Owners who want to sell residential rental units often meet strong resistance from the tenant who occupies the unit.  This is not surprising, as the sales process is disruptive to the tenant’s daily life and the end result is usually that the tenant will have to move, with little or no compensation.

California Civil Code §1954 allows the landlord to enter the premises and show them to prospective buyers upon reasonable notice.  Section 1954(d) allows the landlord to give a blanket advance written notice of the intention to show the property, good for 120 days, and then actually show the property to buyers with 24 hours’ notice before each showing.

An open question for owners and their listing brokers has been whether these provisions allow the agent to hold open houses.  A court in Southern California has decided that Section 1954 does authorize open houses.

In the case of Dromy v. Lukovsky (2013 Westlaw 4654568), the owner of a condominium unit in Santa Monica had listed it for sale and his agent wanted to hold open houses.  The tenant had allowed individual showings but she refused to allow open houses.  In many jurisdictions, the landlord might simply have terminated the lease, but Santa Monica is a rent control city and termination on these grounds would have been difficult.

The landlord sued for declaratory relief, seeking an order that he had the right to hold open houses under Section 1954.  The trial court heard evidence from the broker about the importance of open houses in effective marketing.  The court then entered a judgment in favor of the landlord and allowed the open houses with certain restrictions.

The Court of Appeal agreed that open houses are permitted under Section 1954 and affirmed the trial court’s judgment, including the conditions that the listing broker be present and that the tenant was permitted to be in attendance.  The court also required the open houses be on weekend days between 1:00 and 4:30 p.m. and that they be scheduled 10 days in advance.

This case confirms that open houses are permitted despite the tenant’s objections.  Although the exact conditions imposed by court are not set out in Section 1954, they are reasonable concessions to the tenant’s concerns and something like them should be offered to a tenant before resorting to court.

If you have any questions, please contact Mark Hudak at: (650) 342-9600 or mhudak@carr-mcclellan.com.