Tenants backed out of Move In, want Money

[gryndor]

What is the name of your state (only U.S. law)? CA

I am the landlord of a property located in California, while I live in Arizona.

I showed the property in person to my potential tenants in mid-October, move-in date was set for November 15th, free November rent and first month due on December 1st (rent of $1000/month).

They loved the house and put down the $1000 deposit. They started emailing me during the first two weeks of November wanting to move in early, while my previous tenant was moving out. I had my Property Manager keep in contact with them about when the place would be available to them, always maintaining the Nov 15th date.

On November 14th, the tenants showed up at the door to get the keys, and luckily the Property Manager was at the house. He let them in and they asked about the paint job. My PM said he could re-paint a couple of the rooms for them, and they agreed. He went out and bought the paint, and they agreed the move-in would be put off for one or two more days until he completed the paint-job. They were also given the option of moving in on the 15th, and he could come back at a later date to paint, or they could buy whatever paint pleased them and I would take the price of it off their December rent with a receipt.

Today, November 15th, the move-in date, the tenants wrote me this email:

LandLord,

As per our rental agreement, the set move in date was the 15th of November. Upon inspection of the premises, moving in today is not an option. The house isn't up to code with cleanliness standards and residing conditions based on the contract. As this is an owner default in our rental agreement, I will unfortunately have to ask for my deposit back and decline rental of this property.

I deeply apologize for any inconvenience this may cause. Thank you for your time and attention to this matter.

If you can let me know if it is easier for you to deposit the refundable security deposit directly into my bank account: Account # xxxxxxx or to send it via post office.

Please feel free to call me if you have any questions.

Tenant

My questions are these: The house is absolutely in clean rentable condition. Can the tenants back out now? Am I required to return the deposit? Or does it fall into the 30-day notice realm where that deposit transfers over to defaulted rent? If the deposit turns into the first month of rent, do I wait until December 1st to find new tenants, or try to rent right away to mitigate my losses, and return the mitigated portion to the tenant?

 

[Antigone*]

What is the name of your state (only U.S. law)? CA

I am the landlord of a property located in California, while I live in Arizona.

I showed the property in person to my potential tenants in mid-October, move-in date was set for November 15th, free November rent and first month due on December 1st (rent of $1000/month).

They loved the house and put down the $1000 deposit. They started emailing me during the first two weeks of November wanting to move in early, while my previous tenant was moving out. I had my Property Manager keep in contact with them about when the place would be available to them, always maintaining the Nov 15th date.

On November 14th, the tenants showed up at the door to get the keys, and luckily the Property Manager was at the house. He let them in and they asked about the paint job. My PM said he could re-paint a couple of the rooms for them, and they agreed. He went out and bought the paint, and they agreed the move-in would be put off for one or two more days until he completed the paint-job. They were also given the option of moving in on the 15th, and he could come back at a later date to paint, or they could buy whatever paint pleased them and I would take the price of it off their December rent with a receipt.

Today, November 15th, the move-in date, the tenants wrote me this email:

LandLord,

As per our rental agreement, the set move in date was the 15th of November. Upon inspection of the premises, moving in today is not an option. The house isn't up to code with cleanliness standards and residing conditions based on the contract. As this is an owner default in our rental agreement, I will unfortunately have to ask for my deposit back and decline rental of this property.

I deeply apologize for any inconvenience this may cause. Thank you for your time and attention to this matter.

If you can let me know if it is easier for you to deposit the refundable security deposit directly into my bank account: Account # xxxxxxx or to send it via post office.

Please feel free to call me if you have any questions.

Tenant

My questions are these: The house is absolutely in clean rentable condition. Can the tenants back out now? Am I required to return the deposit? Or does it fall into the 30-day notice realm where that deposit transfers over to defaulted rent? If the deposit turns into the first month of rent, do I wait until December 1st to find new tenants, or try to rent right away to mitigate my losses, and return the mitigated portion to the tenant?

Mitigate your damages by listing the home as quickly as you can. You have a deposit that you may keep since you took the home off the market and held for them.

