Around here, most leases have a “failure to deliver possession” clause that says that, if the landlord can’t deliver the apartment at the start of the lease, you don’t have to pay the rent until he does. That seems superficially reasonable, so lots of people sign leases with that clause. Especially lots of students.

What the students don’t understand is that, without that clause, the landlord would be responsible for paying the damages that result from the landlord not honoring the lease. (Typically, the cost of a hotel room and storage fees for your stuff. Also extra money to your movers, since they probably charge extra to unload your stuff into storage, and then load it back up to deliver it when your apartment is finally ready.) Instead, with the clause, the student is just out in the cold—no place to live, no place to store their stuff—for an indefinite amount of time. Plus, they can’t just go find another place to live, because they’ve signed a lease. Once their landlord delivers the keys, they have to start paying the rent.

This is not something that I would have worried about when I was a student. In fact, I was shocked and appalled the first time I heard about a whole apartment building that was supposed to be finished in time for students to move in August 1st, but was still unavailable the day the dorms opened in late August. (The most common version of this clause in contracts around here does give the renter the right to cancel the whole lease if their apartment isn’t available after 30 days. Maybe that’s required by state law, or maybe it’s just that judges found it unconscionable to try to hold a renter to a lease for an apartment that can’t be made available even several weeks late. In any case, it’s kind of meager comfort since all the good and cheap places to live will have been long ago rented out by the time it’s safe for you to sign another lease.)

Over the years, though, I’ve gotten kind of inured to it. It happens year after year. Especially in years that a big new apartment building goes up, the newspapers have a bunch of stories in late August with sad and angry quotes from frustrated students with no place to live. I almost begin to hold it against the students, for being so foolish as to sign such a one-sided lease. And then I remember how surprised I was the first time the real effect of that clause was explained to me. I remember realizing that I could easily have been caught in the same error. Even six or seven years out of college, I didn’t know the ins and outs of that clause. How could the students know? (Actually, I kept a dorm room right through college, partially because I knew that I didn’t want to try to deal with all that stuff.)

I wish I knew a way to prevent this problem. The two obvious ways have both already failed:

  • Education doesn’t work, because there’s simply too many things that someone who’s trying to set up housekeeping for the first time needs to know. The evidence shows that this particular one falls through the cracks. (The local Tenant Union has been warning about this issue forever.)
  • Reasonable rules don’t work, because there are reasonable rules, except that the rules permit the parties to agree to waive them.

I guess what we need are rules that can’t be waived (or, at least, can’t be completely waved) in the lease. But that’s always fraught. Some people really don’t need the protection—local students who can easily enough wait another few weeks to move out of their parents’ house, for example. And the landlords are already taking a risk by investing in constructing a new apartment building. Layering it up with the risk that a minor construction delay could force them to cancel dozens of leases may be asking too much.

But I’m sure that the current scheme is bad. I see the bad results in the newspaper year after year.

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5 thoughts on “Failure to deliver possession

  1. This is another example to me of how the world has become unreasonably complicated. I frequently feel like I’m overwhelmed trying to figure out how to navigate complex systems in today’s world. I figure if I, a PhD, frequently feel paralyzed or like I have to punt, the average person must be even more overwhelmed.

    I don’t know a definitive answer, but for a lot of it, I think we could do with more effective unions — or union-like organizations. Having a union to manage negotiating my contract seems like a great thing, to me. It’s democratic and I participate in the governance, but it can hire experts (ie, lawyers) that can specialize in contract law and to help us understand what the employer is trying to do and help us, as a group, advocate for more favorable terms.

    Unfortunately, US society has largely gotten turned against organizing. People are convinced they have to do everything for themselves, like rugged individualists. Instead, they’re like sheep for the fleecing.

  2. Very good point. In fact, the Tenants Union that I link to is sort of that kind of thing—not an actual union, but a organized group paid for out of student fees so it has some money to hire lawyers and such. Without it, I might still not know what the story is about apartments not being available at the start of the lease.

  3. First thing I thought about, when reading Steven’s comment, was how our health care system seems to suffer a similar fate. I’m going to soon be faced with some flexibility I haven’t had to date. I either get to choose the insurance my consulting company will offer, or go and shop for my own. I’ve found it virtually impossible to compare plans with all the variability they contain. The closest thing to “unionizing” in this case would be, I suppose, the health care pools on the horizon or taking the corporate plan on faith that they’re offering something competitive. I’m not sure I like either option.

  4. In the old days companies thought they had multiple reasons to create great health plans: It gave them a competitive advantage for attracting the best employees, it meant that their employees could focus on work even when a loved one was sick, and it let upper management feel happily paternalistic about providing the best for their people.

    None of those feel valid anymore. Companies figure they should provide the cheapest health insurance plan that doesn’t make them so completely out of line with their competitors that they can’t draw workers.

    They (and everyone else—especially things like cell phone plans) also take delight in making things extra complicated. They do it in the name of “choice,” but they also know that most people will end up accidentally paying for things that they’re not going to use, meaning more money in the company’s pockets.

    And, if there’s anything worse than deal with that sort of crap, it’s gotta be dealing with that sort of crap when you’re sick.

  5. Yeah, if my rental experience has taught me anything, it’s that the lease is mostly useless. Out of five apartments in town, I’ve had three bad experiences. In the first one my downstairs neighbors were violating the lease in about six different ways (including not paying rent), but my landlord didn’t want to evict them because they paid more rent than we did. In the second one, my landlord was coming by at all hours of the day and night without giving notice, and it was Urbana law that protected me, not the lease. And now, the guy upstairs is violating the lease in at least a couple ways, but it’s up to the landlord to choose if he wants to do anything about it.

    And if those students didn’t have a “failure to deliver possession” clause, they’d still have to get the landlord to actually PAY the damages, which he wouldn’t necessarily do (at least in time to pay for the actual hotel rooms they needed.)

    Incidentally, my current lease has “failur to deliver possession” in conjunction with a clause allowing me to break the lease after a certain number of days of undelivered possession.

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