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There’s been much news swirling around Section 8 housing, whether in Washington, the California statehouse or in the City by the Bay, where years of financial mismanagement has finally caught up with the San Francisco Housing Authority (SFHA).

Ben Carson muses about his future, but whenever he decides to bow out from heading HUD, he’ll leave behind a lot of ruffled feathers. Under his leadership, Carson has dialed back civil rights enforcement at the agency, suspended Obama-era rules that had been aimed at fighting housing segregation, and sought to triple the minimum rent paid by families on federal housing assistance.

For the embattled San Francisco Housing Authority, however, doubling the rent wasn’t an option. When HUD pressured the agency to bring in more money to cover budget shortfalls, SFHA balked at raising the minimum amount of rent housing voucher recipients have to pay, from $25 to $50 – the extra $25 was a deal breaker for the housing  authority.

When push came to shove, the federal government said: “You’re fired,” putting an end to a string of scandals and embarrassments. Rent relief for 14,000 low-income households is now in the City of San Francisco’s hands.

The conclusion of this debacle came not long after the federal government reopened for business after a protracted shutdown that forced many landlords to tap into their reserves. In an earlier article, we said that participation in Section 8 has always been a trade-off between guaranteed subsidies and other perks, and less endearing aspects of the program. Yet the government shutdown taught rental property owners that housing authorities could run out of money. The prospect of programs going broke fundamentally challenged the inviolability of rent security that has been so appealing to landlords who accept Section 8 vouchers. Without the assurance of the government’s regular checks, this give-and-take relationship crumbles and the system collapses with it.

Of course, the Section 8 program has never been big enough to subsidize everyone who qualifies to be on it and the program largely relies on willing private landlords who opt to work with housing agencies and voucher holders. Yet, whoever came up with the clever phrase that a rising tide lifts all ships clearly did not have Section 8 housing in mind. In today’s red-hot Bay Area real estate market, many landlords are giving Section 8 a cold shoulder, leading some cities to offer the promise of easing inspections and other reform, as well as to dangle carrots to attract more landlords. Oakland, for example, is offering financial incentives to hang on to more landlords.

Many of our clients, however, have found that once they opt-in, it’s until death do us part. The Oakland Housing Authority (OHA) will only sever ties when the lease has been terminated in accordance with the Just Cause for Eviction Ordinance and so, given the difficulty of exiting Oakland’s Section 8 program, owners are advised to do a careful cost/benefit analysis before taking the plunge.

No matter where you stand in the love-hate relationship with Section 8, Senator Holly Mitchell, a Democrat from Los Angeles, would compel rental housing providers to consider tenants who receive federal housing voucher assistance. If passed, SB 329 would make it illegal to deny a tenancy on the grounds of the applicant’s participation in the federal Housing Choice voucher program.

A law is already on the books prohibiting discrimination against a prospective tenant based on some sources of income (for example, Social Security, pensions, CalWorks, or the type of job one holds). California does not define Housing Choice Vouchers or other rental assistance programs as income, so the state law does not currently protect Section 8 clients.

Under the proposed legislation, this definition of source of income would be expanded to include housing subsidies paid by the government directly to landlords.

We hasten to say that while current federal law doesn’t make it illegal for landlords to deny a tenancy based on Section 8 participation, some municipalities such as Berkeley and San Francisco have filled the void. In case you were wondering, those type of ordinances have survived judicial challenges.

Landlords are reminded they can use their regular screening criteria regarding tenant history. Any reason that can be used to deny any other tenancy – a checkered rental history, for example – can also be used when the applicant is a voucher holder. Some owners mistakenly believe non-discrimination laws require them to rent to any voucher holder. While housing providers cannot refuse to accept a tenant based on his or her use of a voucher to help pay rent, more suitable tenants can be found when vetting a pool of candidates. When it comes to this type of communication, less is more.

Discriminatory advertising

Caution should be used when advertising the rental unit, as we have seen many apartment listings with exclusionary language that runs afoul of fair housing laws. When the language expresses a preference for certain groups or, conversely, attempts to discourage other groups from applying, it invites liability.  Property management companies that experience high employee turnover and a lack of formalized legal training are especially at risk of publishing ads like these.

Getting the elephant out of the room

Many landlords who give the cold shoulder to Section 8 applicants feel their position is justified by some preconceived belief that housing voucher recipients will cause damage to the rental unit or instigate other problems. Bornstein Law’s position has always been that no group should be painted with a broad brush.

We always operate under the assumption there are good landlords and bad landlords and in like fashion, there are good tenants and bad tenants. While there is a set of landlords who can relate horror studies about renting to Section 8 tenants, there is no shortage of bad experiences that can be told by landlords who rent to other tenants who do not hold housing choice vouchers. Indeed, many tenants who rely on these vouchers are extra studious tenants because he or she does not want to risk becoming ineligible for the program, so, once again, we urge proper screening to evaluate rental risks on a case-by-case basis.

Domestic violence in public housing

It’s been said that home is where the heart is, but what happens to the home when the heart is broken? When domestic violence rears its ugly head, it is a difficult subject that cannot be ignored. In our next article, we take on the Violence Against Women Act and HUD protections afforded to survivors of domestic violence. Subscribe here to stay in the know or follow us on Facebook.

Although potential minefields always await landlords, participating in Section 8 has its own unique challenges, paperwork, and rules. but you can count on Bornstein Law for proper counsel.

Wholesale expansion to rent control was rejected at the ballot box in November 2018 as Proposition 10 went down in flames, but we urged the rental property industry not to celebrate for too long – our fraternity won the battle for the time being, but the campaign for a new regulatory regime steams forward as resilient tenant advocates are taking the battle to local municipalities.

Oakland is perhaps the most vivid example. Just as the cypress trees do not grow in each other’s shadow, Oakland no longer plays second fiddle to its sibling of San Francisco and is now a force in its own right. Yet history has shown that growth begets calls for increased tenant protections. If the agenda for statewide eviction and rent increase regulations had been too ambitious, tenant advocates still are chipping away at owners’ rights in piecemeal fashion on the local level, and Oakland has become one of most successful sandboxes in tinkering with owner rights. Even as the city carved its own destiny, it remains in the shadow of San Francisco’s onerous rent control rules.

Although cities have been ground zero for tenant advocates, the chorus has sounded once again to the Statehouse. The California Legislature has rolled out hundreds of bills impacting the rental housing industry, and we look here at some of the worst offenders here.

SB 329

This proposal floated by Sen. Holly Mitchell, a Democrat from Los Angeles, would make it illegal to deny a tenancy based on the applicant’s participation in the federal Housing Choice voucher program. Under current law, it is illegal to discriminate against a prospective tenant based on the applicant’s source of income. At present, however, Section 8 housing vouchers do not legally meet the source-of-income standard. SB 329 would change the status quo by expanding the definition of source of income to include housing subsidies paid by the government directly to landlords.

We hasten to say that while state law has lacked consistent standards in this regard, some municipalities have enacted their own protections for Section 8 tenants and so even if state law is mute on a landlord’s discretion to deny Section 8 applicants, some cities have resolved the quandary by enacting their own ordinances.

Section 8 has always been a trade-off between inspections, red tape and other less endearing aspects of the program and counting on Uncle Sam to pay its share of the rent on time. Yet the government shutdown has taught us that housing authorities might run out of money, forcing landlords to tap into reserves and casting doubt on guaranteed rent. The San Francisco Housing Authority is particularly broke.

Although the envelope of protected classes is constantly being pushed, landlords do not have to accept Section 8 tenants. Any other valid reason that can be used to turn down an applicant can also be cited to deny tenancy to a housing voucher recipient – a blemished rental history, for example. More suitable candidates can be found, but where landlords and property managers get in trouble is when they make emphatic statements about who their ideal tenant is, or paint an exclusionary picture of groups who are not welcome in the rental unit. When it comes to this type of communication, less is more. For more background, visit our earlier article on Section 8. 

SB 18

We have chimed in many times on San Francisco’s ordinance dubbed “The No Eviction Without Representation Act,” but for Senator Nancy Skinner, a Democratic from Berkeley, the right to free legal counsel to evictees should be extended beyond 49 square miles. The Homelessness Prevention and Legal Aid Fund would be established to provide legal aid to tenants facing eviction or displacement, using competitive grants.

Bornstein Law can’t help but draw a parallel in the language of this bill with Oakland’s vacant property tax. In an earlier post on the punitive tax aimed to repopulate land deemed to be underutilized by the city, we said that property owners were assigned inordinate blame for the intractable homeless problem. SB 18 likewise gives owners a black eye for a difficult situation they did not create.

However ill-coined, this bill would ratchet up the legal costs for rental housing providers and be especially detrimental to mom and pop landlords who would be forced to defend against numerous gambits attorneys use to delay an unlawful detainer action and coerce owners to settle the case. If we didn’t steadily rail against free legal representation afforded to tenants, you might say we are opportunistic in predicting this bill will only be a boon to attorneys.

AB 53

In an earlier article, we submitted that the law and a culture of amnesty stand to conceal rental risks. Bornstein Law is all about second chances and forgiveness. We are also about transparency and equipping rental housing providers to connect the dots and mitigate risk. If Assemblyman Reginald Jones-Sawyer, a Democrat from Los Angeles, has his way, however, landlords would be banned from inquiring about criminal records during an “initial application phase.”

Our friends at the California Apartment Association were instrumental in defeating a similar bill floated by Jones-Sawyer and we are optimistic that AB 53 will share the same fate.

Regardless of the outcome, we note that while turning down a tenant because of a criminal record can be legally justified, blanket bans on ex-offenders can run afoul of fair housing laws and if criminal records are used as a consideration in approving or denying a tenancy, the policy must be narrowly tailored. Evaluating criminal history is a subject we took on here.

SB 529

Sen. Maria Elena Durazo, a Democrat from Los Angeles, wants to allow members of a tenant association, by a majority vote, to withhold rent payments for up to 30 days in response to grievances with the landlord.

The withholding of rent is something most commonly seen as part of an affirmative defense to an unlawful detainer (eviction) action whereby the tenant or the tenant’s attorney argues conditions are not livable, a topic we chimed in on here. Regardless of the merits of the underlying reason for the grievance, SB 539 would legalize a mob mentality, permitting tenants to hold rent payments hostage so long as they band together in a team effort.

AB 1110

Rent increases are already highly regulated, especially so in rent-controlled jurisdictions but for Assemblywoman Laura Friedman, a Democrat from Glendale, regulations don’t go far enough. This bill would increase the length of notice required for rent increases during month-to-month tenancies. 90 days’ notice for rent increases of more than 10 percent would be sufficient under the proposal and 120 days’ notice would be required for rent increases exceeding 15 percent.

More on the horizon

We are also following AB 36, a bill that lacks details, but is aimed at stabilizing rental prices and increasing affordable housing stock. In his State of the State speech, Gov. Newsom renewed his commitment to enacting some kind of tenant protections this year. “I want the best ideas,” the Governor said. To lawmakers: “Here is my promise to you: Get me a good package on rent stability this year and I will sign it.”

What the proposed law will look like is yet to be seen, but suffice it to say it will be consequential to rental housing providers. A recent LA Times editorial offers a premonition on what shape AB 36 will morph into.

Whether under the dome of the Capitol or in city halls, Bornstein Law is committed to keeping you abreast of changing laws and regulations.

In our earlier article, we said that what can be asserted without evidence can also be dismissed without evidence and stressed the importance of producing authentic testimony, documents, and other evidence in the event a landlord-tenant dispute is enlarged and lands up on the courthouse steps.

When a client comes into our office, we can immediately get a gut level reading of the quality of their documentation. Some of our clients have beautiful files, in perfect chronological order, with leases, rent increases, and tenant correspondence, even a log of telephone calls in the actual file. Other clients’ files look like a hurricane and this disorganization or lack of documentation becomes problematic in the unfortunate event litigation arises out of a failed rental relationship.

Property management companies tasked with overseeing bookkeeping, trust accounts, and complying with DRE rules and regulations have their own unique risks in their fiduciary duty if bookkeeping is not meticulously in order. When the California Department of Real Estate knocks on the door and discovers untidy books, the property management company can lose its license. Further, if any irregularities are discovered in client accounting statements, it can be calamitous. Daniel Bornstein addresses this more at length in this webinar on the top 10 pitfalls for property managers, but let’s move onto how long a landlord should keep documents after the tenancy has been terminated.

Once a tenant moves out, how long should documents be preserved?

This question is one of cauterizing risk and the short answer is that documents should be preserved until you are no longer liable in a potential criminal or civil lawsuit. In one of our most widely disseminated posts, we noted that tenant lawsuits are proliferating throughout the Bay Area, and even the most studious of landlords are susceptible.

Perilous actions take many forms, be it wrongful eviction, constructive eviction, harassment, myriad breaches of the rental agreement, violation of any number of local ordinances, personal injury or negligence, and more. Contact our offices to learn how long the tenant has to raise claims after he or she has moved out.

Also, keep in mind that keeping documents accessible may be prudent in the event of a state or federal tax audit. Generally speaking, the IRS can audit a landlord’s tax return for up to six years or even longer if fraud is suspected.

