How to lose your home to your Los Gatos tenant!?

Last year ago we met a Los Gatos home owner who had created the riskiest situation with her tenant by creating an Employment and Rental Agreements with her tenant using a verbal agreement!   Yes, it’s true.   She could have easily lost her home to this tenant; if the tenant knew how to navigate her way to the Fair Housing and Employment office and file a discrimination law suit!!  

We could not believe it ourselves when we heard the complicated situation created by the mixture of employment and lease agreement without a paper trail identifying the expectation and terms of the dual role that this tenant was supposed to perform.

Here’s how the situation had developed.   The home owner had allowed the tenant to share their Los Gatos home with the owner’s elderly Mom in exchange for reduced rent.
This arrangement however was never documented on paper and it was all done verbally.

We were called in to help when the arrangement was falling apart since the Landlord was not happy with the quality of the care that the tenant was providing for her elderly Mom.  The landlord now wanted the tenant to fire her from her job and vacate the property.   And she was not cooperating!

This was insane since the implication were huge.  If there was a dispute on amount of services, this home owner could have lost the home to litigation since the tenant could have claimed that she was on call for 24 hours a day.  She could have taken the landlord to court and won a solid case for back wages that could have created a huge lien on the property.    

This is not speculation on our part either since there is case law supporting these kind of suits.   In one case, the workers at 24 hours storage facilities filed a class action law suit against Public Storage claiming that they were discriminated on wages since they had to work 24 hours and they were only paid for 8 hours!  

Bottom line is that leases have to be in writing.  In addition there are other considerations that have to be included in the lease for it to be a legally binding contract in California.   These elements are:

As you can see negotiating a lease for your Los Gatos property is not a trivial matter and the legal language included in all these sections of the contract can create unnecessary risk for landlords. That’s why we are convinced that hiring a property manager for your Los Gatos home is worth the extra pay.

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