landlord building ADU in backyard after renewing lease

[Wendy Wong]

Hi everyone! I recently renewed my lease but just found out the new owners are now building two ADUs in the backyard. This is more a question from a tenant’s POV—but I figure people in real estate were the best people to ask. I have a call with the property manager next week but want to go into it having done some research.

If you were the landlord in my situation, would you charge your tenant any fees to break the lease early? (I’m in Los Angeles if that makes a difference.)

If I stay, what can/should I negotiate (i.e. rent, increased electricity bill if the crew uses exterior outlets, construction start/stop times)? How much should rent be reduced for no longer having the full backyard and garage? Should there be a clause that lets us leave with 30 days notice and without any penalties if we can’t take the noise after all? (My partner and I both work from home.)

Thanks for your help!

[Dan H.]

Originally posted by @Wendy Wong:

I emailed the property manager/owner with questions about options and some of the things he’s saying make me think they’re gonna make this process difficult.

“Every lease unless stated otherwise allows for construction/remodel of property.” Is that true? Minor construction I get. (The previous owners had an electrical fire, rotten fence, etc—and we were fine when people came to repair it.) But does “every lease” really allow major construction?

They would need 60 days notice of a lease break or else they'll take our security deposit. The owner was saying that he was helping us out because typically they'd take our deposit for any kind of lease break. Now, this seems sketch because they're essentially breaking the terms of the lease with this ADU build—but on the other hand, it would probably take us a month or two to find a new place.

There’ll be a 15% discount on rent during construction. (They say construction will last 6 months—from 8am-4pm Mon-Sat—but I’m skeptical because it’s taken me months to do minor repairs at my rental property. Can’t imagine how building 2 ADUs will take 6 months.) We’ll get $100/month for losing our driveway. Does that seem like a fair rent reduction? If we have to be here for two more months, we want to make sure we’re at least compensated for the inconvenience.

 BS to the LL claims.  Repairs are typically covered in a lease and likely implied if not covered by the lease.   New construction is not implied by any lease. 

The yard being included is implied in the lease unless explicitly excluded.  

The LL is breaking the lease by taking away a yard and driveway (assuming the yard and driveway are not excluded in the lease) and they are breaking the lease by performing new construction on your rented property (again assuming it is not explicitly covered in the lease).

I am not a lawyer but suspect my knowledge in this area exceeds your LL but suggest you verify what I indicate with a tenant rights attorney.  I believe they cannot legally start construction, without your permission, until the end of your lease.  This is because they are breaking the lease which implied a yard/driveway as well as breaking the lease with new construction.  If they want to start construction prior to the end of the lease they should buy you out of your lease.  Forget that BS about you being the one to break a lease, the LL is breaking the lease.  Consult a tenant rights attorney. In many areas Tenants have free access to tenant attorneys.  Do not agree to anything prior to consulting an attorney.  

The LL is trying to take advantage of your perceived ignorance. You have the control here. You LL will not be able to keep your deposit for you moving (no court would allow this if you presented things accurately) as they are breaking the lease.  They should be paying you for moving expenses and the hassle of moving if you choose to move. Because you have the leverage, the $100/month reduction in rent for loosing driveway/yard and dealing with the construction is a joke.  If you move out, the LL might find it difficult to obtain a tenant at less than a 25% discount and would have the expense of the vacancy and the tenant turnover costs.  

You did not indicate if you property was rent controlled, but if it is you could possibly have additional leverage. 

Good luck