Goldstein v. Weiner — A Definitive Ruling, but an Uncertain Future, for Landlord Tenant Court in Philadelphia

For those of you who’ve ever had to deal with landlord tenant court here in Philadelphia before, you know that it can be a harrowing experience – especially if you don’t have an attorney. Here’s a quick run down of a recent Common Pleas Court decision that may change the future of eviction proceedings.

In Pennsylvania, we theoretically have some excellent laws here to protect tenants — including the Landlord Tenant Act and the Unfair Trade Practices and Consumer Protection Law. And in Philadelphia specifically, tenants have some additional protections due to the oft-maligned Department of Licenses and Inspections.

Requirements to Rent a Property in Philadelphia – Landlord and Tenants Take Note.
Landlords who wish to rent out a property in the city are required, at minimum, to have two basic things:

1. A Business Privilege License for the property they wish to rent out; and
2. A Certificate of Rental Suitability, required before a landlord rents out a property to new tenants.

Under the blackletter law, if a landlord doesn’t have these things, he cannot legally collect rent.
What Does the Blackletter Law Say?
Under the Philadelphia Property Maintenance Code PM-102.6.4, Rent Collection:

[n]o person shall collect rent with respect to any property that is required to be licensed pursuant to this code unless a valid license has been issued for said property.” And under 102.7.1. of the same code, any landlord who does not comply with licensing requirements “shall be denied the right to recover the premises or to collect rent during or for the period of non-compliance during or for the period of license suspension or revocation.

In other words: if a landlord doesn’t have a certificate of rental suitability, he is legally forbidden from either collecting rent or evicting a tenant for nonpayment of rent. (Similarly, if a landlord has any outstanding L&I violations on the property, the same restrictions apply). Tenants, you can check this information down at the Municipal Services Building concourse.
The problem with this law, though, was that it wasn’t really being enforced in landlord tenant court. If a landlord leased a property to you for 300 days without a license, then got a license on day 301, he was allowed to file for eviction and ask for any unpaid rent, despite his non-compliance with the law.

That all may have changed.

On December 14, 2011, Judge David Shuter of the Philadelphia Court of Common Pleas issued an opinion in the case Goldstein v. Weiner.

Here’s the quick run down.
Damian Goldstein, the plaintiff landlord, sued his former tenants, defendants Stephen and Majorie Weiner. The Weiners moved into the property in June 2006 and paid all their rent through September 2009. They stopped paying rent in October 1, 2009, and refused to pay until they moved out of the property on May 31, 2010. Goldstein filed an eviction complaint on May 19, 2010 — just before the Weiners moved out. As required by the Property Maintenance Code and Rule 109 of the Municipal Court Rules of Civil Procedure, Goldstein attached his Housing Inspection License for the Property to his eviction complaint. It was dated May 19, 2010 – the same day he filed the complaint.

Essentially, Mr. Goldstein had been renting his property for years without a license.

Nevertheless, the Municipal Court judge found in plaintiff Goldstein’s favor and granted him a judgment of $5,873.16 for unpaid rent and court costs.

You see, the practice in Municipal Court had been that if a Landlord who doesn’t have a license for his property gets one before he files suit for eviction, that cures any past non-compliance and entitles him to collect all back rent — even for those periods when he never had a license to rent the property.

So in response to the judge’s ruling, the defendant tenants appealed to get a new trial in the Court of Common Pleas. Judge David Shuter heard the case and issued his opinion on December 14, 2011. And this is where things get interesting.

Things get interesting.
First, the Judge looked to Sections 102.6.4 and 102.7.1. of the Property Maintenance Code. After looking them over, he wrote

The clear and express language of [the Property Maintenance Code] unequivocally provides that no landlord may collect rent while he or she does not possess a Housing license, of for the period during which the landlord failed to maintain such a license … As a result, the Plaintiff cannot collect rent for the period during which he did not have a valid House License.

