Shankman & Associates

Landlord Tenant Conference...

2011-05-04T06:12:00.000-07:00

Shankman & Associates is holding a Landlord Tenant Conference on June 17th, 9AM-4PM at The Ramada Inn in Lewiston, Maine. If you are a Landlord or Property Manager, this seminar is not to be missed. Our main topics will be, Planning Ahead to Avoid Problems, Lease Agreements & House Rules, Evictions, State and Federal Statutory Requirements, Impact of Bankruptcy on Evictions & Collections and Civil Rights/Discrimination Issues. Click here for more information and Registration form. Space is limited.

THE SEMINAR

Landlord-Tenant law continues to challenge property managers with its comprehensive, contradictory and ambiguous statutes, complicated by tenants who do not feel they are required to abide by the law and judges who are too quick to give the benefit of the doubt to someone who does not deserve it. Learn how you can protect yourself in the future. We will talk about leases, tenants and your rights. We will be taking questions during the seminar and will be available for consultations during breaks and at lunch. Don’t miss out. Sign up today. Space is limited.

FACULTY

Neil Shankman is the senior partner of Shankman and Associates Legal Center, a general practice law firm, with offices in Lewiston, Topsham, and Yarmouth. Mr. Shankman represents landlords and property managers responsible for literally thousands of rental units in the State of Maine. From 1977 to 1981, he was employed by Pine Tree Legal Assistance as their primary lobbyist on various issues concerning tenants’ groups in the state. He has served as general counsel to the Maine Real Estate Managers Association since 1987, has worked with the Maine Apartment Owners and Managers Association and its local affiliates for over 20 years, and is author of Maine Landlord Tenant Statutes and Commentaries, which is an annually updated compilation of applicable statutes with commentary. Attorney Shankman received his bachelor’s degree in sociology from Georgetown University and his J. D. degree from Capital University in Columbus, Ohio.

This conference is sponsored by

Maine Apartment Owners & Managers Association

Maine Real Estate Managers Association.

If you have any questions please call Shankman & Associates,

Landlord Tenant Paralegal, Karen Cook at 786.0311.

She really does have all of the answers!

New Maine Landlord/Tenant Books...

2011-01-17T07:36:00.000-08:00

Shankman & Associates is proud to announce the recent release of three new publications… updated versions of our Landlord Tenant book series. We have provided a trilogy of tips and tricks to help landlords, property managers, mobile home parks and others involved in the business of owning rental properties and managing tenants.

The 2010 seminar manual, Landlord Tenant Relations: Process & Procedures, is a comprehensive analysis detailing the practical realities of being a landlord or a property manager in Maine. The 198-page book covers everything from planning ahead to avoid tenant problems, to termination, abandonment, holdovers and abandoned property, to evictions, to the rights and obligations of the parties, to civil rights issues, to the impact of bankruptcy on eviction and collections. We have included samples of various forms, including notices, leases and other basic documentation.

The 2011 edition of the Maine Landlord-Tenant Statutes and Commentaries by Neil Shankman is the latest compilation of Maine law and analysis. Each statute that impacts landlord-tenant relations is presented, along with a detailed commentary, appropriate case citations and cross-references.

We have also recently published the 2011 edition of Maine Landlord-Tenant Relations in Mobile Home Parks & Land-leased Communities. This manual focuses on the statutes and court cases that influence tenant’s rights and responsibilities in mobile home parks. The book details the practical realities of being a park manager in Maine. The basic text and sample forms address creation of tenancies, landlord-tenant rights and responsibilities, evictions, discrimination, and the impact of bankruptcy on eviction and collections.

If you would like to order any of these books, give our Landlord/Tenant Paralegal,
Karen Cook, a call at 1-207-786-0311; e-mail us; or log on to our website.

Smoke-Free Buildings...

2010-11-04T06:51:00.000-07:00

Today we are featuring an article specifically for Maine Landlords and Property Managers. You can learn more about our Landlord Tenant Practice at www.shankmanlegal.com.

SMOKE FREE BUILDINGS
One of the biggest controversies currently facing landlords and property managers is the balance of the rights of smokers who smoke tobacco, and non-smokers to be protected from the affects of second hand smoke. Can you establish a “non-smoking” policy for a building when your tenants began their tenancy with the freedom to smoke? While there is an inherent risk in every decision for change, the fact is that you are more likely to be exposed to liability by permitting smoking.
Generally speaking, the common areas of buildings must be smoke free pursuant to Maine’s Public Place Smoking Law, Title 22 M.R.S.A. §1542. There is nothing in the law that requires a landlord to forbid tenants from smoking in their apartments. But what happens when the smoke from one unit spreads into the hallway, or into the unit of another tenant?
The Americans with Disabilities Act and the Federal Fair Housing Act both enable individuals with disabilities to seek a “reasonable accommodation”. A tenant who has a breathing disorder may use either law to bring legal action against a landlord for not making “reasonable accommodations” to protect them from secondhand smoke in common areas of the building. This would include the consequences of seepage between apartments.
The Maine Human Rights Act prohibits discrimination in housing on account of physical disability. The definition of discrimination includes “the refusal to make reasonable accommodations” in rules, policies, practices or services when those accommodations are necessary to give an individual equal opportunity to use and enjoy a rental unit.
While there have been no reported cases in the State of Maine, there have been lawsuits filed in other jurisdictions pursuing claims against landlord, who permit smoking. Areas of liability have included breach of the covenant of quiet enjoyment, negligence, nuisance, breach of the warranty of habitability, battery, intentional infliction of emotional distress, negligent infliction of emotional distress, trespass and constructive eviction.
Your ability to change rules will be determined by the terms and conditions of your lease. If there is a provision authorizing you to change the rules upon thirty days’ notice, then that is all you have to do. If the lease is written in such a way that it is nothing more than a month-to-month tenancy, then you must give a minimum of thirty days’ notice of a “New Contract” which would essentially be your old lease with a new provision. If there is no written document, then you are dealing with a tenancy at will situation. Under those circumstances you would have the right to change the terms and conditions of the tenancy upon thirty days’ notice (again, essentially creating a new tenancy).
In dealing with public housing, or other subsidized housing, you may add a non-smoking provision to the lease at any time it is renewed. If you are dealing with a Public Housing Authority, make sure the change is approved by them in advance.
For those landlords who want to get more creative, you have the option of establishing a non-smoking policy for new tenants, while allowing existing tenants to continue to smoke in their units. The key to all of this is making sure that any change in policy has been properly noticed to all affected individuals.
The law is quite clear at this point. Landlords in the State of Maine have the right to prohibit smoking in their buildings. The only issue is whether the change in the lease terms or building rules has been done properly…with proper notice and in full compliance with the applicable contract and/or applicable Federal or State regulations. The right to smoke is not protected under the law. As long as the policy is not used to target a protected class or minority, smoking restrictions (or prohibitions) are legal and binding.
Do you have questions? We have answers, give us a call today @ 207.786.0311 or send us an email.

