Owning a home is supposed to provide stability, but a major disaster such as an earthquake, fire, or flood can send many homeowners in search of temporary living quarters. As families who may not have been renters for many years suddenly find themselves in the market for an apartment, condo, or other rental property, here's what they need to keep in mind.
Your homeowners' insurance policy most likely includes coverage for "loss of use." That means living expenses, including housing costs, that exceed your normal, everyday expenses. You're within your rights to ask your insurer to send you an advance on those expenses.
If your house just needs relatively quick repairs in order to be livable again, the insurer will pay for a hotel stay. If your house needs major repair or rebuiling, you're going to need a large chunk of cash to cover not only your first month's rent on an apartment, but also a security deposit. In California, for example, this can be up to twice the monthly rent, or three times the monthly rent for a furnished rental (see Cal. Civ. Code § 1950.5). If you rent an unfurnished home, you'll need money for furnishings, too.
Most policies place a dollar or time limit on your loss-of-use coverage to pressure you into acting quickly to get your home repaired or replaced. Think twice before signing any long-terms leases!
Your insurance company will pay for a rental that closely approximates the home you can no longer occupy. So, if you lived in a simple one-bedroom in a modest neighborhood, don't set your sights on a lavish condo or four-bedroom mansion.
Call your insurance agent BEFORE you start apartment hunting, and work out an understanding of the reimbursement you can expect (confirm any conversations in writing or by email). The reality may be that only higher-end rentals will be available, in which case you shouldn't have to pay out of pocket. Or, if you're dissatisfied with what's in your price range, you may decide to kick in some money of your own to rent a suitable place.
Your local rental market may have been tight before the disaster, but it can only get worse afterward, as you compete with others in equally desperate straits. Landlords may be sympathetic to your plight, but need to protect their business interests, too. They'll look for the prospect most likely to pay the rent and be conscientious and considerate. Follow the tips below to make yourself stand out.
Pull together and bring with you key documents establishing your qualifications on the spot, such as:
Many states forbid businesses from unfairly profiting from calamities, by preventing unreasonable price increases following the disaster. For example, California makes it a misdemeanor (punishable by a fine of up to $10,000, a year in jail, or both) to charge a price that exceeds, by more than 10%, the price of an item before a declaration of emergency (see California Penal Code § 396). The law applies to those who sell food, emergency supplies, medical supplies, building materials, and gas. It also applies to repair services, transportation, freight and storage services, and housing and hotel accommodations.
For tenants seeking rentals in emergency areas in California (even those who aren't doing so due to the emergency), this means that no landlord may increase the price of a vacant unit more than 10% of the rent that existed before the emergency was declared. For example, the landlord can't bump up the rent on a $2,000 unit to more than $2,200. To check for any such price jumps, ask the landlord, check the newspaper (the online version may not have been updated), or ask neighbors.
If you discover a rent-gouging landlord who won't trim the rent to a legal level, consider filing a complaint with your local prosecutor's office or with the statewide attorney general. In California, tenants can fill out an online form at the Attorney General's website.
Once you've found a suitable rental, you'll want to sign a lease or rental agreement. Here's why the difference matters:
Consider which arrangement is better for you (assuming the landlord gives you a choice). Rebuilding a house can easily take months, especially with architects and contractors suddenly in short supply. If the market is tight and might continue to be so, you might benefit from a lease, knowing that the rent will be locked in and that if you leave, the landlord won't have much trouble finding a replacement tenant. However, know that the rent-gouging law referred to above covers only tenancies that run month to month, not leases.
Fair housing laws protect all applicants from discrimination on the basis of, among other things, familial status (families with children), disability, and gender. You may need to call upon fair housing law if, for example, you encounter a landlord who has set an overly restrictive occupancy limit, perhaps trying to keep out families. In general, landlords must allow two persons per bedroom (in California, it's "two per bedroom plus one"). If your family of three is willing to live in a one-bedroom apartment, the landlord is on thin ice by declaring it's too small.
The landlord's major responsibility is to provide and maintain a safe and habitable home. This means that if the roof leaks, the toilet doesn't work, or the hot water is scalding, you're entitled to repairs. Other important tenant rights include the right to a rental that's reasonably secure from criminal intrusion, and the right to privacy (many states limit the reasons, and time, a landlord may enter your home, and set specific notice periods). Especially if you'll be a renter for a substantial period of time, you'd be well advised to learn the rules (see "Resources," below).
You'll be leaving this rental when your home is rebuilt, repaired, or you choose another. Make sure you're in line to get that security deposit back and leave with no lingering hassles with the landlord. You're expected to return the rental in the same condition as when you rented it, normal wear and tear excepted. If you damage the property, the landlord can deduct from the security deposit for repairs.
While you're a renter, you need to protect the items that you're purchasing to get on with your life. Talk to your insurance agent about adding a renters' policy to your existing homeowners' policy (it shouldn't cost much).
To fully understand your rights and your responsibilities, check out these resources from Nolo: