Even With a Good Reason, Landlords Don't Have to Break a Lease

10-Nov-1996 Sunday
(Page H-7 )

This column on issues confronting renters and landlords is written by Certified Property Manager Robert S. Griswold, host of KSDO Radio's "Real Estate Management Today" and by attorneys Steven R. Kellman, director of the Tenants Legal Center, and Ted Smith, principal in a law firm representing rental owners.

Q: We signed a one-year lease for a trilevel townhouse a few months ago. Unfortunately, my wife's medical condition has deteriorated and she has difficulty coping with the stairs in the townhouse. While the doctors have not finished their tests, it appears that she has a serious heart condition and that we may have to move to a single-level home. What is our legal position if we need to break the lease?

A: Griswold: Immediately contact your landlord and explain the situation. While the landlord is under no legal obligation to break a lease (even for serious medical conditions), many landlords will work with you. The goal should be to find a new tenant who can move in as you move out. Of course, the new tenant must meet the landlord's rental qualification criteria.

Kellman: In this case, the tenant needs to break the lease and move into a single-level rental based on a serious medical condition. While the tenant may have a very good reason to move, the law, unfortunately, does not recognize such circumstances as grounds to cancel a legally binding lease contract. The lack of an easy way out of the contract should not be a deterrent to the tenant to break this lease with a minimum of cost.

The tenant may simply try to find replacement tenants to take their place. This is called assignment or subleasing. Generally, the landlord should be contacted to seek approval of such a procedure. If the landlord refuses to approve of an assignment or a sublease, the tenant may use that denial against the landlord's claim made for lost rent. The landlord must, by law, help to re-rent the unit. If the landlord does not help, this too may be used by the tenant to defend against a claim by the landlord for lost rent. Rent should be kept current while the tenant is in possession of the unit. A landlord who does not use reasonable efforts to assist or cooperate with the tenant regarding re-renting the unit will probably be viewed with suspicion at any legal proceeding regarding this lease.

Q: My tenant complains of high utility bills and is now demanding that I install additional insulation in the rental home. Who is responsible?

A: Kellman: The law does not require any specific amount of insulation in a rental other than the building code required at the time the unit was built. Only in recent years has insulation been required by the codes. The law, however, does require a rental to have adequate weatherproofing against the cold, wind, rain or heat. Thus if the insulation, or lack of it, is so bad that tenants are unable to keep their unit at comfortable temperatures, then the landlord must act to correct the problem. This may include adding weather-stripping, sealing doors and windows, and even perhaps adding insulation. Excessive utility bills may be evidence of a problem that the landlord needs to correct.

Griswold: While the landlord only has a legal obligation in the event of insufficient weatherproofing, a prudent landlord will realize that installing or upgrading the insulation can have many positive benefits to the landlord. First of all, the weatherproofing is an improvement to the property that will maintain and preserve the asset. Second, if the improved weatherproofing leads to lower utility bills the landlord benefits indirectly in that the tenant will have lower financial obligations and therefore more of a financial "cushion" to keep the rent current. Naturally, the tenant is also more likely to stay in the rental home if the property is well maintained, energy-efficient and the utility bills are reasonable.

Future prospective tenants will also have the same concerns. My suggestion is for you as the landlord to turn this lemon into lemonade and take the necessary steps to properly weatherproof your rental home.

Q: I recently signed a one-year lease on a nice home in Santee where the owner required first and last month's rent, plus a $750 security deposit. The monthly rent is $1,250, therefore I had to pay $3,250 just to move in. Is the owner legally required to give back the interest on my security deposit?

A: Griswold: No. The payment of interest on security deposits is not required by California law, with very limited exceptions for subsidized housing or in certain rent-control areas. Under California law, your "security deposit" here is $2,000 because the last month's rent is legally part of the security deposit. A landlord can collect a security deposit of up to two times the monthly rental rate in addition to the first month's rent. Therefore, your landlord could charge a maximum security deposit of $2,500.

Q: I rent a large home and I am the only tenant on the one-year lease. I am thinking of adding a couple of roommates to reduce the cost of my rent. Can I collect a share of the security deposit from my new roommates without serious legal ramifications?

A: Kellman: The security deposit follows the lease. If the new tenants move in, the deposit, as between the landlord and original tenant is not affected. If the original tenant takes some security deposit money from the new subtenants (roommates), then this original tenant becomes the roommates' landlord and must hold the deposit under the same laws as his landlord is holding his deposit.

Regardless of the subrenters, the original tenant remains responsible to the landlord for rent and damages to the property, if any, under that one-year lease. The legal ramifications may come, not from collecting a deposit from roommates, but if the landlord discovers and objects to subrenting to those roommates. If the tenant is keeping the rent current and taking care of the property, there should be no rational basis to object to the roommates. Despite this, many landlords will try to object, claiming the lease was for the original tenant and no others. This is a situation which may, in many cases, be overcome with a proper showing by the tenant that such a restriction attempted by the landlord is unreasonable.

Smith: Not so fast. You need to read the lease. Most standard leases prohibit the addition of roommates without the landlord's prior written consent. It sounds like you want to sublease portions of the house to your prospective roommates. If the landlord agrees to this, then you may ask for security deposits from the new tenants. Keep in mind that you continue to be responsible for the entire rent on the "master" lease, even though your subtenants may default. You will also be responsible if they begin causing problems in the house such as disturbing the neighborhood or damaging the property.

Prior to approval of the roommates, the landlord would have the right to request information about, among other things, their financial wherewithal. Don't be coy. Let the landlord know that's going on and try to work it out.

If you're a tenant or landlord, the authors stand ready to answer your questions. Write them at: Rental Roundtable, Homes Section, San Diego Union-Tribune, P.O. Box 191, San Diego, CA 92112. Or you may e-mail them at rgriswold@retodayradio.com

Back to 1996 Rental Roundtable Index

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