NEW LEASE PROVISION REGARDING BEDBUGS...

2010-10-14T18:06:00.000-07:00

On July 11, 2010, a new law regarding bedbug infestation and eradication went into effect in Maine. We have previously posted an article outlining the impact of the law. However, based on ambiguity in certain aspects of the law and the need to be able to evict tenants who are being uncooperative when bedbug issues arise, we have drafted a new section to be added to your market rent leases. We hope that you find this information helpful.

Both tenant and landlord are required to comply strictly with the Maine Bedbug Law (Title 14 M.R.S.A. §6021-A). Tenant agrees to promptly notify landlord if he knows of, or suspects, an infestation of bedbugs in the dwelling unit. Upon the tenant receiving notice of a need for access to the premises for bedbug issues, he must fully cooperate with the landlord and any pest control agent hired by him. The tenant is required to comply with all reasonable measures to eliminate or control bedbug infestation. Failure of the tenant to fulfill his obligations hereunder is a breach of this lease and is grounds for termination of this tenancy.

If you have more questions please call Shankman & Associates at 207.786.0311 and ask for Karen Cook.

Radon Testing, The Law and YOU...

2010-09-28T06:22:00.000-07:00

This is a short and sweet commentary about the most recent RADON Testing Law.
During the last legislative session a law was enacted that requires landlords to have their residential buildings tested for radon no later than 2012, with subsequent testing every ten (10) years thereafter. It is not clear from the statute itself, or from the legislative history, whether the phrase “by 2012” is intended to require that the testing be done prior to the commencement of that year, or prior to the end of that year. See Title 14, Section 6030-D of the Maine Revised Statutes.Home testing kits are not permitted. Radon tests must be conducted by a person who is registered with the Department of Health and Human Services.
If test results reveal a level of radon of 4.0 picocuries per liter of air or above, the landlord is required to take all necessary steps to mitigate the level of radon to a number below that standard.
“Mitigation services” must be provided by a person registered with the Department of Health and Human Services. Landlords are required to provide written notice to tenants and potential tenants regarding the presence of radon in the building. This information must include the date and results of the most recent test and must explain the risks associated with exposure to radon. Standard disclosure forms are being prepared by the state and will be accessible at some point during 2010. Go on line at
www.state.il.us/IEMA/radon/pdf/DisclosureRadonHazards.pdf.
If a landlord fails to comply with the requirements of state law, he or she would be subject to a fine of not more than $250.00 per violation. It is likely that enactment of this new law will strengthen the
hand of Plaintiff’s lawyers who are filing litigation on behalf of individuals who have been harmed by exposure to radon.
Landlords, do you need a new lease or help with an eviction? Give us a call we can help. 207-786-0311

Eeek... Bed Bugs, You and the Law...

2010-04-19T14:04:00.000-07:00

BEDBUG LAW
WILL BITE YOU IF YOU ARE NOT CAREFUL

As problems with bedbug infestations have increased throughout the State of Maine, the Legislature has been called upon to respond. In 2010, a new law was enacted. Title 14 M.R.S.A. §6021-A. It will go into effect on July 11, 2010.

If a landlord receives either written or oral notice from a tenant that a dwelling unit may have a bedbug infestation, the landlord must conduct an inspection within five days. If it is determined that an infestation of bedbugs does exist, the landlord has ten days to contact a pest control agent as that term is defined in Title 22 M.R.S.A. §1471D. The landlord is required to “take reasonable measures to effectively identify and treat the bedbug infestation” through a pest control agent who carries liability insurance.

Landlords are prohibited from renting a dwelling unit unless they disclose to a prospective tenant that an adjacent unit is currently infested with, or being treated for, bedbugs. If at any time a current tenant or a prospective tenant requests information, the landlord must disclose the last date the unit was inspected for a bedbug infestation and found to be free of such a problem. The landlord may not rent a unit that the landlord knew or should have known is infested with bedbugs.

A tenant is required to promptly notify his landlord when he knows or suspects that there may be an infestation of bedbugs in the unit. If the landlord gives a tenant reasonable notice that he needs to inspect the premises because of a concern regarding bedbugs, the tenant is required to grant the landlord or his pest control agent access to the unit. The law specifies that the initial access to the unit may include only a visual inspection and manual inspection of the tenant’s bedding and upholstered furniture. If the pest control agent reasonably believes that additional items need to be inspected, the tenant is obligated to cooperate. If the pest control agent finds bedbugs in either the rented unit, or an adjoining unit, the individual may have additional access to the tenant’s personal belongings.

Furthermore, the tenant is required to comply with all reasonable measures to eliminate and control a bedbug infestation. The “unreasonable failure” to completely comply with the pest control measures may result in the tenant being “financially responsible for all pest control treatments of the dwelling unit”.

If for any reason the tenant is unable to comply with the requested bedbug inspections or control measures, the landlord is required to offer to “make reasonable assistance, including financial assistance”. Quite frankly, neither the law nor the legislative history clarify exactly what the Legislature was intending by that provision. However, it appears that once the landlord discloses the anticipated cost of the tenant’s compliance with the inspection and control measures, the landlord may charge the tenant “a reasonable amount for any such assistance, subject to a reasonable repayment schedule, not to exceed six months”.

Failure of a landlord to comply with the terms and conditions of the bedbug law is presumed to be a violation of the warranty of habitability (the landlord unreasonably failed, under the circumstances, to take prompt, effective steps to repair or remedy a condition that endangers or materially impairs and health or safety of a tenant). If the landlord fails to comply with the provisions of the law, he is liable for a penalty of $250.00, or actual damages, whichever is greater, plus reasonable attorney’s fees.

If a tenant fails to provide reasonable access, or comply with reasonable requests for inspection or treatment, or if the tenant otherwise unreasonably fails to comply with the requirements of the law, the landlord can seek a Protective Order pursuant to 14 M.R.S.A. §6030-A. If the court finds that the tenant unreasonably failed to comply with the bedbug law, the court is authorized to issue a temporary order, or an interim order, pursuant to Title 5 M.R.S.A. §4654, the Protection from Harassment statute. The court is authorized to grant the landlord access to the premises, allow him to engage in bedbug control measures, and require the tenant to comply with specified measures or, if the tenant fails to comply, assess him with costs and damages related to the tenant’s non-compliance. Any emergency order granting the landlord access to the premises must be served upon the tenant at least twenty-four (24) hours before the landlord enters the premises.

Landlords/Property Managers and Rental Property Management Companies, are you currently a member of Shankman and Associates "Lawyers-online" program? If not, you should know that for a set price you will have many advantages and benefits. Click here for more info.

