Checks, Troublesome Tenant and more

“It is generally not a good business practice to accept cash as payment for rent, due to the increased risk of robbery, theft or other criminal conduct.”

Q: Most of my residents pay on time and their checks are honored by their banks. Lately, it seems that I’ve been getting many checks from small banks, even some internet banks with no real offices; many I’ve never even heard of. I recently had one returned for insufficient funds over three weeks after the check was deposited! Do I have to accept these types of checks? Should I require that all my tenants pay by cash or cashier’s check? What about direct deposit?

A: You can control the method of payment and the types of payment instruments that you will accept. If your tenancies are month-to-month, you may change the terms of the tenancy agreement to establish different payment methods or to require payment by certified funds. Service of a 30-day notice of change of terms will suffice. It is generally not a good business practice to accept cash as payment for rent, due to the increased risk of robbery, theft or other criminal conduct. Many owners allow residents to make direct deposits or transfers to the owner’s bank account. There are many benefits to this arrangement, but many drawbacks as well. If you do allow the resident to make direct deposits, then establish an account separate from your personal general account, and establish clear guidelines instructing the resident when and how to make deposits. Suggested guidelines would state that you will not accept a partial payment without prior consent; that the resident is not authorized to make a direct deposit after service of a three day notice to pay rent or quit or a notice of breach of a covenant of the lease, or for any period of time after expiration of a notice of termination of tenancy. Once your payment terms are established, stick to them and require the residents to do the same.

Q: It’s always something with one particular tenant of mine. When he first moved in three months ago, he deducted $110 from the rent because he said he had to fix a few things in the unit. I didn’t say anything at the time because I needed the unit rented and I didn’t want to upset my new tenant. Since then, he has been able to find something wrong each and every month, deducting a little bit each month. I told him I didn’t think that was right, but he did it again this month. He says he is entitled to do that as California law says he can “repair and deduct” for anything wrong in his apartment. Is this true?

A: California law, specifically California Civil Code Section 1941.2, provides that a residential tenant may make repairs and deduct the cost from the rent only under certain circumstances. These limited circumstances require the tenant to give the landlord notice of the dilapidation before using the repair and deduct remedy. After giving notice, the landlord has a “reasonable time” to make the repairs, before undertaking to repair and deduct. Thirty days is considered reasonable. A shorter time frame would apply to plumbing leakage, water penetration, or defects that place the resident’s safety in jeopardy. Only defects that render the premises uninhabitable will qualify for this remedy. Tenants may only invoke this remedy twice in any 12-month period, and each time the remedy is utilized, the cost of repair cannot exceed one month’s rent.

In your situation, it appears that the tenant is abusing a privilege only available to tenants with serious dilapidations in their apartments. Without providing notice to you of the defect, and an opportunity for you to correct any serious defect, the tenant is not entitled to deduct anything from his rent. Provided you haven’t condoned his conduct, or waived your rights to accept the full amount of rent, you may demand that the tenant pay all amounts previously deducted, and become current.

Q: I recently bought a building in a pretty rough neighborhood. Seems like a day doesn’t go by without some sort of violent crime nearby. Just the other night, there was a shooting just down the street. I buy paint by the truckload to cover all of the graffiti and tagging on the building. I have a couple of vacancies now, and I don’t know if I have to tell them about all the stuff going on. If I did, no one would rent, what do I do?

A: Crime, unfortunately, is a fact of life in many communities throughout Southern California.

When asked by the prospective resident about crime in the area, refer them to the local police department for statistics. Be careful not to portray your building as a “security” building or advertise it in any way that may create a false sense of security or safety. If your property provides an increased risk of harm, or has had a recent rash of criminal conduct, you may have a duty to disclose this fact to the prospective resident, even if not asked.

Q: Street parking spaces are few and far between near my building. My apartment complex has just enough parking spaces for my residents to each have one space. If a resident has more than one car, they must try to 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 to the parking area. Most cities require the sign to con tain 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, because the offender will always claim that you did not give prior notice before towing. If he fails to remove the offending vehicle, the car may be towed.

Q: I rented an apartment to four roommates quite a while ago. One of the four is now moving out, but the other three want to stay. The one moving out is demanding that I return his portion of the security deposit, he says that he paid it so he should get it back. Do I have to?

A: No, the security deposit remains with you as long as any of the roommates remain in possession of the rental unit. Often owners and residents will enter into an agreement replacing one resident with another, thereby removing the one original resident from the lease. The agreement will further provide that the “new” roommate pay the “old” roommate his portion of the security deposit. Absent a written agreement to the contrary, the owner should retain the entire security deposit, then when all the remaining roommates vacate, the refund check should be made payable to all four of the original roommates named in the rental agreement.

 

 

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 285,000 landlord tenant matters throughout California and has collected over $200,000,000 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.