The preservation of documents is a double-edged sword. On the one hand, it is helpful for the purposes of recordkeeping and may be a source of exculpatory evidence against the claims of a disgruntled tenant. On the other hand, an enterprising tenant attorney may request archived documents be produced as part of an onerous and expensive discovery process.

If it’s the landlord’s policy of destroying documents, this should not be a shredding party but rather, the owner should use discretion. If there is a claim at hand, deleting documents relevant to the case will raise eyebrows.

Did the tenant move in like a lamb and move out like a lion?

How long to preserve documentation and correspondence will be shaped, in part, by the nature of the client’s departure.

From our hard-won experience, when the tenancy ends amicably with the residents vacating at their own volition without a dark cloud of notices, prodding, haggling, arguing or rent board appearances, the chance for any residue is small. When there is a history of acrimony between the landlord and tenant, however, your odds at facing a lawsuit down the road increase exponentially. Whenever possible, Bornstein Law likes to obtain a release of claims from tenants, but this goes beyond the scope of this article.

In conclusion

We are sticklers for documentation at Bornstein Law, and generally speaking, the more documentation, the better. This should be well-organized and thought out policy evenly applied. The life cycle of documents begins even before the tenancy begins and continues throughout the duration of the rental relationship, and even beyond.

Perhaps you do not have an imminent dispute, but like going to the dentist for a routine check-up and cleaning, perhaps it’s time to sit down with an attorney to ensure your lease is up to date and your documents are in order. Don’t do the heavy lifting later – an ounce of prevention is worth a pound of cure.

At Bornstein Law, we’ve always likened litigation to a game of tug of war – the harder each side tries to win and pulls on the rope, the tighter the knot becomes. With that in mind, our approach is to untangle the knot and not enlarge the dispute. Generally speaking, 99% of cases settle and ideally, disputes are resolved amicably with the least cost and complications, but we all know it’s not a perfect world we live in. Let’s assume the tenant strenuously pulls and the situation is in fact enlarged.

When you get the dreaded call from our office to inform you the tenants are disputing an eviction, beads of sweat may spill from your brow, but it’s time to be composed and get all of your ducks in a row.

It’s been said that what can be asserted without evidence can also be dismissed without evidence.

Whether the underlying eviction action is based on unpaid rent or eviction for cause, the plaintiff (landlord) has the burden of proof at trial and it is their duty to prove that either there is rent owed or the tenants are in violation of one or more lease provisions.

In law, what we have are competing narratives, and if the unlawful detainer lawsuit goes to trial, it will ultimately be up to a judge or jury which narrative prevails, after reviewing the testimony, documents and other evidence presented by each of the parties.

Getting your financial house in order

Many overexuberant owners of rental property march into court with oral claims of non-payment of rent without bank statements and tenant ledgers, and other supporting evidence. To obtain a Judgment and a Writ of Possession to evict a tenant, the landlord must prove each of the following elements of the case through a combination of witnesses and documentary evidence:

  • The existence of a written or oral lease
  • The occupancy of the leased premises by the tenant
  • The amount of the agreed-upon rent
  • The failure of the tenant to pay the rent

A rent receipt or a canceled check, of course, would be the easiest way for a tenant to prove that rent was paid. Every so often, we encounter landlords who mistakenly accept rent payments after the unlawful detainer action has commenced. This is a cardinal sin because if the landlord deposits any money from the tenant during the unlawful detainer process, the tenancy has begun anew – the owner has forfeited the right to proceed. Taking rent after the expiration of the 3-day notice to pay rent or quit is so egregious, it made our list of the top 5 reasons why landlords lose unlawful detainer actions. Take a look.

Like unpaid rent cases, sufficient evidence should be gathered to prove other lease violations that precipitate the unlawful detainer action. For example, if the evictee caused damage to the rental unit, it is important to bring along pictures, videos, or any other proof that would back up the landlord’s claim.

What to bring to court

The following list is not exhaustive but serves as a good starting point on what rental property owners should be armed with on the day of reckoning in court. Remember, this is not a platform to angrily vent your grievances about a nightmare tenant, but to submit appropriate, authentic evidence to paint a compelling reason as to why the tenant should be transitioned out of the unit.

  • The Notice to Pay Rent or Quit, or the Notice to Cure or Quit if based on another reason;
  • The lease agreement with the tenant’s signature;
  • Correspondence with the tenant, which may include letters you wrote or received about the rental unit, emails, text messages, etc.
  • Photos or videos that show unsafe or unhealthy conditions if the landlord alleges the tenant damaged the unit;
  • Building inspection reports, if applicable;
  • Bills from any contractors you hired to fix alleged damages;
  • Evidence from neighbors of the tenant if they lodged complaints against the tenant you are attempting to evict
  • Other witnesses who have personal knowledge of the facts.

In the event witness testimony is warranted, it is best to get a subpoena issued and properly served to compel his or her presence in court. This is true with willing, cooperative witnesses whose employers require that a subpoena be served on the employee to allow time off to court.

Tenant defenses

At Bornstein Law, we’ve had cases that seemed to be complicated, only to be resolved painlessly. When we broker a successful outcome for landlords, their praise is often prolific, although, in the back of our mind, we breathe a sigh of relief and say, “wow, we were lucky.” Conversely, we’ve had cases that had all of the indications of being easy, only to have what would be a perfunctory unlawful detainer action turn on us and become mired in complications.

One of the biggest variables in this equation is whether the defendant is represented by any number of ferocious tenant attorneys that are prone to articulating affirmative defenses to the unlawful detainer action, so let’s talk about them.

We noted in an earlier post on California’s implied warranty of habitability that a favorite gambit of tenant attorneys is to allege the rental unit is unfit or unsafe for humans to occupy and thus, the tenant is absolved of responsibility to pay rent for the substandard unit.

Indeed, landlords have the duty to maintain a rental unit according to a set of minimum standards, codified in Cal. Civ. Code §1941, 1941.1, and 1941.3. In this video, we’ve outlined nine bulleted points on what these standards are.

We hasten to say that in addition to relevant state law, there may be local ordinances and building codes that dictate what constitutes a habitable rental unit and so landlords otherwise compliant with statutes may be in violation of rules closer to home.

The tenant or his or her counsel commonly argues that since the rental unit is not in liveable condition, withholding rent is justified, an argument that holds water under Cal. Civ. Code § 1942 and the seminal case of Green v. Superior Court.

The importance of providing evidence extends to the tenant and the burden of proof is shifted to the tenant when this affirmative defense is asserted. Other stalling tactics include any number of frivolous pre-trial motions, such as a “motion to quash service,” motion to strike, allegations of discrimination, and still more demurrers designed to put a monkey wrench into the court case and ratchet up the legal costs of owners.

Parting thoughts

When landlord-tenant relationships reach a boiling point and arrive at the courthouse steps, sound evidence is critical to gaining an upper hand during the proceedings. Regardless of the merits of the case, a lack of evidence not only will dampen a landlord’s chances of effectuating a legal eviction. Without evidence in the unlawful detainer action, the process can deliberately drag on for months and ensure the tenant lives rent-free.

Bornstein Law can stop the madness – please consult us first before going down a rabbit hole of complexity that surrounds disputed eviction actions.

 

 

It’s back to basics at Bornstein Law. While our latest articles on Oakland’s slippery slope towards expanded rent control and other posts have been reactionary, certain immutable rules do not blow in the political winds. One of them is state law concerning security deposits.

A bit of trivia: Disputes over security deposits are the most common reason why landlords are dragged over the coals in Small Claims Court, and it’s no mystery why. Rest assured, one of the first things on the mind of outgoing tenants – even before they ask themselves how to get that giant sofa around the narrow doorway – is how they are going to get their security deposit back on moving day. Yet dealing with these disputes are anything but trivial.

This topic recently graced itself in the media after a California billionaire developer has been accused of wrongly keeping millions of dollars in rental security deposits from thousands of tenants. Former tenants also claim they were not provided adequate reasons for damages in apartments when they moved out, as required by state law. Instead, reads the lawsuit, generic descriptions such as “maintenance charge,” or, “cleaning charge” are listed.

Presumably, the billionaire has some financial cushion and can take a hit, but other landlords don’t have the luxury to be so heedless – a costly lawsuit can decimate their rental business.

Security deposit rules are codified in California Civil Code Section 1950.5 and spell out four categories as lawful deductions from security deposits. Landlords may be able to keep all or a portion of the tenant’s security deposit for enumerated reasons:

  • Repayment of back rent at the end of the tenancy;
  • Repair damage to the unit that is not ordinary wear and tear;
  • Cleaning the premises to restore it to the condition at the beginning of the tenancy; and
  • to remedy other defaults that may be designated by the rental agreement.

The law cannot anticipate all circumstances, and so it’s plausible that other charges can be justified on a case-by-case basis.

What is normal wear and tear anyway?

When a tenant absolutely shredded the carpet or completely stained countertops bright red, it’s a clear reason to deduct from the tenants’ security deposit. Ditto for the condition of this apartment – when we shared this photo, it went viral.

For less egregious defects, it’s a judgment call.

Wear and tear is the average deterioration of furniture, carpets, and fixtures of a rental property due to regular use over time and although California vaguely defines this term, there is ample case law that provides guidance. Scuff marks on the wall, small chips of paint from door frames, tread and dirt in carpets, small nail holes in the wall, minor wear on appliances, and the natural decrease of useful life for appliances and carpeting can be considered the result of the tenant using the property for its intended purpose.

For those of you who are visual, we’ve put together a handy, one-page PDF that provides a framework to determine whether defects rise to the level of neglect or if blemishes are to be expected in the natural course of the tenancy.

Download our Security Deposit Deduction Guide…

Bornstein Law has a keen eye for what is reasonable wear and tear and what is not – when in doubt, please consult us first.

Security deposits can come in many shapes and forms

They can be called last month’s rent deposits, pet deposits, key deposits, and others, but don’t let these names fool you. Under the law, they are considered the security deposit period, and cannot exceed legal limits when they are all added up.

Also, keep in mind that certain courts have said itemized deposits can only be used for its stated purpose. For example, pet deposits can only be used for the damage that Fluffy wreaked in the apartment, and not for any other damages unrelated to the pet. To avoid exceeding the statutory maximum and ensure the deposit can be used towards any loss, we advise having a single security deposit.

What the landlord can ask for

California prescribes the maximum dollar amount owners can charge. For unfurnished apartments, landlords can ask for a maximum of two months’ rent if the apartment is unfurnished and up to three months’ rent if the residence is furnished. Owners are entitled to ask for an additional half-months’ rent when the tenant has a waterbed.

Although state law does not require landlords to pay a tenant interest on the retained security deposit, some rent-controlled cities do mandate this. San Francisco is in a rather exclusive club of cities that specify the interest rate to be paid. The rate of interest owed on deposits is established by the Rent Board.

A word about “non-refundable” deposits

If you have “non-refundable” deposit, for example, an automatic deduction for flea spraying if a pet was on the premises, or a deduction for painting, steam cleaning, replacing the carpets and the like, this flies in the face of the law. When a tenant complies with the lease terms, he or she is entitled to all of the security deposit back unless there was serious damage.

Move-out inspections

California has one of the most cumbersome security accounting rules. Every tenant has the right to a pre-move-out inspection on the eve of vacating the premises. If the tenant waives this right, you have no worries. However, if a tenant asserts his or right to a pre-move out inspection, he or she must be afforded the opportunity to be present during the walk-through inspection.

This exercise must take place 14 days prior to the tenant’s actual transition. Any deductions the landlord intends to take after his or her observations of the unit’s conditions must be itemized in writing. During this period of time, the tenant has the ability to remedy any itemized deductions in order to preclude the owner from taking them.

When the tenant finally delivers possession of the unit, it’s time to conduct security deposit accounting, whereby the landlord documents any deductions. Landlords have 21 days to perform this accounting and return a tenant’s security deposit in full or partially.

If any deductions are taken from the tenant’s security deposit, the partial refund check must be accompanied by a written itemized statement that lists the amounts deducted and the reasons for the deductions.

If the deduction exceeds $126, the landlord must share copies of receipts for the charges incurred to repair or clean the unit. If the tenant takes issue with deductions or he or she did not receive an itemization accompanied by receipts, they can send a letter to the landlord, and even though the tenancy has ended by this point, any correspondence should be taken seriously – if the landlord does not respond within a reasonable time, it is ripe for a Small Claims Court Action.

Parting thoughts

We remind landlords that when the carefully choreographed steps of the security deposit are ignored, liability is not limited to the dollar amount of the security deposit. Courts are all too willing to punish nonchalant owners who hold tenants hostage with the security deposit and unnecessarily pocket money just because the tenant forked it over. A phalanx of tenant attorneys will gladly help tenants settle the score.

When it comes to security deposits, documentation is specialized, timelines are unforgiving, and the rules must be followed to the letter. Bornstein Law is very good at managing landlord-tenant relationships from the cradle to the grave of the tenancy – contact our offices to avoid or resolve conflicts and cauterize risk.

It’s been a bumpy ride lately for owner-occupied duplexes and triplexes. Following a spirited debate, these units are now subject to rent control after Oakland City Council voted to place a 180-day moratorium limiting rent increases to the annual CPI adjustment and entitle tenants to a wide range of added protections, including the right to treble damages, attorneys fees and costs.

