Legal Question in Real Estate Law in California

Re: The house next to mine caught fire and caused some damage in my house.

As Mr. Whipple points out, your facts indicate a constructive eviction.

You may be able to recover your losses from your insurance carrier, the neighbor's carrier, the HOA and/or its carrier, and the possible negligence of the contractor.

The tenant can ask, as he has, and you can refuse. You probably will be better served by retaining an attorney to sort this out, since it is more complex that you can probably handle properly on your own.

Good luck!

Re: The house next to mine caught fire and caused some damage in my house.

Depending on how much the condition of the premises has deteriorated, and depending on specific terms of your lease, it is possible that the law will allow him to terminate the lease.

Re: The house next to mine caught fire and caused some damage in my house.

Have you discussed your damage and your losses with your homeowners' insurance carrier?

There is a principle called "constructive eviction." That occurs when the tenant is denied the basic use of the premises that he expected to get when he signed the lease, through no fault of his own. Mere inconvenience or annoyance, or minor repairs, is usually insufficient, but if the premises cannot be used for the tenant's main purpose, or are substantially degraded, there may be a constructive eviction, and that is a breach of the lease's implied (or express?) covenant of quiet enjoyment.

So, the answer is that your tenant doesn't have the right to make unilateral changes in the terms of the lease, such as deciding that he is entitled to a 20% rent reduction, but at some point a degradation of the premises becomes a breach that actually entitles the tenant to declare a breach and move out. At that point, landlord and tenant can agree to part ways, i.e. agree that the lease is breached, or they can negotiate for a reinstatement of the lease at a lower rental, perhaps arriving at the aforesaid 20% figure.

A tenant who is claiming a constructive eviction must move out promptly. He can't have a constructive eviction and possession of the premises at the same time.