By Michael A. Brennan, Esq., Brennan Law Firm
Question. I just purchased a small building and I’m trying to determine the names of the tenants living in the units. I did receive rental agreements during escrow, but the tenant information doesn’t seem to line up with the tenants living in the apartments. I can’t even seem to find the telephone numbers for several of the residents. I’ve purchased properties before, and I know the importance of reviewing the files and doing thorough due diligence before closing escrow. Usually, I am much more thorough before closing but, in spite of the sloppy record keeping, this was a good deal and the seller needed a fast close. Now that I’m the owner, is there anything I can do to clean up the records?
- Answer. The first thing to do is figure out what you’ve got and what you know. Start by creating a tenancy file for each unit. Each file should note both the personal information you have, as well as the information you still need. For example, you will want your records to reflect the names and ages of the occupants, the terms of the rental agreement, whether it’s a written or oral agreement, a lease or month to month, the rental rate, any deposit on file, and the date through which they are paid. You will also want your records to contain any contact information you have, such as their home and cell numbers, as well as their place of employment. Once you know what you have and what you still need, you can create a “Tenant Emergency Information Sheet” that includes spaces for the following information: the names of all occupants, home and cell phone numbers for each occupant, work phone numbers, email addresses and detailed vehicle information. Once the Tenant Emergency Information Sheet is completed, you can go about collecting the information while simultaneously introducing yourself to your new tenants.
While this may startle a few of you, I encourage you to visit the building around dinner-time in the middle of the week, when most residents will be home. Go door to door to introduce yourself personally and to meet briefly with the occupants of each apartment. Let them know you are compiling information for the Tenant Emergency Sheet and spend a few minutes getting to know them, confirming the information in your files, and gathering any missing information. You can ask the residents to complete the Tenant Emergency Information Sheet while you are standing there, in case of emergency. You may be surprised to discover that most of the residents will co-operate by providing the requested information without a hassle. 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 determine the condition of each unit and whether any repairs are necessary. Simply ask the residents if there are any issues that need addressing. It’s better to discover any issues right now and have an opportunity to address them, than to allow those conditions to worsen, thereby damaging the relationship from the outset. Moreover, your desire to take care of any maintenance issues right away will show the tenants that you take maintenance seriously and that you won’t simply ignore their requests moving forward. This is also a great time to prepare new month-to-month rental agreement for their signatures. Remember, you don’t know the players yet, so you don’t want to create a fixed term lease.
Of course, you may have a few “resistant” residents, but those situations can generally be navigated painlessly. Those residents who are less than co-operative will stand out as your “problem residents” and can be handled individually. In fact, the names and contact information of the uncooperative residents can usually be gathered from the neighboring residents, or from public records. If the property is non-rent- controlled, and the residents are on month-to-month tenancies, the rental rate and term can be set with either a thirty or a ninety-day notice of change of terms, depending on the extent of the increase.
Remember, this is both your opportunity to clean up the situation and to establish the tone of the relationship moving forward. By putting a proactive plan together to gather the missing information and introducing yourself in person, it’s more likely than not that you will establish yourself as a thorough, but approachable landlord who takes your role as a housing provider seriously.
Question. Like many rental housing providers, I have never really increased my rent too much. Instead, I’ve raised rent here and there, but never in any significant amount. However, with rent control popping up in a new city every time I look up, I thought it would be best to get my rents up to market before I lose the opportunity to do so. I recently served my tenants a 60-day notice of increased rent that came out to about a 12% increase. Of course, when it came time to pay the increased amount, I had one tenant who paid the old amount. When I asked whether they received the notice of change in terms, they acknowledged that they had, but they told me they don’t have to pay the increased amount because I didn’t use a 90-day change in terms notice. I’d never heard of that. Is that true? Am I required to use a 90-day notice to increase rents now?
- Answer. It’s true that the law regarding the amount of notice required to increase rents changed a few years ago. Moving forward, increases of 10% or less still require only a 30-day notice of change in terms, but any increase greater than 10% now requires a 90-day notice to be served. In your situation, you can immediately serve a new 90-day notice with the same increase but be sure to write “This Notice Rescinds And Supersedes The Prior Notice Of Rent Increase” at the top of the notice.
Question. It seems like my rental forms are getting longer and more complex. I’ve read in your previous articles of several disclosure forms that should be given to my residents. Can you summarize these forms for me so that I can be sure I’m doing it right?
- Answer. Sure, but remember that the list is long, and most of these disclosures are found in your apartment association’s standard lease and/or addenda. Also, keep in mind that the following list is not static, and that it will undoubtedly expand over time.