Three New Books & A Maine Landlord Tenant Law Conference...

2010-03-31T09:57:00.000-07:00

We have been very busy at Shankman & Associates. We have just finished our third book on Maine Landlord -Tenant Law. This has been an important undertaking. The laws are constantly changing and the commentaries in the books must be updated and sometimes almost entirely re-written every few years. The three Maine Landlord/Tenant books written by Neil Shankman this year are: Landlord-Tenant Relations: Process & Procedures, Maine Landlord-Tenant Statutes & Commentaries and Landlord-Tenant Relations In Mobile Home Parks & Land Leased Communities.
We held a conference a few weeks ago for the Mobile Home Park & Land Leased Community Landlords. It was interesting and everyone went away with the clear knowledge of what the new laws are and how to apply them. The also were able to ask questions and have some great dialog about Landlord/Tenant Relations.
Are you a Landlord in the state of Maine? Are you interested in coming to our seminar? We do have one coming up on April 9th at the Ramada Inn, in Auburn. Attending the conference will help you to interpret the new laws and you will have the opportunity to ask questions.
Registration is simple, we have a copy of the registration form in the February MAOMA Newsletter. You can also email Karen Cook or give her a call at Shankman & Associates, 207.786.0311 she will be more than happy to email you a copy of the registration form. We look forward to seeing you there!

Landlord/Tenant Conference...

2010-02-17T07:52:00.000-08:00

Big News... Shankman & Associates is hosting the Landlord/Tenant Conference on April 9, 2010 9AM-4PM at the Ramada Inn in Lewiston, Me. We will be covering the new laws that will affect you and your business. We will also be releasing our newest Landlord/Tenant Relations publications.
If you want to stay on top of your game this is one conference you will not want to miss.
Registration is simple, we have a copy of the registration form in the February MAOMA Newsletter. You can also call Karen Cook @ Shankman & Associates, 207.786.0311 she will be more than happy to email you a copy of the registration form.
We look forward to seeing you there!

Bankruptcy Advice in Maine...

2010-01-19T07:35:00.000-08:00

Bankruptcy can be a difficult decision. In these uncertain economic times Bankruptcy is not an uncommon solution. At Shankman & Associates, we are Maine Bankruptcy Attorneys. We will guide you through your options, and help you to make a decision that helps you. Bankruptcy is an option. We can help to stop repossessions, wage garnishment, lawsuits and foreclosure. In our economy today, you are not alone. You may be able to keep your home, your car and your wages. A fresh start is possible. We will help you to take control of your financial future. We know that it is never an easy decision to go forward with a "Bankruptcy" at Shankman & Associates we can help you to navigate this difficult time with the answers you will need for a fresh start. This is not a decision to be entered into lightly. It will affect your future, both positive and negative.

Mr. Shankman is the Maine representative for NACBA The National Association of Consumer Bankruptcy Attorneys. He and his staff have been helping folks file for Bankruptcy since 1981. We can help you to decide the best route to take, Chapter 7, Chapter 11 or a Chapter 13. We will answer all of your questions and help you to get back on track. Now is the time to give us a call and to schedule an appointment 1.207.786.0311.
We look forward to helping you.

MREMA Conference ...

2009-09-30T06:56:00.000-07:00

Every year MREMA (Maine Real Estate Managers Association) hosts a wonderful conference. They work hard to create a 3 day affair that is filled with speakers, workshops and networking. MREMA covers a wide range of subjects that pertain to the business of managing properties in the state of Maine. This is an event that the members look forward to year after year.

Attorney Neil Shankman is a perennial favorite and has spoken most every year at this conference. He has written several books on Landlord/Tenant Law and his latest book, Maine Landlord-Tenant Statutes and Commentaries is being revised and updated and will be available in the late fall of 2009.

If you haven't signed up for this fun and informative event, here are the details.
See you in October!

October 19-21, 2009
2009 MREMA Annual Conference
The 2009 Annual Conference will be held at the Sugarloaf Resort & Conference Center in Carrabassett Valley. We've secured Toni Blake, aka, Totally Toni, as the keynote speaker. If you attended the 2008 Tri-State Conference in Vermont, then you know that an hour is not enough Toni. With this is mind, we've also asked her to provide an afternoon workshop. Totally Toni will lift your spirits and put the fun back into property management!

Bankruptcy Experts...

2009-07-16T08:18:00.000-07:00

At Shankman & Associates we are experts in Bankruptcy. We have been helping our clients file for bankruptcy since 1981. Neil Shankman, the founder of our firm, is the Maine representative for NACBA (National Association of Consumer Bankruptcy Attorneys). We know this is one of the toughest but often necessary decisions you will make. We can navigate this decision with you.

FAQ'S:
Does a person lose all of his or her property by filing under Chapter 7?
Usually not. Certain property is exempt and cannot be taken by creditors, unless it is encumbered by a valid mortgage or lien. A Debtor is usually allowed to retain his or her unencumbered (or unsecured) exempt property (see Question 29 below). Depending on the law of the local state, property that is exempt in a Chapter 7 case may be either property that is exempt under state law or property that is exempt under the Bankruptcy Code.

What property can be claimed as exempt?
Because one of the goals of bankruptcy is to give the Debtor a fresh financial start, Debtors are allowed to retain certain exempt items of property. The values listed below are for a single Debtor. If a husband and wife file together, the amounts double. The exemptions apply only to equity (how much it is worth minus how much you owe) in real property or personal property

In Maine, the following exemptions apply:

