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Real Estate Today

Chance to Break Lease Isn't Infinite

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Robert S. Griswold | Steven R. Kellman | Ted Smith
24-June-2001 Sunday

This column on issues confronting renters and landlords is written by Counselor of Real Estate and Certified Property Manager Robert Griswold, host of Real Estate Today! with Robert Griswold (10 a.m. Saturdays on AM1130 - KSDO radio, or on the Internet at www.retodayradio.com), and by attorneys Steven R. Kellman, director of the Tenants' Legal Center, and Ted Smith, principal in a law firm representing landlords.

QUESTION: Eighteen months ago we moved into an apartment with our children, who didn't get along with other children in the community.

Two weeks after we moved in, the property manager called my neighbor and me into her office and reported to us the numerous things our kids have done wrong. She verbally gave us the option to get out of our 12-month lease.

A few months ago our lease automatically renewed for another 12 months. We now want to leave and we gave the property manager our written 30-day notice telling her we were going to accept her offer. She said she meant we could break the lease only at the time of the initial problem. Does the property manager and owner have to honor this statement?

ANSWER: Griswold: No, unless you have written confirmation that the offer to break the lease was at your discretion and not limited to any specific time frame. You appear to be trying to take advantage of the property manager who attempted to forge a positive solution.

Verbally offering to let you leave does not seem to be an unreasonable suggestion. It appears that your family took the concerns to heart and some progress has been made.

Clearly, the intent of the property manager making this offer was to resolve the current issues -- not give you a free ticket to pick and choose when you want to leave.

There appears to be agreement by all that your family was involved in creating a problem so to twist the scenario around and give yourself the right to cancel your lease at any time is grossly unfair and unethical.

You are still obligated for the balance of your current lease so I am glad to hear the situation has improved. If you are unwilling to fulfill your lease obligations, I suggest you work honestly with the property manager to develop a resolution that will allow you to leave the rental property under agreeable terms. Be sure to get any such agreement in writing!

Smith: It seems to be unreasonable for you to construe her verbal comment much earlier in time as a continuing offer to get out of your lease upon 30 days notice. Further, since the original lease was required to be in writing to be enforceable under the statute of frauds, an agreement terminating your lease would likewise be required to be in writing in order to be enforceable. I agree with Robert: it's a one-time offer that you failed to accept in a timely manner.

Kellman: It is possible to have a verbal modification of a written lease. You can verbally agree to alter the lease to add a provision of allowing its termination upon 30 days notice. I do not see any facts in your description that makes the 30-day termination provision a temporary one.

If it was for "only at that time," how would you have known unless that was made clear to you? Of course, verbal agreements and modifications of leases can be difficult to prove in court. It is your word against the word of the manager and the terms contained in the written lease. You may use other documents (like letters, notes etc.) and witnesses to prove the existence and validity of the verbal modification. Be careful, however, since in the case of a tie with the evidence, the written lease will win over your verbal agreement.

Do-it-yourself

I am buying some rental units with a partner. We want to keep the rents below market, so we plan to perform some of the work ourselves, such as the cleaning, painting and repairs necessary as each tenant vacates the property.

Can the owners deduct their reasonable labor and material expenses toward cleaning and needed repairs from the security and cleaning deposit?

Kellman: As owners, you may deduct those amounts from the security deposit to repay any rent left owing, to cover costs of cleaning or to make repairs. You may hire services to do the cleaning and repairs and deduct their bills for labor and materials.

Courts frown upon landlords charging for their own labor and therefore you should not do any such repairs yourself if you want to be reimbursed for the labor. This is because a landlord who charges for his own labor creates a situation that casts doubt on the validity of the money charged.

The labor charges claimed may be simply inflated as to the value of the work performed. Perhaps the work done was really routine maintenance being improperly passed on to the tenant while calling it a necessary tenant-caused repair item. Maybe the work claimed was not really necessary at all but the landlord took advantage of an opportunity to improve or upgrade the unit at the tenant's expense.

Further, there would be no unbiased worker able to explain or justify the repair. While I am not accusing you of such intentions, the uncertainty of your own labor charges creates this legal suspicion. This resolves the question about how to make the labor payments to the owners since there should not be any.

Griswold: Steve accurately describes the position frequently taken by the judicial system when resolving tenant/landlord disputes over security deposit issues. While many rental property owners prefer to perform the cleaning and repairs of the rental unit upon turnover, I recommend that a prudent owner evaluate each potential rental turnover separately when determining whether to perform the needed work themselves.

If you have indications from the departing tenant that they will be challenging or unreasonably scrutinizing the security deposit disposition statement, I suggest you use independent outside professionals for all cleaning, painting and maintenance repairs.

You should be able to provide your tenant with copies of dated and detailed receipts for all labor and materials used in turning the rental unit. There will be certain situations in which it makes no sense to do all of this work yourself if you will then find yourself in court trying to justify your hard work.

The majority of rental property owners are honest in determining the proper security deposit charges and often are able to personally perform rental unit turnover work at lower costs than outside professionals.

However, I have also seen some extremely greedy and vicious landlords that seem to believe the tenant's security deposit is there for the taking and they have no qualms trumping up phony or exaggerated cleaning and repair charges. If your plans are to perform the rental unit turnover work yourself, let your tenant know upfront. You should provide them with some pricing guidelines from professional firms and then let them know what you would charge them if you completed the work yourself. Let them be involved in making the decision.

While still no guarantee that a dispute will not arise, the majority of potential court challenges could be eliminated with a little forethought and communication in advance.


IF YOU'RE A TENANT OR LANDLORD, the authors stand ready to answer your questions in this column, although letters cannot be answered individually. Write them at: Rental Roundtable, Homes Section, San Diego Union-Tribune, P.O. Box 120191, San Diego, CA, 92112-0191. Or you may e-mail them at rgriswold.sdut@retodayradio.com

Copyright Union-Tribune Publishing Co.

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Robert Griswold and the Real Estate Today! radio show strongly support the intent and the letter of all federal and state fair housing laws.  As a reminder to all owners and managers of real estate, note that all real estate advertised is subject to the Federal Fair Housing Act, which makes it illegal to advertise "any preference, limitation, discrimination because of race, color, national origin or ancestry, religion, sex, physical disability, or familial status, or  intention to make any such preference, limitation or discrimination." Additional state and/or local fair housing laws may also apply.  Be sure to inform all persons that all dwellings offered or advertised are on an equal opportunity basis.

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Revised and Updated - Wednesday, April 26, 2006

Robert S. Griswold, CRE, CPM, CCIM, PCAM, GRI, ARM
Griswold Corporate Center
Griswold Real Estate Management, Inc.
5703 Oberlin Drive, Suite 300
San Diego, CA 92121-1743
Phone: (858) 597-6100
Fax: (858) 597-6161

Email: rgriswold.ret@retodayradio.com

2006, 2005, 2004, 2003, 2002, 2001, 2000, 1999, 1998, 1997, 1996 Robert S. Griswold.  All Rights Reserved.
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