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In between practicing law and going on the speaking circuit lately to talk about the ever-evolving rent control rules of San Francisco and Oakland, there’s been scarce mention of other locales, so we pivot now to San Jose, which has been a beehive of activity.

History has taught us that with growth, there will be friction between landlords and tenants, and no city knows this better than San Jose. As one of the most expensive rental markets anywhere, it is no wonder why rent control has become a polarizing issue in a technology hub that needs to accommodate not only high-paid engineers and programmers but cafeteria workers, shuttle drivers and security guards.

The proposed “Google village” near downtown has reignited the city’s storied wrangle with rent control and how to handle the influx of residents while keeping a pulse on the costs of living.

Tenant advocates tote signs that read, “Hey Google, affordable housing now,” and “Are your Google ad dollars leading to homelessness?” →

Growth begets friction, which begets tenant attorneys

With the temperature of the rent control debate not cooling down, perhaps it’s time for owners to revisit San Jose rent control laws, – we’ve provided an overview of them here.

Assuredly, with San Jose’s rent control rules so complex, inventive tenant attorneys will wedge every obstacle they can grasp for to thwart or delay an unlawful detainer action. We noted in an earlier article that some favorite gambits of tenant attorneys are claims that the rental unit is unfit or unsafe for human occupancy, frivolous pre-trial motions such as “motion to quash service,” motion to strike, allegations of discriminations and still more demurrers to prolong the case and enlarge the legal bills of the landlord.

Yet tenant attorneys in San Jose seem to be eyeing an obscure part of a law that makes it easier to bring suit against owners where habitability is at issue.

Some housekeeping is in order

In many other venues, we’ve pointed out that a landlord’s fundamental and immutable responsibility is to provide a dwelling fit for human occupancy and habitation. The landlord’s duty to provide a habitable dwelling is known as the warranty of habitability and is implied in every California residential lease agreement. If this basic obligation is not met, tenants or their attorneys can use this as an affirmative defense to an unlawful action, but it doesn’t end there.

In this San Jose ordinance, a tenant can institute a civil action and be entitled to other remedies if the landlord creates a squalid condition. Under this safeguard that adds teeth to state law, owners may be liable for actual damages, costs, attorney’s fees and stiff penalties.

With San Jose’s growing pains of ushering in the tech industry and those in its shadows, there will inevitably be conflict, but landlords can count on the informed advice and advocacy of Bornstein Law.

 

Oakland is at it again.

As the darling of tenant advocates, the city has slowly chiseled away at owner rights like a prison break. Not so long ago, the city mandated tenant relocation payments when residents are displaced when the owner or their relatives attempt to recover possession for their own use.

Continuing down the path of tenant protections, a new ordinance was ushered in to regulate tenant buyout agreements to safeguard residents who are offered money in exchange for voluntarily leaving the rental unit. We noted earlier that in most other locales, it’s uncommon for laws to be enacted that regulate the negotiation and agreement of parties, but following in the footsteps of San Francisco, Oakland’s Tenant Move-Out Agreement did just that.

For an undercurrent of tenant protections in City Hall, it’s not enough. Now, there are efforts underway to peel back a 2002 ballot measure passed into law which exempts small landlords from Oakland’s “just cause” eviction protections.

Some background is in order

The Oakland Residential Rent Adjustment Program applies to buildings with two or more units in Oakland that have a certificate of occupancy prior to January 1, 1983 and dictates that a property owner must have a “just cause” to evict a tenant such as failure to pay rent and other breaches we’ve outlined here. Yet the voters carved out an exception for owner-occupied duplexes and triplexes, a safeguard for small property owners that was challenged at the June 28th Rules & Legislation meeting. Spearheaded by Councilmembers Gallo and Kalib, Agenda Item #4.27 would ask the voters in November to remove the exemptions for 2 and 3 unit owner-occupied buildings and added eviction defenses.

Where the proposal goes from here

Council Community and Economic Development Committee (CEDA) is the arbiter of whether the ballot measure moves forward. In concert with the Oakland Berkeley Association of Realtors, East Bay Rental Housing Association and other industry partners, Bornstein Law urges our fraternity to attend the Tuesday, July 17th meeting at 12:30 p.m. You can let your voice be heard on the 3rd floor at  Frank H. Ogawa Plaza in Oakland.

Some air support from news outlets?

In much of the media coverage we absorb on Bay Area housing, it seems that tenant protections are put on a pedestal and property owner rights, if glazed over at all, take a back seat. When this topic graced itself in the news, then, it was with little surprise that the rhetoric fell squarely on the side of tenants.

Our thoughts, for what it’s worth

When laws are passed which benefit property owners, there is an air of shock or injustice over “greed-fueled displacement,” “outside speculators,” and other less-than-endearing terms that paint rental housing providers with a broad brush without making any distinction between Goliath landlords who own hundreds of units, mom-and-pop owners, or first-time homebuyers who, with the vacancy rate so low, must transition tenants out of the property to move in.

But in fact, Oakland voters made the distinction in 2002 by passing a ballot measure which exempts small landlords for the city’s just cause eviction protections. Predictably, this duly enacted law is dubbed a “loophole.” In the news piece, hidden cameras follow real estate agents around, making them seem complicit in something nefarious by pointing out regulations when in fact, they correctly state the law.

Though we noted that there are many popular terms used by tenant advocates to coin owner move-in evictions, this is the first time we have heard a legal OMI called a “uniquely profitable business model.” Those who use this term would get some argument from Wayne Roland, President of the East Bay Rental Housing Association.

“This is your home. This is not like a business like the guy who’s got the 100-unit building – this is where you live… it takes two to tango. You can’t just set up rules that favor tenants and have your concerns always related to the tenants. You have to be concerned about the people who are providing that housing, as well.”

OBAR makes its own case against the measure

With the fate of many of its members hanging in the balance, The Oakland Berkeley Association of Realtors has articulated some cogent arguments why the duplex/triplex exemptions should not be repealed. In their own words:

  • The Duplex/Triplex Exemption to Just Cause protects Homeowners that live with their tenants. Homeowners that live in Duplexes/Triplexes have a special relationship with the tenants they provide housing to. They share walls, backyards, driveways with one another and see each-other on a daily basis.
  • Most of Duplex/triplex properties in Oakland are occupied by homeowners that are long-term residents of Oakland.
  • Homeowners in Duplexes/triplexes are not rich. They provide housing to the tenants they live with in order to stay in Oakland and provide for themselves in retirement. Homeowners will have to spend thousands of dollars on attorneys if their safety if a problem arises with a tenant they live with.
  • Laws already exist that protect tenants when a homeowner moves into a duplex/triplex.
  • Homeowners are already scared to rent units on their property. Removing this exemption will discourage people from renting units they already have or building and adding rental units to their homes. This is completely contradictory to Oakland’s plan to encourage people to build more housing in the city.

Join us for a workshop discussing this and everything Oakland Rent Control

As proud East Bay residents, we have been elated to see Oakland emerge as a resounding force in the Bay Area, but we have also been alarmed by its gradual erosion of property owner rights. More than ever, it is vital for Oakland rental housing providers and the professionals who service them to understand the laws surrounding the cities’ ever-morphing rent rules. 

Register for the July meetup here.

 

 

 

Immigration law has become a combustible subject lately and while all politics are local, some are more local than others. The Bay Area has become a microcosm of weighty immigration issues that have recently stirred up a lot of soul searching and widespread national debate.

Our role at Bornstein Law is not to legislate or get mired into policy, but to educate the rental housing industry on legal issues that impact their business and to prepare for any anticipated changes in the law.

With California seemingly hunkering down as the capital of democratic resistance in the Trump era, the state was prophetic in enacting AB 291, or the Immigrant Tenant Protection Act. This law clamps down on unscrupulous rental housing providers who use an individual’s immigration status against tenants. Assemblymember David Chiu spoke to his colleagues on the Assembly floor and made his case for the bill.

The law added new teeth

Prior to the passage of AB 291, preexisting California law prohibited landlords from inquiring as to a tenant’s immigration status, but the bill was designed to address the unfortunate acts of intimidation some owners have used to influence tenants to vacate the unit or face being reported to immigration authorities. It adds greater teeth to anti-discrimination laws for renters that are already on the books. Specifically, AB 291:

  • Prohibits landlords from threatening to report tenants to immigration authorities, whether in retaliation for engaging in legally-protected activities or to influence them to vacate.
  • Bars landlords from disclosing information related to tenants’ immigration status.
  • Provides tenants the right to sue landlords who report them to immigration authorities.
  • Codifies an existing defense to unlawful evictions based on immigration status.
  • Prohibits questions about tenants’ immigration status in discovery or at trial.
  • Prohibits attorneys from reporting, or threatening to report, the immigration status of persons involved in housing cases.

The new law isolates the few bad apples, and so it will not affect the day-to-day operations of most law-abiding rental businesses; however, it does highlight the duty of care that landlords must use with the information they glean from their relationship with tenants. This includes their social security numbers, native languages, the times they are home, the identity of their families among other sensitive information, and so landlords must use caution to make sure that any information is not misused.

Perhaps more relevant to landlords is the California Translation Act and so we pivot to this law. 

Don’t get lost in translation

It’s an axiom in contract law that, generally speaking, for an agreement to be legally enforceable, the parties must understand what they are agreeing to. It logically follows that landlords would not want to prepare a lease in a foreign language.

As the most populous and culturally diverse state in the union, it’s with little surprise that California has the highest concentration of people who do not speak English at home — the number hovers at over 44 percent, according to the U.S. Census Bureau.

Enter the California Translation Act, a law codified in Civil Code § 1632 which was originally enacted in 1976 to increase consumer information and protections for the state’s burgeoning population of Spanish-speaking residents, but has since recognized the influx of persons who speak other languages, including Spanish, Chinese, Tagalog, Vietnamese, or Korean.

The statute says that when certain tradespersons or businesses negotiate a contract in these non-English languages, the merchant must deliver a translation of the contract terms and conditions in the native tongue of the other party prior to execution of the contract. Landlords are lumped into this category when they negotiate:

A lease, sublease, rental contract or agreement, or other term of tenancy contract or agreement, for a period of longer than one month, covering a dwelling, an apartment, or mobilehome [sic] , or other dwelling unit normally occupied as a residence.

An exception exists when the tenant has a competent interpreter who is present as you negotiate the lease agreement. But all too often, the landlord provides the interpreter (or does the translation himself or herself), or the interpreter’s full understanding of English is called into question later when a dispute arises, so we advise clients to tread with caution and ensure distance between the landlord and the translator.

The selection of a translator can be challenged down the road

The interpreter must be independent of the landlord, and a minor cannot be the translator — an English-speaking child who answers the door and serves as an impromptu intermediary won’t suffice because of the child’s lack of sophistication and, perhaps, understanding of all the terms.

Ongoing responsibilities

We hasten to say that a landlord’s responsibility under the California Translation Act extends beyond the outset of the tenancy — if there are any material changes to the lease, including, but not limited to rent increases, the modifications must also be translated in accordance with the Act.

In most cases, a tenant cannot prematurely break the lease without penalty, but there are exceptions to the rule. We noted in an earlier article that under certain conditions, the victims of domestic violence can walk away from the rental agreement without consequence.

Another exigent circumstance exists when the non-English speaking tenant claims to have been bamboozled by inking a lease in a language the tenant did not understand.

Given a rash of tenant lawsuits proliferating throughout the Bay Area, it is best to use caution and have a one-on-one with an attorney whenever you encounter a language barrier or have any uncertainties when drafting a lease.

Unwavering resolve

In our storied practice of managing landlord-tenant relationships for over 23 years, the political winds have blown in many directions, yet our fierce advocacy for property owner rights has remained a constant. For proper counsel to manage legal relationships, avoid or resolve conflict, and cauterize risk, contact our office today.

