WHAT IF THE TENANT DOES NOT LEAVE?

If your tenant does not leave at the end of the lease term, the tenant is “holding over.” 

If the landlord consents to the tenant holding over, then in most cases, the new lease term is month-to-month.  Either the landlord or the tenant can terminate a month-to-month lease on 30 day’s written notice to the other.

If the landlord does not consent to the tenant holding over, then the tenant is unlawfully detaining the rental and must be evicted.

If you are a landlord and your tenant does not leave the rental, contact me at www.tornowlaw.com for a free consultation.

HOW DO I EVICT THE TENANT?

            The Landlord Must File a Complaint for Possession.

The first step in an eviction is for the landlord to file a Complaint for Possession against the tenant in the Justice Court for the County where the rental is located.  The Complaint for Possession asks the Judge to give the landlord possession of the rental.  Possession includes the right to enter the rental, change the locks, remove the tenant’s personal property and otherwise control the rental. 

The landlord must prepare the Complaint for Possession.  The Justice Court may have forms the landlord can use.  The landlord should make copies of the Complaint for Possession before the landlord files the Complaint for Possession.  The Justice Court keeps the original Complaint for Possession.  For each tenant, the landlord will want a copy of the Complaint for Possession.  The landlord will also want a copy of the Complaint for Possession for the landlord’s file.  The cost of these copies is not part of the landlord’s “court costs” which are automatically added to the Judgment against the tenant if the landlord wins the case.

If you are a landlord and need a Complaint for Possession to evict your tenant, contact me at www.tornowlaw.com for a free consultation. 

            A Complaint for Possession Can Include a Claim for Damages.

A Complaint for Possession can also include a request for money damages, such as unpaid rent or utilities, damages to the rental or other money owed by the tenant.  There is no additional cost to the landlord to include a claim for damages.  However, pursuing a claim for damages can require additional steps in the eviction process.  Those steps are discussed below.  The landlord should weigh those additional steps against the likelihood of being able to collect the damages.  Most tenants don’t have sufficient assets or income from which the landlord can collect the damages.  If that is the case, then the landlord may not want to bother to include a claim for damages.

If you are a landlord and need help deciding whether to include a claim for damages in your Complaint for Possession, contact me at www.tornowlaw.com for a free consultation.

The Landlord Must Pay the Justice Court a Fee to File the Complaint for Possession.

To file the Complaint for Possession, the landlord must pay a filing fee to the Justice Court.  As of the date of this post, the filing fee is $40.  This fee is part of the landlord’s “court costs” which will automatically be added to the Judgment against the tenant if the landlord wins the case.

If you are a landlord and need help filing a Complaint for Possession to evict your tenant, contact me at www.tornowlaw.com for a free consultation.

            The Landlord Must Get a Summons for Each Tenant.

At the same time the landlord files the Complaint for Possession, the landlord should have the Clerk of the Justice Court issue a Summons for each of the tenants.  There is no charge for issuing the Summonses.

The landlord must prepare the Summonses.  The Justice Court may have forms the landlord can use.  The landlord should make copies of the Summonses before the landlord has the Clerk of Court issue the Summonses.  The Justice Court keeps a copy of the Summonses for each tenant.  For each tenant, the landlord will also want two copies of the Summons for each tenant and another copy for the landlord’s file.  The cost of these copies is not part of the landlord’s “court costs” which are automatically added to the Judgment against the tenant if the landlord wins the case.

If you are a landlord and need help getting a Summons to evict your tenant, contact me at www.tornowlaw.com for a free consultation.

The Landlord Must Have the Summons and Complaint for Possession Served on Each Tenant.

After the Complaint for Possession is filed and the Summonses are issued, the landlord is responsible for having a copy of the Complaint for Possession and the Summons served on each tenant.  That is why the landlord needs the number of copies explained above.