* Residence. $100,000.00 in real estate which serves as a residence, unless the Debtor is over 60 or disabled, in which case the exemption is $200,000.00;
* Motor vehicle. The Debtor's interest of $5,000.00 in one motor vehicle;
* Clothing, furniture, appliances and similar items. The Debtor's interest, not to exceed $200.00 in any particular item in household furnishings, household goods, wearing apparel, appliances, books, animals, crops or musical instruments held for personal, family or household use;
* Jewelry. The Debtor's wedding ring and engagement ring (no matter how valuable), as well as the Debtor's aggregate interest in all other jewelry up to a total of $750.00 held for personal, family or household use;
* Tools of the Trade. The Debtor's aggregate interest of $5,000.00 in any implements, professional books or tools of the trade of the Debtor;
* Furnaces, stoves and fuel. The Debtor's interest in the following items held primarily for the personal, family or household use of the Debtor or a dependant of the Debtor; one cooking stove; all furnaces or stoves used for heating and all cooking and heating fuel not to exceed 10 cords of wood, 5 tons of coal or 1,000 gallons of petroleum products or its equivalent;
* Food, produce and animals. All food provisions reasonably necessary for six months; all seeds, fertilizers, feeds and other material reasonably necessary to raise or harvest food through one growing season; all tools and equipment reasonably necessary for raising and harvesting food;
* Farm equipment. The Debtor's interest in one of every type of farm implement reasonably necessary for the Debtor to raise and harvest agricultural products commercially;
* Fishing boat. The Debtor's interest in one boat, not exceeding five tons burden, used by the Debtor primarily for commercial fishing; (j) Life insurance contract. Any unmatured life insurance contract owned by a Debtor other than a credit life insurance contract;
* Health aids. Professionally prescribed health aids for the Debtor or a dependent of the Debtor.
* Disability benefits; pensions. The Debtor's right to receive Social Security benefits, unemployment compensation, veteran's benefits, disability, illness or unemployment benefits, alimony, support or separate maintenance, or a payment under a stock bonus, pension, profit sharing, annuity, or a similar plan or contract on account of illness, disability, death, age or length of service to the extent reasonably necessary for the support of the Debtor and any dependent of the Debtor;
* IRA account. A payment or account under an individual retirement account or similar plan or contract on account of illness, disability, death, age or length of service to the sum of $15,000.00 or to the extent reasonably necessary for the support of the Debtor and any dependent of the Debtor, whichever is greater.
* Legal awards; life insurance benefits. Debtor's right to receive an award under a victim's reparation law, a payment on account of the wrongful death of an individual of whom the Debtor was a dependent, to the extent reasonably necessary for the support of the Debtor and any dependent of the Debtor; a payment under a life insurance contract that insured the life of an individual of whom the Debtor was a dependent on the date of such individual's death, to the extent reasonably necessary for the support of the Debtor and any dependent of the Debtor; a payment up to $12,500.00 on account of personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss, of the Debtor or an individual of whom the Debtor is a dependent or a payment in compensation of loss of future earnings of the Debtor or an individual of whom the Debtor is or was a dependent, to the extent reasonably necessary for the support of the Debtor and any dependent of the Debtor.
* Other property. The Debtor's aggregate interest, not to exceed $400.00 in any property, whether or not otherwise exempt; and
* Unused residence exemption. The Debtor's unused residence exemption up to $6,000.00 in any item of clothing, furniture, or appliances, tools of the trade or legal awards for personal bodily injury.
Log on to shankmanlegal.com to learn more or give us a call @207.786.0311 today.

We Have Moved our Brunswick Office, to Topsham....

2009-04-15T04:57:00.000-07:00

We are excited to announce our new location in Topsham.
We are located on the corner of Main St. & Melcher Pl.
Easy to find with plenty of parking.
The new offices are quiet with plenty of space.
Info:
2 Melcher Pl. Topsham, Maine 04086
207. 729.1181

topsham@shankmanlegal.com
We look forward to seeing you.
Neil Shankman, Esq.

Bankruptcy: The Twilight Zone Revisited...

2009-02-24T09:35:00.000-08:00

One of the most frustrating tasks facing a property manager is getting rid of a tenant. The eviction process is long, convoluted, and frustrating enough to get someone to reconsider their chosen profession.
Through training, experience and working with competent counsel it is usually not a problem to evict someone. However, today we are going to address the intersection of bankruptcy and eviction …the True Twilight Zone.
When a tenant files a Bankruptcy Petition, he or she is immediately protected by the “automatic stay” of the United States Bankruptcy Code. This protection arises from an Order that is issued by the Court upon filing of the Petition. All entities (creditors, landlords, utility companies, etc.) are prohibited from engaging in any act to collect, assess, or recover pre-Petition claims against the debtor.
As a property manager, you can do absolutely nothing to collect rent arrearages, surcharges or damages. You may not initiate a collection action through Small Claims or otherwise. You are not allowed to even send a letter or have a polite conversation about any money owing from the past.
Until October of 2005, property managers were even prohibited from proceeding with an eviction that had already been started. This is no longer true. The Bankruptcy Code now permits a landlord to continue to pursue the eviction of a debtor who is a residential tenant if the landlord has already obtained a Writ of Possession prior to filing of the Bankruptcy Petition.
If Judgment has been entered prior to the date the tenant filed his Bankruptcy Petition, but a Writ of Possession has not yet been issued, the process can still move ahead. Unless an appeal has been filed, the Writ of Possession will be issued by the Clerk as originally ordered by the Court.
As with all things related to evictions (and bankruptcy), the process can become more complicated. If the tenant/debtor either asserts a legitimate defense or a right to reinstate the lease under State law, the Writ of Possession can be held up if the tenant deposits with the Clerk of the Bankruptcy Court any rent that would become due within thirty (30) days after filing the Bankruptcy Petition. In order to pull this rabbit out of his hat, the tenant must file a Certificate indicating that “there are circumstances under which the debtor would be permitted to cure the entire monetary default that gave rise to the judgment for possession, after that judgment for possession was entered …and the debtor …has deposited with the Clerk of Court, any rent that would become due during the thirty-day period after the filing of the Bankruptcy Petition.”
In addition to complying with the requirement to file a Certificate at the time the Bankruptcy Petition is filed, the debtor must also file a second Certificate within thirty (30) days stating that he has paid the money owed pursuant to the tenancy.
If the landlord/property manager disagrees with the claims of the tenant, he can file an objection with the Bankruptcy Court and a hearing must be held within ten (10) days after the objection is filed.
There is a second exception to the automatic stay dealing with evictions based on “endangerment” or “illegal use of controlled substances”. The Bankruptcy Code allows a property manager to proceed with an eviction if it was started before the filing of the bankruptcy case or if the endangerment or illegal use occurred within thirty (30) days before the bankruptcy filing. In either situation, the property manager would be required to file with the Court and serve on the debtor a Certificate setting out the facts giving rise to the exception.
Beyond all of these rules, and in addition to all of the exceptions, the property manager always has the ability to have his attorney file a Motion for Relief from Stay by which you ask the Court to allow you to proceed with an eviction, for good cause, despite the fact that a bankruptcy is pending.
“Good cause” for relief from the automatic stay exists when a property manager can prove that the debtor is significantly in default under a lease, or that the landlord lacks “adequate protection” to prevent future financial loss. Courts have ruled that non-payment of rent for an extended period of time fits within the definition of good cause. Failure to pay rent that is due after the filing date of the Bankruptcy Petition is a major factor the Courts will consider. Behavioral problems that disturb the peaceful and quiet enjoyment of other tenants or neighbors will also be a factor carefully considered by the Bankruptcy Court in determining whether an eviction should proceed or not.
Finally, it is important to keep in mind that the filing of a Bankruptcy Petition deals only with debt arising prior to filing date. Therefore, failure to pay rent subsequent to filing is not protected. Damage to the premises post-filing is not protected. These debts are non-dischargeable. They do not go away.