This author always enjoyed watching Parking Wars, A&E’s popular reality television series that follows traffic enforcement employees as they ticket, “boot,” tow and release cars back to their owners in the performance of their parking enforcement duties. If you haven’t followed the show, you can nonetheless imagine that these encounters can get heated.

There are other parking wars being waged in rental units throughout the Bay Area, with space such a scarce and prized commodity. The maddening quest for street parking is not just a tribulation for drivers, but often a trial for tenants.

Landlords are charged with the fundamental task of providing tenants a nice place to live and useful amenities and in turn, tenants pay for the privilege of residing there. With adequate parking one of the most important amenities to tenants, it’s no surprise it can also be one of the top causes of frustrations and conflict between landlords, tenants and other residents living in close quarters.

Implied in every California lease is the tenant’s right to reasonably occupy the dwelling peacefully and without recurring disruption. A loss of parking, then, may very well constitute a breach of the landlord’s duty.

Not uncommonly, we encounter inventive tenants who carve out makeshift parking spaces that are not authorized or interfere with another tenant’s “quiet enjoyment” of their dwelling. Of course, another tenant is not allowed to infringe on their neighbor’s right to quiet enjoyment and since a tenant does not have a lease with his or her neighbor, taking over another resident’s assigned parking spot is called a nuisance and though not covered under the covenant of quiet enjoyment, the offending tenant could be culpable of a lease violation.

Don’t let parking wars fester

Although Californians are familiar with road rage, we queried YouTube for the term “parking rage,” and the video results produced spirited conflicts too colorful to share here, but we did come across this G-rated police blotter which recounts a woman being threatened and nearly mowed down by a motorist who felt he was entitled to the parking spot she claimed.

From our hard-won experience in managing landlord-tenant relationships, we have found that a great number of owners and property managers are conflict avoiders and would rather kick the can down the road in hopes that conflicts will somehow work themselves on their own without proactive action. When this wishful thinking fails, the underlying conflict is almost always enlarged, and so we advise owners or their agents to reign in parking spaces and take proactive action by serving a 3-Day Notice to Cure or Quit and if the uncourteous, recalcitrant tenant continues to park where they don’t belong, it may constitute a reason for eviction.

What does the lease say?

Like most rental rules, much miscommunication can be avoided with an ironclad lease that addresses parking and anticipates potential issues with the unique circumstances of the property. Many landlords have the tendency to use stale, outdated leases that leaves parking a dangling, ambiguous topic. Here are just some of the considerations that should be aired out in the lease agreement.

  • Vehicles in areas that are not designated for parking, such as lawns, common areas, in front of dumpsters, double parking, cars off to the side of the driveway or parking lot, etc.
  • Each unit assigned specific parking spaces, accommodating parking for the tenant’s own vehicles with assigned parking spaces, perhaps painting numbers for each parking stall and recording them in the lease agreement or a parking addendum, even ID stickers for tenant vehicles to display. 
  • Clarification of guest parking rules: Tenants are allowed by law to have guests at the property that they renting or leasing and while the landlord can impose limits on how long those visitors can stay, often not spelled out in the lease is where those guests park. Tenants or his or her guests should have a clear understanding that parking in another resident’s assigned space is not allowed and perhaps, subject to towing. 
  • Specifying a specific, properly-sized motorized vehicle for each parking space: Improvising tenants may attempt to squeeze in a motorcycle with their car, or take full advantage of the parking space with a weekend RV, trailers, boats and other vehicles that push the envelope of a reasonably sized parking space. Other times, there may be instances of junked or inoperable vehicles that create an eyesore to the property. Similarly, some tenants may have an affinity for excessive washing or repair of a vehicle, creating an impromptu car wash or auto repair shop with tools and trinkets that spill into areas that are designated for other tenants.

If tenant parking is glaringly absent from your rental agreement, perhaps it’s time to sit down with an attorney to plug the holes.

Whether the physical space is altered through additions, conversions and the like, tenants come and go, or other circumstances of the rental business change, parking accommodations can change with it. We will resist the temptation here to relate stories, but suffice it to say parking rules can be an evolutionary process, with landlords discovering new issues and facing unheard-of situations on a regular basis.

Since parking is such a potentially contentious amenity, we recommend owners communicate any parking changing in writing, perhaps in the form of an addendum, and the landlord may also consider changing the terms of the tenancy. The landlord’s ability to modify the rental agreement and the required amount of notice afforded will depend on how cooperative the resident is, the tenancy type and how long the tenant has occupied the unit. 

If the tenant fails to comply with the notice of the change of tenancy terms after the expiration of the notice period, the owner may serve a notice to perform covenant or quit and if the parking violation isn’t corrected, eviction measures can be pursued.

Still other issues linger

A tenant who is given a place to park may improperly convert the space into a storage area and worse, create a living space. Using garages for human habitation is a cardinal sin and exposes landlords to significant liability, we noted in this article on unauthorized tenant alterations.

Another ancillary issue we see is when a landlord takes away parking in a rent-controlled jurisdiction. If the aggrieved parker feels that they have been shortchanged any amenities promised in the rental agreement, the tenant can petition a rent board for a reduction in base rent because any perceived reduction in amenities should be met with a commensurate reduction in rent, he or she will argue.

A word about towing

Landlords can tow improperly parked on their rental property, with many caveats. If the parking obstruction is deemed not too obstructive severe, we might advise landlords to have a polite conversation to air out the issue before availing the California Vehicle Code and calling the tow company. Merely because a landlord “may” remove a vehicle does not necessarily mean they “should.” Stranding tenants may not further the landlord’s best interests. Nor does turning a blind eye, such as when a third party’s vehicle prevents another tenant’s ingress and egress. Reasonable judgment and common sense should be used.

If towing a vehicle becomes necessary, the law requires ample notice be given to the owner that he or she risks having the improperly parked vehicle towed at their expense. 

This prominent notice must be displayed at the entranceway to the property – although rental property owners can elect to display these warnings elsewhere, it must at least greet visitors upon their entry to the rental property.

The sign must contain the name and telephone number of the towing company, as well as the telephone number of local law enforcement so that the wayward parker can ascertain the whereabouts of the vehicle and be afforded the opportunity to recover it.

A landlord’s obstruction of parking can be tantamount to harassment

In November 2014, the Oakland City Council adopted the Tenant Protection Ordinance (“TPO”) in response to a perceived rash of landlord harassment and intimidation that purportedly led to the displacement of tenants. This ordinance aims to deter landlords from threatening to, interrupting, terminating, or failing to provide housing services. When a tenant feels that the landlord has adversely affected their parking arrangements, it is possible that harassment or intimidation can be alleged.

Berkeley likewise anticipated illegal evictions through intimidating or coercive conduct and codified this disfavor into law. (B.M.C. 13.79.060)

The quintessential point is that parking policies should be well-thought-out, documented and clearly understood by all parties. If there is a gaffe in communication, rent boards are all too willing to air out the resident’s parking grievance, often to the detriment of the owner.

Of course, you can turn to Bornstein Law to avoid or resolve parking wars. Contact our office for informed advice.

 

At Bornstein Law, we love teachers. As parents, we are the first to acknowledge the toils of educators and the indispensable role they have in the classroom. We also love protecting the rights of property owners, and it’s not our call to take sides, but to educate the industry on laws on the books that have been decided by legislators and the courts. One such matter has played itself out in the judicial process and is now resolved.

San Francisco’s prohibition of no-fault evictions against school employees during the academic year has survived a final legal challenge and remains the law of the City by the Bay.

With several caveats, owners can evict a tenant when the owner or a close relative desires to live in the rental unit, but teachers and kids are nearly eviction-proof, at least during the school year. That’s because Ordinance No. 55-16, unanimously passed by the Board of Supervisors in 2016, catapulted school staff to a newly protected class, prohibiting their displacement through a no-fault eviction during the academic year. The law also bars condominium conversion, removal of the rental unit, capital improvement and “substantial rehabilitation” evictions for educators and students during that time.

Landlord groups successfully challenged the new protections in court, with Superior Court Judge Ronald Quidachav’s ruling that the law was “invalid on its face, pre-empted by state law and unenforceable.” However, an appellate court panel disagreed with this logic, and teachers rejoiced when the judge’s ruling was reversed.

When we first visited this topic, we predicted that given the constitutional gravity of the matter – a clash between state and local law – arguments for and against the ordinance would be heard by the state Supreme Court. California’s highest court aired out the issue and affirmed the city’s limitations on a landlord’s ability to effectuate no-fault evictions during the school year.

Bornstein Law has proudly represented aspiring homeowners who make their first purchase. But, with the vacancy rate so low in San Francisco, these buyers must use an owner move-in eviction as a vehicle to gain access to their property. Having stretched their finances for an astronomical mortgage to purchase a property, we’ve taken great pride in giving these buyers the ability to use the property.

A great number of these buyers themselves have children, and so while we recognize there is perhaps no other occupation that brings more value to our community than educators, taking a balanced approach, we maintain that the rights of homeowners should deserve some consideration and not be a casualty.

There is some misplaced sentiment propagated by tenant advocates that owner move-in evictions are overused by opportunistic landlords who attempt to raise rents for an incoming tenant willing to pay it. While there are always some bad apples, those cases are few and  far between, and you will get some argument from first-time homeowners who, without availing themselves of this highly regulated path to homeownership, would not be able to live in a property located in a city that is short of unoccupied units and, as it now stands, will have difficulty moving in during the school year.

While there has been a steady erosion of property owner rights, you can rely on Bornstein Law for proper counsel in achieving your real estate goals.

With the wind against the backs of tenant advocates, rental housing providers are getting nervous about efforts to repeal the decades-old Costa Hawkins Rental Act, a state law which tempers a municipality’s inclination to enact onerous rent control ordinances.

What we predicted as inevitable has become reality, with the Secretary of State’s office recently reporting that backers of the initiative – dubbed the “Affordable Housing Act” – have crossed the finish line by garnering well over the 365,880 signatures needed to qualify for the November ballot.

Up until now, attempts to strike the law from the books have flopped. A state appellate court ruling in 2009 struck down an affordable housing mandate in the City of Los Angeles, a decision that had statewide implications by upholding Costa Hawkins.

Undeterred, affordable housing advocates took to the dome of the Capitol and introduced legislation to repeal the Act. Had it passed, Assembly Bill 1506 would have enabled cities throughout California to impose vacancy control – a landlord’s ability to set rent at market rate when a unit is vacant a new tenancy is established – and to place single family homes, condominiums, and buildings built after 1979 under rent control.

What is Costa Hawkins? Get an overview here →

In an earlier article, we warned our fraternity not to get a false sense of bravado after this legislation was dead on arrival in an Assembly committee following spirited testimony from residents who said the rent was too damn high, and worried landlords looking to protect their investments.

Although the battle was won by defeating AB 1506, the war on property owner rights morphed into different shapes, forms and sizes as inventive legislators in the tenant’s camp seemed to adopt a new strategy.

When it became too ambitious to repeal Costa Hawkins, lawmakers who we coined the “gang of three” introduced more insidious bills aimed to chip away at property owner rights in a piecemeal fashion. If the outright repeal of Costa Hawkins was met with too fierce opposition, progressives pivoted to proposals that would melt away owner protections slowly like a candle, a clever retooling of their agenda, but a tactic which ultimately failed.

These bills shared the same fate as AB 1506 by dying on the vine, yet even as the champions of tenant rights unsuccessfully moved their agenda forward, another effort behind the scenes was gaining more traction – a mass gathering of signatures to place Costa Hawkins repeal on the November ballot. 

Now that the grassroots effort has reached its goal to take its agenda directly to the ballot box, the reality is beginning to set in for jittery property owners – the repeal of Costa Hawkins is more than a whispering possibility. It just might pass this time around.