The landlord must pay a Sheriff’s Department or process server to serve the Complaint for Possession and Summons on the tenant.  The landlord cannot serve the Complaint for Possession and Summons him or herself.  Unless there are complications, the cost for serving the Complaint for Possession and Summons is about $50 for each tenant.  The Sheriff’s Department usually charges less than a process server, but a process server usually gets the Complaint for Possession and Summons served quicker.  The process server also has the advantage of not wearing a uniform, which makes it harder for the tenant to avoid being served.  Most Justice Courts will have a list of process servers that can serve the Complaint for Possession and Summons on the tenant.  The fee paid to the Sheriff’s Office or process server is part of the landlord’s “court costs” which are automatically added to the Judgment against the tenant if the landlord wins the case.

The Sheriff’s Office or process server will know how to serve the Complaint for Possession and Summons, but the landlord must provide the Sheriff’s Office or process server with an address where the tenant can be found.  This is usually the address of the rental or the tenant’s place of employment.  

The Sheriff’s Office or process server must hand a copy of the Complaint for Possession and Summons to each tenant.  They cannot post the Complaint for Possession and Summons; send the Complaint for Possession and Summons through the mail; or leave the Complaint for Possession and Summons with someone else to give to the tenant. 

When the Complaint for Possession and Summons are handed to the tenant, the tenant has been “served with process.”  The Sheriff’s Office or process server will provide the landlord with a “return of service” stating the date each tenant was served with process.  As explained in the next paragraph, the date the tenant is served with process is very important.

If you are a landlord and need help serving a Complaint for Possession to evict your tenant, contact me at www.tornowlaw.com for a free consultation.

            The Tenant Must File an Answer to the Complaint for Possession.

Each tenant has ten business days from the date the tenant was served with process to file a response with the Justice Court.  The first day of the ten days is the day after the tenant was served with process.  In other words, the day the tenant was served with process does not count toward the ten days.  The tenant has until the close of the Justice Court on the last of the ten days to file a response.  If the tenants were served on different days, then the ten days for each tenant will expire on different days.

If you are a landlord and your tenant is disputing your eviction, contact me at www.tornowlaw.com for a free consultation.

            If the Tenant Does Not Answer, the Landlord May Take a Default.

If a tenant does not file a response within ten business days from the date the tenant was served with process, the landlord can move the Court for a “default” against that tenant.  The landlord does this by filing a Motion for Entry of Default.  The landlord must prepare the Motion for Entry of Default.  The Justice Court may have forms the landlord can use.  The Motion for Entry of Default does not have to be served on the tenant.

The default ends the tenant’s opportunity to file an Answer to the Complaint for Possession.  Until the default is entered, the tenant will be allowed to file an Answer to the Complaint for Possession, even if it is after the ten days.  So it is important for the landlord to file The Motion for Entry of Default as soon as the ten business days expire.

If the Judge grants the landlord a default against a tenant, the Judge will issue an Order of Possession against that tenant.  That Order of Possession allows the landlord to enter and take possession of the rental as to that tenant only.  If there are other tenants who have not been defaulted, they would have a right to remain in the rental. 

If you are a landlord and need a Motion for Entry of Default to evict your tenant, contact me at www.tornowlaw.com for a free consultation.

A Hearing is Required if the Complaint for Possession Includes a Claim for Damages.

If the Complaint for Possession also asks for damages, such as unpaid rent or utilities, damages to the rental or other money owed by the tenant, the Court Clerk will schedule a hearing where the landlord must prove those damages.  The court costs described above (the filing fee and service of process fee) are not money damages and are awarded to the winning landlord against the tenant without any hearing. 

There is no cost to the landlord for the hearing, nor does the hearing delay getting possession of the rental.  However, the landlord will have to appear at the hearing and prove his or her damages.  The landlord should weigh this against the likelihood of being able to collect the damages.  Most tenants don’t have sufficient assets or income from which the landlord can collect the damages.  If that is the case, then the landlord may want to advise the Clerk of the Justice Court that the landlord “waives” the claim for damages.  If the landlord waives the claim for damages, the case is treated as if the Complaint for Possession did not include a claim for damages and no hearing is required.

If you are a landlord and need help with a heating on damages or want to waive your claim for damages against your tenant, contact me at www.tornowlaw.com for a free consultation.

LOOK FOR MY NEXT POST.

This concludes the second part of residential evictions in Montana.  In the next post, I will cover what to do if the tenant files a response to the landlord’s Complaint for Possession disputing the eviction.

