Lease attorneys: provide valuable advice, insight: users of NAA's National Lease Program benefit from the free legal analysis done by NAA's in-house counsel and by expert attorneys retained at the state level to maintain the legality of the document.

Professionals in the apartment industry face an abundance of legal issues daily and are no strangers to the pitfalls and challenges of running a business in today's litigious society. Indeed, every aspect of business--from zoning a new project to screening potential residents--can be the subject of costly litigation.

The leasing process and the lease document are not exempted from the gaze of the experienced plaintiffs' attorney out to make a name by hitting the jackpot on the next big class-action lawsuit. Moreover, preventative legal advice can significantly improve a company's bottom line.

Users of the National Apartment Association's National Lease Program benefit from the free legal analysis done by NAA's in-house counsel and by expert attorneys retained at the state level to maintain the legality of the document. Though NAA recommends that users retain their own counsel to guide them through any business activities (including the review of all documents and contracts entered with residents, such as the NAA Lease), one valuable advantage of enrolling in the program is the rigorous legal review applied to the National Lease at the state and federal level by a host of attorneys. This free counsel provides one more protective layer against costly litigation.

Because state and federal laws constantly change, it is imperative for any lease to be reviewed periodically by counsel to protect the property owner and manager from potential liability. In other words, one initial review is not sufficient. Statutes and regulations evolve, and an opinion from the bench can alter jurisprudence in such a way as to mandate the need to amend a lease immediately. NAA, along with its affiliates and local lease attorneys, monitors legislation and case law that affect the National Lease. When change to the document is necessitated, it is made quickly and at no charge to the program users.

The change in federal law regarding military personnel and their rights as renters illustrates how effective NAA is in providing the most legally up-to-date product. In December 2003, President Bush signed the Service members Civil Relief Act which, among other things, changed a number of the rights military men and women have when renting an apartment. NAA, with the help of some of its affiliates, tracked the legislation as it made its way through Congress to President Bush's desk and amended the military provisions in all of its state leases in time for the change of law. Local attorneys were consulted to ensure that the new military provisions complied with the idiosyncrasies of state jurisdictions. The day the bill was signed into law, all of the leases were compliant. This work was done at no charge to NAA Lease users.

"When changes are made to federal law, NAA's state-specific reviews are particularly important," said Kathleen S. Sieler, of Preston Gates & Ellis LLP, a firm that has worked with the NAA Lease Program in Oregon.

"Oregon's residential owner-resident act, for example, provides greater rights to military personnel than the new federal law. Local attorneys are best equipped to determine when changes to existing leases are needed and when they are not," said Chresten J. Gram, Partner, Preston Gates & Ellis LLP.

Addenda to the National Lease are also reviewed by in-house and state attorneys, and participants of the Lease Program can be confident that these documents comply with all relevant laws. In fact, the Lead Hazard Disclosure Addendum recently was given a stamp of approval by the Alliance for Healthy Homes (formerly the Alliance to End Childhood Lead Poisoning). The alliance reported to NAA that many companies sell leases that do not comply with the federal lead hazard disclosure law (42 U.S.C. [subsection] 4852d, 24 CFR Part 35 and 40 CFR Part 745).

In a letter to NM dated Jan. 6, 2004, the alliance specifically mentioned that the NAA Lease (and corresponding lead disclosure form) is federally compliant and asks NAA to encourage its members to use the NAA Lease. Apartment and property management firms using non-compliant leases are in danger of violating the federal disclosure law, which carries fines of up to $11,000 per violation.

"An annual review of an apartment's lease is as important as yearly check-ups or proper maintenance of a person's vehicle," said Gary S. Rubenstein, a partner with Schulman, LeRoy and Bennett in Nashville. "As with other areas of the law; owner/resident legislation occurs each and every year both at the federal and local level." Provisions that were once acceptable become unenforceable and new statutes that would be advantageous to an owner if incorporated into a lease must be added. Fortunately, the NAA lease attorneys with expertise in the owner/resident area are constantly tracking pending legislation and when bills become law appropriate amendments are made to the standard document," said Rubenstein, an associate member of the Greater Nashville Apartment Association and a Director of the Tennessee Apartment Association.

"The NAA lease encourages business expansion since owners and management companies who cross state lines can continue to use the lease that they have become familiar with. The time involved in this process is provided by the NAA attorney leaving the owner free to concentrate on other areas of business.

"When used in conjunction with advice from a company's local attorney the NAA lease becomes an important tool that benefits the landlord and allows the real estate professional to use the scarce resource of time on other matters."

For information about the NAA Lease, please contact W. Michael Semko, Esq., at 703/518-6141, or to enroll in the Lease Program, call Blue Moon Software Inc., the official distributor of the NAA Lease Program Software, at 800/772-1004.

Information about local attorneys well versed in apartment and owner-resident law that NAA recommends can be found on page 70 in this issue of UNITS magazine.

W. Michael Semko, Esq., NAA's National Lease Manager and in-house counsel, can be reached at 703/518-6141 ext. 111 or [e-mail].