Real Estate 100 - Chapter 12 -- Landlord and Tenant Relations

What do CA laws say regarding a property with 16 or more rental units? Chapter 12

. 1. Under CA law, if a property has 16 or more residential units, there must be an on-site manager. He does not have to have a real estate license.

When is a 3 day notice required? Chapter 12

1. A 3 day notice is required when a tenant has defaulted on rent or has violated the terms of the lease.

When is a 30 day notice required? Chapter 12

1. A 30 day notice is required when the landlord is giving the tenant notice to return possession. This means that the landloard is giving them notice that the lease will not be renewed a periodic tenancy or estate for years.

What is a SANDWICH LEASE? Chapter 12

1. A Sandwich lease occurs when the original lessee subleases the property to another. In essence, there is an agreement between the original lessee and the landlord and another agreement between the original lessee and the new subleasee. The subleasee pays rent to the lessee who pays the lessor. If the subleasee does not pay rent, the original lessee is responsible.

What is a freehold estate versus a less than freehold estate? Chapter 12

1. A freehold estate is an interest in real property as an OWNER whereas a less-than-freehold estates interest in real property is as a TENANT.

What is a lease?

1. A lease is a contract between an owner (lessor) and a tenant (lessee). A tenant is given the right to possess and use the landlord's property in exchange for rent. In California, all leases for more than a year must be in writing to be valid.

What kind of notice must be given to a tenant of a mobile home park? Chapter 12

1. A mobile home park tenant must be given 60 day notice. 2. If the mobile home cannot be moved without a permit, the law requires that a tenant must be given a reasonable notice to vacate. 3. the tenant cannot be required to move merely to make space for a person purchasing a mobile home from the park owner.

What is a SUBLEASE of a lease and what are the rights that go along with that? Chapter 12

1. A sublease transfers only a part of the term of the lessee to a sublease. The original lessee is still liable to the lessor (landlord) for the terms and conditions of the lease. The sub lessee pays rent to the original lessee who pays the lessor.

What are the tenants rights and duties under a lease: Chaputer 12

1. A tenant has rights and duties as does a landlord. These are: A. Tenants are expected to pay the rent when due and not damage the property beyond normal wear and tear. B. Tenants who have month-to-month leases are required to give 30 day notice to vacate. NOTE: If the tenant fails to do so, a landlord can sue for 30 days rent. C. Tenants are liable for injuries to guests caused by unsafe conditions so precipitated by the tenant. Tenant should purchase renters insurance to guard against this and loss of personal property. D. Do not interfere with the rights of other tenants. E. Tenant has right to use and enjoy the property. If the property becomes uninhabitable, the tenant may choose to give notice and move. THIS IS CALLED CONSTRUCTIVE EVICTION. F. All CA residential units must adhere to minimum housing and health codes. If it is the fault of the landlord, the tenant can demand the landlord make the necessary repairs. If it is the fault of the tenant, the landlord may bring legal action against the tenant.

What other provisions should be in a lease (although not legally required? Chapter 12

1. Although not legally required, these items should also be included In the lease: A. Who is responsible for utilities and maintenance B. Any rules regulating to noise, # of guests/length of stay, parking, types of pets or none. C. Intended use of property D. Maximum # of tenants as allowed by law. E. Right of tenant to add/remove fixtures

What is an ASSIGNMENT of a lease and what are the rights that go with that? Chapter 12

1. An Assignment of a lease transfers the entire leasehold interest to another party INCLUDING the prime liability and responsibility to make payments to the lessor (landlord).

What is an Escalator clause? Chapter 12

1. An Escalator clause allows the landlord to increase the Rent during the term of the lease if costs increase. Usually tied to the CPI or Consumer Price Index.

What is an Extention of a lease? Chapter 12

1. An extension of a lease is a continuation of an old lease with the same terms and conditions.

What is "Constructive Eviction?" Chapter 12

1. Constructive Eviction is when the tenant sues the landlord if the property becomes uninhabitable.

What is eviction? Chapter 12

1. Eviction occurs when a tenant is dispossessed by operation of the law. This eviction is a legal procedure in court.

Is there a law in California that requires a written document regarding leases? Chapter 12

1. In California, any leases for greater than one year require it to be in writing. All leases less than a year do not need to be in writing, however, it is recommended so that there are no misunderstandings.

What is the difference between a lease and a rental agreement? Chapter 12

1. Lease and rental agreements are sometimes use interchangeably but mostly leases are for periods over one year and rental agreements are usually on a month-to-month duration.

When are leases terminated? chapter 12

1. Leases are terminated for the following reasons: A. The leases have expired and no new terms are negotiated B. The lessor and leasee agrees to terminate the lease with no additional liability on either side. C. The premises have been destroyed D. Eminent Domain by the government such as condemnation or eminent domain E. Breach of contract by either the lessor or lessee.