Evicting Residential Tenants in Montana-Part 1

HOW TO EVICT A RESIDENTIAL TENANT IN MONTANA

Part 1

This is the first of several posts intended to give a landlord a basic understanding of how to evict a residential tenant in Montana.

WHAT KIND OF PROPERTY IS RENTED?

The process discussed in these posts is only for property rented as a residence in Montana.  It does not apply to commercial property, such as offices, storage units, or night-to-night rentals, like hotel or motels.  It also does not apply to mobile homes or mobile home lots.  Those types of rentals have their own procedure for evictions.  The process may also not apply to rentals subsidized by the government.  In return for those subsidies, the landlord often must agree to follow a special process to evict a tenant.

If you are a landlord and unsure what process you need to follow to evict your tenant, contact me at www.tornowlaw.com for a free consultation. 

Likewise, if you are a landlord and want to know about evictions from commercial property, mobile homes or mobile home lots, contact me at www.tornowlaw.com for a free consultation. 

IS YOUR LEASE WRITTEN OR ORAL?

A landlord or tenant often thinks they do not have a lease.  That is not correct.  If you are a landlord, you have either a written lease or an oral lease. Your lease may only be when a certain amount of rent is due, but you have a lease.  I strongly recommend that every landlord have a written lease.  If you are a landlord and want a written lease, or need your existing lease reviewed, contact me at www.tornowlaw.com for a free consultation.

HOW LONG IS YOUR LEASE FOR?

The length of your lease is called the lease term.  The lease term is when the lease begins and ends.  For a lease for more than one year to be binding, it must be in writing.  This does not mean that a month-to-month lease cannot continue for more than one year.  It only means that an unwritten agreement to rent for more than one year in the future cannot be enforced.  If your written lease does not specify a lease term, or it has expired, then the lease term is for one month, called a month-to month lease.  Unless the landlord and tenant specifically agree otherwise, most oral leases are month-to-month.  The lease term of a month–to-month lease usually begins on the first day of the calendar month and ends on the last day of the calendar month.  But again, the landlord and tenant can specifically agree for the lease term to begin and end on other days.  The day the rent is due is strong evidence of when the lease term begins.  To prevent problems, your lease term should be expressly stated in a written lease.  If you are a landlord and your lease term is not clearly stated, or you want your current lease revised, contact me at www.tornowlaw.com for a free consultation.

HAS THE LEASE TERM EXPIRED?

What happens when the lease term expires?  If your lease is month-to-month, it automatically renews for another month unless either the landlord or the tenant gives notice that they intend to terminate the lease.  This applies to both written and oral month-to-month leases. 

A written lease can provide that unless the landlord or tenant gives notice of intent to terminate the lease, the lease term automatically renews for a specific new lease term.  The length of the renewed lease term is usually the same length as the original lease term. 

If a written lease does not require notice of the intent to terminate or provide for automatic renewal, then the lease expires automatically at the end of the lease term.

If the tenant continues to occupy the residence with the landlord’s consent, then the lease automatically converts to a month-to-month lease that can be terminated on 30 days written notice.  However, all other terms of your written lease remain in effect.  For example, if your written lease is for one year and has no automatic renewal, then if the tenant stays after the year ends, the lease term becomes month-to-month that can be ended on 30 days notice.  But all other terms of the lease, like no pets, remains the same. 

It is to the landlord’s advantage to have your lease automatically renew.  Having more than 30 days’ notice that the tenant is leaving lowers the chance of the landlord’s rental being empty and gives the landlord more time to find a quality tenant.  If you are a landlord and want these provisions in your lease, contact me at www.tornowlaw.com for a free consultation.

DOES THE LANDLORD NEED A REASON TO TERMINATE OR NOT RENEW A LEASE; OR TO RAISE THE RENT?

In most cases, at the end of the lease terms, the landlord can terminate or not renew the lease, or raise the rent, for any or no reason.  However, a landlord cannot take such an action because of the tenant’s age, race, religion, handicap, or marital or family status.  Also, the landlord and tenant can agree in the lease to limit the landlord’s ability to terminate or not renew a lease or raise the rent.  An example of such a limitation is a lease that provides that the tenant has an option to renew the lease term.  If you are a landlord and want to terminate on not renew a lease or raise the rent, contact me at www.tornowlaw.com for a free consultation.

