Landlord Awarded Possession Of Residential Property Without Rental Suitability Certificate

In Frempong, the parties entered into a month-to-month lease for a property located in Philadelphia, the opinion said.

According to the landlord, the tenant was responsible for payment of the water bills for the property during the lease term.

According to the opinion, prior to the inception of the lease tenancy, the landlord failed to obtain a rental license for the property or provide the tenants with the certificate of rental suitability for the property or a copy of the associated “Partners for Good Housing Handbook” issued by the city of Philadelphia’s Department of Licenses and Inspections.

For a period of time during the lease term, the landlord did obtain a rental license for the property, however, it was revoked by the city government because of a pending lawsuit the landlord had with the city government for unpaid water bills and real estate taxes due on account of the property, the opinion said.

Some of the unpaid water bills pre-existed the tenants, the opinion said.

Since the landlord could not obtain a rental license for the property, they could not obtain and, thus, provide the tenants with a certificate of rental suitability.

Since the tenants failed to pay rent and some of the water bills due under the residential lease, the landlord provided the tenants with a written notice of termination of the residential lease and notice of eviction, the opinion said.

When the tenants did not vacate from the property, the landlord filed a landlord-tenant complaint in the Philadelphia Municipal Court seeking possession of the property and a money judgment for the rent and other monies allegedly in arrears.

A judgment for possession only was entered in favor of the landlord and against the tenants.

The tenants then appealed that judgment for possession entered against them to the Philadelphia County Court of Common Pleas.

In order to stay execution of the judgment for possession, the tenants deposited the rent, which would otherwise be due under the residential lease in escrow with the trial court.

A bench trial subsequently took place before Padilla, at which trial the parties presented evidence and argument.

After the bench trial took place, Padilla awarded possession of the property to landlord as approximately two months after the award, but ordered that the escrowed funds being held with the trial court should be released to the tenants.

Both the landlord and the tenants ultimately appealed Padilla’s ruling to the Superior Court of Pennsylvania.

Padilla then issued a memorandum opinion to set forth the legal reasoning behind her ruling.

Padilla pointed out that, prior to or at the time of the inception of the lease tenancy, the landlord was required to obtain a rental license as well as a certificate of rental suitability from the city of Philadelphia’s Department of Licenses and Inspections, and to provide the tenants with a copy of the certificate of rental suitability and in addition to copies of the “Partners for Good Housing Handbook.”

Quoting Section 9-3202 of the Philadelphia Code, which is titled “Rental Licenses,” Padilla emphasized that “no person shall collect rent with respect to any property that is required to be licensed pursuant to this Section unless a valid rental license has been issued for the property.”

Padilla also quoted portions of Section 9-3903 of the Philadelphia Code, which is titled “Certificate of Rental Suitability; Required Tenant Documents.” In doing so, Padilla highlighted that an “owner of a property for which a rental license is required, at the inception of each tenancy, provide to the tenant a certificate of rental suitability that was issued by the department no more than 60 days prior to the inception of the tenancy” as well as “a copy of owner’s attestation to the suitability of the dwelling unit … and a copy of the ‘City of Philadelphia Partners for Good Housing Handbook.’”

As indicated by Padilla, under Section 9-3901(4)(e) of the Philadelphia Code, if a property owner fails to obtain a rental license or provide the tenant with a copy of the certificate of rental suitability and the associated “Partners for Good Housing Handbook,” then the property owner “shall be denied the right to recover possession of the premises or collect rent during or for the period of noncompliance.”

On appeal, the landlord asserted that they should have been able to collect rent against the tenants, despite not providing the tenants with a copy of the certificate of rental suitability for the property, along with a “Partners for Good Housing Handbook,” because the tenants prevented the landlord from obtaining the certificate of rental suitability due to their failure to pay the water bills due under the residential lease.

Padilla vehemently disagreed with the landlord’s assertion, noting that many of the unpaid municipal obligations pre-existed the tenants.

Furthermore, Padilla stated that the landlord failed to obtain the certificate of rental suitability prior to inception of the residential lease, as required by the Philadelphia Code.

Padilla concluded that, because the landlord was never compliant with the Philadelphia Code during the lease term, they were not entitled to collect rent from the tenants.

Padilla then addressed the tenants’ argument that she had committed an error of law and abused her discretion by awarding possession of the property to the landlord where the landlord never obtained a certificate of rental suitability, did not have a valid rental license at trial, and was not eligible to receive a rental license or certificate of rental suitability because the landlord’s rental license was revoked due to their noncompliance with the Philadelphia Code.

Citing to Section 9-3901(4)(e) of the Philadelphia Code, Padilla emphasized that any property owner that does not comply with the requirements to obtain a rental license or provide the tenant with the certificate of rental suitability and the associated governmental handbook may only be denied the right to recover possession of the leased premises or to collect rent during or for the period of noncompliance.

By refusing to award rent to the landlord under the residential lease, Padilla stated that she was well within her right to award possession of the property to the landlord despite their noncompliance under the Philadelphia Code.

This is the most critical aspect of the memorandum opinion, as, until now, to my knowledge, there has not been an opinion in writing so holding that a landlord may obtain possession of a residential property in spite of the landlord’s failure to provide the tenant with the requisite certificate of rental suitability and the associated governmental handbook.

As an aside, Padilla briefly addressed her decision to grant the landlord possession of the property approximately two months after she issued her ruling.

According to Padilla, she was well within her authority to set a reasonable time for termination of the stay of the supersedeas that had been in effect.

LESSON LEARNED

In Fremong, Padilla clarified that a landlord in Philadelphia may still obtain possession of the residential property from the tenant even when the landlord fails to obtain a rental license or provide the tenant with a certificate of rental suitability and the associated governmental handbook.

How the Superior Court ultimately decides this issue may dramatically change the landscape of landlord-tenant disputes proceeding forward. In other words, stay tuned.

Reprinted with permission from the November 15, 2018 edition of The Legal Intelligencer © 2018 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382, reprints@alm.com or visit www.almreprints.com.