Escrow, Lease Renewal, CO2, Utilities

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Q: I just closed escrow on a small building and I’m trying to figure out who’s who. I received the rental agreements, but the tenant information seems incomplete. The applications, the few that I’ve found so far, are old and outdated. I can’t seem to find any telephone numbers for the residents, and I’m not real sure that the names on the agreements are the same people who actually live in the units. I’ve read your articles before and I know the importance of reviewing the files and doing thorough due diligence before closing escrow, but this deal just happened too fast. Now that I’ve closed escrow, what can I do to clean up the records?

A:
First things first; figure out what you know and what you don’t. Establish individual tenancy files, one per unit. Based on the limited information you have, write down the names and ages of the occupants, the terms of the rental agreement, written or oral, lease or month-to-month, rental rate, deposit on file, date paid through. Compile whatever contact information you have: home phone number, work and cell numbers. Design a “tenant emergency information sheet” that includes spaces for the following: names of all occupants, home and cell phone numbers for each occupant, work phone numbers, email addresses and detailed vehicle information.

Visit the building about dinner time, most residents will be home, and go door to door and meet briefly with the occupants of each apartment. Spend a few minutes confirming the information in your files and gathering any missing information. Ask the residents to complete the “tenant emergency information sheet” while you are there to use in case of emergency. You will find that the vast majority of your residents will cooperate fully and provide the requested information. Residents are generally eager to please, and since the relationship is still new, there should be no animosity or distrust.

This is also a good opportunity to find out the condition of each unit—simply ask the residents if there are any issues that need addressing as it is better to find out now and have an opportunity to address the needed issues than to allow conditions to worsen, and your relationship with the residents as well.

This is also an opportune time to prepare new month-to-month rental agreements for signatures. You don’t know the players yet, so you certainly don’t want to do fixed term leases. The few residents who are less than cooperative will be quickly identified as your “problem residents” and can be handled individually. Names and contact information of the uncooperative ones can generally be gathered from the other residents, or from public records. If the property is non-rent control, and a month-to-month tenancy, the rental rate and term can be set with either a 30- or a 60-day notice of change of terms, depending on the extent of the change.

Q: Some of my leases are coming up for renewal in the next few months. One of these leases is for a resident who has been a thorn in my side since the day he moved in. If I don’t want to renew him, do I need to provide him a reason? Also, do I need to serve any particular type of notice?

A:
Provided your property is not located in a rentor eviction-controlled area, then you do not have to provide a “reason” for non-renewal. Provided your desire is not based upon illegal dis crimination and is not in retaliation for the resident exercising a protected right, then you are free to “not renew” the lease. Generally, a fixed term lease expires on a certain day. Provided there is no language in the lease that “automatically” converts the lease to a month-to-month tenancy, then the resident is required to vacate on or before the lease expiration date. Neither the tenant nor the landlord is required to serve any prior notice. However, most industry lease agreements used by landlords include an auto matic conversion provision that states that the tenancy automatically converts to a month-to-month tenancy unless a written notice of termination was served by either the landlord or the tenant. In this event, a written notice of termination would have to be served to terminate the resident’s tenancy.

Q: I never got around to installing the CO (Carbon Monoxide) detectors in my apartments. I know it is required now, but just didn’t have the time to install. Any rush?

A:
Yes, a violation of the statute is an infraction punishable by a fine of up to $200 per offense. Before a fine is levied, the property owner must receive a 30-day notice to comply. The greater risk is in the event a CO poisoning inside your apartments causes a death, or worse, severe brain damage in a child or other resident. Your failure to comply with the statute, negligence per se, will support a very large jury award against you. An intentional noncompliance with the statutory requirement can be very problematic for you and may actually provide grounds for your insurance carrier to deny your coverage. Best to get the required CO detectors installed as soon as possible.

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 can’t 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.


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.

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