Log onto our website or blog for more information and articles about Landlord/Tenant issues and to order the updated versions of our “Landlord/Tenant” series of books.
Neil S. Shankman, Bankruptcy Attorney, Maine

Bankruptcy Answers...

2009-01-01T11:22:00.000-08:00

Bankruptcy is becoming more common as month after month of this economic downturn drags on. Did you know it is still possible to file for Bankruptcy? It can be the light at the end of the tunnel during this recession.
At Shankman and Associates we know it can be hard to understand how to move forward and that it is a path wrought with many unknown factors. We can help. We have been helping our clients with Bankruptcy filings since 1984. Neil Shankman is the State Chair for the National Association of Consumer Bankruptcy Attorney's (NACBA). He and his staff can help to unravel even the most complicated of situations.
Bankruptcy. If you have questions, we have the answers.
Give us a call today, 207.786.0311
FAQ'S
What are the Debtor's responsibilities to the Trustee?
The law requires the Debtor to cooperate with the Trustee in the administration of a Chapter 7 case, including the collection by the Trustee of the Debtor's nonexempt property. If the Debtor does not cooperate with the Trustee, the Chapter 7 case may be dismissed and the Debtor may be denied a discharge.

How are secured creditors dealt with in a Chapter 7 case?
Secured creditors are creditors with valid mortgages or liens against property of the Debtor. Property of the Debtor that is encumbered by a valid mortgage or lien is called secured property. A secured creditor is usually permitted to repossess or foreclose its secured property, unless the value of the property greatly exceeds the amount owed to the creditor. The claim of a secured creditor is called a secured claim and secured claims must be collected from or enforced against secured property. Secured claims are not paid by the Trustee. A secured creditor must prove the validity of its mortgage or lien and obtain a Court order before repossessing or foreclosing on secured property. The Debtor should not turn any property over to a secured creditor until a Court order has been obtained. The Debtor may be permitted to retain or redeem certain types of secured property

Bankruptcy and Foreclosure...

2008-10-03T12:54:00.000-07:00

There is not a week that goes by when we are not asked by a client, "Can I save my house from foreclosure by filing for Bankruptcy"? The answer is , well maybe. Yes, I know that sounds a bit ambiguous however there are many laws working for us and against us. Our best strategy is to look at all of the facts and see if
you can possibly file for chapter 13 Bankruptcy. So here is the deal...
When is Chapter 13 preferable to Chapter 7 for a Debtor?
Chapter 13 is usually preferable for a person who (1) wishes to repay all or most of his or her unsecured debts and has the income with which to do so within a reasonable time, (2) has valuable nonexempt property or has valuable exempt property securing debts, either or which would be lost in a Chapter 7 case, (3) is not eligible for a discharge under Chapter 7, (4) has one or more substantial debts that are dischargeable under Chapter 13 but not under Chapter 7, or (5) has sufficient assets with which to repay most debts, but needs temporary relief from creditors in order to do so.
How does Chapter 13 differ from a private debt consolidation service?
In a Chapter 13 case, the Bankruptcy Court can provide aid to the Debtor that private consolidation services cannot provide. For example, the Court has the authority to prohibit creditors from attaching or foreclosing on the Debtor's property, to force unsecured creditors to accept a Chapter 13 plan that pays only a portion of their claims, and to discharge a Debtor from unpaid portions of debts. Private debt consolidation services have none of these powers.

Check out our website www.shankmanlegal.com to learn more, or give us a call, knowledge is power! 207.786.0311
Neil S. Shankman Bankruptcy Attorney, Yarmouth, Lewiston & Brunswick, Maine

Finding A Lawyer Who is Right for You...

2008-09-16T06:37:00.000-07:00

Sometimes bad things happen to good people. From time to time, for most of us, it may be necessary to hire an Attorney for a Divorce, Bankruptcy or even Personal Injury to name a just a few life changing events. You have a choice in how you wish to proceed. You can ignore the situation, probably not a good idea or you can face it head on and seek out the best help possible. Lawyers and Law Firms are like shoes, some fit better than others.

We believe the best approach for our clients is three fold. First find out everything we can about your situation. Second create a plan on how to proceed. Third to actually follow up and get the situation handled and the job done. We believe it is important to be as efficient and economical as possible. This is a good philosophy for you, your case and for us.

At Shankman and Associates we have offices conveniently located in Lewiston, Brunswick and Yarmouth. We have been practicing law since September of 1981. Over the years we have made it our policy to listen carefully to what our clients are facing. We listen carefully to all of the details of your case and then we work hard at helping to solve your legal problem.

Give us a call today, we are here to help.
Neil S. Shankman, Attorney, Lewiston, Maine

Bankruptcy in Maine:FAQ'S...

2008-08-28T12:38:00.000-07:00

Does a person lose all of his or her property by filing under Chapter 7?
Usually not. Certain property is exempt and cannot be taken by creditors, unless it is encumbered by a valid mortgage or lien. A Debtor is usually allowed to retain his or her unencumbered (or unsecured) exempt property. Depending on the law of the local state, property that is exempt in a Chapter 7 case may be either property that is exempt under state law or property that is exempt under the Bankruptcy Code.

When must a Debtor appear in Court in a Chapter 7 case and what happens there?
Most Debtors do not have to appear in "Court". However, every Debtor must attend a hearing called the "meeting of creditors". This hearing takes place about a month after the case is filed and usually occurs in a relatively informal setting in front of the Chapter 7 Trustee. No Judge will be present. At this hearing, the Debtor is put under oath and questioned about his or her debts and assets by the Trustee. In most Chapter 7 consumer cases no creditors appear in Court; but any creditor that does appear is usually allowed to question the Debtor. If the Bankruptcy Court decides not to grant the Debtor a discharge or if the Debtor wishes to reaffirm a debt and is not represented by an attorney, there will be another hearing about three months later which the Debtor will have to attend.

What happens after the meeting of creditors?
After the meeting of creditors, the Trustee may contact the Debtor regarding the Debtor's property, and the Court may issue certain orders to the Debtor. These orders are sent by mail and may require the Debtor to turn certain property over to the Trustee, or provide the Trustee with certain information. If the Debtor fails to comply, the case may be dismissed and the Debtor may be denied a discharge.

What is a Trustee in a Chapter 7 case, and what does he or she do?
The Trustee is an Officer of the Court, appointed to review the Bankruptcy Petition, question the Debtor, collect the Debtor's nonexempt property, and pay the expenses of the estate and the claims of creditors. In addition, the Trustee has certain administrative duties in a Chapter 7 case and is the officer in charge of seeing to it that the Debtor performs the required duties in the case. A Trustee is appointed in a Chapter 7 case, even if the Debtor has no nonexempt property.

