A Rental Lease Usually Benefits
the Tenants more than Landlord
Robert S. Griswold | Steven R. Kellman | Ted Smith
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
and by attorneys Steven R. Kellman, director of the
Tenants' Legal Center, and Ted Smith, principal in a law
firm representing landlords.
QUESTION: I recently renewed my lease for an additional year and I
noticed a lease termination clause that states that if I break the
lease prematurely I have to pay $1,000. I am concerned since a job
transfer or another move out of necessity never seems to coincide with
the expiration of the lease.
Whatever happened to a 30-day notice? The lease seems to be totally
in favor of the landlord. Isn't the $1,000 fee just another way for
greedy landlords to gouge tenants in addition to raising my rent every
year? What are the advantages and disadvantages of a lease? Isn't the
$1,000 lease termination fee a rip off?
ANSWER: Griswold: There are benefits and drawbacks to using
a lease that many tenants and some landlords do not fully appreciate.
In most rental markets, landlords offer tenants a choice of a lease or
a month-to-month rental agreement. A lease is usually offered to
tenants at a lower rent than a month-to-month rental agreement since
tenants are committing to a longer tenancy. The longer a tenant stays
the lower the cost of operating the rental property to the landlord.
The excessive turnover of tenants is very expensive for landlords
not only in dollar and cents costs but also the physical wear and tear
on the property plus the diminished reputation of the rental property
in the community.
Naturally tenants like having a lease since the landlord cannot
change the terms or increase the rent during the lease term.
This has been very beneficial for tenants who have seen rents
escalate significantly in the last few years. It also has given some
protection to tenants that have seen landlords eliminate the
acceptance of pets in an attempt to upgrade their tenant profile as
they take advantage of the strong landlord's rental market.
Also, tenants with leases have been protected from a variety of
other potentially unpleasant changes in terms that could occur if
their rental property changed ownership. The downside of a lease is
that the tenant is committing to stay for a minimum period of time
even if it is inconvenient. A job transfer, relationship or roommate
problems, an opportunity to purchase a home, or even just a better
rental opportunity are not legal reasons to unilaterally break or
terminate a lease.
Of course, under California law, a tenant can break the lease but
is responsible for the balance of the lease term or until the landlord
is able to rerent the property. In your case, the landlord offers a
liquidated damages clause that effectively gives you a lease with the
benefits of a month-to-month rental agreement. You can give a 30-day
notice for any reason or no reason and cancel the balance of the lease
at your sole discretion. The only requirement is you need to pay the
lease termination fee of $1,000.
The landlord is then taking on the additional costs and associated
risk of remarketing and rerenting the rental unit.
An advantage is that you are not taking the risk that you will
still owe rent for the entire duration of the remaining lease term. Of
course, your landlord must also account for and use your security
deposit in accordance with the law.
While I am a strong proponent of leases for tenants who are
interested in locking in the current terms of their tenancy, I am
surprised at the significant number of tenants who do not realize that
a lease has certain limitations.
Overall, my experience is that a lease offers many more advantages
to most tenants than landlords. Thus, I suggest that tenants primarily
concerned only with potential rent increases can seek the best of all
worlds by attempting to negotiate with their landlord for a
month-to-month rental agreement and a written rental guaranty. The
written rental guaranty is simply a written letter or agreement that
the rent will remain fixed for a certain minimum period of time such
as 12 months. Many landlords will agree to this proposal since they
most likely do not have any intentions of raising the rent more often
than annually anyway.
The slob factor
I am an owner of a rental condominium in a very nice complex in the
Mission Valley area. I have had several occasions to enter my rental
unit for various reasons. I am continually shocked at the condition of
the unit. There is no structural damage. However, the tenants are
horrible housekeepers. I do not think they have ever washed the
kitchen floor, there is grease on the stove an inch thick, the
bathrooms are horribly dirty and the carpeting is very soiled.
When they move out I will have to have the place professionally
cleaned and I don't know if the carpeting will ever come clean. The
tenants are very nice and they pay the rent on time consistently. Do I
have any right to tell them to get the carpet cleaned and just
maintain a clean home? What amount of security deposit is appropriate
to take for carpet cleaning and housecleaning? What is considered
"normal wear and tear" vs. damage?
Smith: The concept of ordinary wear and tear is vague. Any
standard or guideline you set up -- despite your best intentions --
could be disapproved by the court. Still, we know certain things about
what you can deduct from a tenant's security deposit. By most
accounts, cleaning an extremely dirty floor would be deductible from
the deposit. California Civil Code specifically addresses that issue
and authorizes, in a general way, deductions for both damages above
ordinary wear and tear and reasonable cleaning expenses.
The facts that the bathrooms are horribly dirty and the carpeting
is soiled all lead me to believe that these matters are deductible.
The way you describe the apartment makes it sound like a pigsty. As
such, most of what you are claiming would be deductible. Should you
come up short on the deposit, you would have the right to file a court
action for your costs exceeding the deposit.
I rent one of three houses owned by the same person. The houses are
identical in floor plan and square footage, located next to each
other. All three houses are managed by the same management company.
One house is occupied by the owner's son and the son's family at a
discounted rent amount. The other house is rented by a Navy family who
$900 a month as I do. The house they rent was upgraded with new
carpet, vinyl flooring and various other fixes to make the house
sellable. However, before it was sold, it was rented to the current
My house has old, I mean old, carpet. Probably the carpet that was
there when the house was new about 20 years ago. The vinyl flooring in
the kitchen and bathrooms is old and worn as well. Since the rent and
the properties are identical, shouldn't I have equivalent dwellings,
i.e., new carpet and vinyl floors?
Smith: Let me give you the landlord's take on this. The
short answer is no, you are not entitled to equivalent furnishings
such as carpet and vinyl floors. Each rental stands on its own. All
that the landlord is required to do is maintain minimal levels of
Habitability does not mean the cosmetically perfect place to live.
Providing bare living conditions is all the landlord is required to
do. New vinyl flooring and carpet are not within the warranty of
habitability. While new carpet may be desirable, there is nothing in
your question to suggest to me that the old carpet is dangerous or a
health and safety hazard. It is quite common for a seller to doll up
the property prior to sale to extract a higher price. But, the seller
is not required to replace the carpet for rental purposes.
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 firstname.lastname@example.org
2001 Rental Roundtable
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.
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
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