Legal Corner Q & A

A Tenant’s Unexpected Death

by Various Authors

Q. I have a tenant who always pays the rent late and then refuses to pay the late fee as required by his rental agreement. Can I evict him for his failure to pay the late fee?

A. This is a frequent and irksome problem for landlords. In theory, you should be able to serve a Three-Day Notice to Pay or Quit, followed by an eviction lawsuit if the fee remains unpaid. Success may, however, be more difficult than anticipated.

Many landlords and tenants alike talk of a late penalty. In fact, penalties are not favored by California law and are usually unenforceable. What should be enforceable are liquidated damage provisions, such as what is provided for in the PPMA Residential Tenancy Agreement (if properly set forth). A liquidated damage is an estimated amount that the landlord and tenant agree approximates the damage the landlord will suffer caused by late payment when it is impracticable or extremely difficult to fix the actual damage. The estimate must have a basis in fact. Most rental agreements set out a fixed amount for a late charge, or a percentage of rent, not defined as a liquidated damage and often bearing little relation to actual damage.

The issue was considered in Orozco v. Casimiro, a published case decided by the Los Angeles Superior Court in June 2004. Though not binding on San Francisco courts, the case’s reasoning is instructive in terms of what our court may do. The landlord attempted to evict a tenant for failure to pay a late fee, which the rental agreement fixed at $50 without defining it as a liquidated damage. The landlord also failed to plead that actual damages were impracticable or extremely difficult to fix, and he failed to prove that in court. The Appellate Department reversed a judgment in favor of the landlord, awarding it instead to the tenant. The landlord, after the expenditure of all the attorney fees, costs and trial time, had achieved nothing.

In San Francisco, not only would the landlord in such a case risk the loss of his own fees and costs and perhaps be required to pay the tenant’s as well, but he or she would also risk a lawsuit by the tenant for attempted wrongful eviction. In short, by using a rental agreement with a well-designed liquidated damage provision, the landlord has a better chance than with other formats to successfully evict a tenant for failure to pay a late fee, but the burden remains on the landlord to prove the elements of a liquidated damage and the reasonableness of the provision. A great deal of time and expense could be invested, only to lose in court. This is not a course to be undertaken lightly, and then only by those who are willing to take a substantial risk.
– Saul M. Ferster

Q.What is an acceptable deduction for cleaning a vacated dirty apartment? Is it true that you do not need proof or receipts if the charge is less than $125?

A. The answer to the question depends on the time required to clean the apartment to the point that it is in the condition that it was when you rented it to the tenants, ordinary wear and tear excluded. There is no specific law or rule that defines ordinary wear and tear. That status greatly depends on the length of the tenancy.

Recent changes in state law now require you to provide a tenant, whom you know is moving out, with a notice of his or her right to an inspection of the premises before he or she moves out. The purpose of this inspection is to identify damages to the premises for which you will make a deduction from his or her security deposit. If you fail to deliver this notice, you may be prevented from making any deductions when the tenant leaves, even if there is damage. If the tenant elects to have the inspection, it must be done during the last two weeks of the tenancy, and you must provide the tenant with an itemized list of the damages and a copy of California’s Civil Code Section 1950.5. The San Francisco Apartment Association sells a form that complies with this requirement.

After the tenant leaves, you have 21 days to either return the security deposit or account for any deductions you have made. You are now allowed to make reasonable estimates for repair costs that you are not able to make within the 21 days and to deduct that estimated amount. You must reconcile the estimated and actual amount of repairs within 10 days after the repairs are finally done. In addition, the law allows you to charge for your own time in doing repairs. The charge must be reasonable. If you do make any deductions on the security deposit, you must now provide receipts for each deduction, unless the total amount of deductions does not exceed $125.
– Jeffery P. Woo

Q. My wonderful tenant jumped off the bridge. She was 38 and did not make a will or arrangements. Her last rent check was short, and her apartment unit had some damage and needed cleaning. What is my responsibility to her mother (heir apparent) as far as the security deposit?

A. This is a very sad and tragic situation. However, your legal responsibility to the tenant’s mother is very straightforward and businesslike. If the tenancy was month-to-month, and no other occupants remain, then pursuant to Civil Code Sec. 1934, your rental agreement with the tenant terminated upon her death. Assuming her mother is the duly authorized executor or administrator of the tenant’s estate, you are required to provide a timely accounting of the tenant’s security deposit to the tenant’s mother. Accordingly, you are obligated to comply with Civil Code Sec. 1950.5(g). In other words, within 21 days after you have confirmed your tenant’s death, you must do both of the following: (1) provide, by personal delivery or prepaid first-class mail, a copy of an itemized statement indicating the basis for and amount of any security received and the disposition of that deposit (that is, show what amounts are being retained and for what reasons); and (2) refund the balance, if any. Of course, given the nature of this matter, you may consider returning the tenant’s entire security deposit in order to assist her family.

If you are unsure if the tenant’s mother is the proper person overseeing your tenant’s estate, then you can contact the San Francisco’s Department of Aging and Adult Services, 875 Stevenson Street, 3rd Floor, or call (415) 355-3555, and request assistance from a Public Administrator (PA) who oversees the estates of San Francisco citizens who die without wills. The assigned PA will provide you with advice and guidance regarding how to legally dispose of the security deposit and any of the tenant’s remaining personal possessions.
– Jonathan Bornstein

The opinions expressed in this article are those of the authors and do not necessarily re�flect the viewpoint of SFAA or the San Francisco Apartment Magazine. The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Saul Ferster can be reached at 415-863-2678 or fersterlaw@yahoo.com. Jeffery P. Woo is with Woo & Associates, 415-705-6470 or woo@mypropertyrights.com. Jonathan Bornstein is with Bornstein & Bornstein, 415-409-7611 or jonathan@bornsteinandbornstein.com. Copyright © 2004 by the San Francisco Apartment Magazine. All rights reserved.