Can I terminate the lease of a tenant in a rent control area who has only occupied rental for less than 12 months?

[Andre05]

What is the name of your state? California

We are in the process of completing the purchase for a duplex in Los Angeles (area code 90038).

The duplex is in a rent control area and the one side of the duplex is occupied by a tenant that signed to lease the property until 2021 for $800 below market value.

We were intending for the property to be income producing and because of this we will have to pay part of the mortgage out of pocket.

After doing some research I found this:

"Vacant Units and Removing Tenants: If a rental unit is vacant, a landlord is permitted to reset the gross rental rate for the unoccupied unit to market rental rates. (Civ. Code § 1947.12(b)). The statute, however, prevents a landlord from terminating the tenancy of a tenant that has continuously occupied a rental unit for at least 12 months, unless the landlord has “just cause” for removing the tenant. (Civ. Code § 1946.2(a)). The statute establishes two different “just cause”

Will we be within our right to break the lease?

 

[Zigner]

What is the name of your state? California

We are in the process of completing the purchase for a duplex in Los Angeles (area code 90038).

The duplex is in a rent control area and the one side of the duplex is occupied by a tenant that signed to lease the property until 2021 for $800 below market value.

We were intending for the property to be income producing and because of this we will have to pay part of the mortgage out of pocket.

After doing some research I found this:

"Vacant Units and Removing Tenants: If a rental unit is vacant, a landlord is permitted to reset the gross rental rate for the unoccupied unit to market rental rates. (Civ. Code § 1947.12(b)). The statute, however, prevents a landlord from terminating the tenancy of a tenant that has continuously occupied a rental unit for at least 12 months, unless the landlord has “just cause” for removing the tenant. (Civ. Code § 1946.2(a)). The statute establishes two different “just cause”

Will we be within our right to break the lease?

You will be as bound by the lease as the tenant is. The snippet you posted doesn't apply to your situation.

 

[adjusterjack]

Will we be within our right to break the lease?

No.

You'll be in breach of contract if you try that. I'm not sure you can even get rid of the tenant or substantially raise the rent on expiration in a rent controlled city.

We were intending for the property to be income producing and because of this we will have to pay part of the mortgage out of pocket.

If you aren't prepared to do that at some point or other, you have no business buying the place.

 

[zddoodah]

Terminating a tenancy and breaking a lease are two very different things. If your tenant has a lease "until [some unstated month in] 2021," the only way you can terminate the tenancy before the end of the lease is if the tenant fails to pay rent or otherwise breaches the lease.

Note, by the way, that your property is subject both to the Civil Code and the City of Los Angeles rent control ordinance, which is quite complex and a pain in the ass for landlords -- especially those who are not well-versed in its requirements. I would strongly encourage you to consult with a local attorney before proceeding with the purchase.

 

[Litigator22]

What is the name of your state? California

We are in the process of completing the purchase for a duplex in Los Angeles (area code 90038).

The duplex is in a rent control area and the one side of the duplex is occupied by a tenant that signed to lease the property until 2021 for $800 below market value.

We were intending for the property to be income producing and because of this we will have to pay part of the mortgage out of pocket.

After doing some research I found this:

"Vacant Units and Removing Tenants: If a rental unit is vacant, a landlord is permitted to reset the gross rental rate for the unoccupied unit to market rental rates. (Civ. Code § 1947.12(b)). The statute, however, prevents a landlord from terminating the tenancy of a tenant that has continuously occupied a rental unit for at least 12 months, unless the landlord has “just cause” for removing the tenant. (Civ. Code § 1946.2(a)). The statute establishes two different “just cause”

Will we be within our right to break the lease?

Speaking of snippets here's another you might keep in mind while greedily searching the Code for a means of autocratically ousting the tenant short of the term of his lease; all curtsey of the venerable Founding Fathers:

"No State shall . . . pass any . . . Law impairing the Obligation of Contracts . . . " (United States Constitution Article 1 Section 10 - Powers Denied to the States)

 

[FarmerJ]

Andre If you havent closed and can get out of the deal I suggest you do it , If the tenant had been there for many many years then they got a sweet heard deal by being there for so long BUT I wonder if the the seller played a nasty game on you being that the tenant may have been a friend of the owner or relative and gave that lease to the tenant to force that new landlord into a position of never being able to get rid of a tenant until the tenant dies or cant pay. think about where that units rent might be in 10 years or what if that tenant lived another 20 yrs or 25 years , even a 60 yr old tenant could live another 25 yrs and then this property will still have a limited cash flow, You never did say how much down you put on it but you might have to consider walking away and flat out tell the seller you think the lease being set 800.00 under market is a deal breaker.