A movement long in the making

Since progressives waged the battle against Costa Hawkins years ago, the political winds have increasingly blown in favor of their cause, but what changed? It was a multiplicity of factors and one catalyst has been the migration of Corporate America to cities.  After hunkering down in suburbs, huge companies have established urban beachheads, lured by tax incentives and a pool of young, digital talent who seek urbane life and are willing to forgo the American dream of homeownership.

With cities becoming a magnet for high-paying jobs, upward pressure on rents ensued. Discontent with rising rents, quarrels over gentrification, and a burgeoning homeless population created the perfect breeding ground for the rent control movement to spread. This time, it has reached critical mass with a well-organized and well-funded coalition that poses a more formidable threat to Costa Hawkins than the failed campaigns of yesteryears.

Bad housing policy

The rental housing industry has always opposed rent control in every form or fashion, but the calls to arms now seem apocalyptic.

“The heart and soul of our argument is something this radical pours gasoline on our housing crisis and makes it worse,” said Steve Maviglio, a spokesman for the opposition campaign called Californians for Responsible Housing.

Visitors who click on the California Rental Housing Association’s website are greeted with an “urgent” and “critical” alert about Costa Hawkins. Once clicked, the important information? “The flawed housing initiative will make California’s housing crisis even worse”, is the headline in big bold font highlighted in red, before railing against the flawed initiative.

Noni Richen, President of the Small Property Owners of San Francisco, doesn’t mince words in his message to the architects of the initiative.

To renters, we have an honest and responsible message: If you think it’s hard to find a rental now, imagine how hard it will be when builders have no incentive to build rentals and owners resist renting out units…

Other owner advocacy groups echo this sentiment in clear and sometimes scathing terms, yet it is not only rental property owner advocates who are debunking the logic of the assault on Costa Hawkins, but a phalanx of economists and sensible newspapers – this editorial board says trying to fix a housing crisis with rent control is like sending an oil tanker to put out a forest fire.

Our take

“It could have a tsunami effect throughout California,” founding attorney Daniel Bornstein was quoted as saying in this article. Noting the repeal of Costa Hawkins would alter the “whole economics” of how developers eye development opportunities, he observes that “it’s hard enough and costly enough for a developer to make a decision to build housing, and they are now put on notice that the housing may be subject to rent regulation.” He goes onto say that developers “may very well be unwilling to make those tough decisions of being invested in building a development.”

All of us want stable housing, but according to Daniel, more rent control is not the solution. “Impacting market-rate rents doesn’t necessarily create stable housing for all,” he says, but instead, it would create “a terrible situation where there is a limitation on supply and an over demand on the available vacant units, which ends up increasing rents for those vacant units.”

The Affordable Housing Act is a misnomer, then, because it would only aggravate the affordable housing deficit. 

What you can do

With the campaign to nix the Costa Hawkins Rental Act almost Presidential in scope, the rental housing industry has been asked to infuse money into the machinery necessary to defeat it. Get involved.

Tenant advocates are in a celebratory mood after Proposition F sailed to victory in Tuesday’s special election. In an only-in-San-Francisco moment, 56 percent of the voters passed the measure, which guarantees free legal representation to tenants facing an eviction, regardless of the underlying cause for the eviction.

Dubbed the “No Eviction Without Representation Act,” the measure also makes no distinction from poor tenants or the well-to-do – counsel is afforded to tenants of all income levels, including the wealthy, without means testing to determine if the person headed for eviction has a genuine need for free legal help. The city controller estimates this ambitious initiative will cost between $4.2 million and $5.6 million annually.

Bornstein Law joined the San Francisco Apartment Association and other industry partners in opposing the measure, but the people have spoken. With Proposition F the law of the land, we won’t dwell on the colorful storyline that led up to the law being minted, but instead, focus on what this means for rental property owners in the wake of its passage.

Rest assured, the newly appointed tenant attorney will make every effort to delay the unlawful detainer by using tactics and wedging obstacles that are beyond the sophistication of tenants who ordinarily would fend for themselves if not for the free legal aid.

Tenant attorneys are inventive

In an earlier post on California’s implied warranty of habitability, we noted that it is not uncommon for non-paying tenants to claim that the rental unit is unfit or unsafe for humans to occupy, a favorite gambit tenant attorneys use to drag on an unlawful detainer action. This affirmative defense is rarely successful, but clever smoke and mirrors are used to delay the inevitable eviction.

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, who have no legal entitlement to free legal counsel but are forced to pay attorneys fees to defend against assertions that oftentimes go unsupported by any evidence.

Don’t kick the can down the road

From our hard-won experience, many rental property owners are conflict avoiders and would rather kick the can down the road in hopes that a failed relationship will resolve itself on its own. We have always warned these wishful thinkers that an unlawful detainer action can take some time. Translation: if swift and proactive action is not taken at the outset of the dispute, the landlord can lose months of rent by waiting for the unlawful action to play out.

The message of addressing a problem early on is one we’ve been parroting to rental property owners for years, but now must be amplified on the heels of Proposition F because, rest assured, the newly appointed tenant attorney will make every effort to delay the unlawful detainer by using tactics and wedging obstacles that are beyond the sophistication of tenants who ordinarily would fend for themselves if not for the free legal aid.

Our biased or not-so-biased conclusion

When Proposition F first appeared on our radar, we debunked its logic in the blogosphere, on social media, and in thousands of emails.

If we didn’t steadily rail against it, you might think we are opportunistic by saying the measure calls for aggressive representation and a counter-narrative by a law firm dedicated to protecting the rights of rental property owners and standing up to tenant attorneys.

We are open for business.

 

San Francisco’s mayoral race has become charged in a very Bay Area way in an epic battle between progressives and moderates. This New Yorker article says the fractious contest will define the future of the left and will serve as a litmus test for the way it is thinking as a collective.

No matter what your ideology may be, whoever inherits the final 18 months of the late Mayor Ed Lee’s second term will have to tackle housing issues and shape policies that are consequential to rental property owners in a strong-Mayor town.

We wanted to put a pulse on where our industry partners stand, and the report card is in. The San Francisco Association of Realtors, Small Property Owners of SF and the San Francisco Apartment Association all endorse lifetime renter and moderate Board of Supervisors President London Breed. Breed is both pro-tenant and pro-developer who believes the affordability crisis is driven primarily by a lack of housing supply.

“The housing crisis has grown visibly worse recently, but it is — at its core — the result of decades of bad housing policy in San Francisco and the Bay Area.” ~ London Breed

This sentiment and balanced approach seems to resonate well with owner advocacy groups, who are also in agreement in opposing Mark Leno or Jane Kim. Predictably, all are in unison by opposing Proposition F, dubbed the “No eviction without representation Act of 2018,” which would establish a City-run and funded program to provide free legal representation for all tenants in the city who are facing eviction, regardless of the underlying cause.

Sitting Superior Court Judges Andrew Y.S. Cheng, Curtis E.A. Karnow, Cynthia Ming-mei Lee, and Jeffrey S. Ross are viewed to be more moderate than the progressive candidates vying for the bench and so anyone tethered to the rental housing industry may be advised to leave all enough alone.

We’ve noted before that the fraternity of rental property owners and the professionals who service them can band together to defeat repeal efforts of the Costa-Hawkins Rental Act, and in the same spirit, urge you to get out to the polls on Tuesday to assert your voice.

Even as we continue to keep an eye on the big picture and follow legislative/regulatory changes and the influencers that shape policy, you can count on Bornstein Law to handle the more mundane legal issues and landlord-tenant disputes that arise in your rental business. Contact us for informed advice.

In the vast majority of cases of strained landlord-tenant relationships that cross our desk, a tenant’s alleged transgression is “curable,” meaning the tenant can fix whatever problem has incurred the angst of the landlord.

Whether the resident is late on his or her rent, the tenant keeps pets in violation of a no-pet policy, plays loud music at all hours, or are in breach of other covenants contained in the lease, they more often than not have an opportunity to pay the rent or correct the underlying behavior.

On behalf of our clients, we commonly serve notices instructing tenants to either pay the rent or move within three days, or similarly, to move within three days if the tenant does not cure another rental agreement violation. Yet illegal activity constitutes a violation that is not curable — so egregious is illegal activity on the premises, the tenant is not afforded the opportunity to remedy the unlawful behavior.

Recognizing that certain types of conduct pose extreme risks to the well-being of residents, Code of Civil Procedure (CCP) section 1161(4) provides rental property owners a vehicle to commence an unlawful detainer action when:

Any tenant, subtenant, or executor or administrator of his or her estate heretofore qualified and now acting, or hereafter to be qualified and act, assigning or subletting or committing waste upon the demised premises, contrary to the conditions or covenants of his or her lease, or maintaining, committing, or permitting the maintenance or commission of a nuisance upon the demised premises or using the premises for an unlawful purpose, thereby terminates the lease, and the landlord, or his or her successor in estate, shall upon service of three days’ notice to quit upon the person or persons in possession, be entitled to restitution of possession of the demised premises under this chapter. For purposes of this subdivision, a person who commits or maintains a public nuisance as described in Section 3482.8 of the Civil Code, or who commits an offense described in subdivision of Section 3485 of the Civil Code, or subdivision (c) of Section 3486 of the Civil Code, or uses the premises to further the purpose of that offense shall be deemed to have committed a nuisance upon the premises.

Dogfighting and cockfighting, prostitution, unlawful weapons or ammunition offenses, and in some instances, gang activity are some examples of illegal activity, but the bulk of these actions are related to narcotics trafficking. Clearly, though, weapons offences often go hand-in-hand with selling drugs.

Of course, prevailing in an unlawful detainer action on the basis of illegal activity transpiring in a rental unit is considerably different than a non-payment of rent case — you will need proof of the illegal activity.

We were intrigued to come across this video from a news outlet that reported how one police department trained landlords to identify illicit activity taking place.

We hasten to say that before the rental property owner plays detective, the owner needs to be aware that in California, landlords are permitted to enter the dwelling only in a limited set of circumstances, and the mere suspicion that something nefarious is going on is not one of them. Inquisitive owners may find activity that raises their eye brawls, only to also find snooping violates the “implied covenant of quiet enjoyment.”

We do agree with the sentiment that landlords must be the “eyes and ears” of their rental unit. While this is the first venue in which we’ve addressed illegal conduct in units, we’ve talked about how landlords need to know what is going on in their property when it comes to unauthorized Airbnb and short-term rental arrangements. This analogy is quite fitting, because under CCP 1161(4), unauthorized subletting is a cause for this form of hybrid eviction where the tenant cannot get back in good graces with the landlord.

Although the law provides a legal basis for a landlord to terminate the tenancy by giving only three days written notice if the tenant has used the apartment for an unlawful purpose, the illegal activity must be proved in the eventuality of a trial.

Of course, the purpose of an unlawful detainer trial is not to determine the guilt or innocence of a criminal defendant. In criminal law, the accused is afforded much more rigorous protections and the State must prove guilt “beyond a reasonable doubt.”

In unlawful detainer trials, the landlord must prove more than 50% of the evidence points to illegal activity, a much lower burden of proof but nonetheless a tall order for the owner to prove the facts stated in his or her complaint. Independent witnesses, police officer testimony, and other evidence to sustain the landlord’s case should be carefully reviewed with an attorney.

Although these types of actions may seem less formal than other Superior Court trials, there are many evidentiary and procedural issues, unforgiving deadlines and specialized documentation that make it imperative to seek proper legal counsel to remove tenants that who are engaging in illegal activity.

Until recently, San Francisco was the only major Bay Area city with rent-control laws to allow landlords to pass on portions of property taxes and mortgage loans, but it no longer stands alone.

The San Francisco Board of Supervisors has passed an ordinance that blunts the ability of rental property owners to increase rents by up to 7 percent on top of the annual allowable increases, to pay down rising property taxes and debt services.

A landlord may still petition the Rent Board to pass through to tenants the costs of certain renovations to the property, which are considered capital improvements — new windows, a roof replacement, or exterior painting, for example.

