the same as the rental term • e. g. , if rent is paid month-to-month, then landlord must give 30 day notice to tenant INDIANA LEGAL SERVICES, INC.

Evictions in Indiana • Largest theme = ALWAYS PAY RENT – Even for bad conditions • Renewing the Lease – A landlord can choose not to renew the lease for any reason, or no reason at all – For written leases the lease expires at the end of the lease term – For non-written leases the landlord must give notice of termination that is the same as the rental term • In order to terminate the tenancy during the course the tenancy, a landlord must have cause – Generally: if tenant breaches the lease agreement, or commits waste INDIANA LEGAL SERVICES, INC.

Evictions in Indiana: Affirmative Defenses • Reasonable Accommodation – The alleged action or damage caused should be excused due to a tenant’s disability • Requires some written notice to the landlord, but can be done after the fact • The Violence Against Women Act (“VAWA”) – Multiple protections for certain victims – Lease may be bifurcated to terminate assistance to a tenant who commits acts of violence against family members • Failure to State a Claim – Admission that the alleged event occurred, but it does not constitute a violation INDIANA LEGAL SERVICES, INC.

Evictions in Indiana: Nonpayment of Rent Defenses • If Tenant fails to pay rent – Landlord must provide 10 day notice prior to filing a court action – Landlord must permit tenant opportunity to cure during the 10 day period – Exception: if the lease states otherwise • Very few defenses for nonpayment of rent, but some include: – Previous overpayment of rent – Inclusion of late fees or other charges – De minimis nonpayment – Absence of tenant’s fault INDIANA LEGAL SERVICES, INC.

Evictions in Indiana: Common Violations and Defenses • Disturbance of Other Tenants – Argue it is not a serious violation – Courts look to whether it is an isolated incident(s) or pattern • Pets – The Fair Housing Act may apply – service animals (can declare after eviction is filed) • Guests and Unauthorized Occupants – Factual dispute • Look to lease for reporting guidelines • Factors include: does guest have another home (and does person pay rent somewhere else); how often is guest present (and for how long); and reason why guest spends time at tenant’s home INDIANA LEGAL SERVICES, INC.

Evictions in Indiana: Common Violations and Defenses • Repeated Late Payment of Rent – Is there a repeated pattern of late payments previously accepted by the landlord? • Refusal to Allow Landlord Entry – Look to lease for landlord notice requirement before entering INDIANA LEGAL SERVICES, INC.

Evictions in Indiana: Other Defenses • Retaliation – When tenant reports landlord for violations (e. g. calling the Health Department) • Discrimination – Governed by the Fair Housing Act • Is tenant being evicted because of his/her/their protected class status? • Waiver and Estoppel – Late payment of rent (pattern of accepting late rent? ) – Landlord acceptance of tenant rent after knowledge of tenant’s alleged breach – Landlord continues to accept subsidies after knowledge of tenant’s alleged breach • Violation Cured – Cure should be an absolute defense • Domestic Violence – VAWA protections INDIANA LEGAL SERVICES, INC.

Constructive Eviction • Constructive Eviction is a common law defense and cause of action – Landlord does something or fails to do something he/she/they are legally required to do that renders the property uninhabitable – This does not necessarily require violation of the Warranty of Habitability – The tenant must vacate the premises and assert damages – Tenant must show uninhabitable conditions or substantial interference with use of the property that resulted from the landlord’s actions or inactions, and that the tenant vacated the unit in a reasonable time • Vacating the unit is required to make a constructive eviction claim or defense INDIANA LEGAL SERVICES, INC.

Evictions in Indiana: Innovations in Eviction Defense • Right to Counsel Approach – Indiana Legal Services, Inc. = Eviction Avoidance Project • Contract Defenses – First Material Breach • Contract theory that if Landlord first breached the lease (e. g. failure to maintain habitability), then Landlord is estopped from receiving a benefit from the lease (such as eviction of tenant) – Duress • In situations where tenant has signed some other agreement or lease addendum under threat of eviction by Landlord, the contract is unenforceable INDIANA LEGAL SERVICES, INC.

Tenant Claims: Habitability • Landlord’s obligation – Landlord must provide a “safe, clean, and habitable” property • Includes: complying with all health codes; maintaining appliances and systems provided in the unit • Landlord cannot waive these obligations in the lease • Tenant’s rights – Tenant can bring a claim in court against a landlord for failing to provide a habitable premises • Tenant must give notice of bad conditions to landlord, and must allow landlord reasonable time to make repairs • Tenant may recover monetary damages, including refund of rent for time she lived in uninhabitable conditions – Tenant CANNOT withhold paying rent due to bad conditions INDIANA LEGAL SERVICES, INC.

