A resident recently vacated, and I discovered extensive water damage from a leaking pipe that essentially destroyed the kitchen and bathroom walls. The departed resident never reported this ongoing problem. Is this just a total loss?
Not necessarily. Housing providers tend to forget that a lease is a contract. While most lease versions fall short of the SFAA Residential Tenancy Agreement, they generally contain language similar to what we insert into our template, which is as follows:
MAINTENANCE and REPAIRS: Tenant shall, at Tenant’s expense and at all times during the tenancy, maintain the Premises, furnishings, and appliances, if any, in a clean and good condition and shall surrender the same upon termination of tenancy in the same condition as received (excepting normal wear and tear). Any and all repair requests shall be made from Tenant to Owner in writing. Tenant understands that Tenant is responsible for replacing their own light bulbs, and for the costs of repair for all damage to the Premises, leased furnishings, and appliances, whether caused by Tenant or anyone else using, repairing, or attempting to repair the Premises, leased furnishings, and appliances during the tenancy.
Contracts in California also contain what is known as the implied covenant of good faith and fair dealing. This means that neither party will take any course of action or, in this case, inaction that would deprive the other party of the benefits under the contract. Indeed, each side must act fairly and in good faith when performing their contractual obligations. Not reporting an obvious water leak that is damaging the property would, arguably, be a breach of the express terms of the lease agreement as well as a breach of the implied covenant of good faith and fair dealing.
After assessing the repair costs, consider the following courses of action. First, if the cost of repair exceeds your insurance deductible, file a claim with your carrier. If you are not insured for this loss or the cost of repair exceeds the deductible, politely request reimbursement from the former residents in writing. If they refuse, you may bring the matter to small claims court. Thankfully, litigants represent themselves in this forum, so you will not incur attorney fees. Currently, the maximum amount of recovery in small claims court is $12,500. If the damage exceeds this limit, you may have to hire legal counsel to file a complaint in regular superior court. That said, you do have the option of litigation, as a resident’s willful failure to report ongoing water damage might constitute a breach of the rental agreement’s terms as well as the covenant of good faith and fair dealing, and it may also give rise to another cause of action known as “negligence,” meaning the resident breached a duty of care that was owed to the housing provider.
Deducting the damage amount from the security deposit may, in this author’s opinion, be a bit tricky. The security deposit law permits deductions for “the repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant.” Here, the internal pipe likely failed on its own and not through some misuse by the former residents. As such, the resulting damage was not caused by the tenant’s use. That said, if the insurance route is not feasible, consider either small claims court or, if the damages are well above $12,500, a superior court action to recoup your losses.