Booming Market Pushing Rents Higher and Higher

Robert Griswold | Steven R. Kellman | Ted Smith
09-Aug-1998 Sunday

This column on issues confronting renters and landlords is written by Certified Property Manager Robert Griswold (host of "Real Estate Today" (1 p.m. Saturdays on KOGO, AM 600), and by attorneys Steven R. Kellman, director of the Tenants' Legal Center, and Ted Smith, principal in a law firm representing landlords.

Q: A year ago, when I moved in, I was offered a month-to-month rental agreement at $695 or a $50 a month discount for a six-month lease, at $645. I chose the six-month lease and everything was fine until it expired. Then I received a notice saying that the market value was now $710 and I could either sign another six-month lease at $660 or roll over to a month-to-month at $710.

When I called the resident manager expressing concern about future increases, he explained that my rent could go up again but it was the policy to keep rents at least $25 below market.

I went ahead and signed a lease renewal. Guess what? I just got another letter saying the market value is now $20 higher and my choices this time are a month-to-month at $730 or a six-month lease renewal at $680.

I have compared rents in the area and my building seems to be lower than many others. I can't afford to pay the higher rent or to move. Is there anything that can be done to prevent a raise every six months?

A: Griswold: Yes, it is legal for the owner to raise your rent at the time the lease expires or upon a 30-day notice for month-to-month rental agreements.

Unfortunately, you are experiencing first-hand the results of a dramatic shift in demand for San Diego rentals over the last 18 months.

After four to five years of a downturn, the market today is extremely tight with vacancies below 3 percent in many areas. Remember that owners during the downturn in some cases lost their properties to foreclosure, or cut back rents sharply. Owners today are anxious to recover the ever-increasing costs of operating an apartment community.

With San Diego's strong economy and a limited supply of apartments, there is only way for rents to go -- up! You can only avoid potential further increases by committing to a longer-term lease.

Q: I recently moved from my apartment, leaving it in good shape with no excessive damage beyond normal wear and tear. The landlord called and said that he will return my deposit minus the costs for cleaning and painting. A friend claims that it is illegal to be charged for cleaning and painting since we rented for more than two years. Is this true?

A: Kellman: No. There is no such standard that shifts the burden of cleaning and painting to the landlord after a specific period of tenancy.

The general rule is that the longer you live in a place, the more it is expected that a landlord will have to paint at his own expense. Two years is a reasonable period to expect a landlord to paint at his expense but it is not a specific law.

Some landlords use a sliding scale and prorate expenses based on the length of the tenancy. It is tough to get around the tenant's obligation of basic cleaning. Dirt knows no calendar.

I assume you cleaned the place before moving out. If something was stained due to age, wear or normal use, you should not be responsible for it. Some worn-out items just can not be made to look like new.

Such conditions will actually require some level of repair or replacement that should be paid for by the landlord if it was caused by normal use.

Griswold: Steve is correct about the lack of any objective standard to determine exactly what constitutes damage beyond normal wear and tear.

However, unless the quality of paint used in your rental unit is substandard, I disagree with him about placing the burden of painting on the landlord after only two years.

Good paint should last three to five years, or even longer. Even if the paint didn't hold up well, remember that the owner is only required to address health and safety or habitability items, not cosmetic repairs.

Generally, paint is considered to be cosmetic.

For purposes of determining the proper charge for your security deposit refund, the condition of the paint upon move-in, the length of your tenancy, and the number of occupants are all factors that must be considered by the owner.

Q: I have recently inherited a small rental property and am concerned that I do not have the knowledge or time to properly manage it. Are there benefits in having a property management company?

A: Griswold: This is a very common question that every owner asks, including those who swear by their property manager and those who swear at their property manager.

As an owner, you must be willing to make the effort to learn the laws plus develop and implement sound policies and procedures that are commensurate with rental property management. This takes time. Even the best landlords will occasionally be faced with the midnight call or chronic problem tenant.

Of course, for many owners there is no one who will manage their property like they will. For owners who are currently managing their own property, the number one goal in hiring a property manager is usually the desire to utilize their talents in more productive ways or they have reached burnout or financial chaos from bad decisions or apathy.

Another common challenge is that owners find themselves getting too close to tenants and not being able to treat their rentals as strictly a business.

The best property managers are able to treat the residents in a consistently fair, firm and friendly manner not forgetting the rights and responsibilities of both parties.

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@retodayradio.com

Back to 1998 Rental Roundtable Index

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