Tenant rights under The Rent Adjustment Program begin no sooner than when the tenant moves in – per the program’s requirements, landlords are to give incoming residents formalized notice of tenant rights, known as the Oakland RAP notice.

There was a flicker of hope for owners as the democratic process was seemingly playing itself out. Landlords outnumbered red-shirt toting tenants on Tuesday, February 5 in front of the Community and Economic Development Committee. In the sometimes raucous hearing, befuddled owners left the corridors, chamber, and galleries with more questions than answers after the Council delayed a much-anticipated vote, based on the recommendation of City Attorney Doryanna Moreno, who cited unspecified legal issues brought to her attention.

Although there was no resolution either way, the pause was welcome for a group of landlords who felt confident the proposal would at least be put under further scrutiny, if not defeated on the 26th. This hope was dashed with an Interim Emergency Ordinance.

For City Councilmember Nikki Fortunato Bas and Lynette Gibon McElhaney, relief from rising rents couldn’t come soon enough. The pair floated an Interim Emergency Ordinance to temporarily eliminate exemptions from the Rent Adjustment Ordinance for owner-occupied parcels with two or three units, and a newly minted council sympathetic to tenants’ rights pushed the emergency amendment through Thursday in an effort to curb rent increases. The Ordinance is implemented immediately, not open to further debate or discussion. You can view the ordinance on our website here.

RELATED ARTICLE: We told Mercury News that being proactive and considering preemptive rent increases is good legal counseling. 

This ends a long era of protecting mom and pop owners of two and three-unit buildings from rent and eviction control measures after a long and storied campaign by tenant advocates to put exemptions on the chopping block. Some background is in order.

It’s important to make a distinction between two components of the Oakland Rent Adjustments and Evictions Ordinance. One pertains to rent control and spells out tenants’ rights, while the other establishes eviction protections by delineating the reasons why a tenant can be evicted legally.

The Oakland Residential Rent Adjustment Program (O.M.C. 8.22.030) applies to buildings that have a certificate of occupancy prior to January 1, 1983, but a notable exemption was carved out for duplexes and triplexes when the landlord occupies one of the units as his or her principal residence for at least a year.

Historically, owner-occupied duplexes and triplexes were also exempted from just-cause eviction protections, but the status quo was changed on November 6, 2018, when over 58% of Oakland voters passed Measure Y. Take a look at the storyline leading up to the proposal that sailed through to victory.

Removing the so-called “eviction loophole” wasn’t enough – it was just the opening salvo in efforts to erode the rights of small property owners and remove exemptions altogether. Act Two: as a companion to Measure Y, Councilmembers Dan Kalb (District 1) and Noel Gallo (District 5) floated a proposal to apply the Rent Adjustment Ordinance, better known as rent control, to duplexes and triplexes that house the owners and tenants. To Kalb, it’s all about uniformity.

“The key here is we’re trying to make all of our rent laws consistent with each other and cover the same types of units … this is an effort to conform with Measure Y that was passed by voters last year.”

Fair return

A property owner of a newly covered unit who feels he or she is being denied a fair return on the investment may file a petition with the Rent Program and submit evidence that in the wake of allowable rent caps under the moratorium, the return on investment is less than the return for a similar risk. To request relief, owners must have several things in hand, but this goes beyond the scope of this article. Suffice it to say landlords must have all of their ducks in a row, with the guidance of proper counsel.

Our takeaways

We predict that an already deluged Rent Board will handle many more complaints and new lawsuits will sprout up for an expanded pool of potential litigants. If we did not steadily rail against expanded rent control, you might think we are opportunistic in saying the moratorium will only be a boon for attorneys. Expanded rent control will also put a damper on the construction of Accessory Dwelling Units at a time when these pint-sized units are sorely needed to ease the housing shortage.

Of course, owners of units newly subject to rent control will be exposed to a regulatory regime previously foreign to them. For those owners who are cast into an unfamiliar labyrinth of rules and heightened risk, you can rely on Bornstein Law to get you up to speed on the lay of the land and provide a counter-narrative to newly emboldened tenants and their attorneys. Contact our office for informed advice.

Editorial note: In this new “offbeat” section of our blog, we attempt to make sense of nonsense, taking on odd and humorous news before imparting serious conclusions for rental property owners.

27-year old Mumbai businessman Raphael Samuel intends to sue his parents for giving birth to him without his consent. Mr. Samuel concedes that parents cannot seek their unborn children’s consent, but insists that “it was not our decision to be born”.

Since we didn’t ask to be born, it follows that we should be paid for the rest of our lives to live, he submits.

“If we are born without our consent, we should be maintained for our life. We should be paid by our parents to live.”

Such an outlandish demand has the potential for causing a rift with any family, but by all accounts, the Samuels are getting along well and taking the recent upheaval with humor. The dinger? The son’s parents are both attorneys, something that doesn’t escape his mother.

In a statement, Kavita Karnad Samuel says, “I must admire my son’s temerity to want to take his parents to court knowing both of us are lawyers. And if Raphael could come up with a rational explanation as to how we could have sought his consent to be born, I will accept my fault.”

Mr. Samuel’s belief is rooted in an increasingly popular yet bizarre ideology that argues that life is so full of misery that people should stop procreating immediately.

If the action proceeds, it would have some interesting legal implications. Every human being would qualify an eligible plaintiff. It stands to upend California’s Probate Code – if the parents are deceased, the children would have a viable claim against the parent’s estate, regardless of the will or any exercise in the equitable distribution of assets since they are all equally damned by birth.

Can we make any serious observations from this?

However silly, the crackpot lawsuit contemplated reminds of us of a real-life eviction case. Some of you may recall that 30-year-old Michael Rotondo was ordered by a judge to vacate his parents’ home after living rent-free for nearly a decade. After repeated entreaties and offers of cash assistance for their son to move out of their Camillus, New York home, Rotondo stayed implanted and the court was tasked with deciding where the parent’s responsibility ends and where the child’s responsibility begins outside the womb.

Although the case was the butt of jokes on the late night talk show circuit, we attempted to draw some serious takeaways in an earlier article. There, we said the action bespeaks alarming abuse of vulnerable property owners who are not ensnarled by the typical fraudsters, but by family members, friends, caregivers, and other trusted advisors. Bornstein Law has been asked to intervene in many extended stays and if push comes to shove, commence a forcible detainer action.

Transitioning a relative out of the rental unit, of course, can be a harrowing experience with unique pitfalls that we don’t see with other perfunctory evictions. We take them on in this article on the difficult prospect of evicting a relative.

With a notoriously high cost of living in the Bay Area, it’s not surprising that one study estimates that nearly 1 in 3 Millenials are living with their parents. Coupled with the growing number of multigenerational families living under the same roof, the elements are rife for potential conflict for families living in close quarters.

Remove yourself from the emotional fray

Being sued by your son or daughter for being born is not so commonplace, but other disputes among relatives are not rare. Bornstein Law can be a voice of reason and lower the temperature of the dispute, or provide sound legal advice on your options in the unfortunate event familial friction can’t be resolved on its own.

A popular real estate agent in South Jordan, Utah, dad of four and a pillar of the community was tragically slain when attempting to evict two tenants. David Stokoe was believed to visit the rental unit and order the pair to leave the premises by 6:00 p.m. Pursuing a report that Stokoe was missing, police learned his last known whereabouts that evening was the apartment and later found his body in a concealed crawl space.

According to court documents, the tenants took issue with the landlord because they felt he was “overstepping his legal rights by entering the apartment without [the renters’] permission.” One suspect told police that Stokoe forcibly entered by kicking down the door, leading to a physical altercation. The tenants claim Stokoe put one resident into a “very serious” chokehold in the ensuing struggle.

Many tributes are pouring in from people who knew Stokoe, and there are no indications from the remembrances that he would instigate violence. While the investigation is ongoing, the suspect’s account of the events leading up to the homicide should be met with skepticism. The tragic event does, however, highlight the dangers of removing disgruntled tenants from rental units without the assistance of law enforcement.

Bornstein Law strongly dissuades our clients from resorting to “self-help” eviction measures that circumvent the legal eviction process. These self-help measures may include changing locks, cutting off utilities, removing tenants’ property, making threats and other heavy-handed antics that amount to landlord harassment. We remind rental property owners that eviction procedures apply regardless of what the tenant has done or how a tenant behaves.

After a writ of eviction is issued, it is the responsibility of the Sheriff’s office to notify residents that they have to vacate by a time certain and ensuring the tenants are removed from the property. When a landlord takes measures into their own hands, it is at their peril.

Courts and rent boards frown upon vigilante landlords who attempt to uproot residents through harassment and intimidation and it is all too common for tenants to be awarded damages for an illegal removal. Aside from the significant civil liability owners expose themselves to by trying to nudge tenants out with graceless means, the landlord can face criminal charges. In our latest video, we also noted that failing to correct, much less creating inhabitable conditions is one surefire way to losing an unlawful detainer action. Other consequences can result from self-help evictions too numerous to name here, but suffice it to say you do not want to defend against them.

Evicting tenants is one of an owner’s most thankless but sometimes necessary tasks. Fortunately, you can rely on proper counsel to manage landlord-tenant relationships and as a last resort, effectuate a legal transition of tenants out of the rental unit while cauterizing risk.

Third-party rent payments can come in many forms, such as individuals like family members or caretakers, social services agencies, or programs spawned by local municipalities or nonprofits. Many landlords have been reluctant to accept payments made on behalf of others, for concerns that a third party would claim a right to possession of the unit.

AB 2219 has assuaged landlord concerns by providing that a landlord can require a third party to sign a document acknowledging that the transaction does not make the payor a tenant. The law amends Civil Code §1947.3. Although this law permits under certain circumstances a tenant to pay through a party, the landlord or his or agent is not required to accept the rent payment tendered by a third party unless an acknowledgment is inked to the effect that no new tenancy is created.

Don’t worry, we have the acknowledgment prepared and as a professional courtesy to our clients, have uploaded it to our website, along with other helpful resources.

Can a landlord demand cash payments?

Although the law allows the tenant to pay rent and deposit of security by at least one form of payment that is neither cash nor electronic funds transfer, an exception is carved out for bounced checks in Civil Code §1947.3 (2), which reads:

A landlord or a landlord’s agent may demand or require cash as the exclusive form of payment of rent or deposit of security if the tenant has previously attempted to pay the landlord or landlord’s agent with a check drawn on insufficient funds or the tenant has instructed the drawee to stop payment on a check, draft, or order for the payment of money. The landlord may demand or require cash as the exclusive form of payment only for a period not exceeding three months following an attempt to pay with a check on insufficient funds or following a tenant’s instruction to stop payment. If the landlord chooses to demand or require cash payment under these circumstances, the landlord shall give the tenant a written notice stating that the payment instrument was dishonored and informing the tenant that the tenant shall pay in cash for a period determined by the landlord, not to exceed three months, and attach a copy of the dishonored instrument to the notice. The notice shall comply with Section 827 if demanding or requiring payment in cash constitutes a change in the terms of the lease.

If you have any questions surrounding this law or other terms and conditions of your tenancy, contact our office for informed advice.

Redwood City’s newly minted minimum lease requirements and relocation payment assistance ordinances read a little like a prenuptial agreement, depending on how long the landlord and tenant remain in the rental relationship.

Redwood City may have its most memorable slogan as the “Climate Best by Government Test,” but its latest test is for landlords who must now contend with added tenant protections imposed by the government. With over half of Redwood City’s residents renting their home, the seminal Managing Growth Study put tenant protections in the spotlight as part of the city’s brainstorming session on growth and addressing community concerns.

Unlike many other rent-controlled jurisdictions in the Bay Area that have implemented “just cause” eviction measures along with prescribed amounts the rent can be raised,  the entertainment hub of the San Francisco Penninsula has taken an inventive approach to support housing security for renters by focusing on the longevity of the tenancy. It provides carrots and sticks to prolong the rental relationship.

Redwood City’s ordinances require longer-term leases at the inception of the rental relationship and it creates a disincentive for a landlord to evict the tenant before the lease expires by mandating relocation payment assistance in certain circumstances, to cushion the displacement of low-income tenants.

Although the owner must offer a written lease which has a minimum of one year, there is wiggle room at the discretion of the tenant – there is flexibility for the incoming tenant and landlord to negotiate the term of the lease. If the tenant turns down the 12-month rental agreement and enters into another arrangement, though, they must state so in writing to make absolutely sure they know what they are agreeing to and are not bamboozled.

Several exceptions and nuances apply, and you can read the entirety of the law here.

Minimum Lease Terms Ordinance
Relocation Assistance Ordinance

We won’t get lost in the weeds of the ordinances, but instead, pivot to our takes for rental property owners.

Making smart rental decisions

Given that landlord-tenant relationships in Redwood City will often last a full year under the provisions of the new ordinances, we emphasize a heightened need for tenant screening. In an earlier post, we noted that while vetting tenants are a crucially important aspect of landlording, the law and a culture of forgiveness stand to conceal risks. This makes it imperative for all landlords to leave no stone unturned in the tenant screening process and especially Redwood City, where investment property owners may have little choice but to honor a long-term lease.  Daniel touched on the subject of tenant screening here.

