August 10, 2018
Author: Deborah J. Galonsky, Esq.
Organization: Elzufon Austin Tarlov & Mondell, P.A.

The Delaware Residential Landlord-Tenant Code (the “Code) regulates and determines the rights, obligations and remedies of all parties of a rental agreement. Inherent within the Code is the principle that the parties shall act in good faith with regard to their dealings.

Implicit in this good faith is the principle that a Tenant will read and observe the Code, the rules and regulations of the Lease Agreement and the Summary of the Code, if applicable.

Another principle of good faith is that the parties will deal fairly with each other and respect each other. The Tenant will respect the ownership rights of the Landlord in the property and the Landlord will respect the Tenant’s right to reside peacefully in the property. However, this scenario does not always occur and the Landlord and Tenant relationship breaks down.

A Landlord and Tenant are free to negotiate and to contract as they wish, however, if a provision agreed to between the parties conflicts with the Code, it may very well not be enforceable.

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IMPORTANT DEFINITIONS

1. Lease or Rental Agreement (§5141(24)). A residential lease or rental agreement is an agreement, written or oral which establishes or modifies the terms, conditions, rules or regulations or any other provisions concerning the use and occupancy of a rental unit.
2. Rental Unit or Unit (§5141(25)) (Also known as dwelling unit or place). A rental unit is any house, building, structure or any portion thereof, which is occupied as a residence of one (1) or more persons.
3. Tenant (§5141(32)). Any person entitled under the rental agreement to occupy a rental unit to the exclusion of others.
4. Security Deposit (§5141(26)). Is any deposit, not including a pet deposit, given by the Tenant to the Landlord that is held for the term, or a portion of the term, of the rental agreement.
5. Pet Deposit (§5141(22)). Any deposit made to a Landlord to be held for the term of the rental agreement due to the presence of animals in the rental unit. The pet deposit may not exceed one (1) months rent and is only allowable to be used to repair damage directly related to the pet(s).
6. Utility Services (§5141(33)). Any water, sewer, electric and/or fuel service.
7. Normal Wear and Tear (§5141(19)). Shall mean the deterioration in the condition of the rental unit by the ordinary and reasonable use of the property

I. THE LEASE

1. PRE-LEASE.

1. The Landlord has a right under the Code to perform a credit background check.
2. As a practical matter there are several important steps a Tenant should take when the Tenant first occupies a rental unit:

(i) Review the Lease Agreement and know all the terms;
(ii) Receive a copy of the Delaware Summary of the Landlord Tenant Code as published by the State of Delaware Office of the Attorney General;
(iii) Allow time for an inspection walk-through with the Landlord;
(iv) Take pictures of the rental unit at move-in condition, especially of any defects;
(v) Submit to Landlord, in writing, a list of needed repairs. The Landlord and Tenant should agree to time frame in which necessary repairs are made.
(vi) Upon vacating of the premises, the Tenant (and Landlord) should do an additional walk-through together and it is recommended that each use a camera to document any damage or repairs that are required

2. THE LEASE AGREEMENT.

The residential rental lease agreement (the “Lease Agreement”) must comply with the Code, regulations and federal and state statutes. Any provision within the Lease Agreement that conflicts with the Code is void and unenforceable. Additionally, the Lease Agreement must not require that a Tenant:

A. Pay a non-refundable fee as a condition to occupy the Unit;
B. Agree to waive any rights or remedies afforded under the Code
C. Agree to any limitation of a Landlord’s potential liability for loss sustained; and/or
D. Agree to an automatic confession of judgment.

If a Landlord knowingly puts such a provision within a Lease Agreement and then subsequently seeks to enforce the provision, a Tenant may bring an action in Justice of the Peace Court to recover damages for as much as three (3) times the monthly rent plus the costs reasonably related to obtain the judgment. Additionally, the Landlord cannot require that assurance money be given by Tenant in connection with the rental of a Unit (§5310). However, the Lease Agreement may require that certain specific fees be charged so long as the fees are disclosed and rental of Unit is not conditional upon payment of the fees. The fees permitted are as follows:

A. Application Fee. The Tenant can be charged an application/credit check fee not to exceed ten (10%) percent of the rent amount up to a maximum of $50.00 (§5514(d)).

B. Security deposit. A security deposit may be charged by the Landlord so long as the deposit does not exceed the sum total of one (1) months rent. A security deposit is to be held for the term of the Lease Agreement. A security deposit must be held in an escrow account designated for security deposit purposes. A Tenant has the absolute right to know the name and location of the bank where the security deposit is held.

