Tenants Notice to Vacate

Before Selling a House in Probate

 

Hi, I’m Kim Ward, let’s talk about tenants notice to vacate before selling a house in probate. As a real estate broker in San Diego County for the past, almost, 20 years, I have been helping executors, administrators, and trustees with homes in probate or a trust.

Tenants Who Don’t Want to Go

From time to time, I run into a situation where there is a tenant in the property that does not want to leave even after they’ve been asked by the estate representative and offered help with moving. So, let’s talk about your options. I’ve come across situations where a California landlord let someone move into their home, typically, that’s what happens in the case of a probate or a trust administration. There’s someone living with them, either as a care taker or a friend or a family  member, and when the owner passes away, they just don’t wanna leave.

It’s important that you know that when a property is sold in California with a tenant in it, the tenant has a lot of rights even when they aren’t legally a tenant, meaning there is either a month-to-month contract or a lease that that particular tenant has (learn more about tenants rights in California here). So, even if the person is just living in the house, there are rights that they have, and we have to be very cautious about how we handle the situation. Meaning that the tenant’s rights need to be honored and respected, and selling the property does not typically justify an immediate eviction of the tenant, unfortunately.

I’m helping Sean with his uncle’s property in San Diego. The uncle had some friends move into the property, one of them was his girlfriend. It has been a year that Sean has been dealing with trying to cautiously move these tenants out of the house. Sean who had to hire a company to help with the eviction process. Now, keep in mind, it typically is not a full year that these processes take, but because of COVID there have been some additional laws that do not allow you to evict anyone out of a home (COVID-19 Tenant and Landlord Protection Legislation). This led to an extremely lengthy time trying to remove these tenants from the property. In the meantime, Sean and the estate are paying the homeowners association fees, a mortgage payment, taxes, and some of the utilities. Learn about the costs of living in San Diego Here. 

Leases and Abiding By the Law

If there is a lease, first and foremost the lease has to be honored. That means if your loved one had a lease with tenant(s) and the terms state it is for a year, which is what typically we have here in San Diego, and there’s three months left on that lease that lease must be honored.If the property is sold within that time frame the tenant has the right to stay there. So, let’s say there’s nine months left on the lease, it’s highly unlikely, unless somebody was purchasing the property to be a rental, that the buyer would want those particular tenants to be living in the property for the next nine months, so it is problematic.

It’s important to note that the tenant is still responsible to honor their part of the contract, which is to pay their rent fees to you, the estate representative. They also have to abide by all the original information in  the lease and the agreement within that contract, in other words everything stays in place until that lease expires. Once the lease expires the tenant needs to move ,or you go through the eviction process, or a new contract would need to be put into place. For evictions the local law enforcement would need to be involved, here is San Diego County’s current Eviction Procedure Information Sheet.

The last thing is the sale of the property. Let’s say you are able to sell the property with the tenants still living in it. The tenants security deposit must be refunded to them, just like in any other lease situation. If you are able to sell the property with the tenant in the property, the security deposit would be given to the new owner, and then they would deal with the tenants and everything else having to do with the lease.

Now, if you have a tenant living in the property and they finally move, keep in mind that you have 21 days to send them the remainder of their secure deposit to their new address. The Security deposit would be minus any damage they did to the property, which you would have to list out clearly, so that they know why you were removing some funds from their initial security deposit.

For month-to-month leases the renter will have fewer rights, the new owner or the estate representative can determine when to terminate their lease, with one caveat, there needs to be proper notice given to the tenant(s). If they’ve lived there for less than a year, a 30-day notice is acceptable. If they’ve lived there longer than a year a 60-day notice is what you’d have to send to them. I’ve had landlords ask me “Can’t I just change the locks?” and NO you cannot do that! You’re prohibited from changing the locks, tenants do have rights. I’ve also had somebody say “Well, I’m just gonna cut off the utilities that I’m paying for” you can’t do that either. So, NO changing the locks, NO cutting off the utilities, you MUST abide by what is in the contract with those particular tenants, EVEN if they’re living in there without a written contract, verbal agreements are still contracts.