Tenant Claims: Emergency Possessory Orders • Tenant may file for an Emergency Possessory Order only when a landlord: • Changes the locks to the property / lock out the tenant • Removes doors, windows, or appliances • Shuts off the electricity, gas, water, or other essential services • A Court will schedule a hearing within three days • Tenant can get injunctive relief • The Court will order the landlord to allow tenant access • Tenant can get money damages INDIANA LEGAL SERVICES, INC.

Tenant Protections: Tenants With Disabilities • Reasonable Accommodation • When a tenant asks the PHA or landlord for a reasonable accommodation based on the tenant’s disability • Example: A tenant wants a parking pass for her caregiver • Reasonable Modification • When a tenant asks the PHA or landlord for a reasonable modification based on the tenant’s disability • Example: Permanently paralyzed tenant requests a wheelchair ramp • Note: for some reasonable modifications to homes (mostly under Section 8), the tenant is responsible for bearing the costs of the modification INDIANA LEGAL SERVICES, INC.

Tenant Protections: Domestic Violence • Change of Locks – Victim and abuser do not live together • Owner must change locks within 48 hours after: – Victim makes a written request – Victim provides court-issued Order of Protection or Criminal No Contact Order – Victim and abuser live together • Owner must change locks within 24 hours after: – Victim makes a written request – Victim provides court-issued Order or Protection or Criminal No Contact Order • Landlord must not permit perpetrator to return to the unit, even to collect his/her/their belongings, unless there is a Court Order issued permitting him/her/them to do so – Victim will reimburse the owner for the costs of the lock change – Unless owner does not change the locks within the time period; in that case, then the owner will reimburse victim for the lock change INDIANA LEGAL SERVICES, INC.

Tenant Protections: Domestic Violence • Terminating the Lease – A victim may terminate the lease, without penalty, when: • The victim provides 30 day written notice to the landlord • Including, with the written notice: – Copy of the civil Protection Order or criminal No Contact Order against the perpetrator – Copy of the Safety Plan, which must: • Be dated no more than 30 days before the date when the victim provides notice • Be issued by an accredited domestic violence or sexual assault program • Recommend relocation • The victim is only liable for rent for the time the person actually continued to occupy the unit INDIANA LEGAL SERVICES, INC.

Final Notes • Subsidized housing offers even greater tenant protections – IN landlord/tenant law is the minimum requirement – Most common: Public Housing Program, Section 8 Housing Choice Voucher Program, Section 42/Low Income Housing Tax Credit Program • Key Themes – Always pay rent – Get everything in writing • • Receipts for rent payment Notices of termination Requests Statements of landlord’s denying rent – Take photos and videos, if applicable INDIANA LEGAL SERVICES, INC.

Thank you! Brandon Beeler brandon. beeler@ilsi. net (317) 631 -9410 ext. 2308 INDIANA LEGAL SERVICES, INC.

Land Contracts in a Nutshell Chase M. Haller Housing Attorney Neighborhood Christian Legal Clinic challer@nclegalclinic. org (317) 429 -4156

1. Mortgages, Land Contracts, & Rent-to-buy Agreements A simplified home mortgage transaction: Bank lends buyer money Home-Buyer e bank Note and mortgage to th • The note is the promise to pay the bank an amount of money at a specified interest rate, usually for a term of years. • The mortgage grants the bank a security interest in the home should the borrower fail to adhere to the terms of the note or mortgage. Home-Seller

1. Mortgages, Land Contracts, & Rent-to-buy Agreements Other features of typical mortgage transactions: 1. They are heavily regulated by the federal and state governments. • This provides various protections for borrowers – Truth in Lending, Real Estate Disclosure Form, Adjustable Rate Notices, etc. 2. The contracts tend to be more uniform and beneficial to the borrower. 3. These transactions are only accessible to people who can be approved for traditional financing.

1. Mortgages, Land Contracts, & Rent-to-buy Agreements A Land Contract: he t s n i eta r d n a Home-Seller tion Home-Buyer sac n a r t s the ent. e c n a fin aym r p e l l e r e u S sec o t d dee Wh e del n K is iver c goo ompl d ti ete, s tle to t eller m he buy ust er Home-Seller 20 -30 Years Later

1. Mortgages, Land Contracts, & Rent-to-buy Agreements Other features of land contracts: 1. Few state law regulations: parties typically have full freedom to contract, but must be in writing. 2. At its best, it can be a path to homeownership for people who cannot qualify for financing. 3. At its worst, it can be a tool for small and large-scale scam operations. • High interest rates • Failure of owner to prove actual ownership of the home • Can be a way for a seller to sell an uninhabitable property or a property with many liens • The buyer typically does not conduct a title search or hire a home inspector before purchasing

