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Real Estate Today

Definition of `Normal' Wear and Tear Creates Snare for this Landlord

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Robert S. Griswold | Steven R. Kellman | Ted Smith
9-February-2003 Sunday

This column on issues confronting renters and landlords is written by Counselor of Real Estate and Certified Property Manager Robert Griswold, host of Real Estate Today! with Robert Griswold (9 a.m. Saturdays on AM1130 - KSDO radio, or on the Internet at www.retodayradio.com), and by attorneys Steven R. Kellman, director of the Tenants' Legal Center, and Ted Smith, principal in a law firm representing landlords.

QUESTION: Is there a way to calculate "normal wear and tear," such as 10 years for carpeting or every three years for painting? Does it matter if a family of four with pets are residing in the rental or just a single grandma?

ANSWER: Tenants' attorney Kellman: The code that governs the handling of security deposits uses the term "ordinary wear and tear" to describe the allowable amount of use (i.e. wear and tear) of a rental without the tenant being financially responsible for repairs or maintenance.

A certain amount of "normal" use of the rental unit will result in an anticipated and reasonable amount of wear that will result in the need for repair, replacement or other maintenance work. The tenant should not be responsible for these costs since they are considered normal maintenance and the cost of being a landlord.

The time frame for each item such as carpets or paint vary depending on certain factors which include the quality of materials used and the number of tenants (and pets) in a household. There is no exact amount of time, by law, that each item should last before it is worn out and needs maintenance, repair or replacement.

Some landlords may have items wear out unreasonably soon due to exceptionally poor or cheap materials used. Other landlords may have items in their rentals last a very long time because of high quality materials they chose to use.

Now factor in the variance between a full household with heavy wear behavior as opposed to a single person who works two shifts and is hardly home. Each situation may be considered normal, at least for them.

What is normal and ordinary wear and tear in each situation continues to defy exact definition despite our best efforts. Some management agencies make a good effort at resolving this dilemma by telling the tenant upfront that certain of their items have anticipated life spans under normal use. As long as those time frames are reasonable, both landlord and tenant may use them to at least try and assess who will be responsible when an item wears out or significant maintenance is required.

Big renege

Question: I have a signed and dated receipt and holding deposit agreement from a qualified applicant of $1,000 that says the applicant will pay the remaining balance of one month's rent and security deposit minus the holding deposit. It also states "the landlord and applicant agree that if applicant cancels or fails to sign rental agreement and pay funds, the landlord may retain the deposit."

The applicant now says she lost her job, will not be moving in, and can't afford the higher rent. Can I keep any part of the $1,000 since I have to advertise again and find another qualified applicant?

Landlord's attorney Smith: You did a good job by having the prospective resident sign a holding deposit agreement. Without a written agreement, the law is unclear as to what deductions are proper. After approval, the applicant did not have the right to cancel the agreement to rent. The provision in the holding deposit agreement allows you to retain at least a portion of it.

You have indicated that your agreement allows you to retain the entire $1,000 holding deposit in the event of cancellation. Some judges could disagree with this and require you to show the court what your actual monetary losses are. Some courts would hold that you can only deduct the daily rental value from the date of cancellation until the premises are successfully re-leased, together with advertising and other costs.

Either way, if you choose to retain the entire $1,000 or your actual losses, if less, provide a written accounting, and, if applicable, any refund, within 21 days of the applicant's cancellation.

Tenant's attorney Kellman: The law disfavors penalties in rental contracts as being improper liquidated damages clauses. Here, you have a clause in your agreement that mandates the tenant to forfeit the entire holding deposit regardless of the damage you may suffer, if any. This is unfair and probably unenforceable even if you want to keep only a part of it.

You may try and soften the problem with keeping the money by only keeping a portion of it but that does not make that provision valid. You would arbitrarily choose how much to keep without regard to any preagreed standard of how much to keep and under what circumstances.

How much is too little or too much? By keeping any money, you risk a claim for that money by the tenants. There are option-type of contracts that keep a unit off the market, pending a possible formation of a contract. Here, the entire option amount may be retained upon the failure to enter into a contract within a given period.

Those agreements must be specific and meet certain legal guidelines to be valid. Your agreement does not appear to be one of these.

A rug's life

Question: Before renters moved into my leased condo, we did a walk-through inspection. The only item that needed fixing was a closet door.

Now they're saying the carpet in the living room was not in good condition. They suggested amending the rental agreement to reflect that. To my knowledge the carpet is fine. I had the carpet restretched, new padding was added, and cleaned thoroughly before they moved in. Do I have to amend the agreement per their request?

Landlord's attorney Smith: You should not acknowledge that the carpet is in poor condition. Further, you are not legally required to modify your rental agreement with this admission.

As the landlord's attorney, I think you should turn things around. Get the tenant to sign an addendum to the rental agreement that acknowledges you have stretched and cleaned the carpet and that it was approved by them.

Tenant's attorney Kellman: Ted is right on when he says that you do not need to modify the rental agreement based on the tenants' request to do so. The facts control the situation regardless of that amendment. Here, you say the carpet was "fine." You replaced the padding, had it stretched and then cleaned.

Despite these efforts the tenants said the carpet was not in good condition. What a surprise. Carpet has a limited useful life and after that time passes (usually about seven years or so), it needs to be changed. Replacing worn-out padding and then restretching it leads me to believe the carpet had outlived its useful life and should have been replaced.

Of course, the carpet may have looked "fine" right after a cleaning and restretching, but those are temporary fixes which do not last very long. It is reasonable that after a few months, the carpet reverted back to its old "replace me" condition.

Old carpet can surely be a habitability concern. Due to its age, it may trap mold or other contaminants that may not be cleaned effectively. Old carpet also causes trip-and-fall or carpet nail puncture hazards. You do not need to change the lease, just the carpet.

IF YOU'RE A TENANT OR LANDLORD, the authors stand ready to answer your questions in this column, although letters cannot be answered individually. Write them at: Rental Roundtable, Homes Section, San Diego Union-Tribune, P.O. Box 120191, San Diego, CA, 92112-0191. Or you may e-mail them at rgriswold.sdut@retodayradio.com

Copyright Union-Tribune Publishing Co.

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Robert Griswold and the Real Estate Today! radio show strongly support the intent and the letter of all federal and state fair housing laws.  As a reminder to all owners and managers of real estate, note that all real estate advertised is subject to the Federal Fair Housing Act, which makes it illegal to advertise "any preference, limitation, discrimination because of race, color, national origin or ancestry, religion, sex, physical disability, or familial status, or  intention to make any such preference, limitation or discrimination." Additional state and/or local fair housing laws may also apply.  Be sure to inform all persons that all dwellings offered or advertised are on an equal opportunity basis.

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Revised and Updated - Wednesday, April 26, 2006

Robert S. Griswold, CRE, CPM, CCIM, PCAM, GRI, ARM
Griswold Corporate Center
Griswold Real Estate Management, Inc.
5703 Oberlin Drive, Suite 300
San Diego, CA 92121-1743
Phone: (858) 597-6100
Fax: (858) 597-6161

Email: rgriswold.ret@retodayradio.com

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