Alabama State House Representative Wren (75th District, Montgomery and Elmore Counties) has introduced an amendment to the Alabama Residential Landlord Tenant Act. Under current law, a residential lease cannot contain a clause making the tenant liable for legal fees in the event of a dispute or a lawsuit. If there is a lawsuit, the judge can award legal fees in some situations, it’s just illegal for the lease to say that. The reasoning behind this was that, previously, some unethical landlords used such a clause to browbeat tenants into giving up valuable rights whenever there was a dispute between a landlord and a tenant. The landlord would say, “Let’s just go to court on this issue. You’ll have to pay MY legal fees and YOUR legal fees if you want a judge to decide our dispute.” Most consumers would just give up.
Now, Representative Wren wants to change the law to add the following paragraph:
(c) A rental agreement may include a provision in which the tenant agrees to pay the landlord’s reasonable attorney’s fees when the landlord prevails in an action against the tenant and is a corporation or other entity required under Alabama state law to be represented by an attorney in a legal proceeding. “
You’ll notice a couple of questions raised by this:
- Is it only corporation landlords (and similar entities) who are allowed to have the clause in their lease, or does it mean anyone can have the clause, but only corporate landlords can collect?
- If only corporate landlords can have the clause, what happens when this clause is in a lease and the corporate landlord sells the property to an individual landlord? Is the lease clause now illegal and the individual landlord liable for statutory penalties for having an illegal clause?
- If the clause is in a lease for a corporate landlord, and then an individual investor buys the property, does the existence of the clause mean the individual landlord can’t collect any legal fees at all, even if the court wanted to award them?
- Does this strip away the current right of an individual landlord to collect legal fees when granted by a court?
- Why does it make any difference about corporate landlords vs. individual landlords?
I’ll contact Representative Wren’s office, and see if I can find out the answers to some of these questions.