Unilaterally Imposed Obligations

Posted by wasserman

My lease does not cover move in/move out fees. I found out after I signed a tenant to a new lease that there is this fee by my condo association. Can I recover this when my tenant moves out in a mid-rise new building—i.e., no rent control?

The answer is no. It makes no difference that the unit is exempted by the local rent law. When we teach Landlord 101, we always stress that good lease drafting is paramount. The rental agreement defines and sets the rules for the landlord-tenant relationship, subject to state and local laws. If a requirement is left out of the lease, it is not a requirement!

For rent controlled units, the rent law interposes restrictions and obligations notwithstanding provisions in the lease to the contrary or that are nonexistent; in all other respects, the lease terms govern the relationship. For non-rent controlled units, the obligations of each party are almost entirely defined by the contents of the rental agreement. For both the rent controlled housing and the exempt properties, a monetary obligation that is not specifically set forth in the lease cannot be unilaterally imposed without the tenant’s consent. Consider this example: A common mistake owners make is failing to specify what utilities a tenant must pay for during the tenancy. If the lease states that a tenant is responsible to pay only for certain utilities, and the owner omits PG&E from this recitation, the tenant cannot be charged for PG&E.

Likewise, the association fee levied by the homeowner’s association may easily be included when the lease is drafted and therefore become the obligation of the tenant. Yet failure to state this term in the lease before the tenant signs precludes its imposition.

For tenancies exempt from the rent law, an owner could change the terms of the tenancy after the initial term expired (e.g., if the lease term is for one year, upon expiration of the year). This process occurs by issuance of a thirty-day notification changing the terms of the lease. Hence, this owner could require payment of the HOA assessment for the new lease term after expiration of the initial term. As such, the landlord’s omission may only have a temporary and one-time consequence.

However, for those who operate under the rent law, an owner cannot unilaterally impose a material lease covenant and thereafter evict a tenant for failure to comply with it. Remember, the expiration of the lease term has no significant meaning under rent control, as the tenancy continues indefinitely unless the tenant vacates or the owner has a just cause reason to evict. Exceptions exist for lawful rent increases and rule changes that are implemented for health and safety purposes. Yet for a monetary assessment such as the annual condo fee, the rent law restricts the landlord from terminating the tenancy if the tenant refused to pay it and the obligation was imposed after the tenancy began.

In sum, draft your leases well and with utmost care. Anticipate what may transpire during the tenancy, and do your best to ensure that the lease agreement encompasses everything you want from the tenant. This practice is mandatory for all owners, and it is extremely critical for owners operating rent-controlled housing, as their tenants are free to stay after the initial term and enforceable material obligations cannot be unilaterally imposed.