HOW DO I TERMINATE A LEASE AT THE END OF THE LEASE TERM?

Either the tenant or the landlord can terminate a lease at the end of the lease term.  Unless the written lease provides otherwise, the notice to terminate the lease must be given in writing and must be given a minimum of 30 days before the end of the lease term.  For example, if the month-to-month lease term ends on the 30th, the notice cannot be given on the 15th to be effective the 15th of the next month.  It must be given no later than the last day of the prior month to be effective on the 30th.

The written lease can also require that the notice of intent to terminate the lease must be given a certain number of days before the end of the original lease term.  For example, a one year lease might provide that it automatically renews for another year unless the landlord or tenant gives 60 days written notice.  This gives the landlord additional time to find another tenant and decreases the possibility of the rental being empty.  It also gives the tenant extra time to find another rental and decreases the risk of not having a place to live when the lease term expires.

If you are a landlord and want to terminate your tenant’s lease, contact me at www.tornowlaw.com for a free consultation.

HAS THE TENANT BREACHED THE LEASE?

If the lease is still in effect, either because the lease term has not ended or neither the tenant nor the landlord has given notice and it has converted to a month-to-month lease, then the landlord cannot evict the tenant unless the tenant breaches the lease.

The most common breach of a lease by a tenant is when the tenant fails to pay the landlord rent.  However, this is not the only possible breach.  Any failure by the tenant to follow the provisions of the landlord’s lease is a breach of the lease.  Other common breaches are the tenant having unauthorized pets, the tenant failing to pay utilities, the tenant not having renter's insurance, the tenant allowing unauthorized persons to live in the rental, the tenant having unauthorized vehicles on the property, or the tenant using or manufacturing illegal drugs.

If the tenant breaches the landlord’s lease, the landlord must give the tenant written notice of the breach.  The length of the notice to the tenant depends on the type of breach.  If the tenant’s breach is failing to pay the landlord rent, the landlord must give the tenant a minimum of three business days written notice.  This is commonly called a Notice to Quit or Pay Rent.  Likewise, a tenant’s breach by having an unauthorized pet or unauthorized persons residing in the rental, damaging or creating a reasonable potential of damage to the rental, or creating a reasonable potential that neighboring tenants may be injured all require the landlord to give the tenant a minimum of three business days written notice of the breach.  For most other breaches by the tenant, such as failing to pay utilities, the landlord must give the tenant a minimum of 14 calendar days written notice.

If you are a landlord and your tenant has breached your lease, contact me at www.tornowlaw.com for a free consultation.

HOW DO I GIVE NOTICE OF THE BREACH?

Notice from the landlord of a breach of the lease by the tenant must be written and delivered to the tenant.  The notice must specifically describe the tenant’s breach.  The notice can be delivered personally by handing the notice to one of the tenants.  It can also be delivered by mailing the notice to the tenants by certified mail or with a certificate of mailing.  If it is mailed, you must add another three business days from the date of mailing to the required notice.  For example, if the landlord mails a three day notice to quit or pay rent to the tenant, then the tenant has six business days to pay the rent or vacate the premises.  Notice is also considered delivered if the tenant acknowledges receipt of the notice.  An example of acknowledging receipt is a tenant emailing the landlord saying that the tenant received the notice.  Posting the notice on the door is not legal delivery unless the tenant acknowledges receiving the notice.

Not correctly giving the tenant notice of breach is one of the most common mistakes by landlords.  If you are a landlord and want to give your tenant proper notice of a breach of the lease, contact me at www.tornowlaw.com for a free consultation.

CAN A TENANT REMEDY THE BREACH?

Under most circumstances, a tenant is permitted to remedy the breach before the expiration of the notice period.  For example, if a tenant pays the past due rent, plus any late fees or other penalties, during the three business days, then the tenant has "cured" the breach and the lease terms continues as if the breach had not occurred.  However, there are some breaches that a tenant is not permitted to cure, such as use or manufacture of illegal drugs.

