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That Attorney's Fee Provision In Your Residential Lease? It's Probably Illegal.

December 21, 2016

Attorney’s fee provisions are often deployed within agreements to intimidate renters into not pursuing claims. The cost/benefit analysis goes something like this: “Is it worth suing to get $150 of my deposit if I’m also risking hundreds, if not thousands in attorney’s fees to the other side? No way, I can’t even afford to get an attorney for myself.”

Under the Residential Landlord and Tenant Act of 1977, the Lease may include any provision not specifically prohibited under the Act. MCA § 70-24-201(1). So, if a term isn’t illegal under the Act, it can be included in your Lease. For instance, the Act does doesn’t’ prohibit a Lease term forbidding pets (yes it’s a double negative, and yes you understood it). However, the Act specifically contemplates  attorney’s fees -- “In an action on a rental agreement or arising under this chapter, reasonable attorney’s fees, together with costs and necessary disbursements, may be awarded to the prevailing party notwithstanding an agreement to the contrary. MCA § 70-24-442(1). Translation: A judge…may award fees and costs…to the prevailing party. They key concept is “may.” Almost all leases contain “must” or “shall” language, but the law says “may,” so the law controls. The Act goes even further by specifically prohibiting Lease provisions attempting “to waive or forego rights or remedies under this chapter” or “to indemnify the other party for the liability or the costs or attorney’s fees connected therewith.” MCA § 70-24-202. Translation #2: No matter what the lease says about attorney fees, you cannot be bound to an absolute attorney’s fee obligation. It doesn’t matter that your lease says otherwise.  

The takeaway here – don’t let an attorney’s fees provision in your lease stop you from pursuing your legal right to recover for violations of the Landlord and Tenant Act. The attorney’s fees provision was included in the Act for good reason – to encourage attorneys to take landlord tenant cases even when the client cannot afford to pay fees out of pocket. In this respect, the Landlord and Tenant Act operates to level the playing field; not only does it eliminate or significantly reduce the client’s fee obligations, it creates risk to landlords who might otherwise “drag things out” in an attempt to exhaust a renter’s resources before they ever see the inside of a courtroom.  

So, take a sigh of relief, ignore that illegal contract provision (even curse it, go right ahead) and find yourself a lawyer who knows how this stuff works.

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