You may have additional damages that you might sue for after you get new tenants in that would all depend on the rental agreement you both signed.

 

[sandyclaus]

Your tenants gave you the deposit based upon acceptance of the property they intended to rent, SIGHT UNSEEN. They cannot now decide that the property isn't acceptable in order to perform on their agreement to move-in.

I could see that if there were a major safety or habitability issue involved, the tenant would have their right to back out, but that's not the case. They are trying to back out based on their claim that the property does not meet THEIR cleanliness and residing standards. (What does that even MEAN???)

You didn't say whether or not the tenants signed a lease or rental agreement. Absent a written lease, they would be considered month-to-month tenants, and CA law requires a written 30-day notice of their intent to terminate. Note that per CA Civil Code 1946, email is NOT considered a proper form of written notice, but states that:

...the lessee may give such notice by sending a copy by certified or registered mail addressed to the agent of the lessor to whom the lessee has paid the rent for the month prior to the date of such notice or by delivering a copy to the agent personally.

Since your tenants were getting free rent for the two weeks in November, their obligation to pay rent wouldn't start until the 1st of December. I suggest that you make a concerted effort to get the place rented prior to that time to mitigate your damages. However, unless and until the proper written notice is provided to you, you can hold the tenants fully liable for the rent under your agreement. You are under NO OBLIGATION to refund their security deposit until you either re-rent the unit to another tenant, or 30 days has passed since they gave you proper written notice.

 

[gryndor]

We did have a month to month rental agreement signed, but their only notice has been emailed... I sincerely doubt that they'll ever send real notice unless I mention that specifically.

Thank you for clearing that up for me... I was really furious when I got that email, I couldn't believe the nerve.

Gryn

 

[sandyclaus]

We did have a month to month rental agreement signed, but their only notice has been emailed... I sincerely doubt that they'll ever send real notice unless I mention that specifically.

Thank you for clearing that up for me... I was really furious when I got that email, I couldn't believe the nerve.

Gryn

Well, unless and until they provide you with PROPER notice of their intent not to occupy/terminate the rental agreement, you can continue to hold them liable for the rent. Or until you get a new tenant in there to replace them, whichever occurs first.

It's not your job to notify them of their legal obligations regarding giving proper notice. They are adults (presumably). They will learn the hard way when they don't get their money back as demanded, and probably get pretty indignant when that happens. But that won't be YOUR fault...

 

[gryndor]

Ok, well I responded to her with a civil too-bad-so-sad reply and she wrote this:

> Based on Calfornia law it clearly states as defined:
> There is no such thing as a “non-refundable” security deposit. No matter what it’s called—a key deposit, cleaning fee, move-in fee, closing costs, last month’s rent, etc.—all money you pay in addition to your first month’s rent is refundable. Since “nonrefundable” deposits are illegal, don’t worry if your rental agreement includes a section about a “nonrefundable” deposit. This section will not be valid even if you have signed the rental contract or agreed to it in California.
>
> We were not given a chance to address any issues, due to no walk through being conducted. During a brief walk through made by PROPERTY MANAGER on November 13, the home has a very strong odor from cigarette smoke, the entire home still required painting, the outside is cluttered with debris and was stated it would stay there until you can get a bid for removal by PROPERTY MANAGER, the carpets have not been professionally cleaned and was stated by PROPERTY MANAGER they would not be cleaned. I suffer from migraines and smoke is an inhibiting factor to those health issues along with my children.

> Furthermore, as the owner of the property you agreed on the set move in date ofNovember the 15th. By that time a walk through was supposed to be conducted and all issues addressed deeming it livable within health code and cleanliness regulations. As it is the 15th and we are still unable to reside at the residence, you as owner have defaulted on the contract.
>
> Based on these factors as tenants and the rights per California Law prior to accepting keys and moving in, the living conditions do not meet our standards. First month rent was to be paid on December 1, we were also given other verbal agreements that we could move in prior to November 15th as well which did not occur. If you would like me to conduct a thorough walk through with Raymond and my lawyer I will do so and at that time if the standards are acceptable we will move in. I have been very honest and upfront with you and I apologize for the inconvenience this has caused you being out of state. Based on your rights as an owner you do have 21 days to refund the deposit. We can work together to come to an agreement or if you choose based on the last email you sent I can have my lawyer contact you to find a resolution.

