Liability Concerns
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31 January 2011
Q: I just put my single-family house on the rental market, and have agreed to rent it to a nice family of four: mom, dad and two kids, two and five. The parents seem responsible enough and I’m sure they’ll make great tenants, but I am concerned because the house has a pool. Is there anything I can do to protect myself from liability should one of the children fall in and drown?
A: The short answer is yes. There are several measures you can, and should, take to protect yourself. First and foremost, ensure that the pool and the gate/enclosure conform to all state and local codes and ordinances. The gate should be self-latching, and should be checked to ensure that it closes properly.
Review your insurance policy with your broker to ensure that your coverage is adequate; consider an umbrella policy as well. Your broker can counsel you on coverage limits; consider $3,000,000 as a minimum. Finally, you should include as part of your rental documents an addendum to the lease in which the tenant acknowledges the dangers of the pool, agrees to ensure that all gates are kept closed, and agrees to periodically verify that the self-latching gate functions properly.
Consider requiring that your tenants procure renters’ liability insurance as well.
These requirements should be a part of your rental policies for a property with a pool, regardless of whether or not your tenants have children.
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 changes 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 noncompliance, you would be entitled to file an unlawful detain action to recover possession of the premises. Rarely though is that necessary, as the vast majority of residents will immediately comply.