If a tenant commits substantially the same breach again within six months, the landlord does not have to allow the tenant to remedy the breach.  The landlord may terminate the lease on five business days written notice to the tenant.  This is to prevent the tenant from regularly committing and curing the same or similar type of breach.  However, the landlord must have given the tenant written notice of the prior breach.  For example, if the landlord gives the tenant written notice of an unauthorized pet and the tenant removes the pet, and then has another unauthorized pet within six months, the landlord may terminate the lease on five business day’s written notice and the tenant has no right to cure.  It does not have to be the same pet.  It only has to be the same or similar type of breach.  But if the landlord did not give written notice of the prior pet, then the subsequent pet is treated as a first breach of the lease by the tenant.

If the tenant does not cure the breach within the permitted time, or if no cure is allowed (e.g. illegal drugs or a second breach within six months), then the landlord may terminate the lease.

If you are a landlord and not sure whether your tenant has cured, or whether you have to allow your tenant to cure, a breach of the lease, contact me at www.tornowlaw.com for a free consultation. 

LOOK FOR MY NEXT POST.

This concludes the first part of residential evictions in Montana.  In the next post, I will cover what to do if the tenant does not leave after the lease has expired or been terminated or after notice of breach has been given and the time to cure has expired.

Power of Attorney for Vet Care

This is National Dog Week!  The law office of Thomas T. Tornow, P.C. is very dog friendly.  Tom and his brother Jack own the building and their lease encourages tenants and employees to bring their dogs to work.  Prospective tenants and employees are vetted to make sure they are OK with dogs, which is usually not a problem in Montana.  Tom has photos of his dogs (and his wife) on his office walls and often a dog sleeping under his desk.  Visiting dogs make a beeline for the dog treats and tennis balls Tom keeps in his desk drawer.  There is a Frisbee by back door to play with the dogs in the field next door and a water dish is waiting 24/7.  The law office of Thomas T. Tornow, P.C. is the attorney for the Flathead Valley’s preeminent animal clinic and veterinarians and is a major contributor to the Whitefish dog park.  As part of the celebration of National Dog Week, the law office of Thomas T. Tornow, P.C. is making the following Durable Power of Attorney for Veterinary Care available to the readers of this blog.     

DURABLE POWER OF ATTORNEY FOR VETERINARY CARE

NOTICE: THIS DOCUMENT GRANTS BROAD POWERS. IF YOU HAVE ANY QUESTIONS ABOUT THESE POWERS, OBTAIN COMPETENT LEGAL ADVICE. YOU MAY REVOKE THIS POWER OF ATTORNEY AT ANY TIME.

I hereby appoint:

Name:             ______________________________________________

Address:          ______________________________________________

______________________________________________

Telephones:      ______________________________________________ Home

                        ______________________________________________ Work

______________________________________________ Mobile

______________________________________________ Fax

Email:               ______________________________________________ Personal

                        ______________________________________________ Business

as my Attorney-in-fact (my “Agent”) to act for me and in my name in any way I could act in person to make any and all decisions, approvals and authorizations concerning the:

A.    Care, veterinary treatment, hospitalization of my animal(s) named herein for any condition;

B.    Admission or discharge of my animal(s) from any hospital, clinic or other institution;

C.    Withholding or withdrawal of any type of veterinary procedure for said animal(s) even though death may occur; and

D.    Disposition of any part or all of said animal’s(s’) body for veterinary purposes, autopsy and disposition of its remains.

If my Agent dies, becomes legally disabled, incapacitated or incompetent, or resigns, refuses to act, or is unavailable, I name the following as my Successor Agent with the same powers and authority as my Agent.

Name:              ______________________________________________

 Address:         ______________________________________________

______________________________________________

Telephones:      ______________________________________________ Home

                        ______________________________________________ Work

______________________________________________ Mobile

______________________________________________ Fax

Email:               ______________________________________________ Personal

                        ______________________________________________ Business

My veterinarian is:

Name:              ______________________________________________

Address:           ______________________________________________

______________________________________________

Telephone:        ______________________________________________ Clinic

______________________________________________ After Hours

______________________________________________ Fax

Email:               ______________________________________________

My Agent and Successor Agent can take my animals to my or any other any other veterinarian and any veterinarian can rely on this Durable Power of Attorney.