Can security deposits be labeled as Non-refundable? Chapter 12

1. No, security deposits cannot be labeled as non-refundable. The landlord can collect the first months rent as well as either the two month security deposit or the three months security deposit at one time.

What does the law say regarding off site property managers? Chapter 12

1. Off site property managers must have a real estate license.

What is a security deposit and what are the $ limits? Chapter 12

1. On residential rentals there are security deposits to ensure that the tenant does not DESTROY the property and this ensures that there are funds if things need to be fixed. A. For UNFURNISHED apartments, one can collect no more than 2 months rent as security deposit. B. For FURNISHED apartments, one can collect no more than 3 months rent as security deposit. C. Security deposits must be refunded within 21 days after a tenant vacates. D. Security deposits can be used to offset back rent and damages caused by the tenant or to clean up the mess. If an offset is used, the landlord must provide an itemized statement showing all charges for amounts deducted .

How are property managers compensated generally? Chapter 12

1. Property managers are compensated generally: A. May be paid a percentage of the rents collected. B. Percentage is negotiable and varies from firm to firm C. Fees may be as low as 1-2% of rents collected D. On small units (rental homes/duplex) 10% or more E. Resort properties may have a higher rate such as 25% or more. F. Some managers may charge a flat rate. G. NOTE: property management fees DO NOT include the cost of maintenance and materials

What do property managers do? Chapter 12

1. Property managers represent owners by screening tenants, negotiate leases, hire personnel to maintain the building and grounds and hire on-site residential managers 2. Property managers collect rent and keep the accounting records for income tax purposes.

What are rental payments to a neutral escrow? Chapter 12

1. Rental payments made to a neutral escrow happens when a tenant may be reluctant to use the one month offset and is seeking legal remedies to include a higher amount. During this time, any rent due is put in a neutral escrow account until such time the situation is resolved.

What is considered sufficient delivery of a notice? chapter 12?

1. Sufficient delivery of a notice does NOT mean putting it under the door or putting it in the mailbox. Delivery should be with the person signing for the notice, actually handing the notice to the person or having the notice delivered by the Sheriff, Marshall or Constable.

What is the FIRST RIGHT OF REFUSAL? Chapter 12

1. The First Right of Refusal means that a lessor is not required to sell, but if he does, he is giving the first right to purchase to the current lessee to purchase if he wants.

What is a Renewal of a lease? Chapter 12

1. The Renewal of a lease occurs when the existing lessor and lessee renegotiate a new lease upon the expiration of the existing lease where the terms and conditions are DIFFERENT from the old lease.

What are the requirements for a valid lease? Chapter 12

1. The elements for a valid lease are: A. Must meet all the requirements of a valid contract, competent parties, mutual consent, lawful objectives and consideration. B. Must be in WRITING if the term is for greater than one year. Any alterations must also be in writing C. Must contain the names of the lessor and lessee D. Must contain a sufficient description of the property E. Must show the amount of the rent and the manner of payment F. Must state the duration or time periods of the lease is to run or in a periodic tenancy, the periods involved. URBAN PROPERTY cannot be rented for more than 99 years and RURAL (AGRICULTURAL) property cannot be leased for greater than 51 years. G. Must be signed by the LESSOR. Does not have to be signed by the lessee to make it valid. The lessee's possession of the propert is considered to be acceptance of the agreement. H. Have the RENEWAL OR EXTENSION provision in boldface type.

What are the four types of leasehold estates? Chapter- 12

1. The four types of leasehold estates are: A. Estate for years - This is a tenancy for a fixed term which could be a week, month or a year. THERE IS AN END DATE TO THIS LEASEHOLD. This is a leasehold that is for a fixed time span and is otherwise referred to as a TENANCY FOR A FIXED TERM. B. Estate from periods to period - This leasehold continues from period to period with no specific term date. Each party agrees to renew or terminate at the end of each period. An example is a month to month lease. C. Estate at will - this is a lease at the landlords will with NO definite term date and usually often verbal. Estates at will can be terminated without notice at any time by the landlord or the tenant. D. Estate at Sufferance - This is a leasehold where a tenant retains possession of the property after the expiration of the lease. Absent any other language, this lease will expire on a certain date. If the tenant is still in possession of the property and the landlord accepts rent, this will turn into an Estate from period to period.

