Sunday, July 15, 2018

Bubble, Bubble, I Smell Trouble!


A young professional leased a house with two other professionals. After living together for well over a year, their relationship soured. One of the roommates drank to excess and an argument ensued resulting in a firearm being brandished against the young man. These three young men were all privileged; they came from wealthy homes, attended the best schools and were employed in professional jobs.

The next day, the young man packed up his belongings, rented a truck, and moved home. But, then his troubles with the property management company began.

The lease had two onerous clauses:

1)  A joint and several liability clause; and  
2)  A clause stating that the Lessee consisted of all three tenants.

Here’s how the lease read:

"Lessee acknowledges that this Agreement is between Lessor and each Lessee executing this Agreement jointly and severally, whether or not in actual possession of the Premises. In the event of default by any one, each and every remaining Lessee shall be responsible for full payment of rent and all other provisions of this Agreement."

"The parties to this Agreement are Property Owner, (hereinafter called "Lessor"), and Tenant 1, Tenant 2, and Tenant 3 (hereinafter called "Lessee")."

The lease was for one year and then reverted to a month-to-month term. The young man submitted a 30-day written notice to the Property Manager. But, they would only accept his lease termination after a “Roommate Change Addendum” was signed by all three roommates and, in that addendum, they required the young man to “relinquish” all rights to his security deposit. They further argued that unless and until the Addendum was signed, that they would hold all three men responsible for the rent and any charges and they did not conduct a property inspection after the young man moved out.

The existing roommates refused to sign the Addendum and argued that the young man was responsible for 1/3rd of all charges (rent, utilities, etc.) until they found a new roommate.

The young man’s problems were further compounded by confusion over what he actually paid as a security deposit and what rights his existing roommates had to his deposit. He was able to secure agreement to the actual deposit amount and he argued that his roommates rights to the deposit were controlled by state law (Cal. Civ. Code § 1950.5).

He also argued that a roommate not in possession of the property cannot be held liable in perpetuity for rent. See Schmitt v. Felix, 157 Cal.App.2d 642, 648. 

“Once a cotenant in a month to month tenancy gives notice to the landlord of his termination of the tenancy, he cannot be held liable for his cotenant's remaining in possession. Upon receipt of such notice the landlord is put to the choice of either accepting the cotenant as his tenant alone, or of terminating the tenancy. “[Emphasis added.]

The resolution cost the young man his security deposit less a small refund owed to him and attorneys’ fees.

Relationships between people are not predictable.  And, roommate disputes are common.

  • It is always advisable to retain a lawyer to review the lease agreement and, if possible, to negotiate the clauses before signing;
  • It is highly advisable to have a written roommate agreement outlining the rent share and share of housing expenses, overnight guests, cleaning responsibilities, and more before moving in together; and
  • To always conduct financial transactions with a written paper trail. While Venmo is convenient, be sure that the transactions are clear and never, ever combine a security deposit transaction with a rent payment.

See Sidebar to this Blog concerning Security Deposits and Roommate Agreements.

No comments:

Post a Comment