Rent Watch Rent Watch (October 28, 2005)

New owner's plans not seller's concern

Q: I’m selling a large apartment complex that I’ve owned for a long time. The new owners have told me that in three months they plan to move into the only four-bedroom unit in the complex. Am I legally obligated to tell the current tenants that they will be getting a notice to move?
A: There is no legal requirement for you to notify the tenants of any future plans the new owners may have. For all you know, the new owners’ plans may change and they won’t want this unit. Civil Code Section 1950.5(h)(1) requires you to notify your tenants of the date the property transferred to the new owners along with either their or their agent’s name, address and telephone number. This is required because the buyers take possession of the property subject to the existing rental agreements and leases. The form Notice of sale of Real Property and of Transfer of Security Deposit Balance also includes an area to detail disposition or transfer of existing security deposits.

If the current occupants of the desired unit are on a lease, the new owners will have to wait until the lease expires to terminate this tenancy or honor the required advance notice time of non-renewal listed in the lease. The lease can be terminated early, only if the lease itself contains a specific provision that terminates it upon the sale of the property. For more information, contact your local housing mediation program.
Q: My former tenant wants his security deposit refund in certified funds -- either a money order or a cashier’s check. I’ve always used a personal check for deposit refunds. If there is a refund due the tenant, can I use a personal check?
A: Unless the tenant’s rental agreement states that any deposit refund will be settled by certified funds, you can continue to use your personal checks. If there are deductions from the deposit, be sure to send an itemized statement listing those deductions as well as receipts for any deduction over $126.
Q: I own a small apartment complex. I want to change from month-to-month agreements to one-year leases for those tenants who wish a longer commitment. Additionally, since I haven’t increased the rents for almost two years, I also want to raise the rents. What steps should I take to accomplish the conversion and the rent increase?
A: You first need to identify the tenants who are willing to convert to long-term leases. Each tenant must be given at least 30 days to decide whether or not to change. Remember that once a lease is signed, conditions cannot be changed for the period of the lease. Once you have identified the tenants, prepare new lease agreements that state the time period, the new rent amount, and any other changes you are making to their tenancies.

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