What are the Debtor's responsibilities to the Trustee?
The law requires the Debtor to cooperate with the Trustee in the administration of a Chapter 7 case, including the collection by the Trustee of the Debtor's nonexempt property. If the Debtor does not cooperate with the Trustee, the Chapter 7 case may be dismissed and the Debtor may be denied a discharge.

What happens to the property that the Debtor turns over to the Trustee?
It is usually converted to cash, which is used to pay the fees and expenses of the Trustee and to pay the claims of unsecured creditors. The Trustee's fee is usually $45.00 plus a percentage of the amount collected from the Debtor.

What if the Debtor has no nonexempt property for the Trustee to collect?
If, from the Debtor's Chapter 7 forms, it appears that the Debtor has no nonexempt property, a notice will be sent to the creditors advising them that there appear to be no assets from which to pay creditors, that it is unnecessary for them to file claims, and that if assets are later discovered they will then be given an opportunity to file claims. This type of case is referred to as a no-asset case. The vast majority of all Chapter 7 cases that are filled are no-asset cases.

We are here to answer your questions, give us a call to learn how you can take control of your situation.
Neil S. Shankman, Attorney, Brunswick, Maine

Wanna Buy An Expensive Lawsuit?

2008-08-14T09:16:00.000-07:00

Let us start with some basics. Like most relationships, a tenancy is far easier to begin than it is to end. Therefore, your goal as a landlord or property manager, is to take all reasonable steps to minimize problems down the road. The basics are simple. Always use a lease. Pre-screen all applicants. Monitor tenant compliance with the lease. Be responsive to legitimate tenant concerns. Terminate any tenancy quickly and efficiently if things are not working out.
The focus of this missive is on preventative medicine. The key is to screen out high risk tenants without exposing yourself to a claim of discriminatory behavior at some point in the future.

All prospective tenants must be treated in the same manner. They must be asked the same questions and they must be judged by the same standards. The first step in the process is usually going to be a determination whether the individual can afford to pay the rent.
You are permitted to request information regarding the applicant and any co-applicant as to his or her current employer, address, telephone number and length of time employed. You may ask for the supervisor’s name and how to reach this person. You may ask about gross income and net income. You also have the right to request banking references (where do they bank, their account number and the type of account in question). As a landlord, you have the right to have them provide you a credit report.
These can be requested by the tenant sending a letter to:Annual Credit Report Request Service, P.O. Box 105382, Atlanta, GA
30348-5281.

You have the right to inquire about criminal history of all prospective tenants. While you may not simply ask whether someone has ever been arrested for a crime, you have the right to ask whether the applicant or any household members have ever been convicted of a criminal offense, and if yes, the details. You can obtain a criminal history report from the State of Maine at the State Bureau of Identification or you can phone them at 207-624-7240.
Another crucial site to check is the Maine Sex Offender Registry. One of the common reasons given by landlords and property managers for not seeking credit reports or conducting criminal background checks is the cost. While we acknowledge this can be a significant drain on a budget, it is important to keep in mind that you do not need to do this on each and every applicant. You may require the prospective tenants to provide this information initially, make a determination regarding overall financial ability
and suitability and then incur the expense for credit checks and criminal background checks only on those applicants who are otherwise qualified for the tenancy.

Between State and Federal law, there are literally dozens of questions that you cannot ask. For example, while you may ask an applicant whether he or she is a U.S. Citizen and whether they are legally eligible to remain permanently in the United States, you may not ask anything about their nationality, lineage, ancestry, descent, or the birthplace of either the applicant or his or her relatives. You may not ask about their native or primary language, or how they learned to read and write. You may not ask how long they have lived in the United States. Questions regarding religious denomination, affiliation, place of worship, religious leaders, or the religious holidays they observe are not permitted. You may not ask someone about their arrest record, although as indicated earlier, questions regarding criminal convictions are permitted. Maine law prohibits any inquiry as to whether an applicant is pregnant, has children, or plans to have children. However, you may ask an applicant how many individuals will be residing in the unit dwelling. You may not ask someone their maiden name (other than for credit check purposes) or their marital status. You may not inquire as to the sex, sexual orientation, gender identity or gender expressions of an applicant. You may not, under any circumstances, request a photograph with the application. However, you may ask to see the driver’s license or state identification for any potential occupants. You have the right to request the names of all individuals who will be residing in the household. You may inquire about someone’s smoking or non-smoking. You may ask an applicant how he or she intends to pay the rent.
Last, but not least, you have the right to confirm the current address of the prospective tenant, determine the name, address and telephone number of the current landlord, and may inquire of him or her. If you determine that the duration of the relationship between your prospective tenant and his or her former landlord is not long enough to satisfy you, you have the right to inquire as to the prior landlord.

Finally, I have consistently urged my clients to include the following “Authorization” at the end of each application (just above the signature line): “The undersigned hereby represents that all of the above statements are true and complete and hereby authorizes verification by the landlord. Failure to answer any of the above inquiries entitles the landlord to reject this application. False information given above entitles the landlord to (1) reject this application
and/or (2) terminate tenant’s right to occupancy if the false information is discovered after the tenant takes occupancy.”
Neil S. Shankman,
Attorney, Lewiston, Maine

Divorce, What You Need To Know...

2008-08-08T10:44:00.000-07:00

Divorce is tough. It is hard for everyone involved. We know that coming to the "Divorce Decision" is not easy. We try to take the guess work out of it, informing you every step of the way by working hard at being your advocate and counsel for what is fair.
FAQ's:
What issues will be addressed in a Divorce?
In addition to determining whether the husband and wife will be granted a divorce, Maine divorce courts have broad powers to resolve all other issues related to the divorce. Other issues often include
(1) the determination of future parental rights and responsibilities (including child support and visitation) if there are children of the marriage under the age of eighteen;
(2) the award of temporary or permanent alimony;
(3) the division of marital property belonging to the parties and the setting aside of non-marital property;
(4) determining responsibility for the payment of marital debts;
(5) permitting a wife to resume her former name;
(6) the determination of the responsibility for paying the attorney’s fees and court costs incurred as a result of the divorce. The property and financial issues which may arise during a divorce are virtually unlimited.

What should I expect from my Shankman & Associates Attorney?
Your attorney will make every effort to keep you informed of the status of your case and we encourage you to call us or schedule an appointment to meet with your attorney whenever you have questions or concerns. Remember that telephone calls are usually easier (and cheaper) than office appointments. If your attorney is not able to take your phone call immediately, he or she will return your call as soon as possible. Please keep in mind, however, that you will be billed for all telephone and office conferences. You may find it easier sometimes to call your lawyer’s secretary or Paralegal and thus avoid a charge for receiving routine information, clarifications or updates. You will receive copies of all of the Court documents which we prepare or which we receive related to your case. We will expect you to advise us whenever you have a change of address or telephone number for your home or place of employment, or if you plan to be out of the area for any length of time.

