My Rental House was Broken-into…..
We provide here a few questions that have been posted in the Community Forums and our answers to them.
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Q1
My rental house was broken-into while the tenant was on a 2-week away vacation. She then moved out afterwards, 6 months ahead of the specified time in signed lease contract. I agree with her moving out, but asked her to pay all the costs (rent, repair etc) until the time I find a new tenant.
I have asked her to report to police if it was a burglary case. However, she didn’t do so. My questions are:
1. Can the break-in be an excuse for a tenant’s early exit? Do I still have a right to collect the other 6 months due?
2. If she didn’t report the case to police, can I? If I do, does it affect my future leasing? Does landlord have to disclose this break-in history to future tenant although the house is in a very good city?
A1
Usually, a break-in of a rental home is not the responsibility of the landlord and does not give a tenant an excuse to break the lease or require the landlord to let the tenant terminate the lease early. However, this general theory can be significantly modified by terms of the lease agreement, actions of the landlord, and/or the laws of a particular state.
Tenants must provide their own insurance for their belongings and landlords should include a clause in the lease agreement wherein the tenant acknowledges the issue.
Damages to your property resulting from the break-in should be covered by the landlord’s insurance policy.
Although entirely possible, it would be unusual for a lease agreement to purposely modify the general theory.
Marketing of the rental unit in ways that promise security or even imply that the property is safe and secure can result in a landlord becoming liable for damages, losses, or injury to a tenant if the promised or implied security is not provided. Such liability can be incurred by the words in an advertisement or brochure, even by things stated orally by a landlord or manager.
Some states have specific laws regarding security that must be provided by the landlord. For example, CA requires that locks be provided for doors and windows, with those locks meeting state defined specifications. Failure to meet the requirements of such a law would both give the tenant a potential cause for breaking the lease without penalty and/or put the landlord at risk for liability for damages, losses, and/or injury resulting from the criminal acts of third parties.
Furthermore, a landlord usually has a responsibility to provide a certain degree of security even when not required by a specific law. For example, the premises must be capable of being reasonably secured. As examples, there should be deadbolt locks on exterior doors and windows and patio doors should be lockable, shrubs around windows and doors should not provide hiding places for those who might attempt to break in, there should be adequate exterior lighting, and locks should always be re-keyed between tenants.
You may have had the right to collect the rent for the remaining lease term, but whether or not you do can’t be determined without knowing exactly what was agreed to and whether the agreement was in writing or otherwise probable. If you allowed her to terminate her tenancy without a provable agreement regarding additional rent you may have waived that right. Absence of such a written agreement would leave it up to a judge if the tenant takes the matter to court. The fact that the tenant refused to report the break-in would allow you to question in court whether there had really been a break-in, but you may have lost that argument by agreeing to her termination.
However, many states require that the landlord minimize damages by making reasonable effort to re-lease the premises as soon as possible and will not allow the landlord to receive rent from the old tenant when a new tenant begins paying rent.
You can probably report the break-in yourself, but this may depend on how long ago it occurred. Whether you should consider disclosing the break-in depends on a number of factors including previous crime history and whether a reasonable person would expect future crimes. You may have some protection against claim of failing to disclose it, as you can take the position that there was no break-in because the tenant refused to report it.
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Q2
Where can I get a lease option agreement?
A2
While there are certainly many sources of lease option agreement forms available in books, in office supply stores, and on the Web, I would be very careful about using a generic format agreement. There are a number of potential problems that must be considered and it is unlikely you will find most available forms cover all issues that are important to your particular circumstances. A few of the issues are as follows:
1. Obligations regarding inspection issues – It is usually best to require that all inspections that are a contingency be performed prior to move-in as a tenant. However, since the tenant can fail to exercise the option for no reason, this doesn’t guarantee that an inspection issue won’t in the future be the cause of no-sale.
2. Maintenance obligations should always be clearly defined in any lease agreement, but it is much more important that all details be covered when doing a lease option. Concerns include who is responsible for (1) high cost replacements or repairs, e.g., heating/cooling equipment and (2) costs to repair of major damage caused by acts-of-nature not covered by insurance, particularly the often not covered hazards of floods and earthquakes. Another issue is what happens in the event of total property destruction.
3. There are numerous issues to consider in determining the option price as well as a number of related issues including the rent premium, the portion of rent to be credited toward purchase price, the security deposit, and the length of the option. It’s a matter of negotiating mutually acceptable terms that are legal under your state’s laws.
The bottom line is that one should seriously consider having a competent real estate attorney or a real estate broker with experience in lease options review the transaction documents. However, you must also consider all the issues yourself as they relate to your particular property and other circumstances and utilize the professionals as a check rather than depend on them to worry about every possible issue that might become important to your situation.
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Q3
We understand that new leases in California need to include Lead Disclosure and Pest Control Service language for buildings older than 1978. Our leases do not include either. But as far as we know, there are no known lead-based paint hazards. Also, the initial treatment for the pest control service started in 1988, way before some of the current tenants moved in and service continues monthly now. Do we still need to inform the tenants? If so, is it too late to do that now as an addendum to the lease and give the tenants the Lead Disclosure Pamphlet as well as a copy of the initial pest control contract?
A3
For many years now, federal law has required landlords of rental units built prior to 1978 to disclose to tenants any known lead-based paint or lead-based paint hazards in rental premises and to give them the EPA pamphlet titled “Protect Your Family From Lead in Your Home.” Both the landlord and the tenant must sign an EPA-approved form titled “Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards.” In most states, the disclosure information and form can be part of the lease agreement, but I’m not aware of any state requiring that and the disclosure and form are usually a separate document. However, you should check current CA law regarding the issue.
Owners who fail to comply with EPA regulations face penalties of up to $10,000 for each violation and treble damages if a tenant is injured by willful noncompliance.
Many states, including CA, have their own lead-based paint laws, with many states’ laws being more stringent than federal law.
I cannot advise you regarding whether you should now do the required lead-based paint disclosure if you didn’t do so before the current tenancies began. Although it may bring you into current compliance, it may also flag the fact that you violated the law when the tenants moved in, perhaps resulting in options for the current tenants. More detailed information than you provided would be required to make such a decision, including how many units, how old the tenancies, and how much is time left on the leases. I recommend that you consult a competent landlord-tenant law attorney regarding the matter.
California’s required notice of periodic pest control treatments is found in Cal. Civ. Code Section 1940.8. I believe it applies to all properties, not just to pre-1978 buildings. You should read the law yourself. You should also be aware that CA has potential disclosure requirements for about half-a-dozen other issues, most of which are found in Section 1940.
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Additional Information
Most of the issues discussed in these Q&A’s are covered in considerably more detail in our eCourses and/or in our Mini Training Guides.