Maps

Rent Escrow for Uninhabitable Housing

A remedy for uninhabitable or substandard housing is rent escrow

When landlords sue tenants for nonpayment of rent, habitability violations are sometimes an affirmative defense to nonpayment – meaning that a tenant can tell the judge about the habitability violations and the judge may decide that they don’t owe some or all of the rent to the landlord. Generally, though, withholding rent can be risky because the judge might eventually decide it was withheld improperly and order the tenant to pay some or all of it back to the landlord. Some jurisdictions allow or require tenants to withhold rent through a rent escrow process. This is where tenants pay their rent into a neutral third-party account until the habitability issue is resolved and then the court decides how much rent should be paid to the landlord and how much should be returned to the tenant for “loss of use” of the rental property. 

Finally, in some jurisdictions, tenants may have the option to recover damages from their landlords for habitability violations that go beyond the value of their rent. The damages could be compensatory (actual cost of finding alternate shelter or trying to fix the issue) or punitive (allowing damages beyond reimbursement of costs to deter the landlord from allowing habitability issues to persist in the future). These types of remedies could be especially powerful if paired with the right to an attorney to help a young person with their case. But without a right to counsel, requiring a young person to go to court to address uninhabitable housing is unrealistic – a better way would be to allow tenants to withhold rent after reasonable notice to the landlord of the need for repair and to then bar the landlord from filing a lawsuit for nonpayment of rent unless they can first prove to the court that the rental unit is habitable.