Q: We bought a single-family home to use as investment property. The sellers told us that the neighborhood, near a major university, is very popular with students because the rents are reasonable. We went ahead and closed the deal. Now we’ve discovered that in fact very few students live here (apparently the rents are prohibitive). This has made it very hard to find qualified tenants. Do we have any recourse against the sellers? –Stephen and Catherine
A: When your seller answered your questions about student renters and their ability to afford neighborhood rents, he was making a "representation," in legal lingo. A representation is a statement that is offered as the truth, sometimes couched in "to the best of my knowledge …"
When a party to a contract makes a representation, it’s a big deal — if it’s false or misleading, about a material (important) aspect of the deal, and the other side reasonably relies on it to their detriment, the "representer" is in for some legal trouble.
For example, telling a buyer that there’s no problem with the neighbors next door, when in fact the neighbors account for continuous police visits, is a major misrepresentation that, if uncovered, would likely affect the buyer’s decision to proceed.
Your seller represented to you that the home would be affordable to students, and that numerous students lived in the neighborhood. This is something that you could have confirmed easily on your own — it wasn’t private information that no amount of homework on your part could uncover.
For example, you could have checked the rental listings for the neighborhood and drawn your own conclusions as to whether student budgets could meet them; and you could have talked to the neighbors (you could also have asked your broker to confirm the information).
For that reason, your complaint carries less weight than if, for example, you were told something that only the seller would know, such as a representation that the folder of home repair invoices and receipts given to you constituted the entire history of repairs at the property (how could you discover otherwise?).
I doubt that you have much of a case against your seller. In the future, be sure to confirm the truth of any representations made to you, particularly those that can be easily checked.
Q: My lease has a no-pets clause. But my landlord let me keep a dog I adopted from the shelter — he signed the form the shelter gives tenants, which calls for the landlord’s OK, to make sure that the dog can legally live where the adopted owner lives. Now I’d like to get a second dog. Do you think the original ban still holds? –Mark
A: People often get themselves into legal trouble when they sign contracts and leases that say one thing, then put up with (and sometimes embrace) actions that are completely contrary to what the document specifies.
Naturally, the other side may conclude that the rules have changed for good. Lawyers who write contracts for clients try to anticipate this, by inserting a clause that says that any instances of not enforcing a clause will not deprive the "enforcer" of the right to enforce it later.
For example, if you’ve got a late rent fee clause, but the landlord didn’t collect it when you were late in September, he can still impose a fee when you’re late in March.
The problem with these "savings" clauses is that sometimes judges won’t enforce them, because it’s simply not fair. This may happen when the circumstances would suggest to any reasonable person in your shoes that, in fact, the landlord had no intention of enforcing that part of the lease in the future, and you have relied on this and taken steps that you otherwise would not have taken.
No-pets clauses are perfect examples — when the landlord knows the pet is on the property and says nothing for months, then serves a termination notice based on the pet’s presence, a judge might side with the tenant who has, in the meantime, invested time and effort in training and maintaining the pet, becoming a devoted and bonded pet owner.
Your situation is a bit different. Let’s assume that you have a savings clause — what was the effect of your landlord signing the adoption agency’s form, signaling his permission that you keep the pet? He will argue that the permission was for that adoption only, because the request was specific to that one animal. If you proceed and get another dog, be prepared for a swift response — but the longer the landlord delays after he’s aware of the second dog, the stronger your case may be.