The animal(s) to which this Durable Power of Attorney applies are:

_____________________________________________            _____________________________

Name                                                                                                  Type/Description

_____________________________________________            _____________________________

Name                                                                                                  Type/Description

_____________________________________________            _____________________________

Name                                                                                                  Type/Description

SPECIAL INSTRUCTIONS:

ON THE FOLLOWING LINE, YOU MAY GIVE SPECIAL INSTRUCTIONS LIMITING OR EXTENDING THE POWERS GRANTED TO YOUR AGENT AND SUCCESSOR AGENT.

_________________________________________________________________________________

UNLESS YOU DIRECT OTHERWISE ABOVE, THIS POWER OF ATTORNEY IS EFFECTIVE IMMEDIATELY AND WILL CONTINUE UNTIL IT IS REVOKED.

This Durable Power of Attorney for Veterinary Care is effective on the date I signed it and continues to be effective, even if I become disabled, incapacitated or incompetent.

I agree that any third party who receives a copy of this Durable Power of Attorney for Veterinary Care may act under it.  I may revoke this Durable Power of Attorney for Veterinary Care by a writing to my Agent that expressly indicates my intent to revoke.  Revocation of this Durable Power of Attorney for Veterinary Care is not effective as to a third part, such as a veterinarian, until the third party learns of the revocation.

I agree to:

A.    Pay for any goods or services rendered by any third party in reliance on this Durable Power of Attorney for Veterinary Care; and

B.    Indemnify the third party for any claims that arise against the third party because of reliance on this Durable Power of Attorney for Veterinary Care.

I am fully informed as to all contents of this Durable Power of Attorney for Veterinary Care and understand the full importance of this grant of power to my Agent and Successor Agent.

Signature:       ________________________________________

Printed Name: ________________________________________

STATE OF MONTANA                     )

: ss.

County of Flathead                               )

Acknowledged before me by the above named Principal on this_______day of _______________, 20__.

________________________________________

Notary Public for the State of Montana

BY SIGNING, ACCEPTING, OR ACTING UNDER THE APPOINTMENT, THE AGENT AND SUCCESSOR AGENT ASSUME THE FIDUCIARY AND OTHER LEGAL RESPONSIBILITIES OF AN AGENT, THE AGENT AND SUCCESSOR AGENT WORKS EXCLUSIVELY FOR THE BENEFIT OF THE PRINCIPAL.  THE FOREMOST DUTY AS THE AGENT AND SUCCESSOR AGENT IS THAT OF LOYALTY TO AND PROTECTION OF THE BEST INTERESTS OF THE PRINCIPAL.  THE AGENT AND SUCCESSOR AGENT HAS A DUTY TO AVOID CONFLICTS OF INTEREST AND TO USE ORDINARY SKILL AND PRUDENCE IN THE EXERCISE OF THESE DUTIES.

______________________________________________                _________________________

AGENT                                                                                                         Date

______________________________________________                _________________________

SUCCESSOR AGENT                                                                                   Date

On the Lighter Side

Denver Post obituary for Michael "Flathead" Blanchard:  "Weary of reading obituaries noting the decedent's  courageous battle with death, Mike wanted it known that he died as a result of being stubborn, refusing to follow doctor's orders, and raising hell for six decades.... He enjoyed booze, guns, cars and younger women until the day he died. . . . He asks that you stop by (his memorial service and) re-tell the stories he can no longer tell" but the obituary recommended that you leave the children at home because of the "adult material" they might hear.

A teacher was reading Chicken Little to her first grade class.  When she came to where Chicken Little told the farmer that "the sky is falling",  the teacher asked the class what they thought the farmer said.  A little girl raised her hand and said "I think the farmer said 'Holy sh*t!, A talking chicken."

Conclusion on Powers of Attorney

Conclusion on Powers of Attorney

A durable power of attorney is an important part of your estate package.  If prepared correctly, a durable power of attorney maintains your privacy and avoids the costly and lengthy process of a judge appointing a guardian or conservator for you.  Thomas T. Tornow has 33 years of experience with durable powers of attorney.  Contact his office at www.tornowlaw.com to schedule your free consultation if:

· You want to make a durable power of attorney so someone you trust can handle your affairs if you become incapacitated.