REAL ESTATE FRAUD SCHEME RESULTS IN CHARGES AGAINST FOUR INDIVIDUALS IN MARION COUNTY WRITTEN BY FEDAGENT ON 06 SEPTEMBER 2012. POSTED IN GENERAL NEWS FROM FEDAGENT. COM Four individuals have been charged in a real estate fraud scheme involving renting out bank-owned homes to victims, according to the Marion County Prosecutor’s Office in Indiana. According to the probable cause affidavit, several employees of the Tertius Malachi and James Youth Foundation claimed to own six homes and collected $19, 000 from individuals who thought they were renting or purchasing the homes. “The victims all thought they were purchasing a home, only to learn that they lost not just their financial investment but the emotional investment they made in what they believed were their homes, ” Marion County Prosecutor Terry Curry said in a release. Shela Amos and Beverly Cannedy were each charged with two counts of corrupt business influence, two counts of burglary, six counts of forgery and six counts of theft. A separate case involved the former head of the Budget Property Group, who would take possession of foreclosed homes without the owners’ consent and then rent out the properties to victims. According to the affidavit, Willie Hawkins was paid $40, 000 by seven people as part of his scheme. Hawkins was charged with corrupt business influence, two counts of burglary, 10 counts of theft and three counts of evasion of tax. A third related case involved Wendell Brown. Investigators said Brown would produce fake deeds and claim ownership of vacant homes. He was charged with five counts of forgery, one count of theft and five counts of intimidation.

1. Mortgages, Land Contracts, & Rent-to-buy Agreements: 1. These agreements closely resemble land contracts but take many different shapes. 2. Typically, these contracts call for the renting of a property for a period of two years of so followed by either an option to purchase or requirement to purchase a property. 3. Can be rife with illegal practices and fraud. The Clinic has seen circumstances where the owner was selling properties on a rent-t 0 -buy basis that had already been sold at a tax sale. The Clinic has also engaged in litigation surrounding rent-to-buy contracts where properties are in deplorable condition but tenants are required in their contracts to make all repairs and waive state law requirements for habitability.

Land contracts – Forfeiture vs. Foreclosure • Indiana favors foreclosure over forfeiture. There are transactions in land that mirror a traditional mortgage except that the seller retains title to the property until the contract is paid in full. This is often referred to as a land contract or an equitable mortgage. • In Indiana, if the buyer has paid more than a token amount toward the token price, based on a totality of the circumstances, the seller must foreclose and cannot seek eviction or forfeiture. See Skendzel v. Marshall, 301 N. E. 2 d 641 (Ind. Sup. Ct. 1973). • Why is this important? There are statutory protections in foreclosure that do not exist during forfeiture. The greatest protection is that the buyer has an equity of redemption that allows them to refinance the transaction before the seller’s interest is foreclosed. In other words, there are other options to keep the property.

Land contracts – Forfeiture vs. Foreclosure • Be on the lookout for rent-to-buy transactions. Because these are far less regulated, if at all, many “purchasers” are taken advantage of, completely mislead, and it would sometimes be appropriate to say that their money has been stolen from them. • If anything looks out of the ordinary to you about the transaction, always direct the person to come to a legal services agency or find an attorney themselves. Otherwise they risk losing much more than what they already have.

Areas of Land Contract Seller Noncompliance • If a land contract seller originates 5 or more credit transactions a year connected to real estate, they are required to obtain a mortgage lending license with the Department of Financial Institutions. See I. C. 24 -4. 4 (First Lien Mortgage Lending Act). No private right of action but failure to obtain a license could also be a violation of the Home Loan Practices Act – I. C. 24 -9 • If a seller conducts credit transactions with any regularity, they may be subject to Truth in Lending protections (interest disclosure, right to rescind transaction, etc). • If anything looks out of the ordinary to you about the transaction, always direct the person to come to a legal services agency or find an attorney themselves. Otherwise they risk losing much more than what they already have. • If a seller fails to disclose a lien or encumbrance existing at the time of the transaction or that attaches after the transaction, that is a per se violation of the Home Loan Practices Act – gives rise to damages and atty fees. • Failure to disclose known defects – this could give rise to a fraud claim or a Home Loan Practices Act claim

Land contracts – Contract Interpretation Exercise 1. Take a few minutes to look over the Contract. 2. Are you renting or buying? 3. We will then discuss how this agreement may or may not be problematic for a renter/buyer.

Enforcement and Reporting • The Clinic and other legal aid organizations assist individuals. Government agencies enforce consumer protection laws on behalf of the state. • The renter/buyer should seek legal advice PRIOR to signing an agreement. They should also conduct a title search. If there are unfair or deceptive practices involved: • Indiana Attorney General Consumer Complaint Form: https: //indianaattorneygeneral. secure. force. com/Consu mer. Complaint. Form

Land Contracts in a Nutshell Any Questions? Chase M. Haller Housing Attorney Neighborhood Christian Legal Clinic challer@nclegalclinic. org (317) 429 -4156