Can We Get Out of This Lease...What Recourse?

This is a long one, but here goes....
My husband and I own a piece of rental property in California. A few months ago we were approached by the tenants who initiated an unsolicited dialog about purchasing the home. The tenants' initial ballpark verbal offer was in-line with what we believed to be reasonable so we verified this by getting some market comps and retained a realtor to represent us in the transaction. When the realtor approached the tenants, they suddenly thought the amount that THEY suggested was ridiculous and completely out of line. So, no deal.

This was fine, except that we have now warmed up to selling the rental property and buying something else. So we informed the tenants that we would put the house on the open market (hoping, somewhat, that this would motivate them to reconsider purchasing the home.) We have a lease that is not due to expire until March 2001. Obviously,if the tenants want to buy the house, the transaction is much simpler. In light of the lease, we intended to seek an investment buyer so that the tenants' lease would not be disrupted. It has always been our intention to honor the lease, despite the complications that this introduces into the sale.

Today, we had a walkthrough scheduled with the realtor to inspect the property and make some valuation assessments. The property manager notified the tenants about the inspection according to the terms of the lease and California law. When we got to the house, we were appalled.

Rooms have been repainted (badly) and there is bright blue paint on the white acoustic ceilings. There are nail-sized holes in the walls. There is some kind of mysterious orange food (?) stain on the ceiling and walls (think sweet and sour sauce!) of one of the bed rooms. Paint has been scraped off the walls in huge sheets and it looks like the kids have been allowed to "carve" in the bathroom enamel. Kids have colored on the walls in the bedroom. The master bathroom door has apparently been kicked in and the knob is completely gone. Perfectly healthy plants have been ripped out of the flower beds.

The smoke detector has been disabled (the cover was off and the battery was sitting on an adjacent shelf.) There is an addendum to the lease expressly prohibiting disabling the smoke detector).

There are bolt-sized holes in walls of the living room from where a baby-gate has been installed.

Here's what pertinent information I can find in the lease:

Under Alterations and Improvements: "Lessee shall make no alterations to the buildings on the demised premises or construct any building or make other improvements on the demised premises without the prior written consent of lessor..."

Under Maintenance and Repair: "Lessee will at his sole expense keep and maintain the leased premises and appurtenances in good and sanitary condition and repair during the term of this lease and any renewal thereof. In particular, lessee shall keep the fixtures in the house or on or about the leased premises in good order and repair...and at his sole expense shall make all required repairs to the plumbing, range, heating apparatus and electric and gas fixtures whenever damage thereto shall have resulted from lessees misuse, waste, or neglect or that of his employee, family, agent, or visitor...Lessee agrees that no signs shall be placed or painting done on or about the leased premises by lessee or at his direction without the prior written consent of lessor.

Under Default: "If any default is made in the payment of rent or any part thereof at the times hereinbefore specified or if any default is made in the performance of or compliance with any other term or condition hereof, the lease at the option of lessor shall terminate and be forfeited and lessor may reenter the premises and remove all persons therefrom. Lessee shall be given written notice of any default or breach and termination and forfeiture of the lease shall not result if, within 3 days of receipt of such notice, lessee has corrected the default or breach or has taken action reasonably likely to effect such correction within a reasonable time."

Naturally, we would be shocked and dismayed at what we saw today without consideration to breaking the lease and we would want these conditions to be rectified, so obviously contacting the tenants and asking them to fix these conditions is the first step. Our question is, what is a reasonable amount of time? The lease says if the non-compliance is fixed within 3 days of notification, the lease is not forfeited. 3 days would not BEGIN to fix this damage, nor do I think the tenants have the cash to make the repairs. But, as Draconian as this sounds, we now would like to get out of the lease in order to simplify and expedite the sale. Naturally, after seeing the condition of the property, we are not feeling inclined to be benevolent beyond the letter of the law.

So, 1) should we consult an attorney about the intricacies of this matter;or are we likely to get blown out of court? Should we just let the lease run out and ask them in the meantime to pretty please fix the damage?

2)What is a "reasonable" but not generous amount of time to allow rectifying the damage? We absolutely CANNOT show the house in its current state. And, can this letter come from us or must/should an attorney write it? If we write it, is it too heavy-handed or incorrect to state that they are in default of the lease, or must we "***** foot around"? The lease is co-signed by the tenant's father and he makes the rent payment. Should he be copied on the notification letter?

3) If the tenants don't repair the damage according to the terms of the lease and the letter/notice we send, is this damage enough basis for an unlawful detainer proceeding
3) Is there any merit to simply asking them to agree to break the lease and stay month-to-month until either the house sells or they find someplace else?

One small wrinkle is that we got a little excited and had a For Sale sign posted on the property (although the house is not technically "listed" so people are not streaming through it all day long). Subsequently, we discovered that the lease allows us "....the privlege of displaying the usual For Sale sign during the last 30 days of this lease." The lease is up in March, 2001. We didn't think this was a big deal at first, because our intent was to sell only to a buyer who would honor the remaining time on the lease. The tenants have not complained about this; and, in fact, have allowed a lock-box to be installed, to provide realtor-access. So, can their silence be construed as agreement or are we likely to get spanked on this issue? We don't want to too self-rightously trumpet the lease, if we have committed some egregious breach...not too big a deal, I don't think, but just wanted to include ALL the details.

I don't think this damage was deliberate to stall a sale--it looks too old and these events have happened over the last 2-3 weeks.

Any advice would be appreciated.

------------------
Hillary Janikula

[This message has been edited by HJanikula (edited September 26, 2000).]

