Legal Question in Real Estate Law in California

Re: Tenant's Right to Terminate Lease When New Management Company Takes Over

Whether you might be able to termiante the lease depends on what the lease says.

Generally a management company only represents the true owner, and a change would not allow you to terminate. However, if your original lease stipulates that payment of rent is to be made in cash, and that a specific amount may be changed for a "late fee," the new management company should not be able to change those terms until the lease term ends, and a new lease is signed. If, however, the original lease does not set the fee for late payments, and is silent on the method of paying rent, the new management company probably has the right to change those terms.

You should probably make an appointment with an attorney in your area and ask that he/she review your lease, and any other documents you were given when you signed the lease. Once the attorney has reviewed those documents, sound advice concerning your options can be given.

Re: Tenant's Right to Terminate Lease When New Management Company Takes Over

Contracts, including leases, can usually be assigned. The most usual exception is contracts for personal services where the identities of the parties are material, e.g. if you paid Picasso $1 million to paint your portrait, you would not want him to assign the job to his student, nor would the law allow this.

On the other hand, think of the giant mergers, such as Worldcom buying MCI. Worldcom didn't have to ask every one of MCI's subscribers to re-enlist; it simply took an assignment of the phone-service contracts.

It is well-established law that a lease remains in effect when the property is sold. Just as certain is that a mere change in management does not give rise to a tenant's right to terminate.

Again, if some truly and significantly personal service were involved, or if the lease specifically granted you the right to pull out on any management change, the answer would be different, but as a general rule, the answer to your first question is no.

On the other hand, whether the new management can make changes in your lease or rental agreement depends upon whether it is a term lease -- say, for one year -- or a month-to-month arrangement. Changes in a month-to-month rental can be made by either the landlord or the tenant upon 30 days' (except for rent increases exceeding 10%) prior notice. If the other party doesn't agree, the rental terminates. Changes cannot be made to a lease, unless, again, the lease's own terms permit such changes, e.g. rent escalation in s five-year lease tied to the Consumer Price Index.

Even so, a very minor change such as a new address for mailing payments would not be such a change to a lease as would cause a breach and allow the other party to avoid its obligations.