All good things must come to an end. Operating a rental is important for what it accomplishes for an owner. However, from time to time it may be needed to change courses and stop operating the property as a rental with the most two common examples being if an owner needs to sell the property or move back in to reside at the property. Whether there’s a lease in place or if the property is currently on a Month-to-Monthrental agreement, the formal process of asking to take back possession of the property needs to be done through posting a formal notice called Notice of Termination of Tenancy.
TENANT PROTECTION ACT
The first question that needs to be answered is if the property is subject to the Tenant Protection Act. For more information on this from the California Department of Justice you can click HERE.
- If Yes:You will be subject to Just Cause requirements and you will want to consult with a real estate attorney for your options.
- If No:You can proceed with the following steps.
FORMAL NOTICE
Regardless of what the reason (selling or moving back in) for terminating the tenancy, the first step is to have a real conversation with the residents as to why an owner is taking back possession of the property. Whether a resident has lived in the property a year or several years they’ve made the property their home, so this conversation needs to be approached carefully with an understanding that the resident is being asked to pick up and move their entire household. This can be a very tough and emotionally draining conversation to have with a resident as you never know how a resident will react when being asked to move out. Having empathy on the call goes a long way in making the best of the situation. The second step required is to serve a legal notice to the residents for this to be valid. The name of the notice is called Notice of Termination of Tenancyand there are several places where you can obtain one such as an attorney’s office, the Apartment Association or a property manager with a membership to the California Association of Realtors (C.A.R.).
LEASE END DATE & FLEXIBILITY
In life most things are not black and white or set in stone. Experience shows that when it comes to asking for possession back of a property the number one thing that an owner can do to have it go as smooth as possible is haveFlexibility! Most situations will call for the residents to be given either 90 days from the date that the notice is formally posted or the lease end date for an owner to legally reclaim possession of the property. If a resident does not move out by the last date, then the only alternative option is to go through the eviction process which ends up as a lose-lose situations for all parties. With this in mind, we recommend the following:
- Flexibility: This 90-day period of time may or may not be enough time for a resident to find suitable housing. From the resident’s perspective, factors that come into the decision making process are things such as number or residents (is it a single resident that can move quickly or is it a household with kids and/or elderly parents which will take more time to move) type of property (is this a 2-bedroom condo that can easily be found in the marketplace or is it a 5 bedroom house which is harder to come by) and length of stay (is it a household that has only lived there a year or have they lived in the property for 10+ years). Another component to keep in mind is when a resident’s application may be accepted. For really proactive residents that start applying right away they may be accepted into another rental within 30 days of being given notice which leaves them with another 60 days or rent obligation or they may have been accepted with a move in date a full 2 weeks or 30 days after the date they’ve been given up to! In a perfect world, their official move-out date would match up with their new homes move-in date… this rarely ever happens. Therefore, we recommend that owners be flexible and allow the resident’s move out date be anywhere between 30 days before or after the official move out date. This allows residents to apply for places and have more leeway in accepting a new rental home making it as much of a win-win as possible.
- Rent Proration:If the above flexibility is being provided, then the rent can be prorated up or down to the time that was actually used.
- Security Deposit:Offering a resident a full refund of the security deposit may assist in facilitating a move out. Yes, this is a tricky one as most times we don’t recommend this and it wouldn’t be in an owner’s best interest. However, given the situation this may still come in handy such as if the resident has been living in the property a very long time where an owner is virtually guaranteed to not have any viable deductions from a deposit or if a resident may be low on funds to utilize as a security deposit for their next place. This option can be thought of as a negotiation tool to be used if and when applicable.
CONCLUSION
Obtaining possession back of a property has several steps that must be followed in order to do things properly. In our experience, working with a resident and having flexibility goes a long way to having the move out go as smoothly as possible.
