When Tenants Divorce, Landlord Needn’t Split Security Deposit
Question: I am the owner of a rental property in the San Gabriel Valley. In September 1996, I leased the house to a married couple. They paid a $700 security deposit.
Toward the end of their one-year lease period, they divorced. The ex-wife moved out and the husband continues to live in the house. I did not receive any kind of notification from either of them that there was a change in their status. When the lease ran out, it reverted to a month-to-month rental as stated in the lease.
Recently I received a letter from the ex-wife, demanding that half of the security deposit be sent to her within seven days. Shouldn’t her former husband pay her the $350 and leave me out of it? Also, doesn’t she have to give me 30 days’ notice? And if so, do I then have two weeks in which to return her half of the deposit?
Attorney Ted Smith replies:
You’re in pretty good shape here, but be careful.
The security deposit follows the rental; you don’t have to split it up. Unless there’s an agreement to give the wife half, she’s not entitled to it now.
She should take her claim to her former husband. Let the divorce court decide that issue.
She has not legally terminated her tenancy in the premises, so you could declare her still on the hook for the rent.
Current law states that you have 21 days from the husband’s departure to return the deposit. When returning the deposit in this case, the check should be made payable to both husband and wife, making the usual deductions for damages and cleaning.
Repair Cost Schedule Sounds Unworkable
Q: We are several months into our one-year lease of our rental home. The other day I received a written notice taped to my front door: a price listing for basic repairs to our unit, in the event of a problem. A clogged sink was $25 and a broken door lock was $50. The only charges listed in our lease are for late rent and returned checks. Is this legal?
Attorney Steven R. Kellman replies:
The landlord may charge the tenant only the actual costs of repairing damages caused by the tenant beyond normal wear and tear. If the door lock breaks or the sink clogs through no fault of the tenant, the landlord pays for the full repair. Even if it is the tenant’s fault, the tenant pays only the true charge for the repair.
The schedule of charges may actually offer some protection for the tenant if damage costs more than what’s noted on the price listing. Would your landlord follow it and pay the extra costs for you? Conversely, if repairing the clog costs less than $25, will the savings be passed on to you?
This seems like an unworkable system that may provide more benefit to the tenant and some trouble for the landlord. Ultimately, such a notice is suspect and is subject to legal attack.
In a Tight Market, Rent Rises Quickly
Q: I live in a nice apartment in the coastal area, and I can’t afford more rent increases. A year ago, when I moved in, I was offered a month-to-month rental agreement at $695 or a $50 monthly rate discount for a six-month lease at $645. I chose the six-month lease, and everything was fine until my lease expired. I then received a notice saying that the market value of the unit had increased to $710 and I can either sign another six-month lease at $660 or allow my expiring lease to roll over to a month-to-month at $710.
When I called the resident manager expressing concern about future increases, I was told that my rent could go up again but that it is the company’s policy to keep rents at least $25 below the market rent. I signed a lease renewal.
I just got another letter saying the market value is now $20 higher and my choices this time are month-to-month at $730 or a six-month renewal at $680. I now wonder if the market value will ever stop rising as I can already anticipate another increase to $705 even if the market value stays the same.
I have compared rents in the area and the rents all seem to be lower than my building. We don’t have rent control, but is it legal for the management to keep raising the market value?
I can’t afford to pay the higher rent or to move. Is there anything that can be done to prevent a raise every six months?
Property manager Robert J. Griswold replies:
Yes, it is legal for the owner to raise your rent at lease renewal or upon a 30-day notice for month-to-month rental agreements. Unfortunately, you are experiencing firsthand the results of a dramatic shift in rental unit demand over the last 18 months.
After four to five years of rental concessions and giveaways, the market is extremely tight, with vacancies below 3% in many areas. Many owners lost property to foreclosure. Current owners are anxious to recover the ever-increasing costs of operating apartments.
With the strong economy and the limited supply of apartments, the only way for rents to go is up. You can only avoid potential rent increases by committing to a longer-term lease.
Property Management Takes Time and Effort
Q: I recently inherited a small rental property. I am concerned that I do not have the knowledge or time to properly manage the property. Besides these two personal factors, what are some other considerations or benefits of using a property management company?
Griswold replies:
This is a very common question from owners, including those who swear by their property managers and those who swear at their property managers.
You have already mentioned two of the most important factors.
You must be willing to make the effort to learn the laws plus develop and implement sound policies and procedures that are commensurate with rental property management. This takes time. And even the best landlords will occasionally be faced with the midnight call or chronic problem tenant.
Typically, owners will seek a property management firm that can provide them with peace of mind and simplify their lives.
Another common challenge is that owners find themselves getting too close to tenants and not being able to treat their rentals strictly as business.
Professional property managers have the experience and procedures to handle the uncomfortable situations that can arise in management of rental housing. The best of them are able to treat residents in a consistently fair, firm and friendly manner.
Also, remember that you must comply with federal and state fair-housing regulations and other legislation. It is not always easy to keep track of these requirements. Examples of recent changes in laws directly affecting rental housing include the required lead paint notification, tenant screening and credit report procedures and disclosures and the installation and maintenance of door and window locks.
Consult your financial and/or tax advisor about any tax implications as well.
New Apartments Won’t Generate Rent Cuts
Q: I notice a lot of apartment construction in certain areas. I am concerned that rents seem to be rising. Once these new apartments open, will that depress rents in the area at existing developments?
Griswold replies:
Hardly. The only rental housing being built in large numbers throughout Southern California are high-end luxury rental units, often with rents of $1,000-plus for one-bedrooms and $1,200-plus for two-bedrooms. Though there will probably be a short-term effect on directly competitive high-end properties in the immediate area, the long-term effect will be negligible.
In virtually all areas of Southern California, rental housing construction is still very low compared to the pace in the 1970s and ‘80s, and construction of moderately priced rental units is virtually nonexistent. The high demand for rental housing and lack of new construction will continue to exacerbate a rental housing market already in disequilibrium. Long-range planning and mutual cooperation by public and private sectors is necessary to address the serious challenge posed by the lack of affordable housing. If reasonably priced rental housing is not available, the long-term consequences to our regional economy are bleak.
Smith replies:
The new apartments will not depress rents. The rental housing shortage continues. The market is improving. Residents are moving into the region. And the units you refer to are high-end retail. Though there may be a temporary exodus to the new properties, this will be more than compensated by the steady flow of new residents to existing developments.
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This column is written by property manager Robert Griswold, host of “Real Estate Today!” (KSDO-AM [1130], 10 a.m. to noon Saturdays), and attorneys Steven R. Kellman, director of the Tenants’ Legal Center, and Ted Smith, principal in a law firm representing landlords.
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If you have a question, send it to Rental Roundtable, Real Estate section, L.A. Times, 202 W. 1st St., Los Angeles, CA 90012. Or you may e-mail them at rgriswold.latimes@retodayradio.com. Questions should be brief and to the point and cannot be answered individually.