So point 1. She was not told she could move in early, she was told that I would see if I possibly could make it happen.
2. the house was advertised as a smoking household, and it smelled like smoke when they came to look at the house in October.
3. I cleaned the carpets with a professional machine myself, about a month ago.
4. Ancillary agreements are not binding when we have a written rental agreement.
5. She has never given notice in an acceptable legal way (email only).
6. She was given numerous opportunities to do a walk through but never had the time.
7. The deposit was given with the intention of holding the house, and if I were to return it I would suffer losses from the expectation of their moving in and subsequently backing out in the eleventh hour.

What would a tenant's lawyer even have to say to me? Is there something in particular that I should say to cover my ass, and or shut her down?

 

[sandyclaus]

Ok, well I responded to her with a civil too-bad-so-sad reply and she wrote this:

> Based on Calfornia law it clearly states as defined:
> There is no such thing as a “non-refundable” security deposit. No matter what it’s called—a key deposit, cleaning fee, move-in fee, closing costs, last month’s rent, etc.—all money you pay in addition to your first month’s rent is refundable. Since “nonrefundable” deposits are illegal, don’t worry if your rental agreement includes a section about a “nonrefundable” deposit. This section will not be valid even if you have signed the rental contract or agreed to it in California.
>
> We were not given a chance to address any issues, due to no walk through being conducted. During a brief walk through made by PROPERTY MANAGER on November 13, the home has a very strong odor from cigarette smoke, the entire home still required painting, the outside is cluttered with debris and was stated it would stay there until you can get a bid for removal by PROPERTY MANAGER, the carpets have not been professionally cleaned and was stated by PROPERTY MANAGER they would not be cleaned. I suffer from migraines and smoke is an inhibiting factor to those health issues along with my children.

> Furthermore, as the owner of the property you agreed on the set move in date ofNovember the 15th. By that time a walk through was supposed to be conducted and all issues addressed deeming it livable within health code and cleanliness regulations. As it is the 15th and we are still unable to reside at the residence, you as owner have defaulted on the contract.
>
> Based on these factors as tenants and the rights per California Law prior to accepting keys and moving in, the living conditions do not meet our standards. First month rent was to be paid on December 1, we were also given other verbal agreements that we could move in prior to November 15th as well which did not occur. If you would like me to conduct a thorough walk through with Raymond and my lawyer I will do so and at that time if the standards are acceptable we will move in. I have been very honest and upfront with you and I apologize for the inconvenience this has caused you being out of state. Based on your rights as an owner you do have 21 days to refund the deposit. We can work together to come to an agreement or if you choose based on the last email you sent I can have my lawyer contact you to find a resolution.

So point 1. She was not told she could move in early, she was told that I would see if I possibly could make it happen.
2. the house was advertised as a smoking household, and it smelled like smoke when they came to look at the house in October.
3. I cleaned the carpets with a professional machine myself, about a month ago.
4. Ancillary agreements are not binding when we have a written rental agreement.
5. She has never given notice in an acceptable legal way (email only).
6. She was given numerous opportunities to do a walk through but never had the time.
7. The deposit was given with the intention of holding the house, and if I were to return it I would suffer losses from the expectation of their moving in and subsequently backing out in the eleventh hour.

What would a tenant's lawyer even have to say to me? Is there something in particular that I should say to cover my ass, and or shut her down?