In deciding whether to nix these pass-throughs, the Board of Supervisors received no shortage of input from a phalanx of tenant advocacy groups and predictably, the rhetoric against “greed-fueled displacement” and “outside speculators” was barbed, falling squarely on the side of tenant advocates.

Although debt service and property tax pass-throughs have been utilized by large corporate landlords and property management companies, they also are used by “mom-and-pop” owners who rely on the pass-throughs to keep themselves solvent. The new law, then, disproportionally impacts these smaller rental businesses owned by predominately responsible, studious landlords who are being saddled with rising costs.

The East Bay Rental Housing Association put human faces on these engaged, positive and compassionate members by profiling several private rental properties owners here, noting they are the providers of the community’s largest segment of safe, clean and affordable housing.

Back when efforts to scuttle debt service and property tax pass-throughs first captured our attention in December 2017, Charley Goss, government affairs managers for the San Francisco Apartment Association, noted that tenants facing financial hardship may apply for an exemption to a pass-through rent hike.

“You want to protect tenants who need protection with hardship petitions, but there has to be a give-and-take with the ability to recoup costs and investments in the property.”

By not engaging in this compromise and instituting a blanket prohibition against rising expenses, the city has dealt a blow not only to Goliath landlords who can absorb rising costs and huge mortgages with less discomfort, but to smaller rental businesses that are already struggling to keep afloat.

As we noted earlier, landlords can still petition the Rent Board for rent increases in other circumstances, but oftentimes, owners are uninformed about their respective rights under the law. Having made regular appearances before rent bodies throughout the Bay Area for over 20 years, Bornstein Law has become well-versed in this nuanced area of law.

As a backdrop, visit our practice page that takes a trip around rent-controlled jurisdictions, or contact our law offices for informed advice.

 

 

As proud East Bay residents, we encouragingly watched Oakland become an emerging force throughout the Bay Area. Yet Bornstein Law has always maintained that the propulsion of rent control measures has moved the needle of progress in the opposite direction and unnecessarily penalizes studious “mom and pop” landlords that are the bedrock of the community and the biggest engine of affordable housing.

Oakland City Hall disagreed with our assessment.

Oakland renters that occupy dwellings subject to Measure EE will now be entitled to relocation payments when an owner attempts to recover possession of a tenant-occupied unit for use as their primary place of residence or a relative’s use where the landlord already lives in another unit in the building. Those payments are compliments of the Uniform Residential Tenant Relocation Ordinance and apply not only to owner move-in evictions but to instances where a tenant is displaced because of the owner’s desire to effectuate a condo conversion.

A fundamental question we have been fielding from Oakland landlords is whether the new relocation rules apply to them, or if their properties are exempt. This calls for a careful review of your unique circumstances, but for the purposes of this discussion, we will assume that tenant relocation assistance is obligatory.

The effect of the ordinance is to extend relocation payments to all no-fault evictions – there were existing laws on the book that mandated relocation payments for only Ellis Act and code compliance evictions. The measure is one of many designed to make Oakland’s rent stabilization more closely mirror the policies of its sister rent-controlled cities in San Francisco and Berkeley.

How much the landlord must doll out will depend on the number of bedrooms that are in the unit.

  • $6500 for studios and 1 bedrooms
  • $8000 for 2 bedrooms
  • $9,875 for 3+ bedrooms

These are the “base rates”, if you will, but owners are required to dig deeper into the wallets if there are any tenants in the household who have low income, are elderly, disabled, or have minor children. One additional, lump sum payment of $2,500 per unit is due when any member of these vulnerable groups inhabit the dwelling.

Half of the standard relocation payment must be made when the eviction notice is served, with the balance due when the tenant vacates. The lump sum of $2,500, if applicable, must be paid within 15 days of when the tenant notifies the landlord of the tenant’s eligibility for the additional payment.

If a recalcitrant landlord does not make the required relocation payment, the tenant or their attorney cannot use the failure to pay a defense to an unlawful detainer action, but we hasten to say many other penalties await a landlord that does not comply with the law. Suffice it to say you don’t want to defend against them.

Of course, like most other matters that cross our desks, the law is cleaner on the page than in real life, with Oakland home to some of the most onerous and highly regulated rent control laws in the country. This minefield is best journeyed with the Oakland landlord lawyers at Bornstein Law.

Section 8 housing has been the subject of some controversy and conflict lately. With a good deal of misinformation floating around, widespread landlord bias against Section 8 tenancies and a potential legal minefield for landlords, we felt obligated to chime in on the housing choice voucher program.

Spawned by 42 U.S.C. §1437, Section 8 aims to assist low-income families, the elderly and disabled to afford decent, safe and sanitary housing in the private market, but like most other matters that cross our desk, the law is much cleaner on the page than in real life application.

Rental property owners seem to have a love-hate relationship with Section 8. Their participation in the program has always been a trade-off between rent security through guaranteed subsidies, shorter vacancies and lower turnover, among other perks, and the unique challenges landlords face when renting to a tenant with a Section 8 voucher. Less endearing aspects of the program include frequent inspections, a labyrinth of regulations, ceilings on amounts the government will pay, concerns over possible property damage and the collection of security deposits, to name a few.

Getting the elephant out of the room

There is a pervasive belief held by many landlords that Section 8 tenants are destructive, with no shortage of horror stories that beset owners can tell to back up their claim – we will resist the temptation to recount the details of these tales. We hasten to say that excessive wear and tear can be afflicted by any tenant, regardless of their income source.

At Bornstein Law, we always operate under the presumption that there are good tenants and bad tenants. By the same token, there are good landlords and bad landlords, so it’s our belief that no group should be painted with a broad brush.

Some landlords do not share our sentiment and have a bias against Section 8 rental applicants. We have always maintained that the wholesale exclusions of any group expose landlords to liability, and a categorical policy of refusing to rent to recipients of Section 8 vouchers is no exception.

What the law says, and where it is mute

The Fair Housing Act (FHA) a federal law, doesn’t bar landlords from discriminating based on Section 8, but some states and municipalities do, oftentimes as part of a larger contextual ban on “source of income” or “public assistance status.” We’ve noted that California defines discrimination much broader than federal law, with the envelope of protected classes constantly being pushed.

Unique protections in the Bay Area

As one of the greatest enclaves of tenant protections anywhere, it’s with little surprise that some Bay Area municipalities have led the charge in discouraging the rejection of Section 8 applicants and codifying this disfavor into law.

Berkeley is one bastion of protective measures for low-income renters – if you say “no” to a Section 8 applicant, it may be tantamount to housing discrimination, as part of Ordinance No. 7568.

The Oakland Housing Authority is dangling financial incentives to landlords who rent to Section 8 participants, but in an earlier article, we related the frustration of many Oakland landlords who experience hurdles in exiting the program – owners who want to divorce Section 8 may find that it’s until death do us part, so a careful cost/benefit analysis is recommended before opting in.

In San Francisco, a longstanding argument over a law that prevents landlords from rejecting Section 8 has been settled for now, as the First District Court of Appeal ruled in favor of the city and affirmed protections for voucher recipients. But with further appeals in the offing, it is likely that we haven’t heard the last of this.

Parting thoughts

We note that there are unique documentation and unforgiving deadlines with the termination of tenancies and rent increases with Section 8 participants and the rules must be followed to the letter.

We also stress that when there is a failed relationship, Section 8 evictions are highly nuanced. The tenant can only be evicted for repeatedly violating the lease agreement, breaking the law in connection with the property, or another “good cause,” an ambiguous term best journeyed with an attorney.

In the vast majority of the cases we handle, tenants violate the lease agreement by failing to pay rent, but there are more nebulous reasons such as violations of the occupancy standards or nuisance violations.

For proper counsel, contact our office for experienced driven, informed advice on the Section 8 program and any other orbits of your real estate business.

 

When rental relationships sour, even the most studious investment property owners can be slapped with a lawsuit that may cost tens of thousands of dollars to defend against, regardless of the merits of the case.

In our 23+ years at Bornstein Law, we have seen some reprehensible conduct by landlords that invite litigation, and the menagerie of shocking abuses inevitably finds its way into the headlines. When investment property owners house tenants in squalid firetraps, bully elderly residents, or relegate vulnerable tenants to a subterranean dungeon, such lawsuits are indefensible.

Responsible landlords who have a sound moral compass tend to look at these egregious cases and develop a misplaced sense of confidence, reasoning that because they treat their tenants well and are good stewards of the property, they will not be exposed to financial and legal liability.

In fact, most of the tenant lawsuits we encounter at Bornstein Law arise from a multitude of simple oversights, a naivety of rent control laws, or an overzealousness of landlords to take matters into their own hands with “self help” evictions or menacing behavior that serves to harass problematic tenants.

We constantly remind owners that while the rental unit is their property, it is the tenant’s home, and when a landlord crosses this nebulous line, the conditions are rife for a tenant lawsuit.

Given the potential spoils of victories, there is no shortage of enterprising tenant attorneys wanting to assist disgruntled residents in evening the score. This is especially true when the tenant is displaced, and the stakes are ratcheted up if the high-pitched tenant is in a rent-controlled jurisdiction, where rent boards are all too willing to right a perceived wrong.

We have been ambassadors for wrongful eviction coverage, noting that tenant lawsuits are proliferating throughout the Bay Area. We would be remiss not to qualify that statement with a summary of potential suits that a landlord can face in a failed tenant relationship, so we outline some common ones here.

Wrongful eviction

When a tenant claims that he or she is displaced through the improper conduct of the landlord, this can be a costly endeavor. The tenant often seeks rent differential damages, the difference between the former tenant’s monthly rent and the actual rental value of the unit. For example, let’s say a tenant who is paying $2,500 in a rent-controlled apartment is wrongfully evicted. Assuming the current monthly rental value is $4,500, there is a rent differential of $2,000. A tenant can argue that if it was not for the improper conduct of the landlord, he or she would have remained in the apartment for five years and, doing the arithmetic, the differential damages are $120,000. Other potential damages may include moving costs, statutory relocation fees, and compensation for the emotional distress of being uprooted.

Breach of covenant of quiet enjoyment

Implied in every lease is a covenant of quiet enjoyment, guaranteeing that tenants will be able to peacefully enjoy their homes, and this has been codified in Civil Code § 1927. Essentially, the tenant has a right to reasonably occupy the dwelling peacefully and without recurring disruption, but ‘quiet enjoyment’ also includes the right to exclude others from the premises, the right to clean premises, and the right to basic services such as heat and hot water. When a tenant claims that the landlord has interfered with these rights, action can be brought against the landlord for breach of the covenant of quiet enjoyment. The tenant may elect to stay in the unit and sue the landlord.

That’s not all

The tenant may also commence a lawsuit for emotional distress suffered because of a landlord’s misconduct or harassing behavior, whether the infliction of anguish was intentional or a result of negligence. In cities that have implemented rent control policies of varying degrees, landlords may also be liable for damages that occur from violations of the respective ordinances.

Triple the trouble?

Enter treble damages in certain locales that triple the damages in a punitive measure to discourage improper landlord conduct and the potential liability is amplified, not to mention attorney’s fees that a landlord can be on the hook for.

At Bornstein Law, we believe that an ounce of prevention is worth a pound of cure, and our overarching goal is to avoid or resolve conflict so that your rental business does not have to defend against lawsuits. Managing a landlord-tenant dispute is like a knot – the harder each side tries to win, the less likely the knot is untangled. We are firm believers in untangling the matter so that the conflict is not enlarged.

Of course, you can count on our advocacy in the courtroom or in front of local rent boards as a last resort. In an era when political rhetoric and tenant protections neglect the rights of property owners, you can rely on our staunch advocacy to level the playing field.

As its name implies, a tenant buy-out agreement (or in Oakland’s vernacular, a move-out agreement) is an arrangement whereby the tenant voluntarily vacates the rental unit, in exchange for compensation. Move-out agreements are particularly attractive when there are no convenient legal grounds to compel a tenant to leave or to avoid the cumbersome legal process.