A heart to heart conversation about rent amounts?

A fair and balanced article in Mercury News reported some landlords were raising rents with the contingency of Proposition 10 passing, and we were asked to chime in. There, we said that being proactive is good legal counseling and perhaps, raising rents of below-market rates may be prudent in order to anticipate future regulation of rent increases.

In the same spirit, Redwood City landlords should have the same exercise of examing whether current rent amounts are sustainable with fresh tenancies commenced after January 1st, as there will be a scarce opportunity to raise rents once the tenancy starts.

At any rate, rent ordinances, rent increases and relocation payments in any jurisdiction are murky subjects that are best approached with the informed guidance of an attorney. Contact our office for informed advice.

We have said in many venues that rental property owners in Oakland are swimming upstream against an ever-expanding regulatory regime. Now, “vacant” property owners – loosely defined as owners of properties that go “unused” for more than 50 days – will be hit directly in their checkbook, thanks to the passage of Measure W, also known as the Oakland Vacant Property Tax.

Voters resoundingly said yes for the measure, aimed to fund homeless programs and services, affordable housing, code enforcement, cleaning up blighted properties and illegal dumping. The law was cleverly marketed – who can be against ending endemic homelessness and removing eyesores from the neighborhood?

Bornstein Law applauds efforts to tackle these problems, but we think that property owners have been saddled with an inordinate amount of blame. There are a multiplicity of factors that have contributed to Oakland’s growing pains, but it seems that the owners of underutilized properties are an easy but misplaced target for a punitive tax.

In the news: Other people agree with our sentiment that the law lacks clarity. Get a backdrop here.

In our viewpoint, a better course of action would be to remove maddening regulations that stand in the way of owners who want to build on their so-called vacant land.

Our opinion notwithstanding, our job is not to legislate, but to educate property owners on the laws on the books. There’s much we know about Measure W, and much that is up in the air as its implementation takes shape, so let’s start with what we know.

What the law says

Starting July 1, 2020, properties deemed vacant will be taxed $6,000 annually if it is a residential, non-residential and otherwise undeveloped property. A $3,000 annual tax will be imposed on vacant condominiums, townhouses and duplex units.  Ditto for ground floor commercial space parcels, which will also be taxed $3,000.

These funds will go into the coffers of the County of Alameda. The first billing will be in included in the Fiscal Year 2020-2021 Secured Property Tax Bill, which covers the period of July 1, 2020, through June 30, 2021, for property deemed vacant in 2019. The payment due dates and the collection of delinquent Vacant Property Tax are at the same time and in the same manner and subject to the same penalties and procedures as the Secured Property Tax Bill by the County of Alameda.

Exemptions are made for very low-income households, low-income seniors and individuals with disabilities. Owners who can demonstrate that the tax would lead to financial or other hardship are also exempted. We might submit that the tax would constitute a hardship for anyone affected, and so it’s unclear how the city will define this ambiguous term. It seems that Oakland will recognize effort – owners of properties being developed will be spared of the tax, as will non-profit owners.

A commission on homelessness will guard the cookie jar by overseeing how the funds are allocated, with the City Auditor checking in every now and then, and so while we noted earlier that owners of vacant properties should not shoulder the expense of solving intractable problems, there appear to be layers of transparency to ensure the funds are being put to good use.

Much remains uncertain

Like most other matters that cross our desks, the law is cleaner on the page than it is in real life, and the City’s Finance Department seems to agree. That body is tasked with the tall order of formulating a plan for City Council to implement and administer the ordinance, and so there are many unknowns. To their credit, the Finance Department has welcomed public comment and has come up with the following timeline in the deliberative process.

In an introductory letter sent to property owners as part of a public awareness campaign, the city concedes there will be many wrinkles to be ironed out and that there is not enough staff to respond to inquiries.

Bornstein Law, however, has the time and resources to engage. Contact our office for informed advice on how this and other laws impact your bottom line as a property owner.

There’s a lot to fall in love with the New Year. A clean slate and a fresh start, the feeling that everything is possible, and of course, the best parties.

For the rental housing industry, however, the exuberance over new beginnings should be tempered with the reality there are a new set of laws to obey.

As we look into the back mirror of an eventful year, one of the highlights has been the defeat of efforts to repeal the Costa Hawkins Rental Housing Act. Our fraternity’s successful outcome in the epic battle against Proposition 10, however, has obscured less prominent initiatives that were successfully passed and we summarize some of them here.

Senate Bill 407 – Retiring water-wasting plumbing fixtures

The water-conservation requirements of Senate Bill 407 have been rolled out in stages and the last hurrah goes into effect January 1, 2009. Effective this New Year, owners of pre-1994 multifamily properties must bring any water-wasting toilets, showerheads or faucets up to specs. To avoid getting a knock on the door from the toilet police, consult our earlier article.

Assembly Bill 1919 – Price gouging bans

In the wake of the tragic fires, now is a time for Californians to come together and help those in need, not for opportunistic landlords and merchants to exploit people in desperate need of goods and housing. That is why the Governor used executive powers to prohibit price gouging and extend the bans when further disasters ensued.

There was a great deal of confusion, however, on how and when California’s price gouging protections would be applied. Although we noted in an earlier article that the attorney general attempted to provide guidance, it was the onus of the legislative branch to codify the disfavor of price gouging into law. AB 1919 criminalizes rent increases north of 10% after a state emergency is declared and also makes it illegal for landlords to evict a tenant after the proclamation of a state emergency and then rent the newly vacant unit at a higher rental price than the tenant could be charged.

Revisions to Bill 2164 – Landlord culpability in cannabis growing

We have long predicted that after the people have spoken by legalizing the recreational use of cannabis, there would be a lot of wrinkles to be ironed out in city halls and in the courts, and we are encouraged that the voice of landlords was not left out. This bill would add protections to unsuspecting landlords who have tenants engaged in the illegal cultivation of cannabis in the property.

This legislation affords owners the right to correct the underlying violation without being automatically slapped with a hefty fine by a municipality when a rogue tenant turns the rental unit into a greenhouse and the landlord had no knowledge. For more background, visit our earlier post on this subject.

Assembly Bill 2343 – Tenants given more time to respond to resolve evictions

Beginning in September, tenants staring at eviction will be afforded additional time to pay past due rent or defend against an unlawful detainer action – weekends and holidays will no longer count towards the previously set statutory limits for tenants to respond to answer eviction proceedings, a subject we dive deeper into this article.

Proposition F – San Francisco Evictees entitled to the right to counsel

San Francisco’s Proposition F guaranteed city-funded legal representation for tenants facing eviction. One of our main takeaways in an earlier article was that tenant attorneys will create logjams and delays in what would otherwise be swift and perfunctory evictions. It was unclear exactly how this newly minted law would be implemented, but the program is gaining steam as Mayor Breed’s office is starting to get their hands on the funds necessary to pay for the free legal counsel. Expect all of the machinery to come together in 2019.

Senate Bill 721 – ensuring balconies are not a death trap

Do you have a deck, balcony, or elevated walkway of more than 6 feet above ground level in a property with 3 or more multifamily units? If the answer is in the affirmative, SB 721 mandates that a licensed inspector stop by to ensure the structures are up to par so that these valuable open spaces do not create injury or death when a tenant enjoys a respite from cramped apartment life.

Redwood City tenant protections

Landlords in Redwood City will have to contend with newfound regulations, and we will reserve our commentary for a future article, but in the interim, you can get the official scoop from the city here.

Start 2019 on the right foot

The above changes in the lay of the land are not exhaustive, and surely more changes will be forthcoming – it’s a little like taking a drink out of a fire hose. You don’t have to make sense of it all – that’s our job at Bornstein Law.

 

There are tenants with many horror stories to tell about irresponsible landlords and the menagerie of shocking abuses are often plastered in the headlines. It’s much rarer, however, to see stories of landlords being abused, and so we were interested to come across the plight of these Oakland homeowners who were on active duty in the Air Force.

That duty called when the couple was temporarily stationed in Maryland, and so they rented out their home on a month-to-month basis to tech service tenants. When it was time to come back home after their assignment was complete, however, the service members with two young children were forced to pay nearly $7,000 in relocation payments because of Oakland’s Uniform Residential Tenant Relocation Ordinance, a law we chimed in on here.

The law took effect in January and is intended to help tenants who are displaced when property owners want to take their property off the rental market so that they or a relative can live there. Owners can turn out tenants only if relocation fees – $6,875.58 – $10,445.60  depending on the type of unit – regardless of the tenants’ income or if they actually use the funds to relocate.  An additional payment of $2,500 is due for families of lower income, containing elderly individuals and/or minor children.  Further, the relocation payments will increase on a yearly basis.

The Oakland couple has now attacked the ordinance in a federal lawsuit filed against the city. Ballinger v. City of Oakland alleges the law is not only misguided but violates the owner’s Fifth Amendment’s Takings and Public Use Clauses, as well as due process.

The plaintiffs’ attorney, Meriem Hubbard, explains why the ordinance doesn’t pass constitutional muster.

California, especially the larger cities, (has) a real housing problem — and that problem is not created by the people who want to move back into their own homes… So we are saying that that is a Fifth Amendment taking (of private property).

Our takes

Relocation payments have been judicially challenged before. In an earlier post, we noted that courts have likened unreasonable relocation payments to “ransom.” This is, however, the first time we’ve seen a tenant relocation scheme attacked on constitutional grounds in federal court. If the plaintiffs prevail, it would have some interesting implications in unraveling other ordinances, though the facts of this case are a bit unusual because the property owners are in the service.

A higher loyalty than rent ordinances?

It will be interesting to see whether the court gives some sort of deference to military service members who are also landlords when an order comes down for them to relocate elsewhere, whether from California to Maryland or being deployed oceans away.

The law has given preferential treatment to tenants when duty calls – although tenants cannot prematurely break their lease in ordinary circumstances, we explained earlier that an exception has been carved out for military personnel, a group who can end their leases without penalty if certain criteria are met. Will the same latitude be given to service members who own a rental property? Will armed forces members be absolved of doling out relocation payments?

If so, two “protected” classes would be pitted against each other – one the outgoing tenant and the other, the property owner, ironically both relocated.

A rising movement

Although the Bay Area has arguably been the biggest laboratory of tenant protection measures, they have been exported elsewhere. Portland has pushed the envelope when it comes to relocation payments and its ordinance, too, is being challenged in court by landlords who say they are stymied by the draconian ordinance.

Calls for expanded relocation assistance payments have been spreading in tandem with rising costs of living and a sense of unfairness that tenants reenter a merciless rental market, yet the case at hand illustrates that owners have hardships of their own. In the debate for relocation payments, owners are often mischaracterized as greed-fueled landlords whose immoral acts have fomented a homeless crisis, when in fact, mom and pop rental property owners are good stewards who treat their tenants with respect and provide cities like Oakland with its largest segment of safe, clean and affordable rental housing. They also are saddled with already high and steadily rising costs, just like everyone else.

We love this piece by the EBRHA that puts a human element on several landlords whose voices go unheard in the fevered pitch for tenant relocation payments.

Of course, Bornstein Law will keep you up to date as the Oakland lawsuit progresses, as well as other developments the rental housing industry should be aware of – we invite you to follow us on Facebook to stay in the know.

In future posts, we will dive into the relocation payment ordinances by city but until then, we wish you a happy holiday season and renew our commitment to helping owners power through their real estate challenges – contact our office for informed advise.

 

Renters who rely on Social Security Disability have no control over when they receive their check in the mail and so landlords who have a blanket policy of demanding rent on the first of the month may have to bend a little to accommodate SSDI recipients, suggests a federal court ruling. First, some backdrop.

Landlords are always a moving target when it comes to costly housing discrimination lawsuits and especially in California, a state which defines discrimination much broader than federal law. Tenants who profess a need for comfort animals or medical cannabis, recipients of housing vouchers, illegal immigrants and several other groups have successfully lobbied for added protections.

With the envelope of protected classes constantly being pushed, landlords find themselves walking on eggshells when denying tenancies or setting rules that may be perceived as favoring any group over another. Although California has defined disability more expansively than the federal government and has carved out new categories of renters entitled to increased safeguards, there are efforts underway in Congress to add teeth to tenant protections. This Kaine-Hatch bill would expand the Fair Housing Act and ban discrimination based on the source of income or veteran status.

Courts warming up, too

Fair Housing Rights Center in Pennsylvania v. Morgan Properties Management Company, LLC is a case that has percolated to our radar after a federal district judge in Pennsylvania ruled that landlords can expose themselves to liability if they refuse to adjust due dates for SSDI recipients who may get their checks after the first of the month. Landlords who do not budge on when the rent is due can create a “disparate impact” on disabled tenants, the court ruled.

Although the case can be considered persuasive law and is not binding in California, it sets a precedent and there is no reason to believe that its logic will not be transplanted in a state that has more ensconced protections than any other in the Union.

