Have you ever heard of a “constructive eviction”?

Of course, everyone understands the word eviction — as in being evicted from a rental unit typically for non-payment of rent.

But there is another kind of eviction that results when a landlord’s behavior, intentional or not, deprives the tenant of the peaceful enjoyment of the premises.

This can include things like failing to make necessary repairs or creating a hazardous environment. In effect, the behavior creates a situation where the tenant has no choice but to move and is, in effect, evicted.

Constructive eviction gives tenants the legal opportunity to break a lease. In my law practice, I’ve seen this happen when a landlord hires an inexperienced or incompetent property manager.

That was exactly what “Julie” complained of after she read my article Why Older Adults Should Think Twice About Being Landlords. The experience she shared with me is instructive for property owners: “Cheap” is often expensive.

Julie described the $4,000-a-month, high-security, two-bedroom apartment for her and her husband, “Jack,” as pure heaven. At first.

From great to not great

“When we moved in, the entire complex lived up to all the advertised claims and conditions stated in our lease.” That included:

• Concierge service

• 24/7 onsite security management

• Common areas secured every night

• Furniture and cushions removed from the patio nightly to deter vagrancy

• Entrances consistently monitored

• Front desk staffed 24 hours every day

• Attentive, friendly staff

Coffee and breakfast items offered free each morning, wine and cheese in the evening

“While located in a bad part of town,” Julie said, “it still was perfect for the two of us. We had a two-year lease, which matched the time required for our vascular surgery residency at a nearby university medical center.

“From time to time, the property managers — a middle-aged couple — would drop by, asking if anything needed attention. Their concern made us feel so secure and glad that we were living here, even if the rent was high. We were in seventh heaven.” Until…

Things went downhill fast

A year after moving in, Julie said, “Everything began going downhill when the property changed hands. At a meeting with all the tenants, 25-year-old ‘Darren’ was introduced as our new property manager. He has a college degree in real estate development, but no experience as a property manager. He is the (new) owner’s son-in-law and has ‘know-it-all’ stamped on his forehead.

“Within weeks, the building became unsafe due to sporadic front-desk coverage, no one present on weekends, packages left unsecured in the entry (attracting porch pirates) and a broken garage door leading to apartment units that could not be shut.

“Vegetation at the entrance became overgrown, preventing the door from closing, and a remote monitoring service of the building, including the parking garage, was canceled.

“It was as if a ‘Welcome, Burglars’ sign had been erected. Cars — including ours — were broken into. Tenants complained. Darren promised to ‘handle’ the situation, but he did nothing.

“It has become dangerous, and we can’t stay here, Mr. Beaver. There is a year to go on our lease. What can we do?”

Major breach of lease and constructive eviction arguments

I have a soft spot where physicians are concerned. Theirs is a world of cooperation and working with colleagues to help patients — not confrontation.

I suggested sending Darren a polite, conciliatory letter, asking for his help and making clear, “We have no choice but to move.”

I cautioned, “Darren is not the only person who will see this letter. You need to project calm and be in control of your emotions, not blaming, but rather, seeking a mutually beneficial result. In a by-the-numbers manner:

• List all the safety issues that have been brought to management’s attention but never remedied.

• Review what was promised in the lease — and delivered by the prior owners — that has been lacking since new management took over.

• Note that these issues create, at the very least, a major breach of the lease and what can also be considered as constructive eviction.

• Stress the reality of an actual risk of harm to you and that there is no way you can remain as tenants without suffering extreme anxiety, something you did not agree to when moving in.

• Do not blame Darren. Rather, say something along the lines that you are sympathetic to what must be frustrating for him as well and are certain he has tried his best to address these issues.

• Conclude by saying, “It is in everyone’s best interest to cancel the lease. We will continue paying rent on time and fully cooperate with showing our unit and will leave by (date).”

Honey vs vinegar

I suggested — and Julie agreed — that one sentence needed to appear at the very beginning of her notice to end the lease:

“Dear Darren, this is not a letter I would ever have wanted to write. We so enjoyed living here and are not blaming you for the items described below. We know you are a fair person and will do the right thing.”

