Coping with Tenant Problems when Selling Real Estate
By Attorney Gregory Wayland, BPE Law Group, PC
Many landlords mistakenly believe that they are just that… the lord of the land. But this attitude can lead to much grief for the property Owner and their real estate agent, particularly when the Property is being sold. This Article is intended to help you and your clients avoid those problems.
Real estate ownership includes a bunch of rights one of which is the right to exclusively occupy the Property. When an Owner rents the Property to someone else, they are giving that occupancy right to a third person, generally called the “Tenant”. A written rental agreement of some kind should always be used to define all of the rights and obligations of both the Tenant and the Owner. Oral agreements can be enforced if the rental period is for less than one year (such as month-to-month) but they provide little protection for anyone.
A critical problem can arise when the Owner wants to sell the Property and it is occupied by a Tenant. California law (Civil Code 1954) allows the Owner to enter the Property to make necessary and agreed upon repairs or to show the Property to prospective buyers and lenders. This must be done on at least 24 hour written notice to the Tenant who has a right to be present.
Note that California law does NOT grant the Owner or their agent a right to install a lockbox on the Property, even if a “call first” reference is made in the Listing. However, verbal notice of showing (24 hour) can be used if a written notice has been given to the Tenant within 120 days. Violation of these Tenant rights can constitute “Constructive Eviction” and can subject the Owner and any entering agents to legal liability for wrongfully entering the Property and interfering with the Tenant’s right of “quiet enjoyment”. Of course, Tenants are often willing to agree to allow a lockbox to be installed, especially if they are given some incentive such as a discount of their rent, but any such agreement must be in writing and be signed by the Tenant and Owner.
If a Tenant refuses to cooperate with the Owner’s efforts to show the Property to prospective purchasers, either directly or through their agents, then the Tenant may be in breach of their rental agreement and the Owner can give them a 3 Day Notice to Perform Covenant or Quit, essentially saying cooperate or get out. If the Tenant still refuses to cooperate, then the Owner can start an eviction action to end the tenancy and vacate the Property… which of course will make showing it much easier.
At BPE Law Group, P.C. we advise owners, real estate agents, and property management companies on how to handle day-to-day issues with rentals and tenant and where necessary provide legal representation in evictions and any other Property related issues. If you need our assistance, please contact me at firstname.lastname@example.org or call our office at (916) 966-2260 to arrange a consultation.
This article is not intended to be legal advice, and should not be taken as legal advice. Every case requires review of specific facts and history, and a formal agreement for service. Please feel free to contact us if you need legal advice and are interested in seeing if we can help you