Parting thoughts & takeaways

Landlords should always exercise caution when fielding rental applications and talking with tenants on source of income, among other swampy subjects that can invite potential liability. We noted in an earlier post that when it comes to this type of communication, less is more. This is all the more true because there are “testers” who attempt to entrap landlords by documenting acts of discrimination. That’s right – their sole intention is to catch a landlord in the act of violating fair housing laws. In our day and age, then, every request for an accommodation should be treated as a potential test case intended to ensnarl the landlord in a costly lawsuit, the likes of which are proliferating throughout the Bay Area.

Finally,  Bornstein Law admonishes landlords and property managers to establish well thought out policies that are uniform, and we are strong advocates for education. If there is any slip up when it comes to fair housing laws, courts will make no distinction between the landlord and his or her agents.

When in doubt, contact our office for informed advice.

Owners of pre-1994 multifamily properties have a short window of opportunity to comply with the water-conservation requirements of Senate Bill 407 or risk getting a knock on the door from the toilet police this New Year.

If your rental property still has the original toilets, showerheads, or faucets, it’s time to get off the pot and replace these water-wasting fixtures. The law was passed in 2009 but has been rolled out in stages. The mandate for water-efficient plumbing fixtures is the last piece of the legislation to be enforced, with a January 1, 2019 deadline.

Compliance flows for plumbing fixtures are as follows:

Showerheads: The flow rate must be 2.5 gallons per minute or less.
Aerators: 2 gallons per minute or less.
Toilets: They must use 1.6 gallons or less.

How, exactly, does a landlord ascertain if his or her devices are compliant?

The flow rate is sometimes listed on showerheads and aerators, but the numbers may have faded like an Egyptian scroll depending on their age.

According to our friends at the California Apartment Association, a low-tech solution is to use a flow bag. That is, you can hold the bag under the aerator or showerhead, turn on the water and wait five seconds. After running for five seconds, it will reveal the gallons flowed. Local water utilities often provide the bags or they can be found online.

Toilets can be a little trickier. If you can stomach the ickiness, they typically have a date stamped inside the tank that can be found to discover whether it is an uncompliant 3.5 or 5-gallon toilet or if uses 1.6 gallons or less. Another creative way to flush out whether the toilet passes the new standards is to open the tank lid is to measure from the bottom of the water line and the full flush water line. The difference between the pre-flush water line and the full flush water line will be a number of inches. If the drop is four inches or more, you have an older 3.5 or 5-gallon toilet. If its 3 inches or less, then you have 1.6 gallon or less toilet.

The CAA’s trusted vendors contained in its Industry Directory can assist landlords in this thankless process.

Is there really toilet police?

No actual police force, but if there were, the officer might look like this guy, who you’ve likely seen in your bathroom before.

In all seriousness, heavy fines can be levied on owners when upon inspection, plumbing fixtures are not up to specs, and so we admonish all landlords to take the law seriously. California lawmakers have declared adequate water supply reliability is critical to the state and is committed to protecting aquatic resources, and so the Senate Bill is not a water-saving tip – it’s the law, with consequences for not following it.

As always, you are always welcome to contact our offices with any questions on this law and any other landlord-tenant concerns.

With the holiday season nearing, the traditional images conjured are families gathering to feast and enjoy quality time together, yet we all know that not all families are so harmonious. When conflicts reach a boiling point with family members living in close quarters, the status quo may no longer be sustainable.

Transitioning relatives out of a property can clearly be a gut-wrenching decision that many families face, and with the rising rate of adult children living with their parents and a growing number of multigenerational households, these tortuous decisions are being made with greater frequency.

One study found that 15 percent of Millennials aged 25 to 35 were living in their parents’ homes. To put that in perspective, that’s five percentage points higher than the previous generation and almost double that of the Boomer and Silent generations, eight percent of whom lived at home in 1981 and 1964, respectively.

With a notoriously high cost of living in the Bay Area, it’s not surprising that the numbers here exceed the national average, with another study estimating that nearly 1 in 3 Millenials are living with their parents. Coupled with the growing number of multigenerational families living under the same roof, the elements are rife for potential conflict.

There may be a feeling of guilt over the prospect of evicting a family member, but this may be the last resort when all else fails. If you are tasked with the thankless but necessary chore of removing someone close, it’s important to understand what you can and cannot do as a landlord.

For example, when tensions run high, you cannot use “self-help” eviction measures such as locking the doors if you want to go to sleep and a family member flops in too late at night. In rent-controlled jurisdictions, the tenant can only be evicted for a limited set of reasons – family drama is not a “just cause” under any rent control ordinance. A common theme we see, then, are owners circumventing eviction rules when the tenant is related, which can make an unfortunate set of circumstances even worse if the dispute is aired out in front of the rent board or in court.

Is the relative a tenant or licensee?

Often, when an owner rents to a relative, it is a casual relationship with no written lease.  Whenever rent exchanges hands, however, a tenancy is commenced.  Accordingly, the relative/tenant is entitled to proper written notice to leave the residence. Barring a written agreement, the tenant is on a month-to-month tenancy, requiring a written notice to move with a date specifying when the tenancy will end. The tenant will be allowed 30 days to move unless the tenant has lived in the rental a year or more, then it is 60 days to vacate. Check California state law (Cal. Civ. Code § 1946 & § 827a) for the exact rules and procedures for how landlords must prepare and serve termination notices.

Eviction is a carefully choreographed process, and now is not the time to be casual. The court will make no distinction between your familial relationship with the tenant, and a non-relative – the rules surrounding every other eviction will apply when transitioning relatives out of a rental unit.

If there is a lease with the tenant, the provisions of the lease must be followed and the process for evicting relatives is the same for evicting any other tenant. This includes written notice and if the tenant does not move out or fix bad behavior – for instance, paying the rent or correcting lease violations – then the landlord can file an unlawful detainer suit, trade word for eviction.

But what if the relative has not paid rent and no tenancy was established? In the eyes of the law, he or she is considered a guest who has worn out their welcome – in legalese terms, the relative is a licensee. A simple analogy is when you invite someone over to dinner, granting a license to your guest and that license lasts until the meal ends or at such time you want the guest to leave.

Forcible Detainers

When no tenancy was ever established, the owner can file a forcible detainer action. This remedy is similar to the more common unlawful detainer action, but it is usually used when the landlord alleges that the tenant has stayed in the unit without his or her permission.

Many of you may recall 30-year old Michael Rotondo, who infamously made the headlines after being evicted from his parents’ house in Upstate New York without paying rent. Take a look at Mr. Rotondo’s story which ended up with a judge giving him the boot and referring the case to an adult protective services agency to investigate possible abuse, neglect or exploitation of his parents.

The case bespeaks alarming abuse of vulnerable property owners who are not ensnarled by the typical fraudsters, but by family members, friends, caregivers and other trusted advisors within their circles. We’ve encountered this all too often at Bornstein Law and take great solace in halting these extended stays, if not averting abuse of the owner.

Before filing the forcible detainer action, the landlord must serve the tenant with a demand that the relative surrender the rental unit within five days from the date of service. To prove his or her case, the landlord must show that the landlord was in actual possession of the apartment at the time of entry and that a forcible entry has occurred, meaning the landlord did not consent to the tenant’s possession. The complaint must also state that the landlord was deprived of possession of the apartment; the landlord is seeking to recover possession; the landlord sent the tenant a demand for possession,  the tenant refused to vacate and the landlord is entitled to possession.

Like its’ sister proceeding for unlawful detainer, a forcible detainer is a summary proceeding and the tenant is afforded the opportunity to file a responsive pleading within five days after being served. If the unwelcome relative chooses to file an answer, he or she has limited defenses.

Potential pitfalls

Once an eviction action has started, the landlord cannot accept a penny more from the tenant because in doing so, the tenancy has begun anew and the landlord forfeits his or her rights to pursue the unlawful detainer. For more surefire ways to lose your case, consult our earlier article.

Try to work it out?

In the end, paying a relative to leave and helping them get onto their feet might be faster and less expensive than trying to evict them. Eviction can be costly, especially if it goes to trial. Family counseling sessions to foster a more harmonious relationship might have their merit and may even be more economical than a protracted battle in court.

Informed advice removed from the emotional fray

One of the most thankless and trying, but necessary duties of a landlord is evicting tenants, but transitioning relatives out of a unit can be exponentially more difficult. While legal counsel is always advisable when rental relationships fail, it is even more important to consult an attorney when relatives are involved because it is rather easy for owners to make rash decisions and understandably have their decisions be clouded by emotion. For informed advice, contact our offices.

Before we dive into the laws relating to squatters and how to remove them, we’ll share a shocking story originally reported here that illustrates the havoc unwelcome dwellers wreak on landlords who are often forced to arduously fight to take back their property.

The tale takes place  on the 22000 block of Ladeene Avenue, a quiet neighborhood on Torrance’ west side. A bewildered property owner was attempting to rent her yellow, four-bedroom rental home, only to discover it was already being occupied by an unknown trio who were living in the property rent-free. When her property manager noticed the oddity of a changed doorknob, he probed further to discover several boxes and a boogie board. Returning later that day, the stunned property manager discovered three squatters camping out. The dwellers stayed implanted after the police were called because the dispute was deemed a civil matter and worse yet, the unwelcome guests were believed to be subletting rooms to other unsuspecting tenants.

The squatters claimed they were victims of a scam after paying a security deposit and the first month’s rent to a mysterious middleman who can’t be found, but more likely, the unwanted residents were the scam artists, since they were unable to produce a copy of the fraudulent lease and refused to sign a rental application with the rightful owner.

The squatters were courteous enough, however, to attract other people off the street who agreed to fill out the rental application, in essence turning the property into a boarding house. One squatter even shared the good news with the owner that suitable housemates were found, but it was with little comfort that the core group of squatters was now opening the doors to more unauthorized tenants.

Out of at least $12,000 in unpaid rent, the loss of a security deposit among other expenses, the rental property owner has started a forcible detainer action to end her nightmare, though she is sure to incur more losses by doling out attorneys fees’.

Squatter rights difficult to be abridged

With high rents and fears of gentrification, California’s political and legal ecosystem seems to favor tenants and even those who have no legal possession. Translation: landlords may have to undergo a lengthy eviction process to remove squatters, especially when the unwelcome tenant comes equipped with a seemingly authentic property claim that has to be sorted out.

State law is not mute on this subject

A law was enacted in 1872 to prevent abandoned rural properties from going uncultivated and established the concept of “adverse possession.” This doctrine essentially allows a trespasser onto a piece of land to gain ownership of that land if the true owner fails to object within a certain period of time and if the trespasser pays faithful property taxes on the subject land. The trespasser is sometimes a stranger but more often a neighbor. 

Fast forward to 2018. In modern times, adverse possession is mostly cited when there is a dispute over property lines. Yet the standard of proof is high – in order for someone else to gain legal title over someone else’s land by claiming adverse possession, the person must prove continuous possession for at least five years and dutifully make property tax payments over a continuous 5-year period, among other things. 

In theory, then, when a squatter lives in a property long enough, and the owner does nothing about it, the squatter can end up owning the property. Of course, most squatters stop hunkering down or are exposed before completing the adverse possession process and so it’s improbable that the trespasser will meet the burden of proof to take over legal title to the property. 

They can, however, assert that there is a written, oral or implied rental contract with the owner, even present authentic looking leases or ownership documents to authorities when confronted. They have also been known to say that they have paid some form of rent by watching over or making repairs to the property or otherwise claim a bogus tenancy that will rarely hold up in court, but these smoke and mirrors can delay their eviction from the vacant unit and drive up the litigation costs of the owner.

Since 99% of cases settle, an enterprising squatter may prolong the eviction action in order to persuade the property owner to make a cash payment to move out. 

An organized effort

For an arm of the San Francisco Tenant Rights Union, squatting is not only a viable option to meet housing needs, but it is an economic necessity. The organization – dubbed Homes Not Jails – links to a list of vacant properties and while conceding it is difficult, instructs squatters how to gain tenants’ rights. This includes trying to find some other “consideration” besides rent in exchange for staying in the vacant property. In the absence of a written rental agreement, squatters are urged to be inventive in arguing a rental agreement exists, however far of a stretch it may be.

The group claims that it successfully established tenants’ rights when a landlord was aware of the squatter and gave up trying to get rid of them. By doing so, the argument was that there was an agreement to live in the vacant property in exchange for maintenance and security. Furnishings, setting up utilities in the squatter’s name and getting mail goes a long way toward a lengthy stay, the organization notes along with other tips. We found a handful of other “how-to” websites chock-full of advice on how squatters can avoid detection.

A legal remedy exists

A forcible detainer claim can be commenced where the occupant is living in the rental property without the owner’s permission or consent. This vehicle is similar to an unlawful detainer, but the forcible detainer is appropriate when no tenancy was established. To prove the action, the owner must be able to show:

(1) the occupant does not have the owner’s expressed or implied permission to occupy the rental unit;
(2) the owner of the real property has been displaced from the real property;
(3) lawful service of a 5 Day Notice to Quit;
(4) the occupants’ continued possession of the rental property after the expiration of the notice; and
(5) the fair daily rental value of the real property.

As with most unlawful detainer actions, this type of eviction begins with the service a 5-Day Notice to Quit. This notice must be served personally or by posting the notice on a conspicuous place on the rental property and mailing a copy to the occupant by regular or certified mail. If the name of the squatter or squatters is unknown, a fictitious name like John or Jane Doe can be used.

