A Selling Issue, Roommates, and more

Print
PDF

Q: Just when I thought I was doing everything right, I think maybe I’m not. Here’s the short version. I’ve had my building on the market for a while waiting for a buyer. I received an offer and we opened escrow a couple of weeks ago. The buyer is doing his due diligence and is going through the books and records, etc. A couple of issues arose. First, the buyer is doing his inspections of the units and we gave all of the residents plenty of notice of when the buyer and his inspection people would visit each unit. My manager served written notices to all and provided well over the required 24-hour notice; most got at least three days’ prior notice. Well, Mr. Thinks-He-Knows-It-All in one of the apartments just sent me a letter warning me that if anyone enters “his” apartment, he will sue everyone. He says he use to go to law school, that he knows his rights, and says I can’t go in. Needless to say, this was unex pected. I have the inspectors and appraisers and the buyer scheduled to visit at the same time. The buyer is very hands-on, and says he must personally inspect each unit. If he doesn’t let me in, it may jeopardize the sale, what do I do?

A:
Mr. Thinks-He-Knows-It-All is mistaken. California law provides that residents must allow access to and entry for appraisers and prospective purchasers, among others, upon service of at least 24 hours’ notice. His failure to allow access violates California law and is a breach of your rental agreement. Your resident needs a little “prompting.” Prepare a Three-Day Notice to Perform Condition or Covenant directing him to comply with California law and the terms of your agreement by allowing access at the already noticed date and time.

Additionally, provided his tenancy is a periodic tenancy and your property is not subject to rent control, a Notice of Termination of Tenancy can be a great motivator. Prepare a Notice of Termination, and instruct your manager to serve it at the same time as the Notice to Perform or Quit. Let the resident know that provided he allows access as scheduled, you will rescind the Notice of Termination. But if he doesn’t, he should start packing. Given the alternatives, compliance almost always occurs.

In the unlikely event he continues in his refusal, you have several options. Typically escrow instructions will preclude your evicting a tenant without the buyer’s consent once escrow is opened. Check your escrow instructions to see if this applies. Most buyers would have no problem and will consent to his removal. The buyer and lender can be appeased by agreeing to a hold back in escrow of sufficient money to effect any needed repairs to the unit, and/or to cover eviction costs. Escrow instructions can be amended to allow for reimbursement for repairs and costs or a return of the retained money to you.

Q: I have a dilemma. I rent a townhouse to three roommates, two girls and a guy. They all signed a one-year lease just four months ago. I got a call the other night from one of the girls and she told me that the guy had moved out a week after they moved in after the three of them had some sort of disagreement. She said that he called her the other day and said he wanted to move back in this weekend. She spared me the details, but she sounded afraid of him. The neighbors told me some stories about the guy and it sounds like we’re all better off if he isn’t around. She asked if she could change the locks and not let him in. I’m not sure what to do, if he’s locked out, won’t he just come to me and ask for a key? What do I tell him?

A:
The one-year lease agreement provides each of the three occupants the right to occupy and use the premises for the entire term of the lease or until terminated. No one tenant has greater rights than any other. Any action, absent a court order, by one or both of the girls to deny the third roommate entry would be actionable. If the remaining two roommates are truly afraid of the third, they should immediately seek a restraining order barring him from coming near the townhouse. The restraining order, if done properly, will allow you to refuse to provide him with a key to the changed locks, and will keep him away from the premises. He will, however, still be contractually obligated to perform the obligations, but the restraining order will prevent him from living in or visiting the unit.

Q: I think I’m ready to join the ranks of landlords here in Southern California. I placed an offer on a 12-unit apartment building, the seller accepted it and I’m currently in escrow. I’m now about to conduct my due diligence. Is there anything special that I should be aware of when reviewing the property or the rent roll? What can I do to protect myself when a tenant claims that he had more security deposit than what gets transferred to me on close of escrow?

