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REAL ESTATE
AND
(Copyright, 1917, by The Record and Guide Co.)
NEW YORK, NOVEMBER 24, 1917
HOW REAL ESTATE IS DISCRIMINATED AGAINST
The Game of '*Beat the Landlord" Is Played With
Great Success—Still Operating Under the Laws of 1776
T^VVENTY-TWO years ago when I
^ embarked in the real estate and
building business, I did so with full
confidence that I had entered a busi¬
ness career. From that time up to the
present day I have encountered an ever-
increasing prejudice and hostility on
the part of the public against the land
owner which convinces me that the
land owner, the builder and the land¬
lord are not considered business men.
It is not to be wondered that the pub¬
lic mind assigns this low position to
the real estate owner, because the pub¬
lic mind is directed in its attitude
largely by the laws as they are upon
our statute books.
Oppression by Law.
When we examine the law regarding
the land owner, and the landlord, we
find that the law does not consider them
business men. This is what is the
matter with real estate, and it is the
duty of all engaged in the real estate
business to see that the laws are
changed placing the landlord upon the
same footing as other business men.
It is the boast of our nation that we
do not tolerate special privilege and in¬
versely then we should not oppress any
particular class, but unfortunately we
dOj for the landlord and real estate
owners are oppressed by law more than
any other class. They are the step¬
children of the law. The ordinary pro¬
cess of law, the common rules of busi¬
ness and the customary considerations
shown to business men are not applied
to the landlord. Since the law discrim¬
inates against him it is no wonder that
the popular idea is that the landlord
is not a business man, but one who
makes his money without work or ef¬
fort.
This thought on the part of the pub¬
lic is behind the hostility shown to
the real estate business. That these
and similar agitations have gained pub¬
lic favor is not to be wondered at,
because any doctrine that promises to
give something for nothing is bound
to attract a large following.
Relation of Law to Landlord.
The first point that I wish to take
up is the relation of the law to the
landlord. The cry of "land and lib¬
erty" is an ancient one, and while
"land" and "liberty" had an inter-re¬
lation in times when nearly all the
real estate consisted of homesteads
during the agricultural era, it has no
relation whatever in our large indus¬
trial centers (which includes nearly one-
half of our population) where most of
the population are rent payers.
From the beginning of the nineteenth
century our country changed from an
agricultural to an industrial nation, and
the rural homesteaders became city
rent payers. The cities grew rapidly.
Tenements, flats, and apartments sprang
up everywhere in ever increasing num¬
ber and size. The constructing, leasing,
operating and selling of buildings now
became an established industry not on¬
ly in dwellings, but also in business
houses for merchants and manufactur¬
ers who previously took pride in hav¬
ing a building exclusively for them¬
selves soon saw the advantage and
By FREDERICK C. ZOBEL
economy of paying rent for one ^ or
more floors in a well-equipped building.
The whole real estate business now be¬
came "commercialized." Its motto was
"built by the block and sold by the lot."
Land and houses were sold like so many
loaves of bread. The builder became
a manufacturer of houses and the
landlord a merchant who sold space
plus service.
This industry now extends over the
greater part of all our large and grow¬
ing cities, and this huge industry is
struggling on through a maze of ar¬
chaic laws which impede its proper de¬
velopment at every step. Every line
of trade has had legislations changed
to aid its development, but real es¬
tate is still trying to do business under
the laws of 1776.
The tremendous changes in the real
estate business have passed unnoticed
because these changes have been so
gradual that even the property own¬
ers themselves have hardly become
aware of them. The law of landlord
and tenant is still the same as in the
days when the only improvements con¬
tained in houses were a pump in the
back yard and a hole in the wall
where a tenant could put a stove if he
chose. Compare with these, the modern
apartment house furnishing all the
comforts and conveniences of a hotel!
It is on the relation of the law to the
landlord that I wish to comment first.
Motive for Taxing Real Estate.
