There are several reasons that a property could be illegal to rent. Perhaps it is a 3 unit that is only approved to be a 2 unit building. Perhaps it is a basement apartment in a single family home that is not cleared to be an apartment. Perhaps there are no standard size windows in a basement or no exit in case of fire. Perhaps you must go through a portion of another apartment to get to yours. Perhaps it is a fire hazard or there is no inside plumbing. Perhaps it is, by mortgage requirements, supposed to be owner occupied. Or, perhaps the building is not registered with the city as an apartment or rental unit.
What are your rights? Can you be evicted from an illegally rented property?
The laws are different in different states. Some states are very strict with landlords who rent illegal apartments to tenants. New Jersey, for instance, makes it very clear to landlords that they may not profit from illegal activity. Of course the tenant loses as well because he must vacate; but the landlord must pay his relocation expenses which are assessed at an amount equal to six times the monthly rent, five days before the tenant vacates the premises. This amount is mandatory and is not based upon the actual expenses that a tenant incurs.
Keep in mind that the tenant must vacate illegal properties, and if he/she refuses to then the landlord must pay for eviction proceedings as well.
While fines and penalties have become much more serious for landlords, it does not change the fact that tenants must vacate an illegal property unless the landlord can remedy the illegal issue(s).
In California, while you must vacate an illegal unit once it is discovered, you may not have to pay any rent and may be entitled to a refund of part or all of the rent you have paid while you were there.
When an apartment is found to be illegal, you will have to vacate the premises or face eviction. The rental agreement in many states becomes unenforceable. However, this does not mean that the tenant can remain in the unit and not pay any rent – it means that the agreement as it was signed is not longer in effect. The tenant may be able to win in other ways.
The landlord may be able to cure the problems and the tenant would be permitted to stay. However, if the problems could not be solved then it would become a vacate or evict. In this case, and in many states, the landlord could be liable for your cost of finding and relocating to a new residence.
While you can be evicted because it is an illegal residence, you cannot be evicted for not meeting the terms of the lease. You may not have a free ride to stay without paying, but you may have the right to recoup at least some of your losses.
Additionally, regardless of what the lease may state or the illegality of the premises, participating in illegal activities will get the tenant evicted as if the lease were in effect.
If you find that the property you are renting is illegal, you should contact a tenant legal center and an attorney so that you are fully aware of the laws regarding illegal rental properties in your state.