Question: I just drove by my rental house and noticed a sign in the front yard indicating that the tenant has applied for rezoning so he can conduct a software development business at the premises. The tenant never asked permission to do this. I feel this action is a breach of trust, and I have lost confidence in the tenant. In addition, I don’t know how to monitor this activity in the future. Do you have a position on this circumstance and/or what action do you recommend on my part?
James McKinley, an attorney for landlords, replies:
Your tenant has no right to request a zoning change for property he is renting for residential purposes. Almost all residential leases will contain a provision stating that the premises are for residential use only, and that the residents may not conduct any sort of business or commercial activity at the premises. You should serve a three-day notice to perform covenant or quit. This notice should quote the paragraph in the lease prohibiting commercial activity, state how the paragraph is being breached, and inform the tenant that if he does not cease all commercial activity at the leased premises, his lease will be terminated, and you will commence action to recover possession of the real property. If the tenant continues to conduct a software development business from the leased premises, you may file an unlawful detainer action.
Steven Kellman, an attorney for tenants, replies:
Your tenant has the right to apply for rezoning anytime and anywhere. Whether it gets granted is another story. Regardless of the lease, the tenant may run into some roadblocks with the city council or the planning commission, or at any required public hearings. First of all, the tenant holds no ownership interest in the land and is simply trying to “design” a way, via obtaining the city’s permission, to conduct a business out of the home. Very creative, but isn’t that what we would expect from a software designer? This type of business (mainly working on the computer) may indeed be run out of the home without rezoning. The tenants may simply apply for a Home Occupation Permit offered by some cities because the business may not attract customers to the site or otherwise offend the neighbors. It may offend you, as the landlord, since the tenant would be essentially getting a commercial space for the price of a residential one. James is correct about serving a three-day notice if the lease prohibits the business activity. If there are no restrictive lease provisions, the tenants may not be doing anything wrong by attempting to run a business from the home, as long as they can get permission from the city in which they live. Of course, when the lease expires, you can correct the situation by amending the lease if it is missing any essential terms about the use of the property.
Question: I have a condo that I rent out. Recently, I was billed $150 by the condo association for an after-hours emergency entry. Apparently, my tenant’s friend was concerned about him when he didn’t show up for work and was not answering his door or cell phone. This friend called the condo association and got them to make an emergency entry. My tenant was not feeling well, but it was not an emergency. Who should pay for the bill? And would it make a difference if it were an emergency?
Landlords’ attorney McKinley replies:
This is an interesting question, because you, as the property owner, entered into contracts with both your tenant and the homeowner association. However, there is no contract between the tenant and the homeowner association. You should review your condominium association’s Covenants, Conditions and Restrictions (CC&Rs) to see under which circumstances, if any, the association may enter the unit without prior permission of the condominium owner. In addition, the CC&R’ would specify who would be responsible for those charges. Typically a homeowner association will enter a condominium unit only in the event of an emergency such as flooding, fire, or some other condition that is damaging the property and that can be remedied only by entering the condominium unit. Normally, the association, or its representative, the property management company, is required to attempt to notify the property owner first. Presumably, the homeowner association and the property management company both have your contact information, and failed to contact you. Additionally, it is unlikely that the CC&Rs provide for entry into the premises to check on the welfare of an occupant.
You should ask the homeowner association to reverse the charges because you were not contacted, and because they had no business making the emergency entry based on the word of your tenant’s friend. Finally, you should also review the contract you have entered into with your tenant. Hopefully it contains a provision stating that any charges or fees incurred from the homeowner association, because of the acts or omissions of the tenant, are the tenant’s responsibility. In that case, any charges from the homeowner’s association would be passed through to your tenant.
This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of “Property Management for Dummies” and co-author of “Real Estate Investing for Dummies,” and San Diego attorneys Steven R. Kellman, director of the Tenant’s Legal Center, and James McKinley, principal in a law firm representing landlords.
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