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.

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.

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.

Perhaps one of the most thankless and trying, but necessary duties of a landlord is evicting tenants when the tenant violates one of the covenants of the lease.

At the risk of oversimplification, the eviction process involves serving the tenant with a notice, waiting for the notice to end, and filing an unlawful detainer action if the tenant fails to do what the notice asks. But like so many other areas of law, meticulous attention to detail is needed to ensure there are no procedural missteps.

Here are five ways that you are likely to use an unlawful detainer action.

The Chief Economist for Redfin predicts that rising prices, an uptick in rates, and higher property taxes will lead to more roommate arrangements due to a lack of affordability. Real estate startups like Nesterly and CoBuy have rode the wave of non-traditional home-buying and cohabitation by fostering technology to play matchmaker between housemates, some of whom are odd bedfellows. Read all of Redfin’s predictions in this report.

Given the necessity for many tenants in the Bay Area to find roommates to absorb some of the highest housing costs in the nation, landlords and real estate professionals should be aware of the law surrounding roommates.

In earlier posts on Airbnb and other subletting arrangements, we advised rental property owners they need to know who is occupying their premises. Some personal sleuthing may be advisable, to ascertain what is going on in your units.

In many cases, roommates can’t co-exist and this leads to a revolving door of swapping roommates, creating confusion as to who is responsible for what, when rent can be raised, and how to legally evict tenants/occupants. The stakes are particularly high and the subject matter more complex in rent controlled jurisdictions. First, let’s define a couple terms.

In California, roommate arrangements can be boiled down to two types of arrangements when the landlord does not live in the rental unit.

1. Roommates as Co-Tenants: A co-tenant arrangement occurs when all roommates have a contractual relationship with the landlord. Both co-tenants directly and individually pay rent to the landlord.
2. 2. Roommate as Subtenant: Subletting means that one tenant has a contractual arrangement with the landlord, hence the primary tenant is referred to as the “Master tenant”. After entering into a binding agreement with the landlord, the master tenant contracts with another person, a roommate or housemate called the Subtenant, who is responsible for paying rent to the master tenant. The master tenant retains all rights and obligations under the “master” lease, which includes, naturally, paying rent to the landlord.

Co-tenants cannot be evicted without “just cause”, meaning they can be evicted only for certain reasons, such as non-payment of rent or other violations of the lease terms. A co-tenant can, however, evict a subtenant. A subtenant is impotent and cannot evict anyone, while a landlord can evict all tenants from the premises, with caveats.

While the subtenant has no direct relationship with the landlord (the master tenant is essentially the subtenant’s landlord), we must caution that you can inadvertently establish a relationship with the subtenant by taking rent money. In other words, roommates who initially occupied your rental unit as a subtenant may be catapulted to the status of a co-tenant by your acceptance of rent, even if they are not named in the lease. This is a cardinal sin we see all too often at Bornstein Law.

Another unexpected and harrowing surprise landlords can face is a long-term guest that becomes a tenant because they stayed in the rental unit for 30 days or more, regardless if they entered into any formal tenancy agreement. Don’t wear blinders — if there is a guest that is staying in a unit for any prolonged period, you have a new tenant under the law, and if they do not leave on their own accord, they are entitled to due process when they are no longer welcome, meaning the guest-turned-tenant needs to be provided written notice to vacate.

Assignment of the lease

An assignment is an agreement to transfer the lease. It encompasses the transfer of rights held by one party — the assignor — to another party — the assignee. A common example is when a property is sold and the landlord assigns the lease to the new owner. In similar fashion, a tenant might assign his or her lease to a new tenant or occupant, which then begins the game of musical chairs and creates a quagmire where the rental property owner does not know who is living in their units.

Fortunately, a properly written lease may prohibit or restrict assignment, subletting and other changes in occupancy. If there is no written lease, or if the lease does not adequately address these issues, you have a problem that needs to be rectified with the guidance of a real estate attorney.

As shifting demographics and alternative living arrangements become the norm, there will be many blurred legal relationships between multiple parties, but Bornstein Law can provide clarity and restore order in Housing 2.0.

When resident managers feel aggrieved, the current climate is rife for costly litigation. These onsite managers are becoming more sophisticated in maneuvering the legal system to take advantage of wrongs inflicted by their employers, aided by no shortage of enterprising attorneys.