It is our objective to handle your case as diligently as possible, keep you fully advised of the status of the case and obtain a fair and just result for you.

FMI log onto www.shankmanlegal.com

Neil S. Shankman, Attorney... Lewiston, Maine

Bankruptcy in Maine...

2008-08-04T12:27:00.000-07:00

Bankruptcy. Sometimes it can be circumstance, a bad economy,
the loss of a job, or many other factors that can lead to the final decision of having to file.
Although it is not as easy as it once was to file for Bankruptcy it is now not only a possibility but a real option. Going bankrupt can be a tough decision. However if you do not have enough money to pay your outstanding debts are in foreclosure and in danger of losing your home it becomes a choice that is not so hard to make. Over the years many famous people have declared bankruptcy. Donald Trump, Francis Ford Coppolla, Walt Disney, Larry King and Mark Twain just to name a few. Most rebounded after seeking Bankruptcy protection.

At Shankman & Associates, we are Maine Bankruptcy attorneys. We will guide you through your options, and help you divorce image to make a decision that helps you. Bankruptcy is an option. Stop repossessions, wage garnishment, lawsuits and foreclosure. In our economy today, you are not alone. Keep your home, your car and your wages. A fresh start is possible. We can help you to take control of your financial future.

Feel free to log onto our website for more info or you can call our office and book an appointment today. 207 786 0311
Neil S. Shankman, Lawyer... Brunswick, Maine

Divorce: Mediation is it helpful?...

2008-07-16T07:20:00.000-07:00

Is Mediation required and is it really helpful?

If the parties are unable to reach agreement on every issue in dispute, they will be required to attend Mediation. If there are no minor children involved, mediation may still be held if both spouses agree to attend or if it is otherwise ordered by the Judge. The mediation fee is $80.00 for each party, although it sometimes makes sense to pay the full amount of $160.00 in order to move matters ahead more expeditiously. Mediation is informal in the sense that the spouses, their attorneys and a mediator meet in private, without the customary Court rules regarding evidence or courtroom procedure. The mediators are hired by the Court and have received training in the art of mediating, although few have formal legal training and they therefore cannot provide legal advice. As an impartial third party, the mediator tries to help the parties reach reasonable agreements regarding the issues of the divorce. It is not a purpose or goal of mediation to seek to reconcile the parties’ marital differences. The mediation process has been found to be a useful tool for obtaining a fair settlement agreement in many contested divorces.
For more information log onto www.shankmanlegal.com or give us a call at 207.786.0311
Neil S. Shankman, Attorney, Brunswick, Maine

Bankruptcy, The Laws Have Changed...

2008-07-11T09:31:00.000-07:00

FAQ Part 2:
3. What debts are not dischargeable under Chapter 7?

All debts of any kind or amount, including out-of-state debts, are dischargeable under Chapter 7 except the debts listed below. The following is a list of the most common debts that are not dischargeable under Chapter 7:

* Most tax debts and debts that were incurred to pay federal tax debts;
* Debts for obtaining money, property, services, or credit by means of false pretenses, fraud, or a false financial statement, if the creditor files a complaint in the case (included here are debts for luxury goods or services and debts for cash advances made within 60 days before the case is filed);
* Debts not listed on the Debtor's Chapter 7 forms, unless the creditor knew of the case in time to file a claim;
* Debts for fraud, embezzlement, or larceny, if the creditor files a complaint in the case;
* Debts for alimony, maintenance, or support and, if the creditor files a complaint in the case, certain other divorce-related debts including property settlement debts;
* Debts for intentional or malicious injury to the person or property of another if the creditor files a complaint in the case;
* Debts for certain fines or penalties;
* Debts for educational benefits and student loans, unless a Court finds that not discharging the debt would impose an undue hardship on the Debtor and his or her dependants;
* Debts for personal injury or death caused by the Debtor's operation of a motor vehicle while intoxicated;
* Debts that were or could have been listed in a previous bankruptcy case of the Debtor in which the Debtor did not receive a discharge.

4. What persons are not eligible for a Chapter 7 discharge?

The following persons are not eligible for a Chapter 7 discharge:

* A person who has been granted a discharge in a Chapter 7 case filed within the last eight years;
* A person who has been granted a discharge in a Chapter 13 case filed within the last six years, unless 70 percent or more of the unsecured claims were paid off in the Chapter 13 case;
* A person who files a waiver of discharge that is approved by the Court in a Chapter 7 case;
* A person who conceals, transfers, or destroys his or her property with the intent to defraud his or her creditors or the Trustee in the Chapter 7 case;
* A person who conceals, destroys, or falsifies records of his or her financial condition or business transactions;
* A person who makes false statements or claims in the Chapter 7 case, or who withholds recorded information from a Trustee;
* A person who fails to satisfactorily explain any loss or deficiency of his or her income;
* A person who refuses to answer questions or obey orders of the Bankruptcy Court, either in his or her bankruptcy case or in the bankruptcy case of a relative, business associate, or corporation with which he or she is associated.
.....Neil S Shankman, Attorney, Lewiston, Maine

Landlord /Tenant: Why You May Need an Attorney...

2008-07-09T11:48:00.000-07:00

As a Landlord, often times it can feel as if the Tenant has all of the rights. This is not entirely true, as a matter of fact we hold several Landlord/Tenant seminars every year so folks like you can be informed on the latest news, decisions and laws that will affect you in the coming year. We have recently published 2 new Landlord/Tenant Books. They are filled with the knowledge you will need to help protect you and inform you.The following are a few of our most "Frequently Asked Questions".
I need to evict a tenant for non-payment, what is the best way to approach this?
Making a request for payment via a Notice of Termination of Lease or Notice to Quit, depending on the tenancy.
What is a notice to quit?
A Notice to Quit is a landlord's written notice demanding that a tenant surrender and vacate the leased property, thereby terminating the tenancy.
Does your firm offer a foolproof lease?
Absolutely. Our Leases hold up in Court !!!
Is there a book available with this information?Yes. We offer two books. The first one is entitled "Maine Landlord-Tenant Statutes and Commentaries", which is a compilation of current statutes with supplemental commentaries and case citations.The second book is entitled "Landlord-Tenant Relations Process and Procedures, which is 200+ pages with sample notices, leases, termination of tenancy, how to handle abandoned property, illegal evictions, late fees, security deposits, bankruptcy, civil rights issues, and much, much more.
How can I protect myself in the future?
In addition to checking references of prior landlords and employers, criminal history and credit reports are a wonderful resource.
What do I need to bring to my first appointment?
A complete copy of your file which should include the following:
Information on the landlord (name, address, phone number)
Information on the tenants (names, addresses, work place, physical description),
A copy of the signed lease (if applicable)If evicting for nonpayment of rent, or any other financial obligation, a recent tenant ledger, recertification of income, notice of rent change, etc. If evicting for anything other than nonpayment, documentation from other individuals who have complained about the action of the tenants.
Can I put Shankman & Associates on retainer?
We recently created a new program for smaller companies: “Lawyers On Line”. For a $300.00 retainer, we open a file for you with all of your basic information. If you later have a question or concern, we are available by telephone and online. Paralegal time is billed at $60.00 per hour and interaction with a lawyer is charged at $150.00 per hour. You are already prepaid and we will have the background information from the initial file set up. It is preventative law at best. Call Karen Cook today, she will be happy to set up your account. 207 786 0311 or log onto our website www.shankmanlegal.com
...Neil S. Shankman, Attorney, Yarmouth, Maine

Divorce: It is About You...

