Investors and landlords often hire us after they’ve bought a home in Sonoma County that is already occupied by existing tenants. During the sales process, there has already been a significant amount of documentation created. For example, the California Association of Realtors uses a standardized estoppel agreement to verify tenancy information, which is then conveyed to the new owner. We believe that the CAR estoppel is suitable, providing critical information required for the sales transaction. However, that document alone does not typically have all the information you need to begin your relationship as the new landlord.
When we take over the management of an occupied property, we send an introductory letter to our tenants. We also provide our own questionnaire, designed to gather the various pieces of information we – and you – need to properly manage the property. There are differences between our documents and standard CAR estoppels. For example, sale estoppels do not always include all of the adult residents. If the tenants’ family has been in residence for 10 years, their child who was 12 at the time of move-in is now 22 years old, an adult – and therefore legally ALSO a tenant. We also need to know precisely when the last rent increase took place. In California, you cannot increase rent more than 10 percent in any 12-month period without a 60-day notice, so accounting for prior rent increases is important for financial planning. You need to make sure you have information on all the occupants in the property, including underage children. Our questionnaire includes information about vehicles as well: how many cars, what make and model, what the license plate numbers are. By doing so, we can provide proper accounting and documentation.
We also ask about water-filled furniture, and what kind of pets – if any – are at the premises. We ask if any residents have engaged in illegal drug sales or manufacture, or if any occupants have been prosecuted for such felonies. We ask if the doors have deadbolts and the windows lock properly. These particular items are habitability standards, so we need to be able to address any such problems promptly. We ask if the smoke detectors and carbon monoxide alarms are functioning. That’s something that is typically addressed during the sales process, but every once and again it gets overlooked.
One of the most important questions we ask is whether the tenant has requested repairs that have not been performed. We need to know this, since depending on the severity of the necessary repair, failure to address it could arguably be a defense to future legal action. We also ask a different variation of the same question: we want to know if the tenant is presently aware of any repairs that were unreported to the prior owner or management.
These questions provide the primary benefit and purpose of an estoppel: when the tenant returns our questionnaire, we have a written record of both the condition of the property and the tenants’ circumstances at that point in time. If the tenant indicates that no repairs are needed, they will be hard pressed to claim later that the roof has been leaking for a long time and nothing has been done. Likewise, we can establish a clear evaluation of who the residents – both adult and underage – actually are, allowing for greater accuracy and less confusion as the landlord/tenant relationship continues.
If you are interested in receiving a copy of the estoppel that we created for use when we begin managing an occupied property, please contact us at DeDe’s Rentals, and we’d be happy to share it with you. If you have questions on this or any other aspect of property management, please call us. We’d be glad to help.