If the squatters remain in the rental unit past the expiration of the 5-Day Notice, a forcible detainer lawsuit can be filed. Assuming proper notice, if the occupant has failed to file a response to the Complaint within five days of service, the owner should file a Request for Entry of Default/Default Judgement with the clerk of the court, which will be entered if the clerk of the court finds that the Summons and Complaint have been properly served.

If the occupant of the rental property has been properly served and has not filed a response to the Complaint within five days of service the owner of the rental property should file a Request for Entry of Default/Default Judgment with the clerk of the court, which will be entered if the clerk of the court finds that the Summons and Complaint have been properly served. If, however, the occupant files a response, the owner can obtain a trial date.

Both parties must appear at trial to prove their case. For the owner, this means proving by testimony and documentary evidence that:

(1) he/she/it is the owner of the rental property;
(2)  the occupant of the rental property does not have the  owner’s permission or consent to occupy the rental property;
(3) the owner of the rental property was displaced from his/her/its right of possession of the rental property by the conduct of the occupant(s);
(4) lawful service of the 5-Day Notice to Quit; and
(5) the fair market daily rental value of the rental property (called holdover damages).

Whether obtained by default or at trial, once the judgment is entered, a Writ of Possession must be applied for and issued by the court, and this is then forwarded to the Sheriff’s Department, tasked with serving the Writ of Possession on the squatter(s) and posting a lockout notice on the front door with a time certain for the unwanted residents to vacate. If they remain past this date, the squatter(s) will be removed by the Sheriff’s Department.

Tenant attorneys can muddle the case

In an earlier article on San Francisco’s ballot initiative that entitles San Francisco tenants facing eviction to free legal representation, we noted that clever tenant attorneys reach into a toolbox of demurrers to delay eviction actions and ratchet up the legal expenses of property owners. Frivolous pre-trial motions, depositions, written discovery, and demands for a jury trial are some of the expensive mechanisms of litigation. Many squatters attempt to prolong the eviction action in hopes the owner will dangle money to entice the unauthorized occupant to move out. This legal extortion plot is all the more unseemly when the squatter is represented by free counsel. 

As you can see, encountering squatters is a harrowing experience and the ensuing court process is not so simple, making it imperative that you consult with the landlord attorneys of Bornstein Law to restore sanity.

 

In California, the citizen is the legislator if they pay $200 and manage to get a few hundred thousand signatures with a clipboard to qualify their idea for the ballot. There have been some crackpot initiatives – the state will not secede from the United States, and eating shellfish will not earn you a $666,000 fine per consumption or an imprisonment of up to six years – yet there are measures that usher in far-reaching changes.

One of the winners of last night’s election are hens, who will now enjoy more room to peck as voters said yes to the Proposition 12 chicken cage ban, but what about landlord rights? We are still digesting the election results, but here are some early observations that have jumped off the page.

Proposition 10 is rejected

In a blow to tenant activists and a win for landlords, Proposition 10 has failed at the ballot box, leaving California’s limits on rent control intact. There is no indication that tenant advocates have been deflated, as they look for the next fight and take their calls for expanded rent control in cities throughout the state. For the time being, rental property owners have dodged a bullet after voters overwhelmingly agreed that repealing Costa Hawkins would only exacerbate the dearth of affordable housing.

Proposition 5 shot down

Championed by the California Association of Realtors, this initiative would allow homeowners age 55 or older and those with a severe disability to take their property tax savings with them when buying a new residence, no matter the value of the new home, its location or how many times the buyer has moved. The argument that seniors can move to a home better suited to their needs without facing higher property taxes was rejected at the polls.

The current law remains on the books, and so eligible buyers can transfer a tax assessment if their new home is of equal or lesser value of their old home and only once per lifetime.

Oakland continues its trek down a slippery slope

As proud East Bay residents, we have been elated to witness Oakland’s growth but alarmed that it has become the latest bastion of tenant protections. Election night did little to reverse this trend and made further dents into owner rights.

The biggest newsflash for Oakland landlords is the passage of Measure Y, which removes the owner-occupied exemption from just cause evictions and allows the addition of eviction defenses. We have strongly opposed the measure to peel back landlord protections of an eviction ordinance passed 15 years ago, but the voters have now ushered in additional regulations for small owners who rely on rental income for their subsistence.

If you own a vacant property in Oakland, you will now get a hefty tax under Measure W, an initiative that aims to incentivize owners to put land and housing into use. Empty lots or buildings and condos that are used less than 50 days out of the year will be levied with a $3,000 to $6,000 parcel tax. There are exemptions for low-income seniors but for the rest of owners sitting on empty properties, they will be funding homeless services and illegal dumping cleanup.

The voters have also infused an estimated $9 million a year in new revenue for the city by passing Measure X, a progressive real estate transfer tax that is similar to the one San Francisco has. Most Oaklanders will won’t be affected because the transfer tax rate will remain at 1.5 percent, but land and buildings that sell for between $2 million and $5 million, the tax rate will bump up to 1.75 percent. More expensive properties that sell north of $5 million will be taxed 2.5 percent.

By saying no to Measure AA, Oaklanders stopped short of amending the city charter to establish a parcel tax – a kind of property tax based on units of property rather than assessed value – at the rate of $198 per parcel for 30 years to fund education services for pre-K through college students and career readiness.

San Francisco’s Proposition A sails through

Voters approved Proposition A by a comfortable margin, authorizing the city and county of San Francisco to issue up to $425 million in bonds at an estimated tax rate of $0.013 per $100 of assessed value to fund repairs and improvements the Embarcadero Seawall and Embarcadero infrastructure and utilities for earthquake and flood safety.
Landlords are authorized to pass-through 50% of the property tax increase to residential tenants, in accordance with Administrative Code, Chapter 37.

Pivoting to Berkeley

We noted in an earlier post that forward-thinking municipalities were taking a hard look at their rent control ordinances and how to modify them in the event that Proposition 10 passed. In Berkeley, Measure Q was mostly designed to position the city for a post-Costa-Hawkins world. Although Proposition 10 was scuttled, a provision of Measure Q exempting accessory dwelling units from rent control will become the law of the land.

The exemption does not apply for tenancies created before November 7, 2018 and portions contingent on the passage of Proposition 10 are preempted.

While we applaud Measure Q, we regret to inform owners that by passing Measure P, the voters have increased the tax on the transfer of real property from 1.5 percent to 2.5 percent for property sales and transfers over $1.5 million to fund general city purposes and the establishment of a homeless services panel.

Santa Cruz landlords score a major victory

Santa Cruz rent control advocates couldn’t sell Measure M to voters. With a total of $850,000 raised, the campaign was one of the most expensive in the city’s history but in the end, voters rejected the measure, which would restrict evictions, limit rent increases and create a board to enforce the rules.

Under a newly minted law, California businesses – including those in the rental housing industry – must conduct training that educates employees about sexual harassment and slays the beast.

The viral hashtag campaign #MeToo has exposed sexual harassment and sexual assault wherever it has reared its ugly head and has created a seismic shift in the workplace culture. After rocking every other facet of society, we noted in an earlier article that it was only a matter of time before inappropriate behavior in the rental housing industry was exposed.

In one way, the rental housing industry is particularly susceptible to abusive behavior, because a common theme we have observed with the spate of fallen high-profile figures is that they often appeared to be intoxicated by power and were in a position to influence the careers of their victims, many of whom acquiesced to the harassment or assaults for fear that reporting it would lead to their detriment.

With affordable housing such a rare commodity in the Bay Area, landlords and their agents similarily exert an inordinate amount of influence on one of life’s most basic needs – shelter. Unsavory housing providers can easily take advantage of this inherent power by demanding sexual acts in order to rent or continue living in a unit or make it difficult to feel comfortable in their home. At least one apartment dweller thought she found a gem in a $1,200 apartment in pricey San Francisco, only to find it came with lewd text messages and sexual entreaties. 

While this egregious case made the headlines, the phenomena is likely widespread, because tenants often don’t report it – many are captive because they can’t afford to move out.

New law expands training

Until now, only businesses with 50 or more employees were required to provide sexual harassment prevention training, but SB 1343 will mandate training to businesses with five or more employees, including temporary and seasonal workers. The author of the bill, Senator Holly Mitchell, D-Los Angeles, says this will fill a gaping void.

Millions of California’s most vulnerable workers are not being informed of their rights and protections nor trained on how to detect work-inappropriate behaviors and how to report those behaviors… In order for an adequate culture shift to take place around this issue, all employees need to feel confident that they are adequately protected by their employers’ policies and procedures when it comes to safeguarding against sexual harassment.

Immediate action is in order

The law prescribes that affected employees must undergo expanded training by January 1, 2020. If the requisite training occurs in 2019 it need not be repeated before this deadline. The training mandates at least two hours of sexual harassment prevention training for all supervisory employees and at a minimum, one hour of sexual harassment training to employees in non-supervisory roles. Once an employee is appointed to his or her position, training must be conducted within six months and then every two years. 

Bornstein Law has always advised clients not to kick the can down the road, and this is no exception. The rental housing industry should not get a false sense of comfort because the law goes into effect far-flung in the future. Given the pervasiveness of the problem and the consequences of sexual harassment, we urge that a zero-tolerance policy is set today and is not viewed as a perfunctory compliance issue later on. 

Some time has elapsed since Proposition 64 has passed. Since the voters have legalized the recreational use of cannabis and its cultivation (with several caveats), there were a lot of irons to be wrinkled out in City Halls and in the courts. We are encouraged that in this circuitous process, the law has acknowledged the rights of law-abiding landlords who are not complicit in their tenants’ abuse of the people’s choice. First, some backdrop.

It should be clear to rental property owners by now that they can put the kibosh on cannabis in their units, just as they can ban smoking. This prohibition is best spelled out in an ironclad lease and if there is no cannabis clause in your lease, it is likely time to revisit a stale document.

Of course, we are aware that in this democracy, there is a contingency of landlords who voted for Proposition 64. To the group of landlords who condone cannabis, we warned that liability can result from exposing neighboring tenants to harmful chemicals and that the owner is an easy target for claims that he or she violated California’s implied warranty of habitability by letting the residual effects of cannabis spill into the units of other residents who do not enjoy the leafy substance.

There is another category of studious landlords who have had the wool pulled over their eyes by tenants intent on concealing their behavior.

While Bornstein Law has always maintained that owners should be the eyes and ears of their rental units, sometimes tenants go through great lengths to hide activities going on behind closed doors, and in a cat and mouse game, landlords can be misled and obstructed. We have even seen tenants in bedbug-infested units deny entry to exterminators to obscure what is going on in the dwelling to any prying eyes.

As it was originally drafted, AB 2164 gave cities the prerogative to immediately penalize individuals accused of violating local cannabis laws without due process or even a chance to remedy the violation. Translation: the bill would have left innocent rental property owners vulnerable to stiff penalties, with no ability to correct the problem and without any means to appeal.

Thanks to an amendment by Assemblyman Ken Cooley, D-Rancho Cordova, landlords will be afforded the chance to fix cannabis-related violations without being summarily punished for the actions of rogue tenants.

Under the revisions – also brokered by the California Apartment Association – three elements must apply.

  • A tenant is in possession of the unit where the violation occurred.
  • The owner had no actual knowledge that the tenant was cultivating cannabis.
  • And the owner has a lease agreement that prohibits the illegal activity.

The legislative intent was to deal with transient cannabis growers who violate local laws but effectively avoid fines by leaving and setting up shop elsewhere, essentially curing the violation before fines can be levied. Assemblyman Cooley explains.

“AB 2164 allows but does not require, local governments to amend their ordinances to remove the time period to correct a violation in cases of cannabis cultivation only… This removes at least one monetary incentive for illicit grows to continually move while also giving local governments the ability to bring meaningful penalties on willfully illegal growers.”

AB 2164 gives municipalities the option of removing the time to correct problems before fines are levied only apply to cannabis-related offenses, though local governments would still have to allow individuals to get back in good graces and avoid fines by swiftly fixing problems surrounding building, plumbing, electrical, or other similar structural or zoning issues when these gaffes do not pose an immediate danger.

Keeping tabs on your property may avoid units becoming a source of stench, a breeding ground for mold and a guzzler of utility costs, along with many other problems associated with a growing operation. Yet even the most observant landlords can be bamboozled. We applaud the amendment because these unsuspecting landlords can take action without a city being the judge, jury, and executioner.

We would be remiss not to warn owners that over policing their units may fly in the face of a tenant’s right to “quiet enjoyment” of the premises. In our recent article on handling criminal activity in rental units, we reminded landlords that he or she can only enter a unit with a permissible purpose, and then only with proper notice.

Are your leases in compliance in the era of legalized cannabis and up-to-date with the breakneck changes of other laws, or has it lagged behind the times? When in doubt, contact our office.

Starting in September 2019, tenants facing evictions will be afforded more time to answer eviction proceedings under a new bill recently signed into law. AB 2343 will give tenants three “court days” to fork over overdue rent or comply with other terms of the lease, and a full five court days to respond to an unlawful detainer lawsuit. The law amends Sections 1161 and 1167 of the California Code of Civil Procedure.

