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Renters’ Revenge

John Goodell  |  April 30, 2021

MUCH IS WRITTEN about whether it’s better to rent or own your home. Not nearly enough ink is devoted to the issue of renting from a bad landlord.

Perhaps personal finance writers avoid the topic because they’re wary of providing legal advice when discussing potential remedies. On top of that, landlord-tenant law varies greatly from state to state, with some states offering greater protection to tenants and others affording landlords wider latitude.

I know a fair amount about this because I not only spent 14 years as an active-duty Army servicemember who had to move frequently, but also I’m an attorney and for two years ran the military’s largest legal assistance office, which is located at Fort Hood, Texas. The state is among the top three nationally when it comes to both servicemember population and total military retiree population.

While there are several tactics used by dishonest landlords to exact maximum money from their tenants, perhaps the most egregious is withholding security deposits without a valid reason. In the Fort Hood area, it was common for landlords to withhold a soldier’s entire deposit, regardless of what type of work needed to be done on the dwelling after a soldier vacated.

There’s a federal law called the Servicemember’s Civil Relief Act, which protects servicemembers from certain issues, such as breaking a lease due to military orders. Problem is, servicemembers must assert this right in court for the protection to kick in. Landlords know this and assume a transient population like the military won’t fight to get their deposit back.

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How did our legal team solve this problem? We hired a Texas-licensed civilian attorney, who could get us into the local courts. Adhering to the tenet that the best defense is a good offense, we began suing. In the first year of the program, we took the six most egregious cases to court. We won all of them, ensuring that the security deposits involved were returned to the soldiers and their families.

While landlords had to pay their attorneys, our efforts were simply an additional legal service that our office provided. In my final few months as Chief of Client Services, I began to notice that we were getting fewer complaints. My assumption is that we had flipped the script—that landlords didn’t want to pony up legal fees and explain their actions to a judge.

The lesson for tenants in this situation: Consider your options, including speaking with an attorney who’s an expert in this area of the law, doing research on your state’s laws and utilizing small claims court. The American Bar Association offers some excellent general guidance on the topic.

Does this read like an article for HumbleBrag rather than HumbleDollar? A confession: Before my time at Fort Hood, when my eyes were opened to all the possible pitfalls facing renters, I was the tenant who signed a very landlord-friendly contract for a rental in Arlington, Virginia. Did I read the entire contract? Yes. Was I an attorney when I signed it? Yes (sigh).

In 2011, my wife and I agreed to a rental contract with a clause that allowed the owner to take possession if he had to move back to the area for work. Nine months into our lease, our landlord—a Silicon Valley software engineer—told us that he needed his home back.

I had read the contract carefully. I could have refused to sign it or negotiated a different clause. But my new assignment was starting soon. We were desperate for a reasonably priced rental with a fenced-in yard that was near to my wife’s medical school and my workplace. I played the odds. We lost.

Neither my wife nor I can recall whether the landlord kept our deposit, which is probably just as well. You know what they say about “ignorance” and “bliss.”

John Goodell is general counsel for the Texas Veterans Commission. He has spent much of his career advocating for military and veterans on tax, estate planning and retirement issues. His biggest passion is spending time with his wife and kids. Follow John at HighGroundPlanning.com and on Twitter @HighGroundPlan, and check out his earlier articles.

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Mike Zaccardi
Mike Zaccardi
18 days ago

I had to call my landlord’s parents (several times) to bother them enough to return it. Way too much effort than it should have been!

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