· You want your power of attorney reviewed to make sure it complies with your State's law and reflects your specific intentions for your financial and family situation.

· You want help deciding whether to give someone a power of attorney.

· You want to terminate your power of attorney.

· You have been asked to accept a power of attorney.

· You have questions about how to use your power of attorney.

· You have been asked to be an agent.

· You want help deciding who should be your agent.

· You want help deciding what powers to give your agent.

· You want to change your power of attorney.

·You want to change agents.

· You want to limit your agent’s authority.

· You have questions about your agent’s obligations.

· You are an agent with questions about your duties and obligations.

· You want help deciding what your agent should be paid.

· You are an agent and wonder what you can be paid.

· You have questions about your agent’s authority.

· You are an agent with questions about your authority.

· You or your agent are having problems using your power of attorney.

· You think your agent has breached his duties to you.

· You have questions about whether someone is incompetent or incapacitated.

· You have questions about the Durable Power of Attorney Act.

Thomas T. Tornow, P.C.

By: Thomas T. Tornow

This post is exclusively for informational purposes. It is not legal advice. Viewing this post, using information from it, or communicating through this blog does not create an attorney-client relationship. Thomas T. Tornow, P.C. is not liable for the use or interpretation of information on this blog and expressly disclaims all liability for any actions you may or may not take based on the content of this blog.

What if My Agent Breaches His or Her Duty to Me?

What if My Agent Breaches His or Her Duty to Me?

Your agent has special legal duties.  These are called fiduciary duties.  A fiduciary duty is the highest duty known in the law.  Your agent owes these fiduciary duties to you.  Your agent also owes these same duties to your guardian and conservator.  Those duties are described in detail in a prior post to this blog entitled “What Are My Agent’s Obligations?”

If your agent violates his or her fiduciary duty to you, your first step is to terminate your agent’s authority under your power of attorney.  This is usually done by informing your agent in writing that his or her authority is terminated.  Terminating your agent’s authority is discussed in more detail in a prior post to this blog entitled “When Does My Agent’s Authority Stop?”

Your second step is to inform any person or business dealing with your agent that you have terminated your agent’s authority.  

Your third step is to consult a lawyer about claims you may have against your agent and your obligations to persons or businesses your agent dealt with.

You are still bound by your agent’s actions even if (s)he violated his or her fiduciary duty to you.  For example, if your agent breaches his or her fiduciary duty by signing a contract with a business, you are still bound by that contract.  You have a claim against your agent, but your agent’s breach of duty is not a defense against someone who dealt with your agent in good faith.  A person is not dealing with your agent in good faith if (s)he knew that your power of attorney was revoked, that your agent did not have authority to enter into the contract, or that entering into the contract was a breach of your agent's fiduciary duty to you.

If your agent knows, but does not tell you, that your co-agent has, or is about to, breach the co-agent’s fiduciary duty to you, then your agent is liable to you for all losses that could have been avoided if you had been informed.  A successor agent is not liable for a former agent’s breach of duty unless the successor agent conceals or participates in the former agent’s breach.

Your agent is not liable to you solely because the value of your property or estate declines unless it is the result of a breach of your agent’s duties to you.  Your agent is also not liable for breaching his or her duties to you if power of attorney specifically provides that (s)he is not liable for such a breach, unless:

·         The provision is the result of your agent abusing his or her confidential or fiduciary relationship with you; or

·         Your agent acted dishonestly, with an improper motive, or with reckless indifference to your best interest or the purpose of your power of attorney.

If your agent breaches his duty to you, (s)he is liable to you for the amount necessary to restore the value of your property or estate to the level it would have been had there no breach, plus your attorney's fees and costs.

Any interested person can ask a judge to review your agent’s actions.  An interested person includes:

• You,

• A person asked to accept your power of attorney,

• Your spouse, parent, child, guardian, conservator, caregiver, fiduciary, descendent or presumptive heir,

• Your agent,

            • A person authorized to make health care decisions for you,

• Someone who demonstrates sufficient interest in your welfare,

            • A beneficiary of your estate or trust; and

            • A government agency with authority to protect your welfare.

