A previous resident who constantly lodged complaints about what I perceived to be minor issues like lightbulb replacement, leaking faucets, and difficulty opening windows is now claiming constructive eviction, arguing that the repairs were not undertaken promptly. What is my best defense?
Constructive eviction lawsuits are increasingly common now in California. And, as you undoubtedly have been hearing, insurance coverage for these claims has become more and more scarce, cost prohibitive, and in many cases nonexistent.
By law, every resident has the right to live peacefully in their rental housing. They are entitled to basic health and safety standards known as the implied warranty of habitability. If a housing provider fails to maintain rental housing in a safe and usable condition, and the renter feels compelled to move out and actually does so because of this failing, a claim for constructive eviction may be pursued in superior court. These cases typically cost the owner anywhere from a couple of hundred thousand to several million dollars depending on the facts and circumstances. Common examples giving rise to constructive eviction actions include: (i) failing to make necessary or agreed upon repairs; (ii) failing to provide required housing services such as heat, hot water, safe electricity, and weatherproofing; (iii) failing to remediate mold or to eradicate a pest/bed bug infestation; (iv) refusing to confront and address bad behavior by other residents in the building that are adversely impacting others; (v) undertaking construction work at the property that creates a dangerous or unsafe environment; (vi) failing to relocate residents during major construction projects; and/or (vii) imposing a rent increase designed to force the tenant to leave (e.g., a rent increase that exceeds a fair market value for this rental).
California law allows constructively evicted tenants to be awarded moving costs, emotional distress damages, and the value of their lost tenancy. Indeed, this last category, the value of the tenancy, can be quite serious. Assume for example that the tenancy was 20 or 30 years old, and monthly rent was about $2,000 below market. The displaced renter could claim damages as follows: $2,000 per month for the next ten years, or $240,000. The San Francisco Rent Ordinance then permits this amount to be trebled, making the judgment $720,000. The court may then award attorney fees and other damages to be added to this sum, thereby making the final judgment quite daunting. Add to your woes the distinct possibility that insurance may not cover some or all your losses and you have a recipe for disaster.
The lesson to be learned here is to promptly attend to all complaints lodged by your tenants, even if you suspect that they are minor or frivolous. You are better served wasting time on maintenance errands as opposed to being straddled with potentially devastating financial liability in a constructive eviction lawsuit. Thus, it’s best not to take a gamble that the complainer will quietly depart, and if you feel overwhelmed, consider hiring a professional property management company to take the reins. The bottom line is that our laws require consistent proactive interaction with renters, and failing to do so may result in extremely unpleasant outcomes. Use this advice as your best defense!