What are the duties and responsibilities of the landlord? Chapter 12

1. The landlord owes certain duties to the tenants such as: A. The property is habitable and guarantees or meets the minimum housing and health codes B. Give advanced 24-48 hour notice to tenants in order to inspect the property for repairs or other emergency situations. C. Be sure that there are no unsafe conditions in the common areas and. If so, repair ASAP for residential units. For non-residential, be sure tenants under a triple net lease keep up property. D. Do not interfere with the tenants' quite enjoyment and use of property. E. Do not discriminate according to state and federal laws in renting to disabled or handicapped persons as well as families. Also, do not base decision on age, sex, race, color, national origin, religion or creed, sexual orientation or marital status. F. Keep current with regards to termination month to month leases (60 day notice - if tenant has been there 1 year or longer and 30 day notice if tenant has been there less than one year). G. Landlord cannot force a tenant to leave if he has a lease for a specific term unless the tenant violates the terms of the lease agreement. NOTE: Section 8 has different requirements regarding evictions

What happens when the sheriff evicts a tenant? Chapter 12

1. The steps for a sheriff to evict a tenant are: A. A Writ of Possession has been granted to the landlord by the courts. B. Sheriff sends the tenant an eviction notice. C. If the tenant is still there after 5 days, the sheriff physically removes the tenant, but not the tenant's possessions.. The tenant's possessions are impounded according to the lien laws.

What are the steps involved in an Unlawful Detainer Action? Chapter 12

1. The steps in an Unlawful Detainer Action are: A. Landlord serves the tenant with a 3 day or 30 day notice depending on the circumstances B. If the tenant does not abide by the notice, the landlord files an unlawful detainer action in court.. C. If the landlord wins, the court awards the landlord a judgment. The landlord then asks for a Wirit of Possession authorizing the sheriff to evict the tenant. D. The sheriff sends the tenant an eviction notice; if the tenant does not leave, the sheriff can physically remove the tenant.

What are the three major types of leases? Chapter 12

1. The three major types of leases are: A. Gross/fixed lease - under this lease the tenant pays a fixed rental amount and THE LANDLORD is responsible for taxes, maintenance and insurance. B. Net Lease -(Usually for commercial property) under this lease, the tenant pays a fixed rent plus a PORTION of the landlord's property taxes, hazard insurance and maintenance (TIM). If the lessee pays only ONE item it is called a NET LEASE. If the lessee pays for all THREE, it is called a TRIPLE NET LEASE. C. Percentage Lease - rent is usually based on a percentage of the tenant's gross sales. This type of lease usually has a fixed rent amount plus a certain percentage of the tenant's gross sales. The higher the gross sales, the smaller the percentage and the lower the gross sales, the higher the percentage.

What are the special rules regarding Mobile home park tenants with regards to eviction? Chapter 12

1. There are special rules for those in Mobile Home parks. A mobile home tenant cannot be evicted unless one of the following applies: A. Tenant fails to comply with local and state laws. B. Tenant annoys other tenants C. Tenant fails to abide by reasonable park rules D. Tenant fails to pay rent and other agreed charges E. Tenant has his/her rights condemned by the government F. The use of the park changes.

What is rental offset and how/when can it be used? chapter 12

1. Under CA law, if a residential landlord refuses to make necessary repairs, under section 1942 of the Civil Code, allows the tenant to spend up to one months' rent to make the repairs. The repair bill may offset the next month's rent. A. Some caveats under this law is that a tenant must give adequate notice and time for the landlord to repair or fix the defect. B. As stated, the tenant can offset up to one months rent to make necessary repairs C. A tenant can only use this offset 2 times in any 12 month period and can only use it for necessary repairs. If the tenant makes the repairs, he can't charge for labor. However, if a tradesperson makes the repairs, he may charge for both parts and labor. D. If a tenant spends more than one months rent for repairs, he can only offset one months worth and no more and cannot carry over to the next month.

What is a Lease with an Option to Buy? Chapter 12

1. Under a Lease with an option to buy, the property is rented for a period of time at which time the lessee is given the option to purchase the property on agreed upon terms. The lessee is under no obligation to purchase will lose any option fees or portion of rent paid for this privilege.

Who must be bonded if they are in property management? Chapter 12

1. Under property management, "key" employees of the property management company must be bonded.

We're are unlawful detainer actions heard? Chapter 12

1. Unlawful detainer actions are held in Superior Court and these actions have a priority on the court's calendar. An attorney is generally required for a superior court action.

What agreement is there when a property manager is hired? Chapter 12

1. When a property manager is hired, the manager and the owner sign a management contract. The contract designates the property manager as the owner's agent and lists all the duties and responsibilities of the parties. To be enforceable, the contrast must meet the legal requirements of the California Law Contract.

How does one serve notice? chapter 12

1.. The procedure for service notice is: A. Notice must be personally delivered to the tenant B. If the tenant is absent, a copy should be left with someone over 18 years of age and then a copy must be mailed to the tenants place of residence. C. If no one is home, a copy may be affixed in a conspicuous place on the property and then mail a copy to the tenant.

What is a CPM? Chapter 12

A. A CPM (certified property manager) is a designation given to those who meet the rigorous educational and experience requirements at the Institute of Real Estate Management