Frightening mistakes landlords and property managers can make
Ghosts, zombies, witches, and goblins will run amok this Halloween, but there are scary mistakes housing providers are apt to make long after the ghoulish festivities are over. We touch upon some here.
Using stale, outdated notices that are no longer relevant.
Many rental housing providers are serving bad notices. Either they've been using the same notices for years, or they go to a generic website to download what looks like a great ironclad lease at first glance.
These generic notices do not take into account local ordinances and notice requirements.
Even if the landlord has built a slam-dunk case to evict a tenant because they have not paid rent in a long while, or they are in breach of other lease terms, the unlawful detainer (eviction) action can still be lost because the notice was deficient or served improperly.
Failing to provide required addendums and disclosures.
One of our followers said in jest that landlords should install a bookshelf in each rental unit to store all of the necessary disclosures, and there are many. Is the rental unit exempt from the statewide rent and eviction controls of AB-1482? If so, the exemption must be disclosed.
Tenants must also be educated on bed bugs, the dangers of lead paint, and cautionary notes are required when there are wood stoves or fireplaces. Other disclosures abound, depending on the type of rental unit, when it was built, its location, and the policies of the owner.
Being sloppy with security deposit accounting.
In every time and era, a staggering number of housing providers do not get security deposit accounting right. The tenant would drag their landlord into small claims court and when the tenant prevailed, their landlord would only be liable for the amount of the security deposit.
Now, the stakes have ratcheted up. Under new laws, the landlords can be responsible for paying above and beyond the security deposit if it's found that they withheld the security deposit in bad faith. Also, keep in mind that there are opportunistic tenants' attorneys who can sue the landlord for a tenant’s emotional damages caused when an outgoing renter's security deposit is not properly returned in accordance with the law.
Demanding improper rent amounts, including late fees.
Another surefire way to tank an unlawful detainer action is to serve a 3-day notice demanding rent that the tenant is not legally obligated to pay, such as COVID-related rent debt that has been converted into consumer debt and cannot be used for eviction, or late fees that are not considered rent.
Not understanding what insurance protects, and does not protect.
We are aware of many rental housing providers who have a homeowners policy and falsely believe they are covered when calamity strikes or when the rental relationship sours and they are sued by a disgruntled tenant under the theory of wrongful eviction.
With spooked insurance companies leaving California in droves because of natural disasters and a regulatory regime preventing them from raising rates, we strongly suggest you take a hard look at your policies with an independent insurance agent who can shop around to come up with the just-right coverage.
Failing to register units with local rent boards.
Rent registries where Big Brother wants to peel open landlords’ books and ask for a 360-degree view of their rental business are in vogue.
If you are not in good graces with regulatory regimes that require rental units to be registered, do so now. The consequences can be an inability to raise rents, as well as tenants asserting an affirmative defense to an unlawful detainer action.
Engaging in housing discrimination by summarily denying rental applications for any reason not permitted by law.
Housing discrimination lawsuits are proliferating throughout the Bay Area, aided by no shortage of "testers" looking to entrap landlords in making statements that exclude rental applicants such as those with Section 8 vouchers.
Rest assured, when there is inartful language and the wholesale denial of certain groups of tenants, there is an enterprising attorney not far behind who is willing to even the score by filing a lawsuit, the likes of which can reach six figures.
Accepting rental payments in situations when they should be declined.
Seems counterintuitive - cash-strapped landlords who have not been paid rent in a long time want some money and something is better than nothing, right?
Not when you are trying to evict a tenant and filed the paperwork. As soon as money is accepted, the tenancy begins anew and we have to start all over in the unlawful detainer process. Similarly, when others not on the lease fork over money to the landlord, he or she can claim that they are a tenant entitled to the full breadth of tenant protections afforded under the law.
It may be painful to turn down rent payments but, in certain circumstances, it is necessary to transition problematic tenants out and find more ideal rental candidates.
Have other scary issues in your rental units? Don't let it become a house of horrors.