The prerequisite to any agreement, of course, is to initiate a conversation and negotiate what dollar amount makes sense to both parties, but this dialog will soon be subjected to regulations that the city passed on March 20th, which adds to Chapter 8.22 of the Oakland Municipal Code.

Free speech assailed

A landlord’s prerogative to approach tenants with the offer of buying them out of the residence is constitutionally protected free speech under the First Amendment, a right that after scrutiny, has been upheld by courts.

It is well grounded that private parties can enter into a voluntary agreement and that agreement is legally enforceable if certain elements are met, namely offer acceptance and consideration. A properly negotiated tenant move-out agreement passes the muster.

While it is a rarity for Big Brother to have a say in covenants that are forged between consenting parties, Oakland has joined San Francisco in an exclusive club that regulates buyout negotiations between landlords and tenants. Just as courts have affirmed a landlord’s right to free speech, so too, has it upheld a San Francisco ordinance that constrains this speech.

By passing the Tenant Move Out Agreement Ordinance, Oakland ushered in a sweeping law that creates disclosure and reporting stipulations that must be issued before a landlord can even broach the topic of a buyout.

So as to let owners know that Oakland is serious about the ordinance, the law imposes hefty penalties for landlords that take short cuts by ignoring the procedural requirements and starting an informal chat with a tenant on their own.

The ordinance dictates the choreographed procedures that rental property owners must follow and adds teeth to the measure, and here is the Reader’s Digest version. Owners must:

  • Provide tenant with a written pre-negotiation disclosure on a form prescribed by the City.
  • Inform tenants of their right to consult with a lawyer.
  • Provide tenants with a statement allowing them to rescind the move-out agreement for up to 25 days after execution.

We’ve uploaded the long-form version of the ordinance on our website. Download it here…

These ordinance procedures only apply if an owner and tenant are negotiating a tenant buyout. This move-out ordinance should not be confused with owner move-in relocation fees. For more information on owner-move ins and relocation fees, consult our earlier article on this subject.

Learn more about owner move-in relocation fees →

Mimicking San Francisco

We notice stark similarities between Oakland’s ordinance and that of San Francisco’s, with an exception that jumps off the page – if all of the T’s are crossed and the tenant enters into a proper move-out agreement, only to later change their mind, Oakland residents have 25 days to rescind the agreement, while San Franciscans are afforded a full 45 days to make an about face.

Our take

Bornstein Law laments the passage of the ordinance because it adds new layers of red tape to an already obstructive process that burdens small rental property owners. The new restrictions in communication drive a deeper wedge between landlords and tenants, which will likely result in clogging the court system with cases that could be averted if open communication were not trampled upon.

More fluid dialog, we believe, would increase the number of instances of “win-win” situations, where both parties would negotiate mutually agreeable terms. Being dragged into court is a lose-lose situation for landlords and tenants alike but seems inevitable for a city whose policies have trudged ever closer to the heavy-handed rent control policies of San Francisco.

Constraining communication between consenting parties all but guarantees a pathway to the costly judicial system that adds further expenses to property owners already saddled with high costs of doing business and may very well lead to evictions that would be avoided if there were no stumbling blocks to two parties coming to the table.

Buyout agreements are nothing to be trifled with

Structuring a tenant buyout agreement was already a legally consequential undertaking, but Oakland’s Tenant Move-Out Ordinance adds new layers of complexity that must be journeyed with an attorney versed in landlord-tenant law.

 

 

Airbnb may have won many people’s choice awards, but it hasn’t gotten many points with its hometown. Now, the city seems to have tamed the beast and emerged as the undisputed enforcer of the modern-day iteration of the temporary flop. San Francisco’s newly fanged Office of Short-Term Rentals no longer has to plea with billion-dollar platforms to remove hosts that flout the rules – they merely tell them to remove these bad actors.

In a nanosecond, thousands of straggling, unregistered Airbnb hosts got their listings deactivated, nixing nearly half of Airbnb’s listings overnight. That’s because when the clock struck midnight on Wednesday, January 17, a new law kicked in requiring hosts to register their property went into effect.

In that moment of reckoning, the rules become clearer. A short-term rental host that shows compliance with San Francisco’s laws and earns a license issued by the city is legal, and those who don’t follow the law are illegal and excommunicated – not open for debate or discussion. As part of the long-promised crackdown, 2,000 units were pulled off the site last Tuesday alone, ending an era when not having a license was no bar to ranking in cash.

The data is fresh and we are still analyzing it, but it appears that at least 6,000 short-term rental listings were removed through this process…. For Airbnb alone, around 4,760 listings were removed.”

~ Kevin Guy, director of S.F’s Office of Short Term Rentals

Joe Eskenazi has a riveting behind-the-scenes glance of the final countdown to the Airbnb registration at the Office of Short Term rentals.

San Francisco stands alone in putting such a dent in Airbnb’s listings, but who, exactly, is responsible for this dramatic turnaround? Their capitulation to demands is not owed to Airbnb itself or the city attorney, but to an “only in San Francisco coalition” that united odd bellows to organize, run campaigns, educate, and eventually support the Goliath to quit posting illegal listings, submits this article.

Regardless of the forces behind Airbnb’s about face, Bornstein Law has seen this day long in the making and feel somewhat validated by our predictions very early on in the parade that the law would catch up with technology.

Airbnb wins a lawsuit that threatened its entire business model

In a victory for profiteering renters that improperly sublet their units for extra cash, a federal judge has tossed out a lawsuit that sought to crack down on hosts using the Airbnb website without landlord permission. Denver-based Aimco took the fight to Airbnb in dual lawsuits in Florida and California, claiming that Airbnb was deliberately incentivizing people to break their leases. A judge rejected this argument, ruling that Airbnb was not responsible for any havoc that was wrecked by guests. That according to the Communications Decency Act, a federal law that gives internet companies immunity for content that users or random people post on their sites.

The takeaway for landlords? Don’t wear blinders, and some personal sleuthing may be in order to determine what is going on in their rental units. Owners can and must take corrective action if improper subletting is detected.

If history is any indication, we’re sure that it won’t be too long before Airbnb graces itself in the news again, but you can count on the landlord lawyers of Bornstein Law to help stay in the know.

 

At Bornstein Law, we marvel at California’s scenery and are the first to recognize that all of us must be good stewards of the environment, but we also tout new construction as the most sensible solution to the housing deficit. We think that enviros and YIMBYs that say “build baby, build” can not only co-exist but experience synergy in their mutual goals.

In a January Facebook post, we noted that the California Environmental Quality Act may be aggravating the state’s housing crisis and that it may be time to review a 1970 law that requires public agencies to put a finger on the environmental impacts of projects within their jurisdiction.

However well-intentioned, CEQA has become a tool to deny, obstruct or delay residential construction, irrespective of whether there are significant or legitimate environmental concerns. With the housing crisis upon us, the climate seems ripe to re-examine the legislation and so it was only a matter of time before legislators acted to restore a sense of equilibrium between environmental protections and the need for increased housing in the 21st century.

Sen. Steve Glazer took the charge by introducing SB 1340 and SB 1341, bills that recognize that the frivolous lawsuits will halt new affordable housing developments in the Bay Area and beyond.

Glazer takes a two-pronged approach. SB 1340 attempts to break the logjam of litigation – courts would have 270 days to rule on lawsuits that challenge housing projects. Simultaneously, SB 1341 would add a level of transparency to actions by requiring plaintiffs that initiate CEQA-based lawsuits to come out of the shadows and disclose their identities.

The latter point is not that radical of a concept – it is helpful to know exactly who you are being sued by, but a departure from the status quo of anonymous litigants. SB 1341 would also eliminate the wasteful duplication of multiple lawsuits lodged against individual projects that face similar claims.

While Glazer’s pair of bills are flagship pieces of legislation that stand to knock down the walls of CEQA, there are other measures incubating to reform the way CEQA lawsuits are handled, and we will cover these in future posts.

The new face of YIMBYism

Environmentalists would ordinarily be up in arms over any initiatives to curtail protections, but it seems that the torch has passed to a new generation.

As we noted in an earlier article, enviros are joining the ranks of the YIMBY movement, as a growing throng of progressives and Millennials are recognizing that more homes are good and denser housing would reduce the carbon footprint.

Bornstein Law applauds reasonable efforts to remove barriers to much-needed construction and even as we attempt to help shape the larger debate on housing policy, our landlord attorneys are ready to help investment property owners avoid friction within their rental units and manage landlord-tenant relationships – contact our office today.

 

We came across an intriguing case of a couple that sought court intervention to force their 30-year old son to move out after overwhelming his welcome. After repeated entreaties from his parents to leave their home and refusing money to find new living arrangements, Michael Rotondo was adamant about staying until a judge gave him the boot.

The case gathered wide attention and on Wednesday, even became the butt of jokes on the Jimmy Fallon show. Though the displaced Mr. Rotondo was an easy target after being belligerent in court and giving an animated interview with the media, rest assured this is not a humorous subject for a great number of property owners whose residences are being manipulated by adult children, friends or caregivers.

It’s an unfortunate dilemma when owners invite a trusted individual into their residence, perhaps out of a sense of obligation, only for the unappreciative guest to exert an inordinate amount of control over the dwelling, refuse to leave when asked to and worse yet, take advantage of the owner.

Largely overlooked in the media buzz and late-night banter is Justice Donald Greenwood’s instruction to an adult protective services agency to investigate the case further. That body is responsible for overseeing the suspected abuse, neglect or exploitation of older adults and adults with disabilities. The Justice’s concern bespeaks alarming abuse of vulnerable property owners that 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.

The law provides an answer to regain control

When an owner opens the door and invites someone into their residence, they essentially create a license to occupy the premises. It doesn’t mean their guest (in legalese terms, the licensee) can stay indefinitely.

If the owner invites someone over to dinner, their guest has the license to stay until the meal ends or until such time the owner asks them to leave. Clearly, the dinner guest cannot maintain possession of the unit and start “camping out” without the owner’s permission. This simple analogy is instructive – when a tenancy was never established, the owner can ask whoever occupies their premises to exit.

Although this is readily understood in most occupancy arrangements, some overly reliant, opportunistic or predatory residents insist on staying planted. When these incalcitrant guests cannot be nudged out of the residence, the owner can turn to the courts to commence a forcible detainer action.

Although a forcible detainer action is a different legal creature from an unlawful detainer action, it is similar in many respects and the end goal is for a landlord to regain possession of their unit. Of course, efforts to remove any resident brings into focus many legal issues best journeyed with an attorney.

When family members or other confidants are the subjects of a contemplated eviction, it is even more vital to seek proper counsel removed from the emotional fray.

For more insights, follow us on Facebook or subscribe.

 

Immigration was a divisive topic in 2017, but California has been the capital of democratic resistance in the Trump era, making a concerted effort to protect immigrants from the rhetoric and anticipated changes coming down the pike.

One example is the passage of AB 291, or the Immigrant Tenant Protection Act, which prevents rental housing providers from using an individual’s immigration status against tenants.

Under existing California Law, it is not permissible for landlords to inquire as to a tenant’s immigration status, but AB 291 was designed to address the unfortunate acts of intimidation some owners have used to influence tenants to vacate the unit or face being reported to immigration authorities. It adds greater teeth to anti-discrimination laws for renters that are already on the books. Specifically, AB 291:

  • Prohibits landlords from threatening to report tenants to immigration authorities, whether in retaliation for engaging in legally-protected activities or to influence them to vacate.
  • Bars landlords from disclosing information related to tenants’ immigration status.
  • Provides tenants the right to sue landlords who report them to immigration authorities.
  • Codifies an existing defense to unlawful evictions based on immigration status.
  • Prohibits questions about tenants’ immigration status in discovery or at trial.
  • Prohibits attorneys from reporting, or threatening to report, the immigration status of persons involved in housing cases.