Then, after some legal verbiage, some comparison to other state’s statutes, and examination of the statute’s legality under the Constitution, the judge ruled that the “[Property Maintenance Code] provide Defendants with a ‘perfect defense’ to Plaintiff’s claims for unpaid rent due before May 19, 2010.”

The Judge also threw in some interesting public policy to parry some of the plaintiff’s arguments and further bolster his own Opinion:

[The Property Maintenance Code] was enacted in the interest of protecting the health, safety and welfare of tenants and the general public from harm resulting from dangerous property conditions that exist at rental properties. Therefore, although the specific reason for requiring landlords to apply for and obtain a Housing License is to get landlords to supply information to L&I in order to facilitate proper service of violations and expedite remediation, this does not in any way limit the broader intent of prevention of public harm.

And just in case the judge hadn’t yet made his point:

…[T]he PMC is a remedial ordinance and [] the hardship of having to apply for the Housing License and pay a nominal fee are far outweighed by the goals of the PMC. Moreover, the consequences of failing to obtain a Housing License are clear and unequivocal and not subject to judicial interpretation. As a result, this Court finds no basis to permit the Plaintiff to collect rent during the period he failed to possess a Housing License.

What does this mean for me as a tenant?
The Common Pleas Court has ruled, for the first time, that your landlord must have a business privilege license and a rental certificate for your property in order for him to collect back rent from you in an eviction proceeding. Thought this has been the law on the books for some time, this is the first time it’s really been enforced.

To use the example from above – if landlord rents a property to you for 300 days without a license, and you never pay rent (say, because there’s a hole in the roof), and then gets a license on day 301 when he files to evict you — you are absolved from paying the back 300 days’ rent to your landlord.

So remember: if your landlord sues to evict you, but never had a rental license before suing you, he cannot legally collect any back rent for periods where he did not have a rental license. As Judge Shuter wrote, the Property Maintenance Code provides you with a “perfect defense” to a landlord’s claims for unpaid rent when he does not have a license.

Wait, this doesn’t seem very fair to landlords!
Landlords out there – I understand your frustration. Between your BPLs, property taxes, L&I rental licenses, and the occasional deadbeat tenant, it might feel like the city’s assaulting you and making it horribly difficult to make a living.

The best thing to do is to make sure you have your ducks in a row before you rent to someone. If your paperwork is all complete and legitimate, then eviction proceedings are generally swift and without many defenses.

And the Goldstein v. Weiner case wasn’t all bad for landlords. In fact, the Judge ruled in the landlord’s favor overall. He even awarded the landlord legal fees of $3,100.00 — because the lease required that the tenant pay a landlord’s legal fees in the case of legal proceedings.

So, landlords, take a look at your lease. It might be time to revisit it to ensure you’ve protected yourself.

Wait, so if I’m a tenant and my landlord’s never had a license, can I then sue him for back rent?
No. Judge Shuter addressed this in the opinion. Bottom line, you’ve willingly paid your landlord rent, and you’ve had the benefit of staying in the property, so you have no grounds to recover back rent.

Who were the lawyers in this case?
Kenneth Baritz was the landlord’s attorney. David Denenberg represented the tenants. Both are rather experienced and well-known in landlord-tenant court.

What does the future hold?
I don’t really know. Goldstein v. Weiner came out only a few weeks ago, so we’ve yet to see how it affects Municipal Court proceedings, and whether judges will follow its ruling.

Best bet for all — tenants, pay your rent when its due; landlords, keep up your paperwork. And if you’re facing eviction, or need help addressing a problem tenant – call a lawyer.

Leo Mulvihill is a renter who thankfully has an excellent relationship with his landlord. He’s represented clients in landlord-tenant court both as private counsel and as a volunteer attorney for Philadelphia VIP.

[ed. note Nov 20, 2012. So, apparently this post was deleted somehow. I don’t know how it happened. I am trying to see if we can find a cached copy to restore it.]

[ed note Jan 25, 2013. Found it. Post is back up. I’ve made the opinion available here: Goldstein v. Weiner — Opinion.]