A throng of lawyers are all to willing to handle resident manager complaints on a contingency basis, taking a percentage of the recovery at the tail end of an action, as well as attorney’s fees tacked on to the wages and liquidated damages recovered.

Translation for the rental housing industry: the burden of paying the disgruntled resident manager’s legal bills is borne by the landlord or property management company.

We noted in an earlier article that the Private Attorneys General Act (PAGA), codified in California Labor Code Sections 2698 through 2699.5, essentially creates a class action lawsuit by empowering the resident manager to not only sue his or her employer to recover unpaid wages, but to enlarge the scope of their lawsuit by acting on behalf of other managers that are employed in other buildings. With statewide wage, hour and rent limitation laws that have been ushered into 2018, we wanted to continue this thread of making sure that your resident manager relationships are compliant with the shifting lay of the land.

As the law makes a distinction in the size of the workforce, for purposes of this discussion, we’ll focus on rental businesses with less than 26 employees.

Where do property managers fit in?

California Code of Regulations Title 25, Section 42 makes it incumbent for owners to have a live-in manager if a building has 16 or more units. This person is defined as a “manager, janitor, housekeeper, or other responsible person”. These caretakers are considered employees in the eyes of the law, not independent contractors, and entitled to the prevailing minimum wage.

Although California’s minimum wage is $10.50 per hour, several Bay Area locales have raised the bar. San Francisco, Oakland, Berkeley, and Emeryville, among other municipalities, have set their own minimum wages that rental housing providers must be aware of.

In addition to California’s Labor Code, the Industrial Welfare Commission peels the onion deeper with a number of “Wage Orders” that govern employment in specific industries and occupations. One such order — enumerated as Wage Order №5 — regulates wages, hours and working conditions in the public housekeeping industry, which includes “apartment houses” and thus, is germane to resident managers of apartment complexes. The Order mandates employers to pay the minimum wage to a resident manager for every hour worked, exempting time the manager spends on personal tasks outside the purview of the assigned duties.

Since resident managers are employees, they are afforded full protections that include the ability to make a claim for an amount equal to the wages unlawfully unpaid, plus interest, if the landlord does not pay the minimum wage. Labor Code section 1194.2. This is just one of the perilous consequences that may await owners that do not dutifully pay their property’s overseers.

Parting thoughts

We’ve only scratched the surface here, not giving justice to the myriad of other complicated issues that can color the relationship with resident managers. Managing relationships in Bay Area rent controlled jurisdictions raise unique concerns that require the guidance of an attorney to carefully navigate this minefield.

No matter your unique circumstances, documentation and bookkeeping is the key to staying compliant, and the hallmarks of our service at Bornstein Law.

Our conclusion? Rather than penalizing landlords, we should come together to focus on solutions. Of course, that’s easier said than done. Our area is world-renowned for its innovation. If we conjure up the same level of creativity, perhaps we can finally address the endemic problems.

When city leadership, government leaders, and nonprofits get creative and serious about tackling the issues, solutions can take shape. Certainly, there is no silver bullet to solve one of today’s trickiest urban issues, and it requires a holistic approach. This involves inclusionary zoning, removing parking minimums, changing building codes to make it easier to rehab older buildings and new funding models.

Fortunately, we can draw upon the examples of other cities such as Denver, Cleveland, Minneapolis, Philadelphia, and Salt Lake City. It’s also instructive to study our neighbors to the North – although affordable housing is a local issue, Canada’s well-conceived national policy and funding has made a huge difference there.

This article takes a sampling of other cities to find out what creative solutions they are employing to address the very same problems we are facing in the Bay Area.

Finding creative solutions to landlord-tenant disputes is what the San Francisco real estate attorneys at Bornstein Law have been doing for over 23 years and it is with the same win-win and outside-the-box mentality that we approach the aggregate housing issues that affect our region. But all parties should lower the temperature of the debate and realize that this is not a zero-sum game.

In that venue, we noted that while the law is clear that a rental property need not be a palace, it must be safe, sanitary and secure. Apparently, Ms. Mendoza and Mr. Paredes were not kept in the loop or did not heed our strong advice.

Sometimes, there is a blur between what is legal and what is right, but there is no quandary here. Both the ethical and legal breaches in the case at hand are atrocious. Although this story represents an extreme case of depravity, it should put rental property owners on notice that they have an obligation to provide livable quarters for their tenants. Failure to do so is both immoral and illegal.

