The Property Management Shop

Don�t Market Occupied Apartments

by Marc Wilson

Q. My tenant tendered a 30-day notice to vacate her apartment. The apartment was in perfect condition, so I put it on the market and found a new tenant after a couple of weekend showings. I arranged for the new tenant to take possession of the apartment three days after the old tenant planned to vacate, prepared the documents, ratified the rental agreement and received and deposited the new tenant’s money. Two days before the old tenant’s date to vacate, she called me and said she couldn’t move at the end of the month because her new home would not be ready for an additional two weeks. I told her that I had already committed the apartment to a new tenant, and she would have to conform to the content of her notice to vacate, meaning she would, in fact, have to vacate at the end of the month. Now she’s not returning my calls. What should I do?

A. These things happen. This is one of the reasons why I don’t like to market occupied apartments. You never really know if a vacating tenant will actually vacate the apartment up until the time that you actually take possession of the apartment. A 30-day notice to vacate does not obligate your tenant to vacate the apartment. Your tenants’ failure to adhere to the contents of her notice to vacate is not a violation of her rental agreement nor of any local laws or ordinances, and it is certainly not considered a just cause for eviction under the Rent Ordinance.

Here is what you need to do: when the vacating tenant finally calls, ask her to put her comments in writing. Spell out that she must fax you a document that rescinds her original notice to vacate and establishes the new date she intends to vacate. Make sure to tell her to immediately tender the rent due for the extra two weeks of occupancy. Once you receive her fax and rent money, you should decide whether she is actually going to vacate in two weeks or whether she is just too flaky to trust. If you can trust her, then don’t string along your new tenant. Simply call the new tenant and tell him the facts. Explain that you don’t know if the vacating tenant will actually vacate, but that you think she might. Your new tenant might have the flexibility and the motivation to hang around and see what happens. One way or the other, you don’t have any liability with the jilted new tenant. Item 3 in your PPMA Residential Tenancy Agreement clearly states that “if owner is unable to deliver possession of the premises at the commencement of the term, owner shall not be liable for any damage caused…” Clarify with the new tenant that you are willing to refund all monies in your possession and tear up the lease if he is so inclined. You can’t insist that your new tenant hang around while you clean up your problems with the vacating tenant.

If and when the vacating tenant vacates, change the dates on the new tenant’s rental agreement and consummate the deal, assuming the new tenant is so inclined. Once the vacating tenant is gone, you can charge her for 15 days of extra rent, because she only gave you a 15-day notice that she planned to vacate the apartment. Remember, she rescinded her first 30-day notice and then tendered a new 15-day notice. Your PPMA Lease clearly states that she must give you a 30-day notice, so she is on the hook for the additional 15 days of rent. Just deduct this amount from her security deposit. Be sure to include a copy of the relevant section of her rental agreement in her security deposit disposition documents.

I would try to avoid “double dipping” with regard to lost rent. You can’t legally collect rent from two different people for the same period of time. If you manage to rerent the apartment in a time frame that spares you any real rent loss, then don’t charge the previous tenant for lost rent. If she never ends up moving out, you can charge her for the real costs associated with marketing and leasing her apartment. These charges might include advertising, rental agreement preparation fees, leasing commissions and any other related charges. Item 26 of your PPMA Lease clearly states that “if tenant fails to vacate the premises on or before the date set forth in tenant’s notice, tenant shall be liable for any costs incurred by owner who relied on tenant’s notice terminating the tenancy.” I usually just compute the costs and place the bill in her file. When she really does vacate, I even up with her security deposit disposition documents by simply deducting the money from her security deposit refund. I find that if you present her with the bill now, two things will probably happen: she will not pay the bill and will withhold her last month’s rent, suspecting that you plan to deduct these costs from her security deposit. You don’t have any financially practical way of getting the money now, so just wait until she vacates.

The same thing goes for any other tenant who tenders a notice to vacate, which does not conform to the 30-day notice requirement. I will often receive a notice on the 16th or the 17th of the month, which indicates the tenant will vacate at the end of the month—essentially a 13- or 14-day notice. I just process the notice to vacate, mail an acknowledgement to the vacating tenant and take possession of the apartment on the last day of the month. I don’t call the tenant and announce that her notice does not conform to the contents of the rental agreement. I figure the tenant is going to do whatever she is going to do. Why call the tenant and inform her of an obvious breach of her rental agreement? What are you going to gain? Just process the notice to vacate, take possession of the apartment and then deduct the amount of rent owed from the security deposit. If the tenant has been well behaved and otherwise perfect, I usually don’t deduct the money owed.

The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of the SFAA or the San Francisco Apartment Magazine. Marc Wilson has been managing and selling San Francisco Apartment buildings for over 15 years. Please send your questions concerning property management issues to Marc Wilson at 1699 Van Ness Avenue, San Francisco, CA 94109. he can be reached at 415.229.1275. Copyright ©2004.