Under the current law surrounding unlawful detainer actions:

  • A tenant has three calendar days following receipt of the landlord’s notice to cure a lease violation (e.g. pay rent or any other breach of lease) or vacate the leased premises.
  • A tenant has five calendar days following service of summons to respond to an eviction lawsuit (i.e., an unlawful detainer action) filed by the landlord.

The newly minted law extends a tenant’s 3-day and 5-day response periods in an unlawful detainer action to exclude Saturdays, Sundays, and judicially observed holidays.

As one of the most prolific authors of tenant rights bills, it’s with little surprise that Assemblymember David Chiu, D-San Francisco was the chief architect of this measure.

“Legal aid attorneys across California have reported incidents in which tenants are presented with a notice on a Friday before a holiday weekend and are essentially barred from correcting a breach of a lease or responding to a court summons because courthouses are closed or they cannot secure legal representation over a long weekend. AB 2343 will restore some fairness to the process and give tenants a chance to stay in their homes.”

Renter rights advocacy group Tenants Together claim that there are a staggering amount of default judgments entered against tenants when they fail to respond within five calendar days to their eviction lawsuit or have not filled out the forms properly and that AB 2343 will restore fairness to the process. 

Although landlords will have to wait longer under the new law, it is not eternity. The original proposal was to allow tenants 10 days to pay back rent and have 14 days to respond to an unlawful detainer action, so it’s not as bad as it could have been.

Make no mistake, political rhetoric often sides squarely on the side of tenants, and this law is just one win in the column of an energized tenant rights movement that must be met with equally aggressive representation from landlord attorneys who have been advocating for owner rights for over 23 years.

 

When Senator Bill Dodd was forced to evacuate his NAPA home around midnight on the first night of the October fires, he couldn’t open his heavy wooden garage doors to use as an escape route. With widespread power outages, the garage door motor wasn’t working, but thankfully, a good neighbor came to his aide. One trapped neighbor encountering the same problem was actually forced to drive through his garage door.

“This isn’t a problem most people have thought of,” the Senator says in a news release, but he brought it to the forefront by introducing SB 969, co-authored by Assemblywoman Cecilia Aguiar-Curry, D-Winters and supported by the Consumer Federation of California.

Under the new law, landlords and other property owners will no longer be able to install automatic garage doors unless they have a battery backup function designed to operate during an electoral outage. The bill’s requirements will be enforceable next summer.

For Dodd, the fire season exposed several vulnerabilities and underscored the need to be proactive in adopting policies that make communities safer in the wake of a disaster. Ensuring battery backups for garage doors is “a small step that can literally save lives,” he goes onto say.

At least five of the 40 people who died in the North Bay during the fires did not or could manually open their garages, The Press Democrat reported in December. Seniors and those with heavy wooden doors are especially at risk.

What the law means for rental property owners

Landlords are not required to proactively install new automatic garage doors, but any replacement door installed on or after July 1, 2019, must have the battery backup feature. Owners face a $1,000 civil penalty for failure to comply.

We applaud the bill and have always maintained that owners should develop an emergency preparedness plan before a disaster strikes, to protect, life, limb, and property.

Some habits are annoying to this author, but it might be okay with you, and you might even be the perpetrator of the peeving behavior. Likewise, you might consider me to be a little bothersome at times but in a perfect world, we all come together, celebrate our differences, and get along. Yet we all know that not all human interactions are so harmonious, especially when living in close quarters.

Barring egregious acts or illegal behavior, what constitutes a nuisance has always been somewhat ambiguous, and in an unlawful detainer action (i.e. “eviction”), it will ultimately be up to a judge or jury to decide if the underlying behavior warrants the removal of the tenant.

In a recent lawsuit, however, the city of Oakland and the Oakland Housing Authority Police Department are accused of overstepping their police powers by using a loitering ordinance to maneuver residents and guests, telling them “they can’t be where they are, they have to leave, and they can’t associate with friends and family in public spaces,” in the words of Jude Pond with the Lawyers’ Committee for Civil Rights of the San Francisco Bay Area, a group that joined the ACLU in the litigation.

Some residents purportedly fear to gather outside their own yards or risk being stopped, handcuffed, or fined hundreds of dollars for acts as abominable as sitting in a lawn chair.

We are hard-pressed to offer much commentary on the 161-page lawsuit, except to say it brings up some interesting constitutional questions as to whether the police should be arbiters of who should stay and who should be dispersed when congregating around a rental unit. The lawsuit alleges that under the guise of enforcing the ordinance, police have “broken up family barbecues, and have dispersed groups of friends simply hanging out and getting fresh air,” even questioning a resident as bereaved friends and relatives were gathering for a funeral, in violation of due process and freedom from unreasonable searches and seizures.

The loitering ordinance uses vague phrases that criminalize anyone who “loiters, prowls, wanders, or is present without lawful business” and expresses disfavor for anyone who delays, lingers, or idles about Housing Authority property without a lawful purpose.

It’s submitted that the ordinance applies excessively to black men and is even likened to “loitering ordinances that were used to control black residents of the South in the Jim Crow era,” and that these kinds of laws “have been widely criticized and struck down as enabling unjustified infringement on people’s—usually people of color’s—constitutional rights,” according to one plaintiff’s attorney.

In fairness, OHA says it’s their lawn, and the buck stops with them.

“Property owned by the Oakland Housing Authority is private property not open to the general public. Enforcement of this code is utilized as a means to minimize the risk of impairing the peaceful enjoyment as well as the health and safety of OHA residents and their guests from others who have no lawful business to be present on the property. Put simply, OHA residents and their guests deserve the same protection from trespassers as any other families in Oakland living in privately owned property.”

The claim that law enforcement is using Oakland’s anti-loitering law to criminalize and harass tenants is a story we will continue to follow, but the headline provides a good outlet to discuss the laws surrounding nuisances, with an emphasis on Oakland.

“I’ll know it when I see it?”

There are several layers of law to get to the heart of what a nuisance is.

California state law defines a nuisance as an activity that injures health, including selling illegal drugs, indecent behavior or behavior offending the senses. Behavior that obstructs the “free use” of property and interferes with the “comfortable enjoyment of life or property” is also a nuisance.

Under Oakland’s Just Cause for Eviction Ordinance, known in some quarters as “Measure EE,” owners are allowed to evict a tenant only for “just cause,” and nuisance falls into this category when the tenant continues to disturb other tenants and neighbors after written notice to stop. We hasten to say that although in most instances, tenants are afforded the opportunity to cease the underlying behavior to get back in good graces, illegal activities are not curable and with the guidance of an attorney, an eviction proceeding can be accelerated.

A public nuisance, on the other hand, is one that impacts a community, neighborhood, or “considerable number” of people. Anything deemed not a public nuisance is deemed to be a private nuisance.

Closely related is of the Oakland Municipal Code § 9.08.250, which applies only to Housing Authority properties and is the ordinance currently being challenged.

As we can see, this is not a simple matter of what I like and what annoys you – the law is more muddled, making it imperative to consult with a landlord attorney when friction occurs in a rental unit. 

 

San Francisco and Oakland are in a rather exclusive club by allowing landlords to exempt buildings from rent control because of “substantial rehabilitation,” though Oakland’s rule is headed to the graveyard and we predict that many dilapidated buildings will share its fate as landlords let properties atrophy in the absence of any financial incentive.

The rule – which has been around since Oakland first instituted rent control in the 1980’s – permits landlords to ask the rent board to permanently strip away rent control on his or her units when they spend more than 50 percent of the cost of building an equivalent number of new units on fixing up existing units. The spirit of the exemption was to incentivize investors to renovate rundown buildings, taking uninhabitable dwellings and restoring them to living condition.

Some Oakland lawmakers predictably coined this a “loophole” that had the potential for abuse and have put the exemption on ice with moratoriums. It was unclear if City Council would continue to kick the can down the road again or provide a sense of finality to the rule by voting it up or down on the eve of an October 21 expiration date. Last Tuesday, lawmakers extended the moratorium until March, but agreed in principle that the substantial rehabilitation exemption should be nixed and so they are just buying time for staffers to come up with an ordinance that puts the final nails in the coffin. More backdrop here.

We were quoted in this article saying that if rehabbing a building cannot lead to a rent control exemption, it will result in a “class of buildings that continue to exist in a downward spiral of dilapidation” which is to the detriment to the community. In the eventuality the exemption is nixed, we believe that the city’s housing stock will deteriorate as landlords put away their checkbooks and refuse to make sorely needed repairs because they can’t realize a return on investment.

If the substantial rehabilitation exemption was to be left intact, some people would assuredly lose, and what we mean by that is that some tenants will be priced out of rental units they can’t afford. Yet there would be beneficiaries – people who want to move to Oakland and can afford market rate rent, and so it’s not a simple subtraction of one tenant.

As proud East Bay residents, we are elated to witness Oakland’s growth, but Oakland’s stance towards more stringent rent control moves the needle of progress in the wrong direction.

No matter the political winds in Oakland, rental property owners can rely on our advocacy for owner rights.

Keep your recycling bin close by, as Proposition 10 season is upon us with pounds of fliers and pamphlets sure to litter your mailbox and front door between now and election day.

Bornstein Law has strongly opposed the measure and we are encouraged that a growing number of cooler heads are prevailing in the debate against the repeal of Costa Hawkins. Aside from landlord groups and other predictable foes against Proposition 10, sensible progressives such as the California NAACP leader and other odd bedfellows have staked their case against expanded rent control because they correctly point out that it will only aggravate the housing deficit.

A growing chorus of editorial boards has joined the opposition to Proposition 10, including our own San Francisco Chronicle in their indictment of the ill-advised proposal. 

“… More rent control — and more local government control — will probably further suppress the supply of housing and deepen the crisis for the state. More housing is the way out of the housing shortage. Proposition 10 is not.”

The passage of Proposition 10 is more than a whispering possibility

We’d like to think that the glass is half full and that the many cogent arguments against Proposition 10, coupled with the millions of dollars infused into the machinery to defeat it will prevail. Yet the lawyers in us tell us that we must prepare for the worst. While we can’t predict the future, we can do the next best thing by advising rental property owners on courses of action they can contemplate in the eventuality that voters pass the biggest tenants’ rights bill in decades. First, a little backdrop. 

We noted in an earlier article that after nearly a quarter of a century of trying to repeal Costa-Hawkins to no avail, pro-tenant groups may actually succeed in a new cosmosphere. With cities becoming magnets for high-paying jobs and a corresponding rise in rents and quarrels over gentrification, coupled with a burgeoning homelessness epidemic, the political winds have shifted in the favor of militant tenant advocates who pose a more formidable threat to landlords than the failed campaign of yesteryears.

Cities are grappling with the eventuality of Costa Hawkins repeal and none more tortuously than the City by the Bay.

California cities are the arbiters of what happens if Costa Hawkins is repealed

If Proposition 10 is passed, it will not automatically trigger expanded rent control, but it would remove barriers to a city’s desire to impose more stringent rent stabilization policies. In cities that already have ensconced tenant protections, this is shaping up to be a messy exercise in democracy, as municipalities attempt to strike a delicate balancing act between satisfying tenant advocates who are salivating at the prospect of increased rent control and engaged, tax-paying landlords who may exit the rental housing business or let their properties atrophy if they cannot make a buck.

After some soul searching, Berkeley City Council’s answer was to kick the can down the road to November, when proposed amendments to the rent ordinance will be decided by the voters. As the proverbial capital of tenant’s rights, San Francisco’s debate on how to modify their rent ordinance is more cantankerous.

Under Costa Hawkins, San Francisco cannot move its rent-control date forward from 1979. With tens of thousands of units built since then, the passage of Proposition 10 would have consequences of epic proportions. It is far from resolved, but Supervisor Jane Kim offers a premonition. 

“My guess is that this Board would pass legislation that’s balanced… The fear that we’d go crazy and establish these laws saying tenants could stay in their units no matter what they do … This Board wouldn’t do that.”

At Bornstein Law, we don’t want to get mired into the wranglings of City Council – inquisitive minds can get that here – but suffice it to say that there is no reason to believe that if Proposition 10 is passed, it will not lead to expanded rent control in San Francisco and expose owners now exempt from the rent ordinance to a new set of rules that were previously foreign to them. This begs the question of what San Francisco investment property owners should do in anticipation of Costa Hawkins repeal, or for that matter, landlords throughout California. 

With Costa Hawkins repeal efforts gaining traction, owners currently exempted from rent control should take a hard look at their options

Owners of single family homes, condos, and newly constructed rental properties should have a “heart to heart” discussion about whether current rents are sustainable and if not, consider raising rents to future-proof their rental business before expanded rent control is ushered in.

With the possibility of vacancy decontrol – a rule which would bar a landlord from raising the rent on a unit once a tenant moves out – forward-thinking landlords may also consider terminating the tenancy, a difficult subject but one worth having. Of course, raising rents and transitioning tenants out of rental units are not trivial matters and are best journeyed with a real estate attorney who specializes in the nuances of landlord-tenant law. 

There are some rental property owners who prefer to ride out the storm and not upset the applecart, whatever metaphor you like, perhaps wanting to avoid conflict. In this LA Times article, the author suggests a novel exemption to Proposition 10 by making landlords live alongside their tenants, because “no one is evil enough to live among people, look them in the eye, and raise their rent by $500 a month.