[HomeGuru]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by HJanikula:
This is a long one, but here goes....
My husband and I own a piece of rental property in California. A few months ago we were approached by the tenants who initiated an unsolicited dialog about purchasing the home. The tenants' initial ballpark verbal offer was in-line with what we believed to be reasonable so we verified this by getting some market comps and retained a realtor to represent us in the transaction. When the realtor approached the tenants, they suddenly thought the amount that THEY suggested was ridiculous and completely out of line. So, no deal.

This was fine, except that we have now warmed up to selling the rental property and buying something else. So we informed the tenants that we would put the house on the open market (hoping, somewhat, that this would motivate them to reconsider purchasing the home.) We have a lease that is not due to expire until March 2001. Obviously,if the tenants want to buy the house, the transaction is much simpler. In light of the lease, we intended to seek an investment buyer so that the tenants' lease would not be disrupted. It has always been our intention to honor the lease, despite the complications that this introduces into the sale.

Today, we had a walkthrough scheduled with the realtor to inspect the property and make some valuation assessments. The property manager notified the tenants about the inspection according to the terms of the lease and California law. When we got to the house, we were appalled.

Rooms have been repainted (badly) and there is bright blue paint on the white acoustic ceilings. There are nail-sized holes in the walls. There is some kind of mysterious orange food (?) stain on the ceiling and walls (think sweet and sour sauce!) of one of the bed rooms. Paint has been scraped off the walls in huge sheets and it looks like the kids have been allowed to "carve" in the bathroom enamel. Kids have colored on the walls in the bedroom. The master bathroom door has apparently been kicked in and the knob is completely gone. Perfectly healthy plants have been ripped out of the flower beds.

The smoke detector has been disabled (the cover was off and the battery was sitting on an adjacent shelf.) There is an addendum to the lease expressly prohibiting disabling the smoke detector).

There are bolt-sized holes in walls of the living room from where a baby-gate has been installed.

Here's what pertinent information I can find in the lease:

Under Alterations and Improvements: "Lessee shall make no alterations to the buildings on the demised premises or construct any building or make other improvements on the demised premises without the prior written consent of lessor..."

Under Maintenance and Repair: "Lessee will at his sole expense keep and maintain the leased premises and appurtenances in good and sanitary condition and repair during the term of this lease and any renewal thereof. In particular, lessee shall keep the fixtures in the house or on or about the leased premises in good order and repair...and at his sole expense shall make all required repairs to the plumbing, range, heating apparatus and electric and gas fixtures whenever damage thereto shall have resulted from lessees misuse, waste, or neglect or that of his employee, family, agent, or visitor...Lessee agrees that no signs shall be placed or painting done on or about the leased premises by lessee or at his direction without the prior written consent of lessor.

Under Default: "If any default is made in the payment of rent or any part thereof at the times hereinbefore specified or if any default is made in the performance of or compliance with any other term or condition hereof, the lease at the option of lessor shall terminate and be forfeited and lessor may reenter the premises and remove all persons therefrom. Lessee shall be given written notice of any default or breach and termination and forfeiture of the lease shall not result if, within 3 days of receipt of such notice, lessee has corrected the default or breach or has taken action reasonably likely to effect such correction within a reasonable time."

Naturally, we would be shocked and dismayed at what we saw today without consideration to breaking the lease and we would want these conditions to be rectified, so obviously contacting the tenants and asking them to fix these conditions is the first step. Our question is, what is a reasonable amount of time? The lease says if the non-compliance is fixed within 3 days of notification, the lease is not forfeited. 3 days would not BEGIN to fix this damage, nor do I think the tenants have the cash to make the repairs. But, as Draconian as this sounds, we now would like to get out of the lease in order to simplify and expedite the sale. Naturally, after seeing the condition of the property, we are not feeling inclined to be benevolent beyond the letter of the law.

So, 1) should we consult an attorney about the intricacies of this matter;or are we likely to get blown out of court? Should we just let the lease run out and ask them in the meantime to pretty please fix the damage?

2)What is a "reasonable" but not generous amount of time to allow rectifying the damage? We absolutely CANNOT show the house in its current state. And, can this letter come from us or must/should an attorney write it? If we write it, is it too heavy-handed or incorrect to state that they are in default of the lease, or must we "***** foot around"? The lease is co-signed by the tenant's father and he makes the rent payment. Should he be copied on the notification letter?

3) If the tenants don't repair the damage according to the terms of the lease and the letter/notice we send, is this damage enough basis for an unlawful detainer proceeding
3) Is there any merit to simply asking them to agree to break the lease and stay month-to-month until either the house sells or they find someplace else?

One small wrinkle is that we got a little excited and had a For Sale sign posted on the property (although the house is not technically "listed" so people are not streaming through it all day long). Subsequently, we discovered that the lease allows us "....the privlege of displaying the usual For Sale sign during the last 30 days of this lease." The lease is up in March, 2001. We didn't think this was a big deal at first, because our intent was to sell only to a buyer who would honor the remaining time on the lease. The tenants have not complained about this; and, in fact, have allowed a lock-box to be installed, to provide realtor-access. So, can their silence be construed as agreement or are we likely to get spanked on this issue? We don't want to too self-rightously trumpet the lease, if we have committed some egregious breach...not too big a deal, I don't think, but just wanted to include ALL the details.

I don't think this damage was deliberate to stall a sale--it looks too old and these events have happened over the last 2-3 weeks.

Any advice would be appreciated.

<HR></BLOCKQUOTE>

My advice is short. Hire an attorney to cancel the lease agreement and evict these tenants.

Hire an attorney immediately. You may be able to evict them for disabling the smoke detector. You have a good case, & evictions take a long time in CA, so get started now. Go back & take pictures -- lots of them.

------------------
This is not legal advice and you are not my client. Double check everything with your own attorney and your state's laws.

HomeGuru and Tracey:
Thank you both for your quick replies. We have retained an attorney and the 3-day notice is on its way...

Hillary