2008-07-09T11:15:00.000-07:00

First in a Series...
What are the grounds for divorce?
The answer to the question is that Maine permits divorces to be granted on the ground of “irreconcilable marital differences between the spouses”. This is also referred to as a “no-fault” divorce. In order to obtain a no-fault divorce, it must be shown that the marital differences are sufficiently serious as to make it impossible for you and your spouse to live together.
Although the traditional fault-related grounds for divorce such as “cruel and abusive treatment” and “adultery” still exist, virtually all divorces now proceed solely on the grounds of irreconcilable marital differences. The purpose of the no-fault divorce is to reduce bitterness and hostility between the spouses which can be generated by the divorce process. There is no “advantage” gained by proving fault. Except in the case of economic misconduct, neither side is penalized based on inappropriate behavior.
What issues will be addressed in a divorce?
In addition to determining whether the husband and wife will be granted a divorce, Maine divorce courts have broad powers to resolve all other issues related to the divorce. Other issues often include (1) the determination of future parental rights and responsibilities (including child support and visitation) if there are children of the marriage under the age of eighteen; (2) the award of temporary or permanent alimony; (3) the division of marital property belonging to the parties and the setting aside of non-marital property; (4) determining responsibility for the payment of marital debts; (5) permitting a wife to resume her former name; and (6) the determination of the responsibility for paying the attorney’s fees and court costs incurred as a result of the divorce. The property and financial issues which may arise during a divorce are virtually unlimited. For more information log onto www.shankmanlegal.com
...Neil S. Shankman, Attorney

Bankruptcy: Chapter 7 can be an option...

2008-07-09T11:04:00.000-07:00

First in a series...
Bankruptcy can be a difficult decision. At Shankman & Associates, we are Maine Bankruptcy attorneys. We will guide you through your options, and help you to make a decision that helps you. Bankruptcy is an option.

1. What is Chapter 7 and how does it work?
Chapter 7 is that part (or Chapter) of the Bankruptcy Code that deals with liquidation. The Bankruptcy Code is that part of the federal laws that deal with bankruptcy. A person who files under Chapter 7 is called a Debtor. In a Chapter 7 case, the Debtor must turn his or her nonexempt property, if any exists, over to a Trustee, who then converts the property to cash and pays the Debtor's creditors. In return, the Debtor receives a Chapter 7 discharge, if he or she pays the filing fee, is eligible for such a discharge, and obeys the orders and rules of the Court.
2. What is a Chapter 7 discharge?
It is a Court Order releasing a Debtor from all of his or her dischargeable debts and ordering the creditors not to attempt to collect them from the Debtor. A debt that is discharged is one that the Debtor is released from and does not have to pay. Some debts, however, are not dischargeable under Chapter 7, and some persons are not eligible for a Chapter 7 discharge.... To find out more log onto www.shankmanlegal.com...Neil S. Shankman, Attorney, Lewiston, Maine

Landlord Tenant: A Pound of Cure....

2008-07-09T08:01:00.000-07:00

PREVENTION VERSUS CURE
By Neil S. Shankman

Over the course of the last 25 years, at least 3 or 4 times per year, I have made presentations to groups of landlords and property managers. One key element of every presentation has been the importance of reviewing and updating leases on a regular basis. Laws change. Federal regulations are amended. Courts reinterpret the meaning of words. The consequences of your failure to update your knowledge of the law and change your basic working documents can cost your company literally thousands of dollars.

Simple mistakes or even honest misinterpretations of the law can lead to substantial consequences.

A number of property management companies in the State of Maine have included provisions in their lease by which a tenant would have to pay a fee if they terminate their tenancy early. While State law has always been clear that “liquidated damages” clauses are looked at with disfavor by the Courts however they are permitted under limited circumstances. This basic rule applies to business contracts as well as to landlord/tenant situations.

Between 2005 and 2007, one Portland property management company routinely charged their tenants an early termination fee pursuant to the terms and conditions of their lease. The rational was that even if the company was able to find a new tenant, there would be certain inevitable expenses for advertising, screening new tenants, cleaning the apartment (normal wear and tear) and extra staff time that warranted a $600.00 flat fee. The basic position was that this was not an arbitrary “liquidated damages” clause, but rather a rational financial consequence that would be suffered by the landlord due to early termination.

The Attorney General concluded otherwise and in April of 2008 a Complaint was filed against the property management company. Ultimately, the company concluded that the cost of litigation was not worth arguing for the validity of the $600.00 fee. A Consent Decree was entered whereby the landlord agreed to refund to the affected former tenants up to $46,711.00 of “improper fees charged”. Additionally, the company was also ordered to pay a $10,000.00 fine. Furthermore, the company agreed that it would not charge tenants for such fees in the future.

Title 14 § 6010-A of the Maine Revised Statutes Annotated provides that a landlord is under a duty to mitigate damages when a tenant wrongfully terminates his or her tenancy. The landlord cannot simply leave the apartment un-rented for months at a time and expect the tenant to provide full reimbursement. Essentially, the tenant is on the hook for the actual out of pocket expenses that the landlord expends to re-rent the unit. However, once the unit is re-rented, the tenant’s obligation is complete (so long as the landlord has been fully reimbursed for his or her losses).

Many of us in the property management industry have been aware of the inherent risk of liquidated damages causes. However, the recent Consent Decree is the first time that the Attorney General has challenged such a provision with such vigor. If your lease contains a penalty for early termination, it is imperative that you amend your lease immediately. If you have a tenant currently subject to such a provision, it is your obligation to notify the tenant that the provision will not be imposed against them. At the same time, however, you can explain to your tenants that the consequences of early termination include personal liability for the full amount of actual damages incurred by the landlord.

All of this is simply another reminder that an ounce of prevention is worth a pound of cure, the early bird gets the worm, and an annual review of your leases and other basic forms is a wise business decision. ...Neil S. Shankman, Attorney, Lewiston, Maine