No matter how you are leaning, it requires careful deliberation best journeyed with the landlord attorneys at Bornstein Law – for informed advice, get in touch.

Renters make up nearly two-thirds of all San Francisco households, and they rallied to make history on June 5th by passing Proposition F, a measure guaranteeing legal help to any tenant facing eviction, regardless of income.

The passage of the ballot measure is likely to advance a “right to counsel” movement for non-criminal cases. This is a debate being reframed in a handful of cities, but San Francisco is leading the way as one of the biggest laboratories of tenant protections.

Although New York City was the pioneer in ushering in the first law entitling evictees to access some form of free legal assistance, a means test in the Big Apple was applied. San Francisco’s universal representation for tenants, on the other hand, makes no distinction between tenants who have the resources to hire an attorney, and those who have genuine hardship. 

Dean Preston is the executive director of the statewide advocacy group Tenants Together and was the chief architect of Proposition F. Now that his cause has been codified into law, he is pushing for resources to see it through to fruition.

This has shaped out to be an only-in-San Francisco moment. Even as Los Angeles has taken the first steps to give renters facing eviction free legal assistance, there is a sentiment there that counsel should not be afforded to individuals who do not need a lawyer on the city’s dime and that renters being evicted for missing payments should not qualify for the giveaway. Tenant advocates in dozens of other cities are taking notice of San Francisco’s experiment, with pilot projects for right-to-counsel sprouting up in Washington, D.C., Denver, and other epicenters.

Where San Francisco’s unprecedented law stands now

Implementing the ambitious ballot measure now falls into the lap of the Mayor’s Office of Housing and Community Development, now in the early planning stages and identifying service providers. There are a lot of wrinkles to be ironed out. 

In an earlier article on the eve of election day, we noted that while London Breed is a lifelong renter, she was considered the most moderate candidate on housing and gave only tepid approval of Proposition F. To her credit, candidate Breed favored income limits instead of blanket rights to free counsel.

Now that she has been minted mayor, it’s not entirely clear how London Breed’s office will choose to implement the mandate. MOHCD has until July of 2019 to come up with an ironclad plan, and how it will be funded is up in the air. The city controller estimates it will cost $4.2 million to $5.6 million a year to fulfill the will of the voters.

A counter-narrative to landlord-tenant disputes

Earlier, we noted that tenant attorneys will use many gambits to delay an unlawful detainer action, many of the claims frivolous. While it would ordinarily take several weeks to effectuate an eviction, San Francisco landlords can now anticipate further clever smoke and mirrors concocted by tenant attorneys. This makes it imperative to seek landlord attorneys who can level the playing field. 

 

A perennial issue we’ve had at Bornstein Law has been communicating the law when it sometimes has the shelf life of a banana peel. When it comes to police presence at a rental unit, our earlier article stands to be upended.

In that venue on domestic violence, we noted among other things that when discord spills into other units and interferes with other tenants’ quiet enjoyment of the premises, a landlord should give deference to a tenant when they are victims of “domestic violence, sexual assault, stalking, human trafficking, or elder or dependent adult abuse.”

California Code of Civil Procedure §§ 1161 & 1161.3, prohibits a landlord from terminating a tenancy or refusing to renew the tenancy based solely upon acts of aggression, and so the law attempts to ensure that those preyed upon are not victimized twice by being evicted.

In other words, landlords cannot penalize residents if they call law enforcement to report domestic abuse or other crimes or emergency situations at the rental property. By merely calling for help, a tenant cannot be labeled a “nuisance.”

This sentiment remains, but under a bill which has been passed by the legislature and has now landed on the Governor’s desk, it will be easier for tenants to assert their victim status and thus, be entitled to legal protections.

People should be able to call for help without fear of losing their home

~ Assemblyman David Chiu

AB 2413 would loosen documentation requirements, which previously required that abusive acts be documented by protection orders or police reports. It also extends protections to tenants who are victims of other crimes, not necessarily domestic violence. 

The measure received nary opposition and was endorsed by the California Apartment Association. We applaud the legislation and wholeheartedly believe that tenants should not be punished for calling the police when they are a victim of a crime.

Not a blank check

We would be remiss not to point out that the law does not preclude an unlawful detainer action when repeated 911 calls are part and parcel of illegal activities or a larger pattern of behavior which indeed, creates a nuisance. To qualify that statement, it’s instructive to examine how the law defines this term. Under California Civil Code Section 3479, a nuisance is:

“Anything which is injurious to health, including, but not limited to, the illegal sale of controlled substances, or is indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property, or unlawfully obstructs the free passage or use, in the customary manner, of any navigable lake, or river, bay, stream, canal, or basin, or any public park, square, street, or highway, is a nuisance.”

Of course, disruptive behavior and 911calls often go hand and hand.

While tenants cannot (and should not) be evicted for seeking police assistance, perhaps these calls are indicative of underlying conduct that is, in fact, injurious or interfering with the quiet enjoyment of other tenants. Put differently, a 911 call in itself is no reason to evict, but the activities that precipitated the emergency call can rise to the level of a nuisance.

When there are recurring disruptions in a rental unit, the tenants should be afforded the opportunity to correct the behavior. We noted in an earlier article, however, that illegal activity is not “curable,” and with our assistance, an unlawful detainer action may be accelerated.

Tenants in a position to bow out of the lease

Although most of the chatter about this law relates to a landlord’s inability to transition a tenant out of the rental unit, an overlooked fact is that a tenant may prematurely break the lease. In an era where political rhetoric often falls squarely on the side of tenant advocates, much of the discussion is about removing tenants when in fact, a landlord may want to maintain the status quo and desire that the survivor of domestic violence stays in the rental unit. The law, however, affords the victim the ability to exit the unit without penalty if certain conditions are met.

Contrary to popularized belief, then, a vacancy is not the goal of a landlord, but to the detriment of him or her in most cases.

In conclusion, the law is sure to be signed by the Governor and is good in theory, but like most other matters that cross our desk, the law is cleaner on the page than it is in real life. You can rely on Bornstein Law to translate how it impacts your rental business. 

 

Landlords are urged to seek legal advice before raising rents north of 10 percent after Governor Brown has once again extended price gouging protections.

California law generally prohibits charging a price for many consumer goods and services, including rental housing, that exceeds by more than 10 percent, the price of the item before a state or local declaration of emergency. The price gouging prohibitions make no distinction between existing tenants and a unit turnover. Nor does it exempt certain types of rental units such as single-family homes – the law applies to all rental units with an initial term of one year or less, regardless of size, location, or age. 

California’s Attorney General and District Attorneys throughout the state have been very vocal in admonishing service providers to keep prices below pre-disaster levels or risk stiff penalties, which can result in one-year imprisonment and/or a fine of up to $10,000, but it doesn’t end there. Violators are also subject to civil enforcement actions which include civil penalties of up to $5,000 per violation, injunctive relief, and mandatory restitution.

The underlying rationale behind the price gouging prohibition, of course, is that when disaster strikes, it is time for the community to come together and help each other impacted by the tragedy, not for opportunistic merchants and housing providers to take advantage of the most vulnerable.

Yet, prosecutors throughout the state are sorting through a stream of complaints by struggling or displaced residents who feel they have been exploited in a time of need. One guest of a Redding motel had to leave when the prices soared, and Shasta District Attorney Stephanie Bridgett weighs in.

A regional task force was formed, in fact, to curb illegal spikes in the price of essential goods and services, netting in several landlords, including a Sonoma County landlord who raised monthly rents to the tune of 40 percent – four times what’s allowed under the law designed to protect tenants after a disaster.

Landlords outside of ravaged areas should not get a false sense of bravado.

Although the law itself is somewhat ambiguous as to whether a particular area has increased consumer demand as a result of the declared emergency, the Attorney General’s interpretation matters. 

The state’s top cop says the price gouging law applies anywhere in the state, irrespective of county border, and we hasten to say that local ordinance may enact their own price gouging rules and penalties.

Yet another issue remains, and that this is how to calculate the 10 percent cap and determine the base amount. Given such a murky area of law, it’s best to reach out to the landlord attorneys at Bornstein Law whenever a rent increase is contemplated. 

Click on the television and you will likely be greeted with insurance ads. Geico has the most marketing muscle, but you’ll also be graced with the presence of Stephanie Courtney, better known by her TV persona Flo, from Progressive insurance ads.

This author’s personal favorite is “Mr. Mayhem,” the face of Allstate – Dean Winters – who always gets a bad break. Whether experiencing an explosion when he ignites a grill, staying in a creepy roadside motel because he ran out of gas, being forced to change a tire in a downpour and other vexing events, catastrophe is always looming for Mr. Mayhem, who has superhuman resilience in not only surviving these calamitous events, but offering cool commentary.

As a sidebar, the lawyers in us note there is some sentiment the term “mayhem” is misplaced because it has a specific legal definition of the criminal act of maliciously disabling or disfiguring another person. Nonetheless, rental property owners should anticipate unique risks not necessarily covered by insurance, and unless they take a hard look at their policies, they can share this character’s fate. 

Writing a home, auto policy and the like comes with its own complications but is fairly perfunctory. Some insurance policies that are not always so always top of mind. In a two-part series, we touch on them. 

Wrongful eviction coverage

Many studious landlords that do right by their tenants cannot fathom being sued, but assuredly, it happens at an alarming rate. Our hard-won experience has shown us that in 99% of the cases, the litigation is not initiated because of any shocking abuse that makes the headlines, but by mundane disputes or a naivety of rent control laws that can quickly balloon out of control.  In this video, Daniel Bornstein explains the importance of going through your insurance policy with a fine tooth comb to ensure there is a rider for wrongful evictions.

If the displaced tenant feels aggrieved, they can allege all manner of claims we outlined here and especially so when aided by a firecracker tenant attorney.

San Francisco rental property owners who file an unlawful detainer action, in particular, should be put on notice that they will be greeted by opposing counsel since the City has guaranteed legal representation to all evictees. Our main takeaway in a previous article was that the so-called “No Eviction Without Representation Act” will be a field day for tenant right attorneys who will erect barriers to the unlawful detainer with various gambits that are beyond the sophistication of the resident had he or she fended for themselves.

What’s at stake

“Rent differential damages” are painful enough, but enter punitive or treble damages, and rental housing providers are well-advised to pay for wrongful eviction coverage.

A standard liability insurance policy insulates a property owner from lawsuits and liability from bodily injury and property damage, but typically exclude ‘personal injury’ coverage that protects against intangible or economic harm to a claimant that does not arise from bodily harm. Being sued for wrongfully evicting a tenant, then, falls into this category.

One of the largest economic consequences, of course, is attorneys fees to defend a wrongful eviction lawsuit, irrespective of the merits of the litigation and of course, in San Francisco, there was no concerted effort to provide free legal counsel in order to protect good landlords from bad tenants.

Coverage for short-term rentals

There is no shortage of horror stories among hosts who came home to find tens of thousands of dollars worth of damages or learn that a guest has been injured. Airbnb’s Host Protection Insurance is a great perk, but the coverage is far from comprehensive.  If property owners are engaging in short-term rental agreements, it’s vital to keep a finger on where your protection begins and ends. 

Insurance companies have been slow to adapt to the modern day iteration of the temporary flop and its unique risks, but as carrier appetite remains low for these hospitality arrangments, some emerging programs are filling the void. When in doubt, please contact our office for a check up on your policy to cauterize risk.

We will pick up on this topic in a future post – to be alerted to the latest news and insights, subscribe to our timely feed or follow us on Facebook.

 

In an ongoing series, we profile the people who are disrupting the rental housing industry, shaping the housing debate in California, or just interesting people that give a fresh perspective.

Dan Kalb

Oakland has become the latest bastion of tenant protections, and Dan Kalb can take the latest credit as the chief architect behind a measure to extend “just cause” eviction protections to tenants living in owner-occupied duplexes and triplexes throughout the city. To Kalb, it’s about fairness. “People should have the right to stay where they want to stay,” he was quoted as saying in this San Francisco article. “If they’re already living somewhere, they should have the right to continue to live there as long as they’re not breaking any of the rules. The protections and the rules that exist for some renters — most renters in the city — should also exist for renters who live in these smaller buildings.” We took issue and were quoted in the same piece. 

Alexander Chatzieleftheriou

Blueground wants to make it easier to provide smart and hassle-free housing for business travelers and transient individuals. The housing startup landed in San Francisco with Alexander Chatzieleftheriou at the helm and he stands to disrupt corporate housing as we know it.

Hillary Ronen

Housing issues play a strong role in District 9 and for Supervisor Hillary Ronen, a concern has been displacement in the Mission, particularly among the Latino community, and she is intent on intervening. Another vexing problem in her district is the homeless crisis and after about 18 months on the job, the Supervisor says she’s transitioning from crisis management to trying to address the root cause. Read the full interview here.

Michael Weinstein

After nearly a quarter of a century of trying, tenant activists in California could be on the cusp of repealing the Costa-Hawkins Rental Housing Act, thanks to Michael Weinstein. The president of the AIDS Healthcare Foundation led the charge for expanded rent control statewide and put millions of dollars behind it. His cause has now reached critical mass.