Berkeley axes roommate replacement and flat lease termination fees

Rental property owners and operators can no longer charge any roommate replacement fees, after a perception in City Hall that some landlords were profiting from a revolving door of roommates in a community with a high college student population.

According to Krista Gulbransen, the head of the Berkeley Property Owners Association, it wasn’t so much about opportunistic landlords lining their pockets by gouging fees as it was about recouping the costs attendant to the rotation of tenants in and out.

Inexorably, time is money, and so the added burden of paperwork required to transition a tenant out of a rental unit and ushering in a new one should require additional compensation. This game of musical chairs also requires the changing of locks, and certainly, handymen or locksmiths don’t work for free.

The City disagreed with this position, dismissing the extraordinary expenses of swapping tenants as normal “costs of doing business.” Gulbransen says only a “small number” of tenants cried foul when fees were imposed during a roommate replacement, but in an era when political rhetoric falls squarely on the side of tenants, it’s unsurprising that any extra expenses incurred by residents were put on the chopping block.

Flat fees prohibited when leases are broken

When tenants break a lease in California, they have little leverage in bowing out of this binding contract unless there is a rare set of circumstances. Early termination fees, however, should recompense owners for actual damages he or she incurs when forced to re-rent the property. Whenever an exact dollar amount is attached to an early termination fee in a lease without taking into account the real expenses of breaking the lease, the landlord is walking on shaky legal ground.

There is no substitute for the time, accounting and paperwork to arrive at a specific dollar amount. Berkeley has balked at flat fees, but at the end of the day, once the actual damages are tallied up, the runaway roommate who prematurely terminates the lease will likely be on the hook for even more money than having a convenient, flat fee.

Roommates have always been double or triple the potential legal trouble, but even more uncertainty looms during the pandemic with an exodus of housemates and especially students, relocating elsewhere because of the pandemic. More than ever, rental relationships can become blurred to the point when owners do not know who is residing in their units, or even how to label ever-changing faces as master tenants, tenants, co-tenants, sub-tenants, guests, and the like.

These times, more than ever, call for the informed advice of Bornstein Law.