I can see the point about the house smelling like smoke, but there is no health code that regulates the smell of cigarette smoke in a house. To appease them, you MAY want to hire a professional carpet cleaner to deal with this, as it could also cause other potential non-smoking tenants to balk at renting the property. In addition to the carpeting, cigarette smoke can stain/discolor and permeate the paint on the walls. If you have not already done so, you should also consider re-painting. (Both of these expenses could easily be passed on to the prior tenant who caused the smoke damage.) I would say that you or your property manager need to fully photograph or video the property at this point (with something showing the current date) so that if there is an issue of cleanliness, you will have definitive proof of the condition.

If she is considering the money she gave you to be a "security deposit", then it was already agreed they were definitely moving in to the property. I'm assuming you never told her that the security deposit was non-refundable, but only that she would NOT get the money back due to her backing out of the agreement to move in, which was the appropriate response.

I believe that their threats to involve their lawyer is just an attempt to bully you into giving up the deposit. Don't fall for it. You have two weeks to find another tenant before it starts eating into your bottom line. And you still have the point of not getting proper written notice to fall back upon.

 

[gryndor]

They just won't quit!

Now they've sent a new email... trying to work out MOST of their deposit by taking advantage of the free November rent I allowed, and the late fee per each day into December that the 30-day notice would take to expire. I wonder if this holds any water, because it feels like they're still trying to strong-arm me, and really how would they serve me small claims documents since they do not know my new address :/

LANDLORD,

After speaking with our lawyer, Bryan Coggins of Coggins and Johnston, we wanted to ensure clarification that you're aware we are terminating any interest in the property of ADDRESS in TOWN. As of November 15th, we gave you written notice via email that we will not be moving into the property.

By California law an email is considered a written notice. With a full 30 days notice, our rental agreement is void as of December 15th. Based on the rental contract that we signed, we are charged $10 a day for a late rental payment. Therefore, December 1st through the 15th is equal to $150.

As it is stated on the rental contract, we were given free rent for the month of November. We are willing to make a compromise with you for the return of our security deposit, originally $1000, for $750.

If we are unable to come to a compromise within 3 days, per our lawyer, we will be forced to settle this in small claims court.

Which, at that time you'll be summoned to California via a process server, which in turn would cost you money, on top of us charging you two times the security deposit plus any legal fees incurred. Regardless we would be rewarded at least $850 (1000-150) due back to us and if you choose to not meet us in court we will win by default. We are willing to compromise with you as we don't want this process dragged out, and I am sure you don't as well.

Can I just tell them to go pound sand? Is email notification really allowed per CA law, as previously negated in this thread? If they don't have my address can they serve me court papers? And if they faked a Proof of Service (I know people that have won in court with this tactic) would the Judgement stick?

Gryn

 

[justalayman]

I do not believe email is acceptable but if memory serves me correctly, if you act as if you had received notice (basically proving you had received notice), it is proof you have received notice, even if notice was by some means other than a legally acceptable written notice.. I'll try to find support for this.

 

[sandyclaus]

I do not believe email is acceptable but if memory serves me correctly, if you act as if you had received notice (basically proving you had received notice), it is proof you have received notice, even if notice was by some means other than a legally acceptable written notice.. I'll try to find support for this.

It's NOT proper notice for service of a termination notice per CA Civil Code 1946. Here is the relevant statute for you, with the pertinent section HIGHLIGHTED:

A hiring of real property, for a term not specified by the
parties, is deemed to be renewed as stated in Section 1945, at the
end of the term implied by law unless one of the parties gives
written notice to the other of his intention to terminate the same,
at least as long before the expiration thereof as the term of the
hiring itself, not exceeding 30 days; provided, however, that as to
tenancies from month to month either of the parties may terminate the
same by giving at least 30 days' written notice thereof at any time
and the rent shall be due and payable to and including the date of
termination. It shall be competent for the parties to provide by an
agreement at the time such tenancy is created that a notice of the
intention to terminate the same may be given at any time not less
than seven days before the expiration of the term thereof. The notice
herein required shall be given in the manner prescribed in Section
1162 of the Code of Civil Procedure or by sending a copy by certified
or registered mail addressed to the other party. In addition, the
lessee may give such notice by sending a copy by certified or
registered mail addressed to the agent of the lessor to whom the
lessee has paid the rent for the month prior to the date of such
notice or by delivering a copy to the agent personally.

