08 Dec Non-Paying Resident, Utilities, Maintenance
“Essentially, those housing providers with non-paying residents have been involuntarily placed in the role of lenders…”
Q. I understand that my options are still limited when dealing with a non-paying resident, but there must be something that can be done. I can barely make my mortgage payment yet my resident still lives in my rental without paying a dime. What should I be doing now?
A: As of this writing, second week of November, Governor Newsom’s declaration of a State of Emergency is still in place, the controversial CDC Order has not been vacated, and AB 3088 is still restricting our ability to remove non-paying residents. Essentially, those housing providers with non-paying residents have been involuntarily placed in the role of lenders with non-performing assets. Most courts are now open, albeit with reduced schedules, mandatory video appearances and trials, all fraught with delays and dysfunction.
Going forward, continue to communicate with your residents, thank the ones that are performing, continue to allow payment plans for those making the effort.
For those residents who are violating the terms of their lease, i.e., by subletting without your consent, maintaining a pet without your consent, have altered or damaged the premises, you do have a remedy.
Identify the material breach, prepare and serve a three-day notice to perform conditions or covenants or quit. If the resident has not cured the material default within three business days, then you are able, thank you AB 1482, to prepare and serve a three-day notice to vacate. If the resident has not vacated within three calendar days, then you may file an unlawful detainer action to recover possession. This process is available whether the resident has a month-to-month tenancy or a fixed term lease. Alternatively, many housing providers may form the intent to “withdraw the rental unit from the housing market.” Not surprising when a resident is in possession, not paying rent, and causing wear and tear to the rental property. Talk with an experienced attorney, one intimately familiar with AB 1482, AB 3088 and the CDC Order before proceeding down this path.
Q. My new tenants just moved in a month and a half ago. The lease requires that the tenant pays for all utilities, and must put the utilities in their own name prior to moving in. Well, I just received the electric bill, and it’s still in my name. I’m thinking about not paying it, just letting it get shut off. Maybe when the lights go out, they’ll take care of it. Can I do that?
A: No, you cannot let the utilities be shut off. Your tenant’s actions are a breach of the rental agreement, and must be addressed in compliance with California law. You should immediately prepare and serve a Notice to Perform or Quit–Breach of Covenant notice. The notice should identify the specific breaches, the failure to place the electric utility in their own name, and their failure to pay the utility charges incurred since taking possession. The notice should be specific as to how they must cure the breach, namely, they must put the utilities in their name, and reimburse you for the amount of utility charges that have been billed and incurred post tenancy.
Note that some jurisdictions may require that you include a statement identifying a witness who observed the breach, as well as the date and time of the breach. In such jurisdiction, you or your manager would suffice as the witness, and the breach would be considered “ongoing” as it continues to occur. In the event of non-compliance, you would be entitled to file an unlawful detainer action to recover possession of the premises. Rarely though is that necessary, as the vast majority of residents will immediately comply.
Q. Can’t seem to keep my apartments maintained. Lately, it seems like they are falling apart. I do the best I can. I fix most stuff myself, and contract out some, but it seems like some of my tenants are sabotaging the apartments. I’ve replaced the smoke detectors in one of my rentals three times in the last year. I know something’s up, what do I do?
A:It’s more important now than ever before that you establish and follow an operations and maintenance plan when managing and maintaining your rentals.
Not only is it just good business sense to maintain your rentals properly, but also the law man dates your prompt response to complaints of serious habitability defects. It is critical to identify tenants who engage in damaging and destructive conduct.
Although the code specifically precludes a tenant from benefiting due to his inflicting damage to the apartment, often it is difficult to prove the tenant caused the habitability defect. A good practice to enact is to create a maintenance log of repairs to each unit. Many owners will require a tenant “sign off” when the repair is completed, other owners photograph the repaired item upon completion as proof of completion. These practices will support your claim that the “self-destructing” smoke alarm is being damaged by the tenant.
Several pieces of legislation have been enacted to crack down on the small minority of landlords who fail to properly maintain their buildings. Depending upon the severity of the defect, and providing that it is not tenant caused, a landlord may be cited by one of several governing agencies and given a period of time, ten to 35 days to make the repairs. If the repair is not completed as required, there are provisions that would allow the governing agency to make the repair, and add the fees and costs of correction as a lien against the property. Additionally, legislation eliminates the tax benefits to the owner during the period of non-compliance, and in extreme circumstances, precludes an offending owner from demanding or accepting rent. Now more than ever before, it is critical that you document your repairs and identify the residents who are engaged in sabotage or other destructive conduct.
Q. I am a very conscientious landlord. I want to ensure that my rentals are well maintained and that any maintenance issues are addressed immediately. Every year, I send a notice to my residents informing them that I will inspect each unit. I have been doing this for years without any problems. This month I received a letter from one of my tenants telling me that I had no right to enter his apartment to look around, that he would not let me in. What do I do? Can I force my way in to do the inspection?
A: Your policy of doing annual inspections is admirable, and is practiced by responsible landlords throughout California. Most tenants welcome a responsible landlord’s actions in ensuring that all is well, and voluntarily cooperate in providing access upon the landlord’s reasonable request. It is clearly in the best interest of all to ensure that any maintenance issues are promptly addressed, and that a spirit of communication and cooperation exists between a landlord and his residents. Trouble is, your resident is right. There is no specific provision in California law requiring a resident to allow the landlord access to merely “inspect” the premises. California law states that a landlord can enter a rental unit only for certain reasons. Those reasons are in an emergency; when the tenant has moved out or abandoned the premises; to make necessary or agreed repairs, decorations, alterations or other improvements; to show the unit to prospective purchasers, tenants or lenders; to provide entry to contractors or workers who are to perform work on the unit; or to conduct a pre-moveout inspection at the end of the tenancy; pursuant to court order; or to inspect the smoke detector or inspect the installation of a waterbed.
Conspicuously absent from this body of law is the unfettered right of a landlord to just inspect for the pure sake of just making sure everything is alright. You cannot force your tenant to allow access for the purpose of inspection.
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.