A:
When doing your due diligence, it is important to review all existing rental agreements and other contracts that affect the building. A practice that is becoming more and more common in smaller multi-family complex transactions is to require that estoppel statements be prepared and signed by both the seller and the occupants of each unit. When you compare these signed estoppel statements with the written agreements, and with the seller’s representations, you will be aware of any discrepancy. This has the added benefit of affirming the terms of the rental agreement either written or verbal and confirming rental amounts, due date, names and number of authorized occupants, and the amount of security deposit currently being held for each unit.

A buyer is required to make a reasonable inquiry and investigation as to the amount of security deposit held. If the buyer fails to inquire, then the tenant may prevail in an action against the buyer for return of deposit, even if the deposit was never transferred to the buyer in escrow. As crazy as it sounds, the law provides that a tenant may prove the existence of a security deposit by documentary evidence or merely by a declaration in certain circumstances. In addition to a thorough review of your tenancy agreements, inspect other contracts relating to the property. If you see a laundry room, inquire as to who owns the machines. If the machines are leased, request a copy of the laundry lease agreement, and contact the laundry company to confirm the terms.

Q: Parking is very tight in the neighborhood around one of my buildings. My apartment building has 14 units and 14 parking spaces. There is just enough parking for each of my residents to have one space. If a resident has more than one car, they must park it on the street. It has been working out fine for years but now I have this one tenant who refuses to follow the rules. He is constantly parking his second car in someone else’s assigned spot. I’ve told him several times but he just ignores me. What do I do?

A:
Your community rules and regulations should specify your parking rules, specifically stating that only one vehicle may be parked on the premises, and that all parking is assigned. Ensure that you have the proper signage at the entrances of the parking area. Most cities require the sign to contain certain restrictive parking language, plus the local police department telephone number, and the California Vehicle Code section that provides for towing of unauthorized vehicles. Contact your local police department for their specific requirements, as they vary from city to city.

Next if you know the offender, then provide a written warning of the violation. Attempt to serve it at his residence, post it on his door if he’s not in, and also put the warning on the windshield of his car. If practical, take and save a photograph of the warning on the vehicle windshield and on the offender’s apartment door, if applicable. The offender will always claim that you did not give prior notice before towing, so ensure that you document the warnings well. If he fails to remove the offending vehicle, the car may be towed.

Q: I’m still a bit confused about the security deposit disposition form, and whether or not I must include receipts. Can you summarize it for me?

A:
The method of accounting for security deposits after a tenant has vacated your rental unit is defined by statute. California law requires that certain documentation be provided to the departing tenant under certain circumstances. The law requires that landlords prepare and send an itemized statement, within 21 days of the tenant returning possession detailing all deductions from the security deposit.

If the deductions for repairs and cleaning exceed $125, then the landlord must provide copies of receipts and invoices along with the itemization, along with the name, address and telephone number of the vendor who did the work or provided the supplies. If the repairs cannot be completed within the 21-day time period, you may provide an estimate of the work needed within the 21-day period. Upon completion of the work, you must provide receipts and invoices within 14 days of completion. The law provides that an owner and his employees may perform the work themselves and charge a “reasonable” fee. The law is clear as mud as to what that reasonable fee may be, suffice it to say that owners should maintain logs and time sheets to justify time spent on repairs and the reasonable hourly rate charged.


This article is presented in a general nature to address typical landlord tenant legal issues. Specific inquiries regarding a particular situation should be addressed to your attorney. Stephen C. Duringer is the founder of The Duringer Law Group, PLC, one of the largest and most experienced landlord tenant law firms in the country. The firm has successfully handled over 255,000 landlord tenant matters throughout California, and has collected over $155,000,000.00 in debt since 1988. The firm may be reached at 714-279-1100 or 800-829-6994. Please visit www.DuringerLaw.com for more information.

Contact AACSC

Apartment Association,

California Southern Cities
333 W. Broadway St., Suite 101
Long Beach, CA 90802
(562) 426-8341

This e-mail address is being protected from spambots. You need JavaScript enabled to view it