What Happens if Your Rental Is Hit by a Natural Disaster?

The last few months have wreaked havoc on large swaths of California. It seems as though for a while if it wasn’t burning, it was being drowned. Tremors, quakes and more can quickly damage or destroy one of your tenants. While no one ever wants to think of this happening, it happens all the time. The big question for you as a property manager or landlord is, what are your responsibilities with regard to your tenant if they have paid the rent before the disaster strikes (meaning they are current on their rent)?

Consider This

You collect the rent the first of every month and at the moment all of your tenants are current on the rent. Then the unthinkable happens, a wildfire comes through and burns one of your rentals to the ground. Two questions come to mind. First, do you have to refund that month’s rent to your tenant and second do you have to release the tenant from his lease?

The answer to question one is very simple, once you have collected the rent it becomes yours and you do not have to refund it to your tenant. On the other hand, you could choose to do so out of the goodness of your heart due to their loss.

The answer to question two is also quite simple. According to the law, in order for you to be able to collect rent on a property, it must habitable when you rent it out and must remain the same way throughout the entirety of the lease. Obviously, if the rental property has burned to the ground, it is not habitable. So, yes, you would be obligated to release your tenant from his lease.

Along with this, you would need to refund their security/damage deposit. You cannot use their deposit to help cover the cost of any damage caused by the natural disaster.

Short-term Damage

On the other hand, if the damage caused by the natural disaster is only enough to make the residence uninhabitable for a short period of time, your tenant might still be responsible for the balance of his lease. At the same time, he would be responsible for the cost of any damages to his own property and vehicles.

Your tenant would also have to pay for any transportation costs incurred during the evacuation. He must also pay for his own hotel/motel costs, meals, moving expenses, daycare, pet care, and any other associated bills.

Finally, your tenant would not have legal recourse to seek monetary reimbursement for his inconvenience at having to leave because of the natural disaster. You should always make sure you include this information in your lease and go over it with each tenant. You may even want to have them sign to say they have read this information and understand what it means.

No one wants to appear to be the bad guy when a natural disaster strikes. But, in the end, there is only so much you are responsible for. How much else you choose to do for a loyal tenant is completely up to you.