However, if you object, the judge cannot review your agent's actions unless your agent is asking for the review or the judge finds that your lack the capacity to revoke your power of attorney or your agent's authority.  You probably lack the capacity to revoke your power of attorney or your agent's authority if you are impaired in your ability to manage your property or business affairs or to make or communicate decisions even with the use of technological assistance.  The lack of capacity and its consequences are discussed in more detail in a prior post to this blog entitled “What If I Become Incompetent or Incapacitated?”

If the judge finds your agent breached his or her fiduciary duty to you, your agent can be held liable for the cost of repairing the breach and paying the interested person’s attorney’s fees and costs.

Thomas T. Tornow has 33 years of experience helping people whose agents have breached their duties and assisting agents accused of breaching their duties.  Contact his office at www.tornowlaw.com to schedule your free consultation.

Thomas T. Tornow, P.C.

By: Thomas T. Tornow

This post is exclusively for informational purposes. It is not legal advice. Viewing this post, using information from it, or communicating through this blog does not create an attorney-client relationship. Thomas T. Tornow, P.C. is not liable for the use or interpretation of information on this blog and expressly disclaims all liability for any actions you may or may not take based on the content of this blog.

What I Become Incompetent or Incapacitated?

What If I Become Incompetent or Incapacitated?

It is common for a power of attorney to provide that the agent's authority springs into effect only if the principal (the person giving the power of attorney) becomes incompetent or incapacitated.

You are incompetent or incapacitated if you:

A.    Have an impairment in your ability to manage your property or business affairs;

B.  Have an impairment in your ability to make or communicate decisions even with the use of technological assistance;

C.     Are missing; or

D.    Are outside the United States and unable to return.

Your springing power of attorney should name one or more persons (other than your agent) who are authorized to determine in writing whether the specific event has occurred.  If the specific event is that you are incompetent or incapacitated, that person has the right to access your health and Social Security records and to communicate with your health care provider.  If you do not name anyone, then your power of attorney becomes effective when a physician says in writing that A or B above exists or an attorney or judge says in writing that C or D above exists.

You can name in your power of attorney who you want to be your guardian or conservator if you become incompetent or incapacitated.  That person can, but does not need to be, your agent.  The judge is required to appoint the person you name in your power of attorney unless there is good reason to the contrary or the person you name is not legally qualified to be a guardian or conservator.  Unless the judge limits, suspends or terminates your agent's authority, or your power of attorney provides otherwise, your power of attorney will remain in effect even after your guardian or conservator is appointed.  Your agent owes the same duties to your guardian or conservator as your agent owns to you.

If you become incompetent or incapacitated without having given a power of attorney, it may be necessary to have a court appoint a guardian or conservator for you.  A guardian takes care of your person.  A conservator takes care of your financial affairs. 

Having a court appoint a guardian or conservator is a lengthy and costly process that is usually paid for from your assets.  It requires filing a case with a court and one or more hearings before a judge.  The person who files the case, his or her attorney, your attorney and perhaps other witnesses are required to attend the hearing.  The judge will often appoint a person to meet with you and may require doctors to examine you and report to the judge.  The judge, rather than you, chooses the guardian or conservator and the scope of his or her authority.  The judge usually requires your guardian or conservator to inventory your assets and make periodic reports to the judge.  The hearings and reports are almost always open to the public and add to your loved ones' stress during an already difficult time. 

All this can be avoided by a properly prepared durable power of attorney that names who you want as your guardian or conservator, should that be necessary, and what authority you want your guardian or conservator to have.

Thomas T. Tornow has 33 years of experience with guardians, conservators and powers of attorney.  Contact his office at www.tornowlaw.com to schedule your free consultation.

Thomas T. Tornow, P.C.

By: Thomas T. Tornow

This post is exclusively for informational purposes. It is not legal advice. Viewing this post, using information from it, or communicating through this blog does not create an attorney-client relationship. Thomas T. Tornow, P.C. is not liable for the use or interpretation of information on this blog and expressly disclaims all liability for any actions you may or may not take based on the content of this blog.