Do You Have to Refund the Rent After a National Disaster?

Southern California has seen more than its fair share of natural disasters and is likely to see more in the future. Once the property becomes uninhabitable and is expected to remain so for several months, you as the landlord or property manager may be required to release your tenant from their lease. This only makes sense as no one should have to pay rent for a home they cannot live in. But, at the same time, this does raise a big question. Do you, and the landlord/property manager have to refund the rent your tenant just paid? For example, they paid on the first of the month, disaster strikes on the 7th. Do you have to refund the remainder of the month’s rent?

There is Only One Right Answer

Is the right answer:

  1. A) Yes, you should because the property must remain habitable for the duration of the lease period?

Or

  1. B) No, because once you collect the rent, it is yours to keep.

Hands up all those who said yes you should. Your rental unit must remain in continuous habitable condition through the lease period if you want to collect rent for it. At the same time, you would be obligated to return their security deposit as you cannot use the deposit to cover any damage caused by a natural disaster.

For all of those who chose answer B, you might want to check your empathy levels. While you are in the property rental business to make money, there is a time and place to put humanity before cash. And when a natural disaster strikes, is definitely one of those times.

What If It’s Only Uninhabitable for a Few Weeks

If your rental property is the victim of a natural disaster and is only expected to remain uninhabitable for no more than a few weeks, your tenant could still be held responsible for the remainder of his lease terms. Your tenant would also be responsible for the cost of any personal property damage, such as vehicles. They would also be responsible for the cost of their lodgings, transportation, food, pet care, day care, moving expenses, and any other costs of day to day life.

Your tenant would not be able to ask nor expect you to cover any of these expenses despite the inconvenience of having to move out during a natural disaster. While it is easy to abide by the laws and stick to them like glue, this may not be the best idea if you want to retain better quality tenants.

While no one is suggesting, you go overboard in handing out cash hand over fist, if the home is not livable for a period of time, being kind to your tenants never hurts. Working with your tenants and giving them all or part of the month’s rent can go a long way towards helping them find emergency accommodations while their home is being repaired.