California fires

The fires in Northern California’s Bay Area have left communities, families, and individuals devastated as they deal with the tragic aftermath.  

According to CAL FIRE, at the peak of the wildfires there were 21 major wildfires that, in total, burned over 245,000 acres, forced 100,000 to evacuate, destroyed an estimated 8,900 structures (as damage assessment continues, this is the latest count), and sadly, took the lives of 43 people.

Among the structures lost in the fires are thousands of residences. The Sacramento Bee reported that an estimated 5 percent of Santa Rosa’s housing stock was destroyed in the fires, with more homes destroyed outside its limits. Santa Rosa is one the area’s largest city affected by the fires.

As the state begins rebuilding and recovery efforts, concern has grown for who and how housing will be provided to families who have lost their homes.

Angela Hart from The Sacramento Bee states that, “Rents have skyrocketed across the region in recent years as the vacancy rate hovers around 1 percent and home prices soar. Residents are spending 30 to 50 percent of their income or more on housing. State and federal resources are stretched thin, as floods, fires and hurricanes have gripped the nation and California confronts an unprecedented, statewide housing crisis. Meanwhile, many whose homes burned are finding their insurance policies won’t cover the cost of rebuilding. Others lack home or renter’s insurance altogether. Some say the task of rebuilding could be more difficult because of an ongoing construction worker shortage.”

This will have a huge impact on homeowners, in addition to those who own investment properties, their property managers, and their tenants. Property managers and landlords need to be aware of their responsibilities to tenants who have been displaced, while tenants should also be aware of their own rights.

This article is written with the intent to provide guidance to renters, landlords, property managers, and investors for what do when your property was damaged in these California fires. But as I am researching this article, I am blown away by the lack of information available for how to manage fire damage repairs for rental properties. While it’s obvious that homeowners insurance is the answer for a residence that currently lives in the home they own, it is very unclear for what happens to any displaced renters.

Renters will be looking to their landlords and property managers for information on where they can currently live if their home was damaged or destroyed in the California fires. And landlords, property managers, and investors will be looking for information about how to answer these tenant questions. Additionally, property managers need to work with owner clients to communicate repairs and their responsibilities for honoring or canceling lease agreements and how it will affect your clients’ rental income.

Here’s a look at some of the information and California housing laws I could find to help guide your decisions during this difficult time:

Fire Damage to California Rental Property

California rental property owners and managers are required to uphold the Implied Warranty of Habitability to their renters. According to Cal. Civ. Code §§ 1941 A rental unit must be fit to live in; that is, it must be habitable. In legal terms, “habitable” means that the rental unit is fit for occupation by human beings and that it substantially complies with state and local building and health codes that materially affect tenants’ health and safety.

A renter’s right to an implied warranty of habitability is something I predict most renters will turn to when asking their landlords to provide temporary housing for them while rebuilding takes place. In fact, in California, if a tenant has to temporarily relocate for required maintenance and repairs, a tenant does not have to pay rent to his landlord during the time he is not able to live at the property.

But here is the big BUT…

If a property is totally destroyed, like those homes in Napa and Sonoma counties, the California Department of Real Estate states that a rental lease will terminate, the landlord does not need to provide temporary housing, and the tenant can stop paying rent.

If the premises are only partially destroyed (due to no fault of the tenant), the tenant may terminate the lease upon delivery of written notice to the landlord if a substantial portion of the premises is damaged or if a material portion of the premises necessary for tenant’s use is damaged.

What’s a renter to do?

If your rental was destroyed in the fire, your landlord or property manager has hopefully communicated with you your rights and provided information about repairs, relocation, or lease termination.  If you have renters insurance, your policy can help cover the cost of belongings. The American Red Cross, FEMA, and several local non-profits have set up relief and recovery stations in the communities for displaced residents to find resources.

If you have been permanently displaced due to total property destruction, your options are leading towards finding new rental housing.  A grave story reported by The Mercury News, reveals that rental prices have nearly tripled in Santa Rosa on Craigslist.

The Mercury News also reports that, in Sonoma County, officials are promoting its Shared Housing and Resource Exchange program, or SHARE, which was initially designed for homeowners aged 60 or older, though it could be used by anyone with extra space in their homes. It allows the homeowner to post available rooms and helps people seeking a room get matched with a landlord by either entering into a traditional lease agreement or exchanging some clearly defined services the renter provides, such as meal preparation and driving the homeowner to appointments.

Sonoma County Supervisor James Gore told Mercury News, in the short term he said the county is focused on creating incentives for those with vacation homes to open their residences to people displaced by the fires. Similarly, in Santa Rosa, Vice Mayor Jack Tibbetts said officials are partnering with Craigslist and Airbnb to get residents to open spare bedrooms and in-law units to activate otherwise idle spaces.

Renters, investors, landlords, and property managers in affected areas are advised to seek licensed legal assistance in their area for more advice on their state’s rental laws.

Rentec Direct created a California Landlord-Tenant Laws Resource Guide to serve as a starting point for renters, landlords, and property managers to understand their rights.  

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