By: Stephen C. Duringer, Esq. The Duringer Law Group, PLC
QUESTION What do you think about the practice of allowing a tenant to directly deposit his rent check into my checking account? Seems simpler than requiring him to mail it to me, then my having to go and deposit it into my bank. I know a few owners that do this and it seems to work out well. Any problems with this?
ANSWER Seems logical, save a stamp for the tenant, save a trip to the bank for you. This practice has worked just fine for some landlords that have tried it, but has resulted in disaster for many. In a perfect world, your perfect tenant will deposit the entire rental amount promptly on the first of each month, each and every month without fail. For all of those landlords whose crystal ball tells them that this is the tenant that will never fail, never have a problem, then those landlords may consider this practice. For the rest of us, in this imperfect world, there are unlimited ways that this practice can go wrong. Consider when your tenant doesn’t pay the rent when due. You serve a three day notice for the monthly rent, say $1200. On the third day, not having all of the rent, your tenant deposits $50 to your bank account. You just took a partial payment, thereby voiding your three day notice, back to square one. What if the deposit of $50 is the day before your unlawful detainer trial? Same result, you accepted a partial payment, voiding your notice and defeating your court action. For these and many other reasons, this may not be a good management practice for the vast majority of landlords. Sure you could close the account when you serve your notices, or you could state on your notice that no partial payments will be accepted, and the tenant is not authorized to deposit any funds after expiration of the notice, but you would have to strictly enforce this procedure, and not waive any written procedures that you have established. For those that still want to do this, then consider using a sweep account that maintains a zero balance and is definitely not one of your operating accounts. Your written procedures should provide that the procedure is merely an accommodation that it is an optional procedure for payment that may be eliminated at any time without notice. And yes you should provide a physical address as the alternative place where payment may be delivered by the resident. The procedure should also state that only full payment may be deposited by the residents check, a money order or cashier’s check, no third party checks should be deposited. Deposits may be made on or before the due date, and only full payments are authorized, no partial payments. It should further state that payment after the due date must be pre-authorized by you in advance of the deposit. This pre-authorization requirement minimizes the risk of payment, and therefore waiver, after a lease or termination notice expires, or after the resident is served with a default 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, remember this is California, the most litigious state in the country, so the following list is not static, it will change and no doubt expand over time. If the rental unit was built prior to 1978, the landlord must disclose the presence of known lead based paint and lead based paint hazards in the dwelling before the prospective tenant signs the rental agreement. You must also give the prospect 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. Landlords must also provide a copy of the notice received from their pest control provider detailing the pesticides to be used in an initial or periodic maintenance program. Residential property built prior to 1981 may contain asbestos. Although not specifically required, unless you have ten or more employees, it is strongly recommended that landlord’s advise their tenants of the presence of asbestos and further inform them of the proper care of asbestos material. All landlords with ten or more employees must disclose the existence of carcinogenic materials to prospective tenants. The owner of a dwelling who knows that an illegal controlled substance, such as methamphetamine, LSD 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. The owner of a dwelling who has applied for a permit to demolish the dwelling must give written notice of this to the prospect, and it must state the earliest possible date that the tenancy will end. Additionally, if your rental unit is located within one mile of a closed military base in which ammunition or explosives were used, you must give written notice prior to signing the rental agreement.
QUESTION One of my elderly residents recently fell and broke her hip, and it looks like she won’t be getting around very well ever again. She has been living in our building for many years and I would hate to see her move, everyone loves her. Her daughter asked if I would install grab bars in the shower and in the bathroom, and kind of implied that I must do it at my expense because of the ADA requirements, whatever they are. Now this resident is very sweet, but I just cannot afford to spend the money, my husband and I are barely making it as it is. Do I have to allow my resident to install the grab bars and do I have to pay for the cost?
ANSWER A landlord must allow a disabled tenant to make reasonable modifications to the rental unit to the extent necessary to allow the tenant full enjoyment of the premises. The tenant, not the landlord, must pay for the modifications. As a condition of making the modifications, you may require the tenant to enter into an agreement to restore the premises to their original condition upon termination of the tenancy. You cannot require an additional security deposit in this situation, but you can require the tenant to pay a reasonable estimate of the restoration cost into an escrow account.
QUESTION I just received the most curious letter. Seems my local police department has identified one of my residents as an undesirable, they say he’s suspected of being in a gang and is dealing drugs. They say that if I don’t evict him, the police will prosecute me for allowing a criminal to operate on my property. I may even lose the property! The family has been there for several years, other than a couple bounced checks they have been model tenants. Help, I cannot afford a vacancy right now, what do I do?
ANSWER In this upside down world we live in today, this actually is a growing trend in law enforcement. Rather than prosecute the criminal, many law enforcement agencies are taking the lazy way out and threatening the law abiding landlord, forcing them to evict the resident. Rather than locking up the bad guys, just shuffle them off to another community. If the police are certain he is dealing drugs, why isn’t he in the “gray bar hotel”? If the letter you received is inconsistent with your experience with your resident, follow up with the police department by asking for documentation supporting their claim. Have there been arrests on the property? Have illegal drugs been found there? Ask other residents in the building, gather independent information. If the information you gather supports your resident’s involvement in criminal activity, take action immediately. Consult your attorney to determine if you have enough facts to support a three day nuisance notice, or if a thirty day or a sixty day notice is appropriate. Remember, a letter from the police department is not sufficient evidence in court to support a nuisance notice by itself, testimony from percipient witnesses will be required.
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. The Duringer Law Group, PLC, one of the largest and most experienced landlord tenant law firms, has successfully handled over 225,000 landlord tenant matters throughout California, and has collected over $130,000,000.00 in debt since 1988. The firm may be reached at 714.279.1100, toll free at 800.829.6994 or 877.387.4643. Visit www.DuringerLaw.com for more information.