I'm putting together a lease agreement and I have noticed that most agreements have language which indicates that if there is a dispute between the landlord and tenant and it has to go to court that the prevailing party can recover court costs and attorney fees. I also saw language which indicated that each party shall be responsible for their own attorney's fees and court costs. If I don't include any language regarding attorney and court fees, will this be something the judge would decide? Do you suggest I put in language to specify or just leave out?
6 Answers from Attorneys
I do not advise you to draft your own lease, and even this particular issue will depend. However, I in L/T leases representing landlord I generally lean towards each party paying their own attorneys fees and legal costs, because too many people tend to feel they are right and that they will win every legal case, and therefore want to test the legal system (who have not been in court too often) especially if they think they will get attorneys' fees paid for, so it may result in more litigation, which I dont think is what you want as a landlord.
Let me know if you need help.
Daniel Bakondi, Esq.
The Law Office of Daniel Bakondi, APLC
870 Market Street, Suite 1161
San Francisco CA 94102
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Pay an attorney to draft your lease. If there's no attorney fee clause then each party would pay their own fees and costs.
I disagree with Mr. Stone on one point. If there is no provision for attorneys fees, then the court isn't going to award attorneys fees. It has to be in the contract (lease) to be awarded. The prevailing party, however, in litigation, is always entitled to recovery of court costs set forth in Code of Civil Procedure section 1033.5.
With a few not relevant exceptions, attorney fees are not awardable unless the underlying contract provides for them. The judge does not have the discretion to award them without the contract allowing for the award. But if the contract gives fees upon being the prevailing party [several legal questions as to what prevailing means], both sides are entitled to fees if they prevail.
Attorneys differ as to whether putting the provision in is a good idea or not. It might scare a tenant, but most tenants are basically judgment proof so the landlord will not collect anything. If the landlord has made a slight mistake [withheld $50 more form the security deposit than should have, the landlord pays the $50 plus a few thousand the tenant's attorney will claim]. Talk to other landlords or property management companies to see what their experiences have been.
Both as an attorney and a former landlord, I recommend against including an attorneys fees clause. As Mr. Roach correctly points out, the prevailing party gets their costs no matter what the contract says, and each side pays their own attorneys fees unless the contract says otherwise. So if the contract is silent, each side pays their own fees and the winner gets their out of pocket costs. I recommend leaving the contract silent. Even if you win you won't likely collect from the tenant, but if the tenant wins they can take your building.
Wow! An abundance of advice. I'll go with Mr. Roach. Another optional clause sometimes appearing in real-estate agreements is an arbitration clause, or a mediation and arbitration clause. The argument against is "Why pay for a judge when the county will provide one for (almost) free?" The counrt-argument is that arbitration is quicker and may avoid related costs for discovery and various motions. I'd say leave it out.