Arkansas Landlords Should Review Leases for Compliance with Act 1052 of 2021

Posted: July 26, 2021

On April 30, 2021, Governor Hutchinson signed SB594 into law, now known as Act 1052 of 2021 (the “Act”), which establishes minimum housing standards for rental property in Arkansas. Arkansas landlords should take notice and review their residential lease forms to ensure compliance with the new law.

Under the Act, there will be implied in all residential lease and rental agreements entered into or renewed after November 1, 2021, a requirement that a rental unit have, both at the time the tenants take possession of the rental unit and throughout the term of the lease or rental agreement, the following minimum quality standards:

• a source of running hot and cold water;
• a source of potable drinking water;
• a source electricity;
• a sanitary sewer system;
• a functioning roof; and
• a functioning heating and air conditioning system.

If the rental unit does not comply with any of the foregoing minimum quality standards, the tenant may send the landlord written notice of the noncompliance by certified mail or such other method of notice stated in the lease or rental agreement. Provided the tenant is current on their rent, the landlord will have thirty (30) days after receipt of the notice to remedy the noncompliance. If the landlord fails to fix the defect in that time, the tenant may terminate the lease or rental agreement without penalty and receive a refund of their security deposit. Notably, a landlord’s failure to remedy the issue does not enable a tenant to withhold rent.

Arkansas landlords will be deemed to satisfy the minimum quality standards if the landlord supplies the tenant, at the time the tenant takes possession of the rental unit, a form with which to list any defects and (i) the tenant signs the form without noting a defect to any of the minimum quality standards and takes possession of the rental unit, or (ii) the tenant fails to return the form to the landlord within two (2) business days. As to defects which arise after possession by the tenant, a landlord will be deemed to satisfy the minimum quality standards if (i) the tenant delivers notice to the landlord but refuses the landlord entry into the rental unit to fix the defect, or (ii) the noncompliance was caused by the deliberate or negligent act or omission of the tenant, or members of the tenant’s family, or a visitor of the tenant. If the landlord is deemed to satisfy the minimum quality standards, the landlord may apply the tenant’s security deposit for the payment of any damage to the rental unit.

In addition to establishing the minimum standards, the Act permits a tenant to install, at his or her expense, a battery powered or plug-in smoke or carbon monoxide detector; provided, however, the tenant is responsible for maintaining the detector in working order and repairing any damage to the rental unit caused by the installation and removal of the detector.

The new law will take effect with respect to lease agreements executed or renewed after November 1, 2021. Arkansas landlords should consider updating their lease forms to address the new implied terms. Lease forms used by landlords typically contain landlord-friendly terms, including provisions that attempt to eliminate any implied warranties as to the condition of the leased premises at the commencement of a lease, or provisions that severely limit a landlord’s maintenance and repair obligations. Such provisions could be found by a court to violate the minimum standards provided under the Act, resulting in an entire lease agreement being set aside and declared invalid. Absent contractual language to the contrary, Arkansas courts are typically hesitant to “blue-pencil” unenforceable contractual provisions, and will instead declare an entire contract as invalid rather than modifying it.

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