Watch David Chiu (D-San Francisco make his case for the Bill on the Assembly floor.

The new law isolates the few bad apples, and so it will not affect the day-to-day operations of most law-abiding rental businesses; however, it does highlight the duty of care that landlords must use with the information they glean from their relationship with tenants.

This includes their social security numbers, native languages, the times they are home, the identity of their families among other sensitive information, and so landlords must use caution to make sure that any information is not misused.

We have always acknowledged the crucially important and difficult role of teachers, so Bornstein Law was encouraged to see that their toil in their classroom is being increasingly rewarded with a better prospect of home ownership “If you work at a school, we’ll help you buy a home”, is the tagline for Landed, a San-Francisco-based startup that assists teachers with their down payments. It’s a nice uplift, but with its services reaching 10,000 educators in eight school districts, it is a drop in the bucket.

In San Francisco and throughout the Bay Area, cash-strapped educators have struggled to keep pace with rising housing costs, and municipalities have heard their struggles. San Francisco has recognized that 20 percent down payments are hard to come by on a teacher’s salary, leaving many no choice but to rent indefinitely, endure grueling commutes, or seek greener pastures in cheaper school districts, with young minds hanging in the balance.

In recognizing the plight of these educators, along with the upheaval of students being implanted during the school year or severing ties with a displaced school employee, the San Francisco Board of Supervisors unanimously approved Ordinance No. 55-16. In 2016, the ordinance catapulted school staff to a newly protected class, prohibiting their displacement through a no-fault eviction during the academic year.

The ordinance lasted all five months before Judge Ronald Quidachay sided with the San Francisco Apartment Association and the Small Property Owners of San Francisco Institute. These groups sought judicial review of the ordinance, claiming that the law “is facially invalid because it is preempted by State laws governing landlord-tenant notification procedures and timetables governing the parties’ respective rights and obligations, including the timing of the right to terminate tenancies where the landlord has otherwise complied with all state and local substantive requirements necessary to terminate the tenancy.”

In plain English, Judge Ronald Quidachay agreed that state laws on evictions and property rights prevented cities from passing their own laws covering evictions and property rights.

The First District Court of Appeal in San Francisco took issue with this logic and on Wednesday, said that the city acted within its authority. The appellate court asserted the city’s ability to provide a permissible limitation upon a landlord’s property rights, without meddling with the overall right to evict under state law. The cerebral types can read the full case law here.

Perhaps with the exception of  Social Studies teachers that are fascinated by the abstract concept of preemption, the takeaway for jubilant teachers is that if a landlord attempts to evict them through no fault of their own, the eviction has to wait till the summer.

It begs the question: what takeaways are there for landlords? The lawyer for the SFAA and Small Property Owners of San Francisco offers his premonition.

“For property owners in San Francisco, what this ruling means, if upheld, is that if a property owner needs to access a piece of property to make repairs — let’s say a boiler breaks in November — they won’t have any way to get access until the summer months…. It’s a problem that the city created. We hope the Supreme Court will consider the importance of the issue.”, attorney Andrew Zacks says.

Zacks vows to appeal to the state Supreme Court and given the constitutional gravity of the matter – a clash between local and state law – the matter is almost certain to be heard. As always, you can count on Bornstein Law to keep you abreast of the developments.

To which we might add that in today’s climate, no-fault evictions are met with increased scrutiny, regulations, and tenant lawsuits, making it more imperative for landlords to consult with an attorney when they are contemplated.

At Bornstein Law, we have children (Daniel has five), and we love teachers. We also love protecting the rights of landlords. Our job is to not pass judgment,  but to protect the rights of clients no matter where they fall on the spectrum.

 

A little bit off the mark?

“After weeks of political wrangling, San Francisco is poised today to approve legislation that would allow the creation of tens of thousands of in-law units within existing buildings.” That was the intro to this 2016 article on the day the Board of Supervisors voted to alleviate barriers to construction of accessory dwelling units (ADUs), known colloquially as in-in-law units, granny flats, and other terms.

It was estimated that upwards of 30,000 affordable housing units would be carved out in privately owned buildings, but this goal was a tad ambitious – with 23 units built, there are 29,977 more to go.

There has been a romance lately with ADUs and even we were guilty of touting the benefits of new incentives to building a residential unit in an underutilized area of a property. But recent numbers have soured the love affair.

Although a lot of lip service has been paid to the benefits of ADUs, this San Francisco Business Times article reports that the number of units that have sprouted up are in the double digits.

In 2016, the gravity of the housing shortage was beginning to register for San Francisco. Recognizing this deficit and understanding that many properties have space that is not being used to its highest potential, the city passed Ordinance No. 162-16 in September of 2016 to allow their construction citywide.

In an oldie but goody, take a look at this San Francisco Planning Department’s video that rolled out the program, noting the unique and important role that ADUs play in a neighborhood’s housing supply. It was a good sales pitch, but many San Franciscans are experiencing buyer’s remorse.

After the law was ushered in, we assisted several clients in evaluating the risks and rewards of building a residential unit in an underutilized area of the property. Exuberant owners looking to take advantage of laxed Planning Code requirement found that building codes were still maddening to a lesser extent, as they jumped from the fire into the frying pan.

There’s plenty of finger pointing to go around. Although frustrated owners balk over the approval process and run into obstacles when it comes to passing fire code and other requirements, San Francisco Fire Department Fire Marshal Dan de Cossio told the Building Inspection Commission that “the onus to meet code and the requirements falls on the design professional, falls on the architect of record, engineer of record, etcetera.”

Marcelle Boudreaux heads the Planning Department’s accessory dwelling program and related to the same Commission stories of vexed architects that do not know how to properly advise their clients in the absence of guidance from city agencies, notably the Fire Department tasked with overseeing rescue windows and egress requirements. All agencies involved are hashing out the details on accelerating the approval process and breaking the logjam, so we will watch to see if the pace is picked up.

While only 23 ADU’s have been built among the 109 permits issued for new construction, the legalization of once illegal units stacks up a little better. With tens of thousands of illegal ADU’s estimated to be in the shadows, the City has received 658 permit applications of owner volunteering to legalize these units, of which 163 have completed the process.

Although these numbers are discouraging, property owners should not abandon their endeavor to build a backyard cottage but proceed with proper counsel. With a 23-year tradition of advocating for owners, coupled with tentacles in the property management industry and access to reliable contractors, Bornstein Law is best equipped to assist you in erecting an ADU or legalize an illegal unit that is eligible for proper permitting.

 

As heavy consumers of Bay Area housing news, we came across this article chronicling the plight of Cindy Chau, a tenant who thought she found a gem in a $1,200 a month apartment in pricey San Francisco. The bargain came with a caveat not included in the lease – lewd text messages and sexual entreaties. However disturbed we were by this occurrence at Bornstein Law, we were encouraged that the little-spoken about issue of sexual harassment within rental units was brought to light.

It’s difficult to turn a hashtag campaign into long-lasting change, but in short order, the #MeToo movement has upended the landscape of a number of industries, exposing sexual harassment where it has reared its ugly head. Whether in the hallowed halls of the Capitol, California’s technology sector, the good ole’ boy network of the entertainment industry, and just about every other facet of society, this issue has been in the forefront. It was only a matter of time that this endemic problem trickled its way down to the rental housing industry.

Related: Tenant lawsuits are proliferating throughout the Bay Area…

More women are breaking the silence, making this no longer a taboo subject – it’s a topic being discussed at nine o’clock in the morning. Watch this edition of the TODAY show.

As a guest on the TODAY show, Shark Tank’s Kevin O’Leary – a man no stranger to real estate and running businesses – offers some tutelage by saying that an enforceable policy of ‘zero tolerance’ must be set from the top, a message that must be heeded by landlords and property management companies, lest they face costly litigation or become a radioactive waste business.

Landlords can be held liable for the harassing behavior of their managers and other agents, making it vital to set and enforce policies from the top down.

Many people who infamously made headlines have seemed to become intoxicated with power, and the heavy-handed exertion of influence over other people, unfortunately, extends to a small group of Bay Area housing providers. In our pricey housing market, renters dealing with harassment are in a bind. In the words of one attorney cited in the East Bay Times article, “tenants basically are captive because they can’t afford to move out.”

We noted in an earlier article on permissible reasons for a landlord to enter an occupied residence that the tenant’s right to privacy is sacrosanct and that unknowing owners may be held liable for the actions of their property managers or agents. Cindy Chau’s case serves as an exclamation point. The understandably aggrieved tenant (shown below) is suing not only her property manager Gregg Molyneaux, but also Mr. Molyneaux’s parents, who are her landlords, on the grounds of harassment and wrongful evictions.

One of the greatest takeaways at Bornstein Law, then, is that it is imperative for any rental business to instill a culture of zero tolerance and an awareness of laws surrounding harassment and discrimination. With a high attrition rate, property management companies are especially susceptible to liability by the actions of employees that are not versed in basic tenets of law. Aside from harassment and discrimination, we add rent control regulations to the list of must-know subjects for property management employees to study.

It should be common sense, good business and human decency for the rental property industry to avoid crossing a red line, but if this is not reason enough, the romantic fascination of tenants or rental applicants can be quickly soured by the Unruh Civil Rights Act or Fair Employment Act and numerous cases where the courts have frowned upon the sexually-based transgressions of landlords with hefty financial consequences. Brown v. Smith and DiCenso v. Cisneros, are just a couple cases that roll off our tongues.

Most rental businesses are small shops, and they are well advised to consult the laws surrounding harassment. Harassment training isn’t optional for larger groups with more than 50 or more employees – under AB 1825, it is mandated.

In parting thoughts, we want to emphasize that in today’s scandal-laden and litigious era, any perceived acts of impropriety may be put under a microscope, with potentially severe repercussions to landlords and property managers. The writing is on the wall.

To understand your legal obligations and avoid or resolve problematic claims of harassment and cauterize risk, contact the landlord lawyers of Bornstein Law.

 

Calvin Coolidge once said that “advertising is the life of trade.” For the rental property industry, we might also add that advertising is the life of discrimination lawsuits that are proliferating in the Bay Area and beyond.

We see a built-in collision between good advertising and federal housing laws. Clearly, effective advertising is warmly and immediately human. It deals with human needs, wants, dreams and hopes, and coddles a sense of belonging. To win the hearts and minds of people, advertising aligns the core values of people by painting a broad brush with words and images that matter. What is intuitive for advertisers, then, may not be advisable for investment property owners.

In achieving its purpose, advertising can easily cross a line with buzzwords that indicate a preference, discrimination, or limitation based on color, race, sex, religion, handicap, national origin, sexual orientation, or familial status.

For its part, Craigslist has a page dedicated to the Fair Housing Act and instructions here.

Being warmly welcomed in a Hispanic community may be good advertising. Living within walking distance of a synagogue may be appealing to a Jewish family, just as a well-to-do household may enjoy being within proximity to a country club, but these representations also create discriminatory preferences that fair housing organizations, testers, aggrieved tenants and their attorneys are all too willing to enlarge. This short video explains these semantics.

Such blatant use of words, phrases, symbols, or visual aids that convey a preference are easy enough to avoid, but HUD peels the onion deeper by prohibiting advertising that selectively uses media, human models, logos, and locations that may signal a preference or limitation.

At Bornstein Law, we advise the industry to include persons with disabilities and ethnically diverse models in its advertising campaign and verbiage that highlights fair housing compliance policies.

We hasten to say that advertising is more than the traditional staples of billboards, commercials, newspaper ads and postings on Craigslist. It also encompasses flyers, banners, leaflets, brochures, deeds, applications, and the like.

It extends even further to anything the landlord or staff members verbally say or imply to prospective tenants. These statements might be uttered in person, sent in an email, condensed in writing, or made during a phone call.