The law is clear here. There are no other allowed methods specified in the statute. If their attorney claims otherwise, tell him to provide you the statute or cite that says so. In SOME other types of cases, email could be construed as proper notice, but NOT in the service of notice by either party to terminate a rental agreement. And most certainly not when it is so clearly outlined in the statute.

 

[aabbcc]

I think they are blowing smoke. If they really have an attorney, you would have received a letter from the law firm. Most attorneys are not interested in such small cases.


If it were me, I would tell them to have their attorney contact me directly.

You did nothing wrong. Go re-rent the property.

 

[justalayman]

It's NOT proper notice for service of a termination notice per CA Civil Code 1946. Here is the relevant statute for you, with the pertinent section HIGHLIGHTED:

.

As I said, I believe I have read where, regardless of how notice was given, if the LL acknowledges notice was give by action, it is accepted that notice was given. It is in some case law. Give me some time to find it.

 

[LdiJ]

Now they've sent a new email... trying to work out MOST of their deposit by taking advantage of the free November rent I allowed, and the late fee per each day into December that the 30-day notice would take to expire. I wonder if this holds any water, because it feels like they're still trying to strong-arm me, and really how would they serve me small claims documents since they do not know my new address :/



Can I just tell them to go pound sand? Is email notification really allowed per CA law, as previously negated in this thread? If they don't have my address can they serve me court papers? And if they faked a Proof of Service (I know people that have won in court with this tactic) would the Judgement stick?

Gryn

There isn't even any logic in that email. If they are formally giving you notice now, that means that they at least owe rent through the 15th of December. Therefore, that whole "late fee" bit is ridiculous and irrelevant.

 

[Blamona]

Free month's rent

I'm not a lawyer, and don't know CA law, but I think you need to look into the "first free month" part. Common logic would assume that the free month's rent is part of the contract based on how long they would live there, meaning the broke the contract by not moving in, and should NOT be entitled to the first months rent applied?

If not, you'd have 1 months tenants all the time not paying! I would assume the first month free is in contemplation of moving for x number of months, and since they didn't move in, would void that portion.

While that may not have legal grounds, it's worth asking about.

On a different note, I bet they would have become major problems, and had you had them move in in the long run in the end would have ended costing you a lot more. While I feel they are probably bluffing about a lawyer(who pays a lawyer $1000 to collect $750?) you might want to consider it good riddance and just the cost of the much bigger headaches you would have had if they moved in.

I also wonder if they took pictures during their "move in " on the 15th to prove it was unlivable. Bet they didn't. I'm sure your property manager can take some pictures for you. And again, while I don't know legally, dirty carpets and smoke smell might not qualify unlivable. Unlivable usually means leaky roofs and no running water, not a change of mind.

So 2 questions you can ask if you decide to peruse:
1. Does not moving in void the first free month?
2. Is the place unlivable based on laws, not "it's not clean enough".

 

[Searchertwin]

These tenants have done this before. They sound like they know how to bully with words.

I agree with Blamona, "On a different note, I bet they would have become major problems, and had you had them move in in the long run in the end would have ended costing you a lot more."

The lawyer could be family, knowing they would be there if needed.
But a lawyer would send a letter. You have not got one from them.

In the CA Civil Code, it mentions that one has to follow procedures listed in the "Section 1162 of Code of Civil Procedure. What is the manner prescribed in that section? It has to be different than sending a copy by certified or reg mail because main word is "OR"

"herein required shall be given in the manner prescribed in Section
1162 of the Code of Civil Procedure OR by sending a copy by certified
or registered mail addressed to the other party. In addition, the
lessee may give such notice by sending a copy by certified or
registered mail addressed to the agent of the lessor to"

In any case, They know they are in the wrong because they are offering you the late fees.
You can continue but I would take the money and let them be on their way. They will be TROUBLE.
Let them think they won. What goes around will come around.