Tenant threatening legal action over adjoining unit renovations

[David Horowitz]

I am currently renovating two out of four vacant units on my property, and one of the tenants in the occupied units (not being renovated) has sent over a formal complaint regarding the noise that it produced, stating that it disrupted their quiet enjoyment of their space.

They are also alleging that I have rendered their unit uninhabitable, and that they are owed additional payment for this.

The one area where I made a mistake is trusting my contractors regarding permits, I asked them repeatedly if they were necessary and was assured that they were not, but the tenant called code enforcement and they had a difference of opinion. I’m currently going through the permit process now. Booking this one as a very annoying lesson learned, it always needs permits, even if you don't think it does.

While I understand that the tenant is upset, I don’t think that they have much of a legal leg to stand on - no work was being done in their unit, and I don’t think that merits much penalty from me. The one thing I’m maybe liable for is that I have to cut the rent by 1/3 for the days that the workers were present, which is also what I think is fair.

Am I correct in that is all the legal liability I currently face? Lawyers I've talked to seem to think that there is also the potential for a bad faith claim which triples liability, and that I started work without permits represents liability.  

- This is in Alameda county.
- All work was done during normal hours and following county rules around noise levels and when construction can be done. 
- No communal spaces were affected during the renovation.
- The city inspector looked over the work and has said everything is up to code - so no issues there I just have to get the permits processed. 

I would love to hear from anyone who has been through something similar, or has has similarly frivolous legal issues.