An extended phone conversation is a particularly insidious breeding ground for housing discrimination claims, as the landlord or property manager attempts to conduct a full-blown interview to weed out undesirable applicants. No matter how scripted or conscious of fair housing laws the interviewer is, these types of open-ended calls give plenty of rope for landlords to hang themselves, which leads us to advise against them.

In parting, we want to stress that staying in compliance with fair housing laws is not limited to ads in print or on the web. The key is to instill a culture where words matter, and one that places compliance with fair housing laws over attraction.

Toward that end, education is key. With high employee attrition, property management companies are especially vulnerable to a culture of ignorance, when new employees do not have a solid understanding of the law and need to be trained in the many nuances of housing discrimination.

For those of you who have followed us for any length of time, we were going to say that we are preaching to the choir. But even that would be exclusionary under fair housing laws.

 

Although tenant screening is critically important in any rental business, it seems that the law and a culture of forgiveness stand to obstruct housing providers that look to connect the dots and mitigate risk.

Efforts to reform tenant screening practices have percolated to the federal level, with legislation endeavoring to reform the Fair Credit Reporting Act to make so-called “tenant-rating” agencies more accountable and afford additional protections to tenants.

Landlords are on solid grounds in denying tenancy to an applicant that has a prior eviction history. But U.S. Senator Cory Booker (D-NJ) says the reports that landlords rely on having limited details and don’t always provide context behind the eviction case.

Booker notes that unlike credit reporting agencies, whose practices are highly regulated, tenant rating agencies have little oversight and are prone to inaccurate or unfair conclusions. The proposed bill would:

• Prohibit a consumer reporting agency from making a consumer report containing information from a landlord-tenant court or other housing court record unless the case to which the record pertains resulted in a judgment of possession in favor of the landlord;

• Prohibit a consumer reporting agency from making a consumer report containing information from a landlord-tenant court or other housing court record unless the case to which the record pertains occurred less than three years before the report is created;

• Require the creator of a consumer report that contains tenant-landlord information to make reasonable attempts to assure the accuracy of the record;

• Require any person who takes an adverse action with respect to a consumer report to provide the consumer with a free copy of the report;

• Require the Consumer Financial Protection Bureau (CFPB) to create a centralized clearinghouse through which consumer may annually obtain a copy of their report from each tenant rating agency free of charge and correct any inaccuracies, and;

• Require the CFPB to conduct a study and submit to Congress a report on tenant rating agencies and their compliance under FCRA.

The rental housing industry is wedged between a rock and a hard place. On one hand, a tenant’s checkered past can be concealed. But overzealous screening exposes landlords to a perilous housing discrimination lawsuit.

Just one spoke in the wheel

This plan is part and parcel of what we see as a larger cultural shift that is tipping the scale in favor of tenant amnesty, over a landlord’s interest in protecting their rental investment by making informed decisions as to who occupies their units. The “eyes and ears” of rental property owners are slowly being handicapped by initiatives that conceal rental risks.

In an earlier article, we highlighted the National Consumer Assistance Plan, a cooperative initiative between the three credit bureaus to purge certain alarming notations on the prospective tenant’s credit report, including civil judgments lodged against them. In effect, the plan leaves the rental property industry blinded.

Ditto for Assembly Bill 2819, which cloaks a rental applicant’s prior unlawful detainer history under certain circumstances, a topic we chimed in on in this video.

In a digital age, sometimes common sense prevails

It seems that now more than ever, landlords and property managers cannot use technology and reports as a crutch – some old-fashioned personal sleuthing is in order. For example, calling previous landlords and asking a pointed question to get to the heart of the matter: “would you rent to them again?” This simple question will be telling and usually will ferret out any concerns.

If the tenant drives up to view the rental listing in a vehicle with hamburger wrappers strewn in the backseat of their car, perhaps it’s a sign that they will treat the apartment in the same fashion. Don’t mention the clutter because in today’s climate, it may invite litigation from fast food connoisseurs.

Housing Discrimination Always Looms Nearby

In all seriousness, while hygiene and other first impressions can go a long way in making an informed decision, we admonish landlords and property managers to keep their observations to themselves. The Unruh Civil Rights Act, and the California Fair Employment and Housing Act prohibit landlords from discriminating between would-be tenants on the grounds of their sex, race, color, religion, sexual orientation, marital status, ancestry, national origin, source of income, disability or medical condition.

However, in the case of Marina Point v. Wolfson, the California Supreme Court decided that the Unruh protections are not necessarily restricted to these characteristics. The envelope is constantly being pushed with newly protected classes being carved out, and so arbitrary discrimination of any kind may get rental housing providers in trouble.

When it comes to communication with a prospective tenant, then, less is more.

Our parting advice – be smart. Be aware. Be diligent. But when your “gut feel” isn’t enough and you have questions, contact our office. Bornstein Law will ensure that your tenant selection does not cry afoul of the law and that you make the most educated decisions when it comes to your rental business.

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“We print buildings” is the motto of Apis Cor, a Russian based company that has a unique mobile 3D building printer that is capable of printing an entire house on site. Their engineers, managers, builders, inventors have a lofty goal: to change the construction industry and improve the housing conditions of millions in urban areas, underdeveloped countries, and people affected by disasters.

This visionary company posted a promotional video of the world’s first printed house being constructed in Stupino, just outside of Moscow. They claim the 400-foot structure was built in 24 hours, with the total cost for the project ringing up at just $10,134. Take a look.

The machine spits out layer upon layer of a concrete mixture using a giant printing machine that looks more like a crane, but hasn’t yet eliminated the human factor. The roof, insulation, windows, and other components were all added later by humans.

“I hope that the construction industry once will become as globally widespread as smart apps in social network, and building a house will be as easy as pressing a like button.” ~Nikita Chen jun-tai, Apis Cor founder

In addressing the Bay Area’s housing shortage and homelessness epidemic, we’ve seen a bit of innovation, such as factory-built, multi-unit housing projects, as well as turnkey services for Accessory Dwelling Units and tiny homes, but the advent of technology to print homes opens up a new round of evolution.

New construction isn’t necessarily about return on investment, but a return on creativity.

With Facebook embroiled in controversy as of late, it’s gone from bad to worse. Now is the perfect time for landlords and property managers to heed this lesson: brush up on fair housing laws.

If you’ve ever posted photos on Facebook of your kids at soccer practice, talked about being a stay-at-home mom or a disabled veteran, “liked” Telemundo or wrote about learning English as a second language, Facebook advertisers may have been able to target you – or exclude you – from viewing housing ads.

That was the claim by a recently filed federal lawsuit lodged by civil rights groups that don’t “like” the “egregious and shocking” discrimination perpetrated by the social media giant that has been allegedly serving up ads that fly in the face of the Fair Housing Act.

The $440 billion advertising company has built its success around the ease by which marketers can finitely target audiences, but now the magic of transmogrifying every like, status update and mouse click into a detailed consumer profile has the potential to enable marketers to exclude groups based on “ethnic affinities,” from seeing ads.

“Facebook’s platform is the virtual equivalent of posting a for-rent sign that says ‘No families with young kids’ or ‘No women’… But it does so in an insidious and stealth manner so that people have no clue they have been excluded on the basis of family status or sex.” 

~ Fred Freiberg, executive director of Fair Housing Justice Center and a plaintiff in the lawsuit

The lawsuit comes in the wake of Facebook’s loose handling of data, the likes of which the company has never seen in its 14-year history of addressing privacy concerns.

It’s been said that the Internet is the largest experiment in anarchy that humans have ever had, but Bornstein Law predicted early in the Airbnb phenomena that the law will eventually catch up with technology and restore order to the anarchism. Sure enough, regulators reined in the laissez-faire nature of unregistered short-term rental units and now have the upper hand. There is no reason to believe that lawmakers and regulators will not restore a similar equilibrium with Facebook and ensure the real estate industry will not use the platform as a proxy to minorities.

We have always preached that rental housing providers should couch their words carefully when using Craigslist and other online portals when adverting their rentals. Seemingly innocuous language can easily cross the lines into fair housing law violations.

Defending these type of discrimination lawsuits can be a hugely expensive undertaking, and unlike tech giants, owners and property managers do not have the vast legal resources and billions of dollars in their coffers.

Avoiding perilous discrimination suits begins with an education of all employees. With a high attrition rate, property managers are especially vulnerable to exposing themselves to discrimination claims through the actions of employees that have not familiarized themselves with what is permissible and what is not.

Some time ago, we wrote an article on ‘fake’ emotional support animals and cited proposed legislation aimed at making it more difficult for a tenant to feign a disability in order to bring Fluffy home.

This turned out to be an emotionally charged subject and so with comments continuing to trickle in on a handful of LinkedIn groups, we wanted to re-visit the viral topic and give an update.

Assembly Bill 1569 died on the vine, but concerns over ‘fake’ comfort animals remain

As a refresher, Assembly Bill 1569 would have required third-party verification when a prospective or current tenant requests the “reasonable accommodation” of allowing an emotional support animal into the rental unit. The bill had a short life, but the underlying concerns remain and are sure to be aired out in other venues. Some background.

The Judiciary Committee and bill sponsors decided to put AB 1569 on ice until the fall of 2017, allowing time for the governing regulatory agency – the California Department of Fair Employment and Housing – to revise current regulations that cover emotional support animals cohabiting rental units. Read the minutes of a September 6 meeting when this body began hashing out the details.

After noting the agency’s progress in tackling landlord concerns of unnecessary comfort animals, lawmakers seemed to have lost oomph and decided to kick the can to California’s top cop in housing accommodations and discrimination. The Fair Employment and Housing Council is about to start the rulemaking process on that proposed regulatory text. It contains, among other things, rules regarding emotional support animals.

How does this rulemaking process work? Download a flowchart (PDF)

The chief architect of the fallen proposal – Assemblymember Anna Caballero – takes credit for bringing this topic to the forefront, noting that without the introduction of AB 1569, the issues of frivolous emotional support animals would go unaddressed by the agency.

The concerns of rental property owners get air support

We were intrigued to see the lofty issue of emotional support animals make its way to air travelers, who may find themselves sitting next to dogs, ducks, squirrels, spiders, turkeys and even disruptive pigs.

Increasingly, the friendly skies are frowning upon unnecessary animals, as Delta has recently tightened its rules. The carrier reports in-flight animal incidents have risen 84% since 2016, and they attribute the strife to a lack of regulation. In the absence of rules, the airline is requiring more documentation and in some cases, promises of good conduct for creatures that may cause raucous and not be able to find the lavatory.

Back on the ground, many landlords share the call for regulation in an age when tenants can obtain a badge and harness with a few points and clicks.

A disconnect in the law?

Under California’s Penal Code 365.7, it is a misdemeanor for someone to knowingly and fraudulently represent themselves to be the owner or trainer of a service dog. To date, however, there is little disincentive for tenants to cry wolf when it comes to an emotional support animal, which need not be a dog and unlike a service animal, is not trained to perform a specific task like fetching dropped items, pulling a wheelchair, guiding the blind and the like.

We suspect that the increased attention will eventually lead to increased regulations. Until this gap is closed, however, landlords should tread lightly, ever mindful of Unruh Civil Rights Act, the California Disabled Persons Act (CDPA), and the Fair Employment and Housing Act (FEHA).If a dog is a man’s best friend, a lawsuit is an owner’s worst enemy.

We would be remiss not to note how moved we were by comments of those who had a loved one that was impaired and related their heartfelt story to argue against any effort to scale back protections against comfort animals. We’ve heard you and agree that animals are a source of healing and have a proven ability to ease the suffering from emotional challenges.

Many people that are opposed to clamping down on emotional support animals nonetheless concede that some tenants are abusing the system. Our role at Bornstein Law is not to legislate, but to protect the rights of property owners who by and large would agree with our sentiment that emotional support animals serve an essential purpose when they are needed. There are bad-faith actors, however, that have no genuine need for accommodation and manipulate a system that is designed to give help to those that truly need it.
In parting, the definition of a ‘service animal’ is much more convoluted today than the traditional image of a seeing-eye dog guiding a blind person. Societal values and medical advancements have identified many disabilities that are not readily apparent, such as PTSD, depression and other ailments that are aided by animals. Coupled with a proliferation of housing discrimination lawsuits, it is well advised for rental property owners to consult with an attorney.

