Fall Real Estate 2008

Publication Date: Friday, October 10, 2008

Rent Watch
In case of foreclosure, does a tenant have to move?

Q- Even though I am a renter, the "mortgage meltdown" has me concerned about my rights if the house I rent goes into foreclosure. Do I have to move if my landlord loses her property in a foreclosure sale?

A- It depends on who owns the property after the sale and whether or not you are a month-to-month tenant or you have a lease. For month-to-month tenants, if the property is returned to the mortgage holder or purchased by a new owner, a new California statute effective July 8, 2008, requires a 60-day written notice to move. Tenants with leases are in a better position only if the lease was signed prior to the mortgage.

In that case, a tenant can stay until the lease expires. Otherwise, a tenant is only entitled to a 60-day notice after the foreclosure even if there is a lease. Sometimes, new owners or mortgage holders may be willing to let a tenant stay on for a period of time or even may be willing to compensate a tenant for moving early, offering what is known as "key money."

Beware of paying rent to someone who has already lost the property in foreclosure or someone pretending to be the new landlord. We are seeing this scam too often. Tenants think they are paying rent when in fact the money is totally wasted.

Q- In about three months I am selling the duplex I own. The real estate agent handling the sale wants my tenants to sign a waiver of no liability in case something is broken or stolen during the open houses, inspections or repair work. One tenant signed, but the other has refused. I don't want to be responsible. Is there anything I can do to force the tenant to sign?

A- The tenant has no obligation to release you from any liability for lost, broken or missing personal property. In fact, for this specific reason, there probably is a clause in the listing agreement you signed with your real estate agent that states you agree to maintain homeowner's insurance on the property during the sale period. This insurance would cover this situation as well as damage to the property itself done by any open house visitors, inspectors or repair personnel.

You need to discuss this matter with your agent or contact the local board of realtors for further information. If an item is broken or stolen during an open house or required inspection, it would be the obligation of the tenant to prove the damage or theft took place during those activities.

To avoid any unpleasant occurrence, it is to your benefit to coordinate all activities related to the sale with both of the tenants and if either one wants to be present, you should do your best to accommodate.

Q- I have a severe back problem. To reduce my pain my doctor has recommended that I sleep on a waterbed, but the apartment manager says waterbeds are not allowed. I can get a letter from my doctor. I feel the manager is not being fair. What are my rights?

A- You have the right to a reasonable accommodation due to your disability. Although landlords may have rules or policies that they can enforce, tenants with disabilities are entitled to exceptions to those policies where necessary for their disability. In this situation, the landlord would need to accommodate your disability by allowing a waterbed, unless they could show that the waterbed posed an undue financial burden on their business, in which case the accommodation would be unreasonable.

The landlord could also request that you obtain a note from your doctor that states your need for the accommodation. Be aware that you may be asked to increase your security deposit if you are a month-to-month tenant. Civil Code § 1940.5(h) allows for a security deposit of 2.5 times the monthly rent for unfurnished property and 3.5 times for furnished property when a tenant has a waterbed. For those on leases, the increased deposit can be requested when the lease is renewed.

Q- I answered a "room for rent" ad on my college bulletin board that said the room had a microwave oven. Since I don't have a lot of money this feature was important and I used it a lot. Well, the oven broke, and now the landlady says she is not going to fix it because she feels I was using it too much. I need the oven fixed. What can I do?

A- Your situation requires two responses. One is that since the microwave was listed in the ad, a workable microwave must be provided. This is called an "express" promise. The landlady has an obligation to repair the microwave or reduce your rent accordingly.

Secondly, in order to remove the oven after it is repaired, the landlady must serve you a 30-Day Change of Terms notice listing the action that the oven will no longer be allowed. This notice only applies if you are a month-to-month tenant; it cannot be used if you have a lease. In this case, the landlady could terminate availability of the oven only when the lease is renewed.



Martin Eichner edits RentWatch for Project Sentinel, an organization founded in 1974 that provides landlord tenant dispute resolution and fair housing services in Northern California and administers rental-housing mediation programs in Palo Alto, Los Altos and Mountain View. Call 650-856-4062 for dispute resolution or 650-321-6291 for fair housing or e-mail mediate4us@projsen.org.