First, before signing a lease or rental agreement, landlords are required to provide potential tenants with information about bed bugs, including information about their behavior and biology, the importance of cooperation for prevention and treatment, and the importance of prompt written reporting of suspected infestations to the landlord.
Next, landlords must disclose the presence of known various materials that pose health and safety concerns. For example, landlords must disclose the following materials or situations: 1) before the prospective tenant signs the rental agreement, the landlord must disclose any lead-based paint and/or any lead based paint hazards in the residence for buildings built prior to 1978. Additionally, landlords are required to provide the applicant with a copy of the federal government’s pamphlet, “Protect Your Family From Lead in Your Home”. The pamphlet is available through your apartment association or by calling 1-(800)-424-LEAD. 2) Residential properties built prior to 1981 may contain asbestos and, while it isn’t specifically required unless you have ten or more employees, it is strongly recommended that landlord’s advise their tenant’s of the presence of asbestos in those buildings as well as information about the proper care of asbestos material; 3) Additionally, landlords must provide a copy of the notice received from their pest control provider detailing the specific pesticides to be used in an initial or periodic maintenance program; 4) All landlords with ten or more employees must disclose the existence of carcinogenic materials to prospective tenants; and, 5) Owners of residential dwellings who know that an illegal controlled substance, such as methamphetamine, fentanyl or its components, has been spilled or dumped on or beneath the dwelling must give a prospective tenant written notice prior to him signing a rental agreement.
In addition to the disclosures listed above, there are some administrative disclosures that must be provided to residential tenants. For example, you must give written notice prior to signing the rental agreement that the rental unit is located within one mile of a closed military base in which ammunition or explosives were used. Moreover, your rental agreement must contain certain specific language informing your new resident of the availability of the statewide database of registered sex offenders. Owners of a dwelling who have applied for a permit to demolish the dwelling must also provide written notice of this to the prospect, and it must state the earliest possible date that the tenancy will end. And, finally, residential leases or rental agreements are required, pursuant to the Tenant Protection Act of 2019, (a/k/a, Assembly Bill 1482) must provide information to the tenant in connection with whether the Tenant Protection Act applies to the particular rental unit they are renting.
Question. I expect a vacancy to be coming up at the end of the month. I started advertising the unit and thankfully, I’ve already received quite a few applicants. There are a few that sort of qualify, and I guess I could rent to one if I had to, but I’d like to continue with the advertising to get a few more prospects to choose from. The thing is, one applicant is getting rather pushy and calls me several times a day, saying she knows she is qualified, and that I have to rent to her because she was the first to apply and she knows the unit is still available. Truth is, she probably does qualify, but I’m just not sure. I just get a bad feeling from her. While I haven’t actually denied her yet, nor have I accepted her. I just need more time to weigh it out in my head. Do I have to rent to her because she was first to qualify?
- Answer. No. Notwithstanding cries to the contrary, there is no requirement to rent to the first person to meet your criteria. You are free to continue and accept additional applications from other candidates. From the pool of applicants, you may select the best and most qualified applicant, without regard to timing of receipt of the application. Often an owner will have a single vacancy and have many qualified applicants to choose from. A thoughtful review of all applicants and their qualifications will allow you to select the most qualified tenant. Don’t let the pushy prospect bully you into making a premature decision.
Question. 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 a reason? Also, do I need to serve any particular type of notice?
- Answer. Provided your property is not controlled by a “rent-control” or “Just Cause” ordinance, (e.g., the Tenant Protection Act of 2019, a/k/a, Assembly Bill 1482) then you do not have to provide a ‘reason’ for non-renewal. Provided your decision not to renew isn’t based on discrimination or a retaliatory motive because the resident exercised a protected right, then you are free to choose not to renew the lease. Keep in mind that fixed term leases often expire on a certain date, and in that situation, 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, some leases have language stating the lease “automatically” converts to a month-to-month tenancy and, in that situation, you would be required to serve a termination notice. In fact, most industry lease agreements include such an automatic conversion provision that states that the tenancy automatically converts to a month-to-month tenancy, so be sure to review your lease prior to determining whether a termination notice is required.
This information presented in this article is general in nature and provided to address typical landlord tenant legal issues. Specific facts and circumstances in connection with a particular situation you are experiencing should be discussed with your attorney. Brennan Law Firm has grown to become one the most respected and experienced landlord-tenant firms in the industry over the past 12 years. The firm has offices in both Orange and Los Angeles Counties and can be reached at (855) 285-2230.
Visit www.MBrennanLaw.com for more information.