Each and every landlord-tenant issue will pose a unique challenge or novel issue. However, most landlords can avoid legal problems by learning from these top five most common landlord mistakes.
1. Preparing your own 3-day, 30-day, or 60-day notices
Landlords should never draft and serve their own pre-lawsuit notices. This can be a time consuming and costly mistake.
For background, a landlord is required to serve a pre-lawsuit notice on the tenant in the event of a failure to pay rent or other breach. These are commonly referred to as a “3 Day Notice to Pay Rent or Quit” or a “30-Day Notice to Quit”. The notice must meet highly technical requirements in order to survive an unlawful detainer or eviction.
The problem is that landlords often prepare these forms incorrectly. This results in the notice having to be re-served and the landlord having wait another three days, another 30 days, or even another60 days to enforce legal rights in court. Landlords should always have an attorney prepare a pre-lawsuit notice.
2. Not asking for a security deposit
Landlords should always require a security deposit of at least one-month’s rent, or even more. Legally, a landlord may require a security deposit of up to two-months’ rent for an unfurnished property and three-months’ rent for a furnished property.
Collecting a security deposit is often a landlord’s only opportunity to collect money from the tenant in the event of a failure to pay rent. As an illustration, in the event the tenant refuses to pay rent, a lawsuit called an “unlawful detainer” must be initiated. That process, if successful, can take 30 days or longer to complete. During that entire time the tenant is typically not paying any rent.
3. Not promptly objecting to late rent payments or other contract breaches
A common problem occurs when landlords fail to promptly object to late payments of rent or other breaches of the rental contract. This is problematic for landlords because the tenant may successfully argue that the landlord “consented” to the breach.
As an illustration, take the case of Jared who rents an apartment in Capitola and his landlady, Laurel.
Jared started off as a very good tenant from Laurel’s perspective and always paid his rent on the first of each month. Then Jared gradually starts paying the rent a few days late. He never pays a late fee. Secretly Laurel is highly annoyed with Jared for paying the rent late, but she never says anything to Jared about the problem. After 8 months of receiving the rent late, Laurel is fed up and wants to evict Jared for failing to pay rent on time and failing to pay a late fee.
Unfortunately for Laurel, and luckily for Jared, Jared may argue that Laurel consented to his practice of paying rent late and paying it without a late fee. He may argue that the long-standing practice of paying rent late modified the rental contract that called for rent on the first day of the month. Jared has a viable defense to an unlawful detainer.
Landlords should always promptly object to late payments of rent or other breaches of the landlord tenant agreement.
4. Allowing “tenant swapping” and “subletting”
It’s a bad idea for landlords to permit to “tenant swapping”. Tenant swapping occurs in multiple-occupant rentals when one tenant moves out, and the remaining tenants select a new tenant to take the old tenant’s place. Tenant swapping is prevalent in student-occupied housing at UCSC and CSUMB.
“Subletting” occurs when an existing tenant rents out the rental premises for a short period time. The original tenant then becomes a quasi-landlord. Subletting is common during the summer when college students leave Santa Cruz and Monterey at the end of the school year.
Tenant swapping and subletting are problematic for two reasons. First, much of the time tenant swapping and subletting results in the new tenant not signing a written landlord-tenant agreement with the landlord. Failing to have a written landlord-tenant agreement with each tenant creates complications with the security deposit and in the event of an eviction.
Second, tenancies that result from tenant swapping and subletting typically do not go through any basic screening and application process by the landlord. A basic screening process will disclose if the potential tenant has a history of evictions and not paying rent. Would you want a career squatter living in your property? Absolutely not!
5. Using free landlord-tenant agreements
Landlords also encounter problems by using free landlord-tenant agreements and leases from the internet. While some free landlord-tenant agreements may be fine, many are not tailored for California law. Free landlord-tenant agreements may also require the landlord to utilize an expensive arbitration or mediation process in the event of a failure to pay rent. Landlords should always use a landlord-tenant agreement from a trusted source that is based on California law.
Are you a residential landlord in Santa Cruz or Monterey County? Call the Law Office of Brian Mathias for a free consultation.
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