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Oakland

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

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

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

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

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

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

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

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

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

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

“I’ll know it when I see it?”

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

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

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

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

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

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

 

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

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

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

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

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

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

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

Although we are heavy consumers of housing news curated around the Bay Area, we sometimes get interjected into the stories we read. Such was the case with this San Francisco Chronicle article that reported Oakland City Council’s recent vote to place a measure on the November ballot that would peel back protections for small property owners who are exempted from just cause eviction rules.

While most Oakland buildings that obtained a certificate of occupancy prior to December 31, 1995 are subject to Oakland’s Just Cause for Eviction Ordinance, a glaring exception is made for duplexes and triplexes where the landlord lives in a unit. Yet one of the last bastions of small rental property owner rights is being assailed as part of Oakland’s continued trek down a slippery slope toward more cumbersome rent control measures.

Before we chime in, take a look at the storyline leading up to the city’s pushing of the so-called “duplex loophole” to the November ballot.

Redefining property ownership

At the risk of semantics, it’s interesting that the conversation begins with the term “loophole,” which seems to be a code word for anything that protects the rights of property owners. Like pass-throughs and other laws that might be viewed as favorable to landlords, the first inclination is to call any measure that benefits owners a loophole. This argument ignores one of the fundamental tenets of ownership – the owner can live in the property and decide what goes on there. 

In an earlier article, we quoted Wayne Roland, who said “it takes two to tango.” The President of the East Bay Rental Housing Association notes that not every initiative should set up rules that favor tenants. “You have to be concerned about the people who are providing housing, as well,” he states.

More often than not, the political rhetoric falls squarely on the side of tenant rights and the interests of landlords often take a back seat, if glazed over at all. Yet, we should give credit where it is due and appreciate Otis R. Taylor Jr’s willingness to hear us out in the Chronicle’s recent article and give us the opportunity to be the voice of landlords in a fair and balanced discussion.

Daniel attempted to make the distinction between deep-pocketed real estate investment companies and small owners who rely on rental income for their subsistence and predicted that if the owners who live in their duplexes and triplexes are hamstrung with additional regulations, it will both reduce the quality of life for residents and negatively impact the property value in a lose-lose situation. 

So what it does is it becomes a disincentive to improve housing stock… While large real estate investment companies may have the ability to handle the complexity of the ordinance, small owners are confronted with a tremendous new regulatory regime that they simply don’t have the money nor experience to handle.

The debate should be settled.

Although most economists generally agree that rent control does more harm than good and there are arguments that expanded rent control will only aggravate the affordable housing shortage in the Bay Area, we need not be in academia or an ivory tower to see it.

With “boots on the ground,” Bornstein Law has already encountered nervous rental property owners who are contemplating raising the rents in anticipation of measures coming down the pike, making substantial repairs to avail themselves of just cause eviction exemptions before they are gone, and otherwise taking advantage of current laws before they are axed.

We can confirm the argument then, that if the tenants’ right agenda comes to fruition, it will be self-defeating. We are strong advocates for housing stability, but there is a right way and a wrong way to accomplish this.

While there is a large chorus of voices for tenants’ rights, the rights of rental property owners seem to be drowned out, but Bornstein Law fills the void. Contact our office for proper counsel. 

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.

 

 

 

 

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.

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.