The Landlord may increase the security deposit sum required as the rent increases. However, if the security deposit increase exceeds ten (10%) percent of the existing rental amount, then the increase must be prorated over the lease term. If the security deposit for that Unit is reduced, then the Tenant shall receive a reimbursement equal to the deduction in deposit. The security deposit can only be used to reimburse the Landlord for the following:

(i) Actual damages. This would be damages beyond everyday normal wear and tear. If the Landlord can correct the damage by painting and ordinary cleaning then the security deposit can not be used;
(ii) For any back rent owed and outstanding;
(iii) Rent monies owed or the cost of reletting the premises due to early termination of the Lease Agreement.

C. Pet Deposits. A separate pet deposit may be collected from a Tenant for the presence of animal in the Unit. The pet deposit may not exceed the sum of one (1) months rent and may only be used to reimburse the Landlord for actual damages caused as a direct result of having the animal. If the damages exceed the amount of the pet deposit, then the Landlord may use the security deposit funds. All pet deposit funds must also be held in escrow.

Any rent and/or security deposit increases or general Lease Agreement modification of terms require sixty (60) days’ written notice. If the Tenant fails to reject the new terms within forty-five (45) days, the new lease terms are deemed accepted. Leases for one year or more require a minimum of sixty (60) days’ notice by either party prior to termination ((§5106(c)). The Lease Agreement must also abide by all federal and state fair housing regulations which are reiterated within the Code beginning at §5116. Neither a Landlord nor the Landlord’s agent shall refuse to rent or cancel an existing Lease Agreement to any Tenant, potential Tenant or a member of the Tenants family because of race, creed, religion, marital status, color, sex, national origin, disability, age, occupation and/or because of the presence of a child. Furthermore, the lease cannot demand extra rent based on any of the above factors. However, a Unit may be limited to senior housing if is made exclusively for seniors

A. In event of violation of this provision a Tenant may recover damages sustained as a result of Landlord’s action “including costs involved in locating adequate substitute housing.

II. TENANTS RIGHTS, OBLIGATIONS AND DEFENSES

Ignorance of the law is a defense available to the Tenant in any proceeding brought under the Code by the Landlord if the Landlord fails to provide the Tenant with a Summary of the Landlord Tenant Code as prepared by the Consumer Protection Unit of the Attorney General’s Office (§5118).

Lease Term Compliance. A Tenant must comply with all the terms of the Lease Agreement, any specific rules as promulgated by the Landlord, applicable local and federal (if applicable) statutes. If the Tenant does not comply, some of its remedies or defenses under the Code may not be available.

Rental Unit. The Tenant has an absolute right to take possession of the Unit at the start of the term of the lease that:

(i) Is comparable to the Unit bargained for in the Lease Agreement;
(ii) Complies with all building and housing codes;
(iii) Is fit for habitation; and
(iv) Is clean and does not endanger the health, safety or welfare of the Tenant;

If the Landlord fails to put the Tenant in actual physical possession of the Unit at the start of the Lease Term, then the Tenant shall be entitled to rent abatement during the time of non-possession.

Payment of Rent. Under §5501, Tenant must pay all rent due and payable by the agreed upon dated within the Lease Agreement. Absent a written Lease Agreement, then the date agreed to orally between the parties.

Most Lease Agreements specify rent is due on the 1st of the month and late as of the 6th day of the month. A Tenant must recognize that a late fee may be charged if rent is paid by the 5th day of the month. A late fee may be as much as five (5%) of the rent as long as the late fee is stated with specificity in the Lease Agreement. Any late fee charged is deemed additional rent.

A Tenant may have a defense for non-payment of rent if the Landlord fails to maintain the rental unit as required by statute or the Code. Generally, in order for a Tenant to be successful in asserting this defense the Tenant must establish that a defective condition exists and that the Landlord either knew of the defect or should have been aware of the defective condition.

Non Payment of Rent and Late Fees. In the event that a Tenant is delinquent in the payment of rent, the Landlord must provide the 5-day letter to Tenant. The letter must comply with certain requirements, otherwise it will be deemed defective and the Tenant can seek to have the matter dismissed by the Justice of the Peace Court. The letter must provide the Tenant with how much rent is delinquent as well as the entire balance due including late fees. The letter must also specify the rental address and be mailed via certificate of mailing or hand-delivered. If any of these elements are deficient, then the Tenant may have the matter potential dismissed. However, this will not prevent the Landlord from re-filing the matter after correcting the deficiencies. Under the Code, if a Tenant who receives the 5-day Letter and makes either a partial payment or a full payment of all amounts in arrears and the Landlord accepts the payment, then unless the Landlord provides the Tenant with a Reservation of Rights Letter the Tenant may seek to have the matter dismissed by the Justice of the Peace Court. A Reservation of Rights Letter states that the Landlord accepts the monies the Tenant is paying, however, the Landlord will still seek to move forward on the summary possession matter.