Within 24 hours, Darren’s father-in-law, the new owner, emailed the couple, agreeing to all of their requests and offering “all the help you might need to relocate. We are sorry to see you leave, but we understand.”

Dennis Beaver Practices law in Bakersfield and welcomes comments and questions from readers,
which may be faxed to (661) 323-7993,
or e-mailed to Lagombeaver1 – at – Gmail.com.

The post From Dream Apartment to Nightmare: When Your Landlord Evicts You Through No Fault of Your Own appeared first on Dennis Beaver.

Arizona readers, 80-year-old Sandy and Jim, sent this email with an offer they almost accepted:

“We own 100 acres of land ideal for a solar farm and just received a letter of intent (LOI) from a San Francisco company wanting to lease it.

“We were about to sign and return the document when we came across your article ‘Leases of vacant land for solar farms pose great risks to owners.’ What do you think of this LOI? Thanks.”

Hanford real estate attorney Ron Jones — who helped me with that earlier article — explained the elements of a letter of intent.

What is a letter of intent?

“It outlines the basic terms of a proposed contract, lease or option, sent to the property owner in hopes that an eventual agreement will be accepted. Consider it a knock on your door with an ‘I am interested in your property on these terms.’

“The property can be anything from industrial machinery, a million dollar yacht, a business, employment, to land.

“In most cases, a letter of intent is not an enforceable contract, but some of its specific contents might be. So, if you receive one, and are tempted to sign, it would be a mistake not to have it reviewed by a lawyer who can clarify points you might not fully understand,” Jones says.

So, consider an LOI as a “cut to the chase,” designed to benefit the offeror by saving the time and expense of drafting a tailor-made agreement for someone who might be uninterested in selling or leasing the property.

Watch Out For These Clauses in an LOI

Jones cautions, “An LOI can lead to some real problems, especially if it contains language that was in the one sent to your readers.”

For example:

Confidentiality

“This agreement will be treated in confidence and no disclosure will be made without Tenant or Landlord’s prior written consent, except as required by law.”

Exclusivity Agreement

“Owner agrees that until the earlier of (a) signing of a lease, or (b) 300 days after the execution of this LOI have passed, the property shall be withdrawn from the market and owners will have no discussions or negotiations with any third parties concerning its possible sale, lease or the offer itself.”

Jones points out, “This means that the couple may be forbidden to discuss the terms of the LOI with their own real estate advisor, and the property will be in limbo for almost a year. If better offers come in, the owners can’t discuss them. This is over-reaching.”

It’s Now or Never

A cover letter to the LOI gave two weeks to respond or the offer would lapse, resulting in the hoped-for response: “They are offering us a great deal of money per acre and we certainly don’t want to let this thing die on the vine,” Jim wrote.

Jones’ take? “The solar farm developer is putting pressure on the couple and it may be considered elder financial abuse since they know their age. It is pure nonsense because the land isn’t going anywhere. They should contact the company and say, ‘We understand you would like this signed quickly, but we need time to run it by our family lawyer.’ It is virtually certain they will agree and just ask to be kept informed.”

He adds, “If the response is, ‘We need it by that date or all bets are off,’ then, they’ve just done the couple a real favor because these guys can’t be trusted.”

Unreasonably long due diligence time frames

Due diligence is designed to lessen risks to the party financing the project and to discover the potential impacts on the site. This may require input from civil engineers as well as archaeological, environmental, water, land and title experts.

Typically, this takes anywhere from eight to 18 months.

Jones underscores, “Before committing to a longterm relationship with a developer, the owners need to conduct their own due diligence to be certain they are dealing with a legitimate company that has a good reputation. Therefore, research their online presence, including reviews, serious complaints, and get references from others who have leased to them.”

Bottom line: It’s always a good idea to consult with a lawyer if you receive an unexpected LOI.

Dennis Beaver Practices law in Bakersfield and welcomes comments and questions from readers,
which may be faxed to (661) 323-7993,
or e-mailed to Lagombeaver1 – at – Gmail.com.

The post Know this before signing a ‘letter of intent’ appeared first on Dennis Beaver.