Although the housing conditions on Mission Street, like that of the Oakland fire, are clearly avoidable and shocking to the conscience of anyone, our hard-won experience at Bornstein Law has shown that most habitability issues arise out of less-known, overlooked violations such as an exposed outlet where children are playing or other mundane violations not so clear-cut. Whether your rental unit passes all of the habitability checks is a subject best reviewed with competent real estate lawyers.

With proper counsel, habitability issues can be avoided and resolved, rectified and liabilities reduced. 

Under ordinary circumstances, tenants do not have the right to terminate their lease early because of a new job or job relocation. One exception is military personnel who can end their leases if certain criteria is met.

If a tenant enters the military after inking the lease and they receive permanent change of station orders, or if their expected deployment will be 90+ days, the tenant has the right to terminate the lease with 30 days’ notice, without penalty.

That according to the Servicemembers Civil Relief Act (SCRA), which broadened and tweaked the Sailors’ Civil Relief Act (SSCRA). The aim of the legislation is to provide protections for men and women in uniform that are called to active duty, essentially postponing or suspending certain civil obligations to allow military personnel to devote their full attention to duty and alleviate stress on their families.

When duty calls, service members must deliver formalized notice to the landlord – oral notice is not sufficient. Pay close attention to the effective date of termination – this is a big deal. Reach out to Bornstein Law if you have any questions in this regard.

Bornstein Law pays homage to our service members and urges Bay Area landlords to be deferential in cases when a tenant must serve a larger purpose. Moreover, it’s the law.

While military deployments are a justifiable exit to a lease, more commonly at Bornstein Law, we encounter what we dub “runaway tenants.”. Broken leases and abandonments are an unfortunate reality of doing business for Bay Area landlords.

Understanding the permissible purposes for terminating a lease and knowing what you can or cannot do when a tenant runs away is crucial information for landlords, but these weighty subjects are best approached with the seasoned real estate attorneys of Bornstein Law.

It is well established that void contracts cannot be enforced by law. Clearly, drug dealers cannot enforce an agreement with narcotics buyers. Robbers may not enter into a legally binding agreement on how to divvy up the proceeds of a bank heist, no more than a parent can contract to sell their child.

But what happens when disputes arise between landlords and tenants that occupy an ‘illegal’ unit like a converted garage or bootlegged duplex? When permits are not properly pulled and there is no certificate of occupancy issued, case law suggests that the landlord has no more enforceable contract rights than a drug trafficker.

Although the ruling long eclipsed California’s housing crisis and surge in tenant protections, Gruzen v. Henry remains the law of the land. This is a landmark case where the court took on the subject of illegal structures, concluding that the landlord is not entitled to collect or request any rent if the structure does not match the Certificate of Occupancy or equivalent issued by the city. The wonky types can read the full case here.

This issue graced itself decades ago but enter a housing shortage that spawned thousands of makeshift living environments that do not satisfy code requirements, and many owners are pressed to decide whether to rent their illegal units. We regretfully inform this group that the law is not on their side and the news is grimmer if the clandestine unit is in a city that has implemented rent control. In rent-controlled jurisdictions, the scales seem to be tipped heavily in favor of tenants.

These informal agreements can go along just fine. But when it goes bad, it is awful.

When a disgruntled tenant becomes contentious, they may be entitled to relocation assistance and seek other damages too numerous to name here. Suffice it to say that you don’t want to defend against these claims.

We were intrigued to read a more recent case, North 7th Street Associates v. Constante. There, the landlord of an illegal unit attempted to use a three-day notice to pay rent or quit as a basis for eviction, and the Court struck down the notice as invalid. The court’s reasoning was that when the purpose of the lease is to rent an illegal unit, the lease is void and by extension, the 3-Day Notice.

This case was notable because it further eroded landlord rights in illegal dwelling situations while propelling those of tenants. Although Gruzen held that landlords were not entitled to rent, the Court nonetheless recognized the sacrosanct right of the landlord to recover possession of the unit.

Although North 7th Street Associates v. Constante was aired out in Southern California and is not binding in Bay Area courts, its underlying logic can insidiously make its way here and be persuasive to judges closer to home. The case is the darling of tenant rights advocates, who are milking it for all it’s worth.

Given a rash of tenant lawsuits including those instigated by illegal unit occupants, it is prudent to ensure you are protected by wrongful eviction coverage, a subject we harped about before.