You typically have to hire an attorney that can help with an eviction, if the tenants refuse to leave. Of course, month-to-month rentals are open-ended and you really wanna have a written agreement. Sometimes, like in the case above, there was some type of an oral agreement. Neither a month-to-month tenancy or an oral agreement have an end date as in the case of a lease. Instead, the tendency continues until the tenants are served a notice to end the tenancy. Generally, we don’t need a reason for ending a month-to-month tenancy, but of course, the reason for property in probate is often that the property needs to be sold in order to settle the estate. With Probate there is a just cause for providing that tenant with a 30 or 60 day notice.

Showing a Property with Tenants

The other part of having a tenant living in a property is that they must be given reasonable notice to have the property be shown to perspective buyers. I am very cautious of, and very respectful to tenants. This is because I want them to let me show the property. The notice that the tenants would receive is stipulated through California’s right of possession. It states that a landlord cannot enter the property without the tenants expressed permission. California law presumes
that 24 hours notice is sufficient. Therefore, if the owner or the realtor wants to show the property, they must give the tenant 24 hours notice. The notice does not have to be in writing, but when we are working with a tenant and want to show the property, we text. This way we have written proof that the tenant is in agreement we can show the property on a certain day and a certain time.

The tenants are entitled to a reasonable time for showing. Frankly, I don’t wanna show a property at 9PM or 7AM, normal business hours are the reasonable times for
showings. The tenant does have the right to say there are certain times that they don’t want the property shown. I’ve had situations where the tenants had small children that nap from 2PM to 4PM so we were very respectful of that and we would not have any showings during those times.

COVID-19 and Showings in Property with Tenants

Recently, I was helping with a property in Chula Vista, and with a tenant living in it who didn’t want to have any showing, she was concerned about COVID. We have lots of documentation now that we must have the tenant sign and also anyone that we’re taking into the house must sign. This protects the estate from the tenants coming back and saying they contracted COVID because we brought somebody into the house for a showing. The documentation also protects the estate, me, and my company from buyers that could potentially say that they went into a house and contracted COVID. Of course, we’re very careful to make sure that everyone who enters our listings is healthy. The tenant didn’t want to have the house shown at all until they had moved out, which would have been 30 days from the time that we had prepared the property and put it on the market. The estate representative didn’t want to wait, so I had a long conversation with the tenant and got their approval to have a two-hour open house time for all prospective buyers to come through and take a look at the property.

Protecting Yourself As the Landlord of the Probate Property

So, how do you also protect yourself through the process of having the home on the market, receiving offers, negotiating offers and getting to a successful sale? I think it’s important to have someone that is an expert with helping with estate sales. Someone that has helped many executors, administrators and trustees through that entire process. If you’re selling a property that has a tenant you want to be very careful that all the paperwork is done correctly. Dot those I’s, cross those T’s to protect the estate from something that could happen if it wasn’t very clear in the documentation.

If there’s a tenant in a house, I always like to build in enough time into the contract that we can give the new buyer a home that the tenant has vacated. 30 days may not be enough time, that’s how long it typically takes from start to finish of a real estate transaction in San Diego. You might need 60 or 90 days depending on the circumstance.

Cash for Keys

Sometimes when there’s a tenant that does not want to move out, we can offer cash for keys. This means that we come up with a dollar amount that the current tenant will accept from the estate in order to leave the property in exchange for giving us the keys. Of course, once they have accepted an offer and moved out of the property we immediately change the locks. Sometimes that is the best option when dealing with a tenant, that way they have money to be able to move to another property and we get a vacant house quicker, and we don’t have to go through the court systems with attorneys and all the fees that are involved (Learn more about Cash for Keys here)

Now, you can do all of these things yourself, but if you really want someone who’s an expert, that would be me! and I’d love to help you! Or just answer your questions to help get you started. You can contact me at KimWard@HorizonRealEstate.net or call my office to speak with one of my staff members at 619.741.0111, I look forward to speaking with you!