ARE HOTEL GUESTS TENANTS?

             Efficiency Lodge advertises as an extended stay motel; its website invites guests to “Stay a nite [sic] or stay forever.”

            Armetrius Neason, Lynetrice Preston, and Altonese Weaver each occupied their rooms for months or years. Neason remains there still, but Preston and Weaver have left.

            When the three Plaintiffs first moved in, they each signed a rental agreement. The agreements stated that “The relationship of Innkeeper and Guest shall apply and not the relationship of Landlord and Tenant.” Each referred multiple times to the occupant and Lodge as Guest and Innkeeper.

            The agreements provided that payment was due weekly, while management reserved the right to enter for housekeeping and maintenance. The agreements also addressed the term of occupancy, but the blanks were never completed.

            One of the agreements allowed the occupant to remain on a week-to-week basis, while another agreement specified that the occupant could remain “for 180 days straight,” after which she would have to vacate for two days before she could return.

            All three Plaintiffs contend that they used the Lodge as their home; the Lodge does not contest this assertion.

            In 2020 during the COVID-19 pandemic, all three Plaintiffs were unable to pay Lodge. Weaver was locked out of her room, although the other two Plaintiffs were not.

            Neason, Preston and Weaver sued the Lodge. They asked for an injunction prohibiting the Lodge from removing them without formal eviction proceedings, and for damages to compensate Weaver for the lockout. The trial court granted the injunction, determining that Plaintiffs used the Lodge as their long-term home.

            The Lodge appealed.

The court of appeals affirmed, finding that the contracts signed between Plaintiffs and the Lodge were ambiguous about the nature of the legal relationship. The appellate court noted that Plaintiffs had lived at the Lodge for a long time, that each brought many personal items with them, and that they used the Lodge as their home address for official purposes. As a result, the court of appeals determined that the Lodge is required to process formal eviction proceedings to remove the Plaintiffs.

So the Lodge appealed to the Supreme Court. The high Court reviewed the facts and applicable law.

            Under the law, tenants must be evicted through a court procedure while guests can simply be precluded from entering their rooms. Innkeepers are required to receive a written statement establishing the period during which a guest may occupy a room. At expiration, an innkeeper can change door locks or otherwise prohibit the guest from entering, without court involvement.

            The Supreme Court first analyzed the structure of a landlord-tenant relationship, which grants a right of possession, enjoyment, and use. Although not stated, the implication is that an estate in land is contemplated in each LL-T scenario. And similarly, a motel or hotel guest has less, more like a license or limited contractual right.

            Possession of the premises is a factor and use of the property as a “home” and “dwelling place” is evidence of a LL-T relationship. The ability to accept and preclude visitors and third parties can also be an important factor in finding or negating the existence of a LL-T structure.

            However, a LL-T relationship is not determined by a person’s subjective belief that a property is used as a home. And of course commercial tenants do not use their premises as a residence, but yet the LL-T foundation is undeniable.

            So the Supreme Court lands exactly where it should, by asking about the intent of the parties. If the agreement is clear then there is no reason to ask further questions. If unclear, extrinsic evidence is needed to explain and resolve the ambiguities.

Parol evidence might also include the parties’ course of conduct, as shown by their actions.

            In that vein, the Supreme Court asks if the Plaintiffs decorated and furnished the premises, cleaned and maintained the room, entertained guests, altered the locks, and changed or added security devices. Or, maybe the Plaintiffs had those rights but ignored them, and instead the innkeeper tightly controlled access, maintained and cleaned, allowed and prohibited guests and set hours, and prohibited anyone from changing door locks and adding security equipment.

            The high Court concludes that the LL-T relationship is created by the transfer of possession, while the innkeeper-guest structure is “marked by the payment of a fee ‘for the purpose of entertainment’ at an inn.” Both court of appeals and trial court decisions are vacated; the case is returned to the trial court to start over and more closely examine the precise relationship of the parties with specific emphasis on the contracts and other related evidence.

See Efficiency Lodge v. Neason; Case No. S22G0838; Supreme Court of Georgia; June 21, 2023: https://casetext.com/case/efficiency-lodge-inc-v-neason-2.

            Questions / Issues:

1. The legal difference between a tenant and guest is a common issue. The former is entitled to all the protections of law; the latter has virtually none. Hotel and motel contracts are often non-existent, or if there is one it is poorly written on an index card, and not signed by both parties. This well-reasoned decision merits review to understand how at least one Supreme Court makes the distinction between tenant and guest.
   

2. If you are a landlord, there is likely nothing you can do to recharacterize your tenant as a guest. If however you own a hotel or motel, or perhaps your mother-in-law is overstaying her welcome at your humble abode, it may be pivotal to examine the relationship closely before you conclude that your occupant is merely a guest, subject to virtually no protection under law, and you prevent entry. Because if you guess wrong, the damages could be steep.
   

3. Is this yet another situation where the State legislature could help? Perhaps paying guests could be automatically converted to tenants after six months of continued occupancy without default, while all others remain guests. Wouldn’t most paying guests be surprised to learn they have no legal protection after six months of room possession?
   

                                                                                    Stuart A. Lautin, Esq.*

 

* Board Certified, Commercial (1989) and Residential (1988) Real Estate Law, Texas Board of Legal Specialization

Licensed in the States of Texas and New York

  

Reprinted with the permission of North Texas Commercial Association of REALTORS®, Inc.