Essential Services. The Landlord is responsible for the supply and maintenance of essential services: heat, water, hot water and electricity. The New Castle County Code requires that from October 15th to April 15th heat must be considered an essential service. Air conditioning is not considered an essential service.

The Landlord’s obligation to supply electricity to the building ends at the Unit if the Unit’s are individually metered and the failure of the electric is due to Tenant’s nonpayment of electric bill.

All water and plumbing fixtures must be properly installed and in working order. Water should be free from contamination and lead.

If the Landlord fails to maintain an essential service and such failure continues for forty-eight (48) hours then the Tenant may:

(1) Upon written notice of continued condition, immediately terminate the Lease Agreement; or
(2) Withhold two-thirds (2/3rds) per diem rent until such condition is resolved. The Landlord may defend by claiming impossibility i.e. electrical issue is that of Delmarva and not Landlord. A Tenant must remember that wrongfully withholding rent entitles the Landlord to double damages plus costs in action for possession (§5308(5)). Non Essential Services (§5307). The Landlord must repair the defective condition within thirty (30) days after being notified in writing of the problem or initiate reasonable corrective measures within 10 days from receipt of the written notice.

In the event that the Landlord does not take corrective measures, then the Tenant may immediately cause a repair to be done and deduct the reasonable sum from rent. The amount deducted can not exceed $200.00 or half the monthly rent, whichever is less, unless the Landlord and Tenant agree otherwise. Tenant would be wise to keep all receipts/invoices for work completed. The Tenant who is delinquent in rent may not take advantage of this remedy. The Tenant is liable for damages for further damage the Tenant causes in any ill fated attempt to repair. The Tenant is also liable to the Landlord for any work performed by a person authorized by Tenant to make repair and who causes damage. Access and Locks. The Tenant must recognize that the Landlord maintains an interest in the Unit as either the actual owner or an agent for the actual owner. Therefore, there are times when a Landlord will need or want access to the Unit. A Tenant cannot unreasonably withhold access if the access is for a legitimate and related purpose. However, a Tenant is entitled to forty-eight (48) hours prior notice if Landlord intends to enter the premises except in certain situations such as (1) When the Tenant has requested the repair (§5509(a)), and (2) Emergency situations (§5509(b)). The Tenant may waive this notice requirement in the Lease Agreement or in an addendum to the Lease Agreement.

A Tenant may install its own lock at the Tenant’s own expense. Tenant must provide written notice to Landlord and supply the Landlord with a key. The new lock must fit the system already in place and lock installation shall not cause damage to the door (§5509(a)). Any damage caused by the installation of the new lock must be repaired at the sole expense of the Tenant. The Tenant is obligated to provide the Landlord with a duplicate key to the new lock system.

The Tenant shall permit the Landlord reasonable access in order to read meters or other appliances for measurement of utility consumption. A Tenant may not unreasonably withhold consent of a Landlord to enter the premise in order to inspect, make repairs or to show the unit to a future potential renter. A Tenant may be liable to Landlord for any harm proximately caused by Tenant’s unreasonable refusal to allow access. A court may issue an injunction against a Tenant who has unreasonably withheld access to the rental unit.

However, the Landlord must provide the Tenant with twenty-four (24) hour notice prior to showing the Unit for re-renting purposes, unless agreed otherwise between the Landlord and the Tenant.

The Landlord is liable to Tenant for any theft or harm that is the proximate result of the entry and/or actions taken by the Landlord, its employees, its agents, its vendors, or with it the Landlord’s permission when:

1. Tenant is absent and has not consented to the access by or on behalf of the Landlord;
2. Without actual consent and Tenant is present and able to consent; and
3. The harm suffered by the Tenant is due to the Landlord’s negligence or the negligence of one of Landlord’s agents, vendors or employees.

III. TERMINATION OF THE LEASE AGREEMENT

The Code is very specific on the rights of a Tenant to terminate the Lease Agreement. If a termination is not done properly, a Tenant may find itself liable to the Landlord for damages. A Tenant may terminate the Lease Agreement at the beginning of the lease term for the following (§5302):

Defective Condition.

