Can Landlords Hold Weekend Open Houses On Tenant-Occupied Units? – By Dale Alberstone, Esq.

Hello everybody.  My discussion this month addresses the issue of whether a residential landlord can hold weekend Open Houses on property occupied by an existing tenant.

When a renter gives a customary notice that he will be vacating his apartment unit at the end of thirty (30) days, one of the first things that comes to the landlord’s mind is when and how he will be able to exhibit the tenement to potential new tenants.

Cooperative tenants may give their permission to allow the landlord to show the premises to a limited number of prospective applicants on a couple of different dates.  But numerous multiple showings may agitate the tenant who then refuses any further exhibitions.

One inducement some landlords employ to secure the cooperation of existing renters is to promise to pay the tenant some sum of money, say, $100, if any applicant rents the unit arising from a showing before the tenant vacates the apartment.

Procuring voluntary cooperation is always the best course for the landlord.  Obviously, the landlord does not need to worry about limitations under the law if the tenant gives his permission each time to each prospective renter.

But when a tenant says “No” or otherwise refuses to cooperate, the legal question is what right, if any, does the lessor have to exhibit the soon-to-be vacant unit to potential applicants.

That issue was recently decided by the California Court of Appeal in the context of aSanta Monicacondominium which the landlord had placed on the market for sale.

In Dromy vs. Lukovsky, decided August 30, 2013, the justices set forth guidelines which largely favored the landlord seller.

There, the owner of the condo listed his house for sale with a licensed real estate agent.  The agent wanted to hold open houses on weekends between 1:00 p.m. and 4:30 p.m.

While the tenant allowed the broker to privately show the property to prospective purchasers by appointment, she refused to permit open houses on weekends.  That frustrated the agent who explained that in her professional opinion, the tenant’s refusal to permit weekend open house showings made it much more difficult to find a purchaser.

In her affidavit, the agent explained that the custom and practice in the residential real estate community is to conduct weekend open houses in order to market properties effectively and expose listed properties to the general public.  Even the tenant, through her attorney, conceded thatCaliforniareal agents customarily hold open houses on weekends.

In its decision, the Appellate Court noted that California Civil Code Section 1954 forbids a landlord from entering a dwelling (which would include an apartment unit) except under the following circumstances:

1. In cases of emergency;
2. To make necessary or agreed repairs, decorations, alterations or improvements, or to supply necessary or agreed services, or to exhibit the dwelling unit to prospective or actual purchasers, mortgagees, tenants, workers, or contractors, or to make certain other inspections relative to the renter’s security deposit;
3. When the tenant has abandoned or surrendered the premises; and
4. Pursuant to court order.

In the subject appellate case, the Court emphasized that a landlord is allowed to enter a dwelling unit to exhibit it to prospective or actual purchasers.

The Court observed that the Civil Code statute (i.e., section 1954) restricted viewings of a dwelling unit to only “normal business hours.”  Because “normal business hours” was never defined by the legislature or explained in any prior published judicial opinion, the Appellate Court had to examine the meaning and develop its own interpretation.  Lawyers call that “a case of first impression.”

Before reading further, I urge AOA members to ask yourself, what would be “normal business hours” in the context of showing a condominium which is for sale?  Would they include Saturdays? Sundays? Every weekend?

In reaching the determination of what should be normal business hours, the Court noted that landlords have a strong interest in being able to sell their real estate, as our law favors free alienability of property.

On the other hand, the Court recognized that a tenant has a right to “quiet enjoyment” in his possession of the premises throughout his tenancy, including the last 30 days of his occupancy.

In order to balance those two competing interests, the Court approved Open Houses of dwelling units (there, condominiums) which are offered for sale, subject to the following specific conditions:

1. Open Houses can be conducted on Saturdays or Sundays between 1:00 pm and 4:30 pm;
2. The owner is entitled to hold two Open Houses per month;
3. The listing agent is required to be present during such Open Houses;
4. The tenant is allowed to be present during the Open Houses (in order that the tenant could safeguard his own possessions); and
5. The real estate agent must give at least ten days advance notice to the tenant of the proposed weekend Open House dates.  The tenant would then have 48 hours to approve those dates or provide alternate weekend dates.

The justices did not limit showings to just those five conditions.  Instead, it held that if the five elements are satisfied, the showings would satisfy the “normal business hours” requirement as authorized by the Civil Code.  The jurists left open whether other dates, times and conditions would also comport with the statute.  In other words, the five conditions were sufficient to satisfy the statutory requirements, but other conditions might also, based on a case by case determination.

Also, the Court’s decision only addressed the showing of a single family condominium residence that was listed for sale by a licensed real estate agent.  The case did not involve the exhibition of an occupied apartment unit which would soon be vacant.  However the conditions for allowing showings of a condominium on weekends should be applicable to an apartment owner.

Of course there are some differences.  Two of them are (1) that vacancies of apartments are usually shown by resident managers or the owner, not by a listing agent, and (2) apartment units typically rent much more quickly than residential real estate is sold.

The first of these differences is likely not too significant.  An owner or resident manager is probably as capable and trustworthy as a real estate licensee for purposes of showing an apartment unit as compared with a condominium.

The second difference may be more problematic.  The listing of a dwelling for sale may occur months prior to the time that the property is actually sold.  Thus, the owner wants to get a quick start in his efforts to find a potential buyer.  With an apartment unit, the existing tenant will vacate within 30 days following his notice.  Thus, for the landlord to have to wait just 30 days before holding open houses of the unit might not be as prejudicial as with a condominium sale.

Concluding Remarks

It is noteworthy that the Court specifically stated that the requirements for weekend showings only applied to the specific facts which were before it in connection with the specific condominium which was listed for sale.  The Court was careful to hold that the elements it set forth may not apply to other residential units which were for sale.

Moreover, the Court did not address open houses for the showing of apartment units which were being offered for lease.  Thus, one can only speculate whether the Court would apply similar conditions to apartment dwellings.

As a practical matter, if a tenant tells the landlord (or resident manager) that he will refuse to allow any open house on a weekend, or for that matter on a weekday, there is no realistic remedy available to the landlord.  Citing the Court of Appeal case to a tenant will likely fall on deaf ears. Indeed, nothing could be worse in this context than a tenant who cautions the landlord that if he attempts to exhibit the premises to a prospective applicant, whether at an Open House or private viewing, the tenant will raise his voice, waive his arms, object, and demand that the prospective renter go away.

Accordingly, the recent California Court of Appeal case is more theory than reality for landlords of apartment units.  But the Appellate Court’s ruling does not hurt and at least the law is moving in the right direction.

Dale Alberstone is a prominent litigation and transactional real estate attorney who has specialized in real property law for the past 36 years.  He has been appointed to periodically serve as a judge pro tem of the Los Angeles Superior Court and is a former arbitrator for the American Arbitration Association.  He also testifies as an expert witness for and against other attorneys who have been accused of legal malpractice.