 

We’ve all seen and heard the inspirational home improvement commercials about doing and saving. It goes something like, “we’ve got this, look what we’ve done, sit back and enjoy the view.” But what if the alterations are made by a tenant without the permission of the owner, and the landlord does not like the view?

Of course, there are studious tenants who wish to make their abode their home and attempt to make cosmetic changes and improvements such as replacing carpeting, changing out light fixtures, painting the walls, swapping out appliances, and the like. Often, there is an amicable relationship in place and when the tenant asks the landlord for permission to make improvements, it is granted.

Yet we have seen countless acts of tenants taking it upon themselves to make major reconfigurations to a rental unit, and this becomes problematic. It is not rare for landlords to discover the kitchen has been renovated, or a new living quarters has been erected in the garage.

With a housing shortage upon us, we’ve seen an alarming number of cases where inventive tenants make material alterations to carve out new living environments for housemates. These material changes expose the landlord to significant liability, especially when the work is unpermitted and the city finds out about it.

Most leases contain, and should contain, a provision that expressly prohibits alterations to the premises without the prior written consent of the owner. When an illicit alteration is discovered, it should be documented by taking photographs. Armed with evidence of an alteration, a notice can be served upon the tenant to restore the unit back to its original condition, at the tenant’s own expense. If the tenant does not remove the alteration, the landlord can commence an unlawful detainer action.

As sticklers for documentation, Bornstein Law can always review your written lease agreement to ensure there is in fact a provision that prohibits tenants from making alterations without the owner’s consent. All too often, there is no such protection because the lease is deficient.

In the absence of a written prohibition against alterations, the tenant may be able to make changes without the landlord’s permission, though it is still illegal to do anything that wantonly or willfully destroys, defaces or damages the property.

Another common alteration we encounter is the unauthorized changing of locks, a topic we broached in this post.

If you discover illicit alterations, the personal and financial liability that can ensue demands immediate action that can be done properly with the landlord lawyers at Bornstein Law.

Related post: Tenants improperly using commercial space for residential use

 

Since its debut on 60 Minutes, we wanted to circle back to the “leaning tower” of San Francisco to see if any progress has been made in the luxury residential high-rise that has sunk 17 inches and tilted 14 inches since it was completed in 2008.

City inspectors say it’s safe for occupation, but residents aren’t so encouraged. The saga is responsible for an exodus from the luxury high-rise and legal bills that can rise 58-stories high. Now, Business Insider reports that the well-heeled residents are taking a haircut, selling their embattled condos for losses in the millions.

Engineers have not offered a better prognosis for the Millennium Tower, which is expected to sink at the rate of roughly one-inch per year.

There may be a fix in the works, we’re told, as a phalanx of engineers explore drilling 50 to 100 new piles 200 feet down to bedrock from the building’s basement. After a litany of proposed solutions, though, skeptics are not buying it.

At Bornstein Law, we have been more than casual observers of this towering debacle. As we noted in a news release, we successfully represented the owners of the Millennium Tower in an eviction suit. The tenant refused to pay rent for six months, claiming the building’s sinking made it uninhabitable and breached the rental agreement. The tenant’s attorney argued that “the leaning and sinking of the building is a structural issue in breach of the implied warranty of habitability.”

The court rejected this argument, and we were able to win a monetary judgment of $42,716 for the client and allow them to take back possession of the apartment.

Whether in the rows of skyscrapers that have lined San Francisco streets, in Section 8 housing, the backyards of ‘granny flats’ and everything in between, you can count on our advocacy for the rights of property owners.

Californians have felt the pain of the housing crunch, but perhaps no other group is more acutely affected by the shortfall than students scraping by. Landing an affordable abode for those pursuing higher education has proved futile for many students in the highest-rent cities in the nation. Some estimates, in fact, have pegged student homelessness in the double digits.

As this article vividly depicts, some of them are bunking in a cramped car, rationing food to save money, or cramming into the close quarters of a tiny apartment or garage. Campuses have evolved into social service agencies by instituting a patchwork of programs that provide emergency rent payment grants and reserving dorm beds for homeless students.

Legislation floated to address the problem

Amid a torrent of bills that attempt to ease the housing crisis, lawmakers are floating proposals to help these mightily struggling college students secure housing near campus without breaking their budgets.

Sen. Nancy Skinner, D-Berkeley, has led the charge with the introduction of SB 1227, a bill that hopes to spur the construction of affordable housing designed for students. She argues under existing California housing law, there is no clear path for students to prove they are eligible for subsidized apartments, regardless of need. In turn, developers cannot cash in on economic incentives they could realize by setting aside a portion of their development for low-income rental housing. Predictably, they don’t build.

“With the housing shortage that California now has, their costs can be so high that it can be prohibitive for them to go to school.”

~ Sen. Nancy Skinner

If the proposal comes to fruition, SB 1227 attacks the issue on dual fronts. It would allow students to submit financial aid documents to qualify for low-income living arrangements but would also explicitly extend state affordable housing incentives to developers that erect apartments for full-time students.

A developer that designates 20 percent of the units for lower-income students at a specified rent level will receive concessions like the inclusion of affordable units, thereby empowering developers to build more housing in a project that would not ordinarily be allowed.

Bornstein Law has always maintained that brisker construction is the answer to the housing shortage, so we applaud the bill to the extent that it gets at the root of the problem.

Enter SB 922, a bill sponsored by Sen. Janet Nguyen, R-Garden Grove, which focuses on optimizing surplus property near campuses – underutilized space near college campuses would be turned into desperately needed housing for college students. If passed, the California Department of General Services would be authorized to hand over unused real estate within two miles of universities or community colleges to local governments or nonprofits that can build.

Once again, we think this is good policy and as we noted in many other posts about accessory dwelling units, “tiny” homes, and other hybrid forms of living, the conversation around solving the housing deficit should be framed not only in terms of return on investment but return on creativity.

The lot of educators and faculty is not much better.

As California campuses confront the growing challenge of homeless students, school faculty find themselves in a similar bind of making ends meet on an educator’s salary. We came across this article that chronicles the tough times of educators in university housing who are staring down the barrel of rent increases, if not eviction, to make way for students.

While landlords who are subject to rent control ordinances are limited in the amount and frequency of rent increases, universities have no such constraints and have been availing the exemption, though San Francisco State officials are quick to point out that despite the rent hikes, faculty members enjoy below-market rents.

The opacity of these rent increases, however, has been called into question, with claims that the faculty is not given sufficient notice of changes coming down the pike.

Not limited to higher education

Teachers throughout the Bay Area’s public-school system are struggling to keep pace with rising housing costs. As we wrote about in this article, San Francisco teachers may feel some respite knowing that they may be firmly planted during the school year and not face eviction after an appellate court upheld Ordinance No. 55-16, a law that prohibits their displacement through a no-fault eviction. We hasten to say that this decision is “stayed” – awaiting further judicial review after the decision has been contested.

Our take

At Bornstein Law, we believe that awareness is half the solution, so we are encouraged to see the housing travails of educators and students be placed under a microscope. Educators serve a critically important role in inspiring young minds, and so there should be deference to these stewards of our community or the Bay Area risks losing them when they seek greener pastures. The same for students, who should not have to fret about where to lay their head or worry about other sustenance.

Clearly, this larger topic exposes a host of legal issues, whether it is rent control, proper notice, rent increases, and the adaptability to changing laws that are sure to come. On this front, Bornstein Law has you covered – contact our office for informed advice.

 

 

Law Surrounding Accessory Dwelling Units, Aka ‘Granny Flats’

Accessory Dwelling Units (ADUs), colloquially known as in-law units or granny flats, are gaining popularity throughout the Bay Area and beyond. Once vilified as a way of cramming more people into tighter spaces or deemed as a way for profiteering homeowners to make money without obtaining permits, these pint-sized units are back in vogue with the Golden State woefully behind on the home production needed to keep pace with a burgeoning population.

With construction on the upswing, there are still other illegal units that are eligible for proper permitting.

The ease of building in-law units become a newsworthy topic across many Bay Area locales lately. This SF Chronicle article shows the creativity of San Francisco Landlords in carving new apartments out of everything from garages and basements, to old boiler rooms.

While in-law units are commonly added to single-family homes in Bay Area cities, most of the activity in San Francisco is happening in larger apartment buildings. San Francisco is unique in creating an ADU program for multifamily buildings, rather than only single-family homes. “It’s a soft way to increase density in a dispersed fashion without changing the physical landscape very much”, says Kristy Want, policy director at the urban think tank SPUR. Other municipalities throughout California are removing roadblocks to in-law unit construction by enacting their own local ordinances, changing the shape of housing as we know it.

“Whether detached, attached, part of a residential cluster or in a multiunit building, more and more dwellings in coming decades will look less and less like the home you now inhabit or the home where your parents grew up”, submits this Washington Post Article. This shifting composition of housing is healthy, in our view, and at Bornstein Law, we are encouraged that long-standing, obsolete zoning ordinances that have stifled housing opportunities and impeded real estate development are finally being revisited or unstripped.

The sprout of in-law units are compliments of legislation signed by Gov. Jerry Brown designed to reforming building laws for in-law suites and help the housing crunch. The two-pronged set of bills, AB 2299 and SB 1069, put local municipalities on notice that onerous restrictions on building in-law units would be “null and void” and until such time local government adopts its own ordinance that aligns with State law, the standards of Government Code §65852.2 will be enforced.

State Law essentially puts local governments in check by revoking city-level ordinances that impede construction of in-law units — from parking restrictions to fire sprinkler requirements to exorbitant costs — making way for new and comparatively lenient, baseline criteria for approval. This has effectively tilted the balance of power in favor of in-law units and recognizes the role they can play in putting a dent in the housing shortage.

Certain obstacles that were axed in the legislation include:

  • An ADU can be attached or detached from the primary residence;
  • An ADU cannot be required to have a clear passageway to the street;
  • Attached ADUs can be up to fifty percent (50%) of an existing living area with a maximum floor area of 1,200 square feet. Detached units are only subject to the 1,200 square foot maximum;
  • Parking requirements are reduced or eliminated;
  • Utility connection requirements and fees for certain units are reduced or eliminated;
  • Applications for ADUs within existing residences or accessory structures must be considered ministerially without the need for any discretionary hearing and within 120 days of submittal.

Although the state has issued guidance on what a municipality can and can’t do, it stops short of writing the city’s ordinance — that is the prerogative of local government. Ordinances vary widely throughout the Bay Area, and making sense of the planning and building regulations are best approached with a real estate attorney that is intimately familiar with the building codes and rules formally adopted in your locale.

In parting thoughts, there is a large rental housing stock throughout the Bay Area that is considered “illegal” for any number of reasons such as unpermitted construction or lack of a certificate of final completion or occupancy. These illegal units can incur the ire of building inspectors that demand their removal, tenancies may be subject to “just cause” eviction provisions, and even invite tenants to make the claim they are not legally obligated to pay rent.

Owners that want to come out of the shadows to legalize their illegal in-law unit should be buoyed by the fact that more often than not, cities prefer to legalize, versus remove, these illegal dwellings. Doing so can add value to the property and provide a level of certainty and security that is only enjoyed by a compliant landlord.

Whether you are contemplating the construction of an in-law unit or looking to bring your illegal in-law unit up to compliance, it’s of utmost importance for property owners to evaluate the law and its impact on your real estate. As the foremost experts in in-law planning, our goal is to educate you on the risks and potential rewards to make an informed decision as to whether these secondary units are right for you, given your unique circumstances.

As always, Bornstein Law is happy to engage any questions. Contact our office today.