1. Under (§5302(c)) when a condition exists which deprives a Tenant of a substantial part of the benefit and/or quite enjoyment of the Unit, then the Tenant shall notify the Landlord in writing of the defective condition and provide the Landlord the opportunity to correct. The Landlord must repair the defective condition within fifteen (15) days, otherwise:

(i) The Tenant may then immediately terminate the lease;
(ii) The Tenant must then initiate JP Court action seeking a determination that Landlord has breached the agreement; and
(iii) The Tenant is entitled to seek damages including a rent deduction from the date notice provided
(iv) If the condition in §5302(c) was caused willfully or negligently by Landlord then Tenant may then recover the greater of:

(A) Difference between rent payable and all expenses necessary to obtain adequate substitute housing; or
(B) An amount equal to one month’s rent and security deposit.

During the First Month of Occupancy.

If the Landlord fails to substantially conform to the rental agreement or there is a material non-compliance with any Code, statute or regulation governing the maintenance and/or operation of the Unit and:

(i) The Tenant has remained in possession of the Unit based on a promise of repair/replacement of defective condition, then
(ii) The Tenant may terminate the lease upon written notice to the Landlord

During the First Six (6) Months of Occupancy.

If during the first six months of the Lease Agreement and the Tenant has remained in possession based on a written or oral promise to correct a preexisting or newly developed condition and the same, or substantially the same condition arises, and
(i) The Tenant had given prior written notice of the condition;
(ii) The Tenant may terminate the lease with at least fifteen (15) days’ written notice;
(iii) Notice must specify the breach that occurred and the date of termination

2. At any time when there is fire or casualty damage (§5309) where the fire substantially impairs enjoyment of the Unit and it was not the fault of the Tenant. The Tenant may:

(i) Quit the premise;
(ii) Promptly notify the Landlord of election to quit within one
(1) week of vacating and the Landlord must timely return the unused portion of the security deposit; or
(iii) The Tenant may elect to only vacate the portion of the premise rendered unusable by fire or damage in which case the rent is prorated to diminution of the fair rental value.

End of Lease Term.

A Tenant may terminate the lease at the end of the lease term by giving the Landlord sixty days notice. The timeframe begins the 1st day of the month following actual notice. It is best if the Tenant provides Landlord with written notice.

Early Termination Exceptions.

The Tenant may terminate a lease early by giving thirty (30) days written notice beginning the 1st day following the delivery of actual notice, when:

1. A change in location of Tenant’s present employer requiring a change in location of greater than thirty miles.
2. A serious illness of the Tenant or death or serious illness of an immediate member of Tenant’s family which will require a change in location for the Tenant on a permanent basis.
3. When the Tenant is accepted into a senior citizens housing facility.
4. When the Tenant is accepted into subsidized public or private housing.
5. Persons who enter the military and are on active duty after signing the rental lease.
6. Surviving spouse or personal representative of the estate upon the death of the Tenant.
7. A person who is the victim of domestic abuse, sexual offenses, stalking or by a person who has a restraining order.

IV. OTHER TENANT DEFENSES: RETALIATORY ACTIONS AND UNLAWFUL OUSTER

The Code prohibits both retaliatory actions and unlawful ouster by the Landlord. A retaliatory act is any attempt on the part of the Landlord to “punish” the Tenant or otherwise make it difficult for the Tenant to stay in the Unit. The purpose of a retaliatory act would be to have the Tenant quit the Unit involuntarily, prematurely or for Landlord to get summary possession.

Unlawful ouster occurs when a Tenant is removed from, or denied access to, the rental unit by the Landlord or an agent of the Landlord without a valid court order authorizing the removal (summary possession and Writ of Possession). The only legal manner for a Landlord to regain possession of a Unit is pursuant to the Code.

A Tenant who is wrongfully ousted from the Unit may either (1) recover possession of the rental unit or (2) terminate the Lease Agreement. The Tenant may also seek treble damages which are actually sustained or an amount equal to three (3) times the per diem rent for the period of time the Tenant was excluded from the rental unit, whichever is greater.

The Tenant is also entitled to recover the costs of bringing the action, including attorneys fees, if applicable.

A Landlord can avoid treble damages, or per diem charges, by seeking the proper judicial order through use of the court system before taking any steps to oust the Tenant. This provision is designed to prevent and possibly punish, a Landlord who does not comply with the legal system to properly regain possession of the rental unit. The proper steps necessary to regain possession of the unit is through a summary possession proceeding.

If the Landlord unlawfully holds or destroys the personal property of the Tenant, then the Tenant may sue the Landlord for common law detainer and/or conversion. If successful, the Landlord would then also be liable to the Tenant for the damages and/or the value of the property at the time the conversion occurred.