Landlords are inserting more illegal terms in leases, study finds

The number of unenforceable, anti-tenant clauses in residential leases has risen sharply over the last 20 years — with Black tenants more likely to be targeted, according to the largest-ever study of housing leases.

Why it matters: The types of draconian clauses that have crept into leases make it easier for landlords to evict tenants — who often feel intimidated, don't know the law and can't afford a lawyer in housing court.

• As pandemic-era evictions moratoria expire, more landlords may be tempted to use these terms to get rid of tenants without due process.

Driving the news: The study by two professors looked at 170,000 leases in Philadelphia from 2005 through 2019 and found them "highly likely to contain unenforceable terms."

• "Their pro-landlord tilt has increased sharply over time," the study said.
• A major reason: The growing adoption by landlords of shared lease forms, "originally created by non-profit landlord associations, and more recently available online for a nominal fee."
• Black tenants tend to be "more susceptible to eviction based on crime or drug use on the premises, an effect concentrated in whiter neighborhoods," the authors found.

Where it stands: While housing law differs by state, the professors found three terms unacceptable in Pennsylvania that have become more common:

• That the tenant must accept the property "as is" — housing law says it must be habitable.
• That the tenant can't sue the landlord for negligence — even if the property has unsafe conditions.
• That the landlord can seize property and charge extra damages if the tenant stays in the premises after the lease expires — a so-called "holdover clause."

What they're saying: "We observed worse [lease] forms over time without really big changes in Pennsylvania law," said one of the study's authors, David Hoffman of the University of Pennsylvania Carey Law School.

• While the study didn't look at how the leases with illegal clauses were adjudicated, landlords tend to use the lease terms as a cudgel to coax or bully tenants out, Hoffman tells Axios.
• For example, when there's a "holdover" clause, landlords can try to avoid eviction court "by saying, 'Hey, if you stay here one more month, you're going to owe us a ton of money, so you better leave,'" Hoffman says.

• Often, a tenant won't show up at an eviction hearing, so the landlord gets a judgment by default even if the term being violated was illegal.

The big picture: Hoffman and his co-author, Anton Strezhnev of New York University, said that the "nationalization of lease provisions," with landlords downloading shared forms without regard to local laws, is part of the problem.

• "Twenty to thirty years ago, most leases were basically highly localized products," Strezhnev tells Axios.
• While the authors only looked at Philly, they consider it likely that the same dynamics are true in other big cities.

The bottom line: This is the first large-scale study of residential leases, and the authors hope its findings open new areas of inquiry for researchers and policymakers.

• "We don’t have federal lease regulations like some countries do, and the result is that you’re at the mercy of your landlords," Hoffman says.