It is beyond dispute that the under¬
lying motive for taxing real estate_ is
economy to the State in the collection
of taxes. All other forms of property
may be hidden, removed or denied and
therefore the collection of taxes would
be difficult and the State put to large
.expense. Real estate is the only prop¬
erty that cannot be so secreted, and
it was therefore found expedient to
place the greater part of taxation upon
real estate. In this way, the landlord
or property owner becomes a tax col¬
lector for the State without receiving
any remuneration. It was always con¬
tended that since people had to live in
houses the landlord could collect the
tax by charging it on the rent. Whether
this is so or not, I will not now dis¬
cuss, but this was the habit from the
earliest times.
Now, if there ever was a class of
people since the beginning of time that
was hated and ostracized by their fel¬
lows, it was the tax collectors, the
tithe gatherers, the publicans.^ In the
Scriptures we read of "publicans and
sinners." These tax gatherers were so
loathed by the common people that
"sinners" were considered their only
fit associates. This peculiar attitude of
mind has endured to the present day
and it accounts for the lack of justice
done to the landlord, both by the law
as it is upon our statute books, and
by the public in general. There is. in
the minds of all rent payers, and their
name is legion, a sub-conscious feeling
that the landlord is a flint-hearted,
grasping rascal, a grafter and a para¬
site on the body politic, and this sub¬
conscious feeling finds expression only
too frequently.
When I say that the law does not
do justice to the landlord, but treats
him with the same scorn and contempt
as many individuals do, I realize that
I am impeaching the fairness of some
of our most cherished traditions. Never¬
theless, comparing the attitude of the
law to the landlord and the attitude
of the law toward the ordinary busi¬
ness man, I repeat that the conduct of
the State towards the landlord can¬
not be too severely criticised.
Entitled to Prior Claim.
The State having appointed the land¬
lord (quite against his desire) as tax
collector, practically says to him: "The
taxes must be paid, I don't care whether
your building is vacant nor brings an
income, the taxes must be paid. I don't
care to whom you owe money, who
has a mortgage on your property, the
taxes are the first lien against the prop¬
erty." Now, the landlord would be
perfectly willing to act as tax-collector
for the State if the State would give
him the same right and power that it
reserves for itself in the collection of
taxes. In other words, the landlord
should be entitled to a prior claim for
rent due to him in preference to all
other creditors. However, the State
does not give him that right. In fact,
it treats him worse than the ordinary
creditor, as I will show later, and I
contend that it is unmoral on the part
of the State to impose obligations upon
the landlord without placing at his dis¬
posal means to meet these obligations.
For the State to say to the landlord,
"If the taxes are not paid your prop¬
erty will be confiscated. I don't care
how you collect your rent." is so mani¬
festly unfair that it is surprising that
this fact has not sunk into the con¬
sciousness of the public long before
this. The only explanation is, as I
said before, that the popular mind pic¬
tures the landlord as a grafter, and
anything that deprives him of his due
"just serves him right."
Comparison of Cases.
Let us draw a comparison between a
coal merchant suing on a contract for
coal delivered, and a landlord suing
on a contract for rent due.
The coal merchant A has a contract
with B by which A is to deliver to B
one ton of coal each day, the coal for
the current month to be paid for in ad¬
vance. A starts to deliver coal, but
about the tenth day, the coal merchant
not having received the money in ad¬
vance, as stipulated in the contract, re¬
fuses to deliver any further coal to B
and sues to compel B to pay the money
agreed in the contract. B makes no
defence except to say that he has no
money and therefore is unable to pay.
The court, recognizing the destitute
condition of B, promptly renders a
judgment that A need not carry out
the contract, instructing him, however,
to deliver coal to B for three or four
days longer and that thereafter A may
seek redress in any way that he may
see fit.
Can we imagine such a legal decision?
Vet this is precisely what the court
does in the average landlord and ten¬
ant case. A tenant may be behind two
weeks or a month or two months and
when the landlord finally sues to re--
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