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What Constitutes “Damages” When Tenant is Charged to Repair the Premises?

 

A “Thorny” Issue

Differentiating between what is “damage” and what is “normal wear and tear” is often a subject of dispute between tenants/landlords/property managers. The way the Civil Code 1950.5(f) (1) addresses this is by providing the Notice of a Right to Pre-Move Out Inspection (within 14 days of the date of the Final Move Out Inspection). The tenant has the right to waive this inspection in writing if he/she chooses not to have it. At Sue Carrell & Associates, we recommend that the tenant have this inspection so that they know two weeks before vacating what will be perceived as damage and what passes as “wear and tear”. It also gives the tenant time to cure the defect if they feel it’s something they can repair cheaper than the landlord will do.

Phone technology makes it easy for property managers and owners to take photos of just about every nook and cranny in the dwelling when the tenant moves in, in order to document the condition of the place at the time they move in. The Civil Code has specific language to address effective age of paint, carpet, appliances, etc. This is a standard that courts and property managers need to bear in mind before charging 100% of paint or carpet replacement to the tenant. A good guideline for tenants to consider is that they should expect to leave the premises in the condition it was in when they moved in especially if they’ve only been in the unit for a year or two.

If You Think I Am Just Trying to Scare You, I Am

 

So many property owners think they are qualified to manage their own rental units. They think it’s “just a matter of collecting the rent and repairing this and that”. If you are one of these property owners, please review the following questions and see how many you can answer:

  1. Do you know what the state requirements are for smoke and CO detectors?
  2. Do you know your state and local codes for outlets and entry locks?
  3. Do you know how to market your rental to get qualified applicants?
  4. Have you set qualifying guidelines for prospective tenants?
  5. Are you familiar with regulations on lead and asbestos abatement?
  6. Do you have the ability to run a credit report?
  7. Do you know how to read the credit report?
  8. Are you familiar with the Fair Housing laws, both state and federal?
  9. Are your forms up-to-date with all the clauses required in California?
  10. Do you know how to properly fill out & serve your notices?
  11. Is your property under rent control? (N/A in Sonoma County)
  12.  Does your City require any disclosures to tenants?
  13. Do you know what conditions would make your property “uninhabitable?”
  14. Do you know how “wear and tear” is determined at the Move Out Inspection?
  15. What do you do if the tenant breaks the lease?
  16. What do you do if the tenant withholds rent?

Miss any? Give Sue Carrell & Associates a call TODAY; you’ll sleep better at night.

What is the maximum amount a landlord may require a tenant to pay for a security deposit

A Residential property is broadly defined to include all dwellings.  The maximum amount a landlord may require a tenant to pay for a security deposit is highly regulated. Residential landlords are limited to a maximum security deposit equal to two month’s rent for unfurnished units and three months’s for furniture in its Cal. Civ Code 1950.5(c).  These limits cannot be waived by tenant.  While the landlord may describe some of the security deposit as “last month’s rent, “cleaning deposit” or “pet fee”, the landlord may not collect or demand any additional amounts for these categories. Cal. Civ. Code 1950.5(c)

In addition to the security deposit, a landlord may collect the first month’s rent in advance. Other than the first month’s rent, advance rent payment may be required only if (1) the amount pre-paid is six months or more rent (2) the term of the lease is six months or longer. Cal. Civ. Code 1950.5(c)

Furthermore, landlords may also charge a non refundable screening fee.  This permissible fee was limited to $30.00 (in 1996) but may be increased annually commensurate with an increase in the Consumer Price Index after January 1, 1998.  The application screening fee may not exceed the “actual out-of-pocket costs gathering information concerning the applicant.”  Cal. Civ. Code 1950.6(a)

What Rules Govern the Return of the Security Deposit to the Tenant?

 

What are the rules that govern the return of the security deposit to the tenant?  According the code; upon termination of a rental agreement on residential property, the landlord must return the unused portion of the security deposit and an itemized statement showing what deductions have been made, no later than 21 days after the tenant vacates the property. (Cal. Civ. Code 1950.5(g)) The itemized statement must be accompanied by receipts or invoices issued by the person that performed the work that the deductions were used to pay for; or, if the landlord or property manager (Agent) performed the work, the itemized statement must list the work that was done, the time spent, and the reasonable hourly rate charged. Sometimes, the work cannot be accomplished within the 21 Day period, then the landlord or agent must notify the tenant that there are funds that will be withheld until the damage is repaired, and another letter will be sent itemizing that cost.

What Happens to the Lease Obligation if the Tenant Dies?

 

Question: If a resident dies and was on a lease, does the estate still owe rent up until someone new moves in? What about a month-to-month agreement? Obviously the person couldn’t give a 30-day notice.

Answer: Death does not terminate term lease obligation if the tenant dies; he resident’s estate remains responsible through the end of the lease term, unless the resident’s estate relinquishes possession of the premises to the landlord, and the landlord is able to re-lease the premises to a new tenant. Month-to-month residential tenancies terminate 30 days after the last rental payment by the deceased tenant (Civil Code §1934). A 30-day notice is not required in this situation. 

Rules Governing Security Deposits, Amount & How They Are Held

 

I think one of the most misunderstood aspects of Tenant-Landlord relations are about the Rules Governing Security Deposits. Usually, a landlord will hold the equivalent of 1 ½ month’s rent as security on the lease. The maximum amount that a landlord can collect is two month’s rent. If the dwelling is furnished, an amount equivalent to three month’s rent is permitted. The landlord/broker cannot collect more than two month’s rent and designate it as a “pet deposit” (in addition to the “security deposit”).

Even if it is a month to month tenancy, a security deposit is still required. It is also required that the disposition of the funds be indicated in the Lease and the Property Management Agreement. They can be held by the landlord or the landlord’s agent; it is not required that the money be put in an interest-bearing account. If landlord and tenant agree, the security deposit may be placed into an interest-bearing account for the benefit of the tenant. The account must be in the name of the broker as trustee for the landlord and must be federally-insured. CAL. Bus. & Prof Code 10145(d)(1). None of the interest can be retained by the broker or the landlord.

Stay tuned for more information about Landlord Tenant requirements.

Next Blog: What are the restrictions for deducting money from the security deposit when the tenant vacates the dwelling?

 

Scammers and Housing Ads

We hear a lot about scammers. This is the downside of internet. It is so easy to cut and paste an ad from the internet and PRESTO! you have hijacked an ad that you can exploit. Just last month, I had two different people call me about an ad I was running for a very nice home renting for $3600. Each told me that the owner had contacted them and told them they would rent the house for $3000 if he got a very large cashier’s check to them right away.

Finding this peculiar, I dug for more information and found that the “owner” was in TN. Well, I knew the owner was living outside the country. It’s pretty easy for someone to look up the owner’s name through public records if they know the address of the property.

The scammer opened an email account on Gmail or Yahoo with the owner’s name in it. Needless to say, I told the callers that they should report the scam to Craig’s List and the Federal Trade Commission. There really isn’t much that anyone can do except warn consumers NOT to wire money anywhere without meeting the owner or the property manager in person at the house first. Scammers will continue to thrive as long as there are people out there who don’t take the precautions to safeguard their money.