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A landlord-tenant dispute between college friends was resolved in favor of the landlord at the Court of Appeals of Indiana, though a dissenting judge would hold that it was the landlord, not the tenant, who breached the lease.
In August 2021, Xihui Wang was a student at Purdue University and was struggling to find a place to rent. Her friend, Mingyu Sun, was moving out of state, so he allowed Wang to rent his house in West Lafayette.
Sun texted Wang a copy of a written lease effective from Sept. 1, 2021, to July 26, 2022, with a $1,300 security deposit and $1,300 monthly for rent. Wang replied to the text saying she couldn’t sign the lease on her phone but would do so later on her computer. But she never did.
On Aug. 5, 2021, Wang paid the security deposit, and on Sept. 1, she paid rent. Sun asked if there were any problems with the house and Wang said no, other than him leaving “a lot of stuff” behind.
Two days later, Wang texted Sun saying there was a strong smell of cat urine in the house and asked him to have someone clean it. Sun had the carpets cleaned but, according to Wang, that didn’t resolve the issue.
Wang cleaned the house until she moved in on Sept. 29. On Oct. 3, Sun texted her that she needed to pay rent.
The next day she responded that she wouldn’t be paying because the house “has not reached a legally rentable standard” given that there was garbage, rotten food and reflective cat urine stains. Wang asked for her security deposit and first month’s rent back.
The next day, Wang emailed Sun informing him that she was terminating the lease agreement due to the conditions of the house. Sun responded that she needed to pay rent for October and that he would find experts to remove the mold and odors at his expense. Wang didn’t accept his offer and moved out and retuned the keys on Oct. 20.
Sun subsequently sued Wang in small claims court for breach of contract. Wang counterclaimed for violation of Indiana’s security deposit statute and asked for her security deposit, plus attorney fees.
Sun relet the house on March 21, 2022. In April, he sent Wang an itemized list of damages as required by the security-deposit statute.
A trial was held in May 2022. Sun testified that he had the house cleaned before Wang’s lease started and that he had the carpets cleaned after she complained about the smell. He said he offered to have the house cleaned again, but Wang “refused.” Sun also asked for Wang to pay rent plus utilities from October to February, which is the time him he was unable to rent the house to someone else.
Wang testified that she never signed the written lease and that she and Sun had a verbal agreement that she would rent month to month. She also testified about the amount of money she spent due to the condition of the house.
The court found both parties in breach of the lease: Sun for failing to deliver exclusive possession to Wang and failing to have the house in a fit and clean condition, and Wang for failing to pay rent after September.
The court ruled that Wang owed Sun a net amount of $38.76 plus $59.37 in court costs.
Wang appealed and Sun cross-appealed, both raising various issues. The appellate court affirmed the Tippecanoe Superior Court’s finding that there was a written lease but also partially reversed, finding Wang was not entitled to attorney fees under the security-deposit statute. The appellate court also increased the amount of damages Wang owes Sun to $1,938.76 plus an additional $59.37 in court costs.
Looking at enforceability of the written lease, Wang argued the 11-month written lease isn’t enforceable because she didn’t sign it.
“However, if a lease has been signed by the lessor and accepted and acted upon by the lessee, it may be binding on both parties even though it is not signed by the lessee,” Judge Nancy Vaidik wrote.
The appellate court held that the lease was enforceable because Wang paid the security deposit and first month’s rent.
Next, looking at the issue of breach of lease, Wang argued that even if she accepted the written lease, the trial court erred in ordering her to pay rent and utilities from October to February because Sun was the first party to breach the lease when he failed to deliver the house in a proper condition.
“Considering the evidence most favorable to the trial court’s determination that Tenant was responsible for rent starting in October, Tenant did not give Landlord a reasonable opportunity to fix any problems that she identified after moving in on September 29,” Vaidik wrote. “Thus, Tenant’s decision to terminate the lease does not mean that she is excused from paying rent and utilities from October to February.”
On cross-appeal, Sun argued that he timely returned the deposit damage statement to Wang, but the trial court ruled he failed to do so.
“Landlord claims the forty-five-day period began to run on March 21, 2022, when he relet the property and therefore the statement he sent to Tenant on April 15 was timely,” Vaidik wrote.
The appellate court agreed, noting the 45-day period under Indiana Code § 32-31-3-12 doesn’t begin until the date the lease ends or when the landlord relets the property.
Lastly, looking at the damages, the COA found Wang owed a total of $7,082.50 for rent and utilities. Giving her credit for her security deposit, September rent and the amount she spent due to the condition of the house, the appellate court ruled that she owes a total of $1,998.13.
Judge Peter Foley concurred but Judge Elizabeth Tavitas concurred in part and dissented in part with a separate opinion.
Tavitas agreed that the parties had a written lease and that Sun’s security deposit statement was timely, but she disagreed with the holding that Wang failed to give Sun a reasonable opportunity to fix the issues with the house.
“Rather, I conclude that the Landlord breached his statutory obligation to provide a habitable residence and that Tenant gave Landlord more than enough time to resolve the issues. Accordingly, I conclude that Tenant is not responsible for paying the rent and utilities for the duration of the lease,” Tavitas wrote.
“I am concerned that the majority’s opinion encourages landlords to simply ignore their responsibilities to provide habitable rental properties,” Tavitas continued. “A tenant should not be required to wait weeks for a landlord to remedy unsanitary conditions.
“I conclude that Landlord, not Tenant, breached the Lease and that Tenant gave Landlord more than enough time to remedy the conditions of the property. Accordingly, I conclude that Tenant was entitled to appropriate damages under Indiana Code Section 32-31-8-6.”
The case is Xihui Wang v. Mingyu Sun, 22A-SC-1473.
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