Question 1: Have there been any developments on the rights of landlords during the COVID-19 crisis?
Answer 1: Not surprisingly, yes. The two biggest developments are the expiration as of September 1 of the California Supreme Court’s April 6th order, applicable to all county courts, which had operated to prohibit new eviction actions (other than those for public health or safety), among other restrictions, and was a significant impediment to landlords being able to hold tenants accountable.
The other major development was by the Legislature, which, (prompted in part by the Supreme Court’s continued suggestion that it was the Legislature’s duty to respond to the pandemic, rather than the court’s), passed AB 3088 as of Monday, August 31. The tenant, homeowner, and small Landlord Relief and Stabilization Act of 2020 was signed into law by the Governor on the same day, to take effect immediately as an urgency statute.
As discussed in the last couple months’ responses to that question, for all of California, evictions for non-payment of rent had been extremely limited, based on the March 27 EXECUTIVE ORDER N-37-20 issued by the Governor.
That order is the baseline of tenant protections related to evictions for non-payment of rent. That order states that even if a local court accepts an unlawful detainer for filing (which most were not), the time allowed for the tenant to file a response is extended by 60 days, if the tenant is served while the order is in effect (the current order is to be in effect through September 30 and does not appear to have been extended as of this writing). The protection only applies if the tenant was current with rent prior to the date of the Order (March 27), notified the landlord within seven days of the rental due date of the inability and reason for non-payment, and can document that the reason for nonpayment is based on the impact of the virus on the tenant’s economic situation.
Question 2: I am not sure if this property has rent control. But if I want to sell my property, what do I tell the tenants who live in the property? They are Section 8, but what if the potential buyers do not want the tenants in the property after the purchase? If I want to gift the property to my family, and my family no longer wants the Section 8 tenants or any tenants in the property, what do I tell the tenants? How long can the tenants reside in the property if it is sold or gifted? If the successor trustee was to become the full owner, does the successor trustee have to maintain the tenants in the property? How would we notify tenants of their need to move without any consequence in one of these scenarios?
Answer 2: As Section 8 tenants, the occupants are in a contract with you and the local Housing Authority whether the property is subject to any local eviction control ordinance or not. That program requires the owner to follow certain procedures regarding the termination of the Section 8 tenancy. It does not matter if the house is sold, or gifted, or placed in trust, as whoever takes title, or beneficial control, will ‘inherit’ the tenants. It is as simple as that. None of your scenarios would change that reality. If the unit is subject to a local eviction control law, such as Oakland’s Just Cause ordinance (Measure EE), additional provisions – primarily the requirement that the owner have a ‘just cause’ ground – would apply to the new owner, as they would to you, before the occupants’ tenancy could be terminated. Of course, all the above is now complicated by legal developments related to the COVID-19, and so any consideration to terminate the tenancy has to be evaluated through that lens as well.
Question 3: I learned from your last article that I may qualify to submit what is called a 1.21 petition to the San Francisco Rent Board, seeking a rent increase because the original tenant no longer makes the unit her principal residence. During the current pandemic period, will there be any problem filing this petition with the rent board?
Answer 3: I have not gotten any information that the rent board is not processing such petitions, and while most rent increases in San Francisco are stayed through October 21, an approved 1.21 rent increase is not subject to the rent increase moratorium in place.
On April 24, 2020, the Mayor signed emergency legislation passed by the Board of Supervisors that temporarily prohibits certain rent increases during the COVID-19 pandemic (hereinafter referred to as “the temporary rent freeze”). On July 7, 2020 and August 25, 2020, the temporary rent freeze was extended by the Board of Supervisors, which is currently effective through October 21, 2020 (unless extended).
The temporary rent freeze applies to all rent increases and pass-throughs that are effective between April 7, 2020 and October 21, 2020 (unless extended), even if the rent increase notice itself was served before April 7, 2020. However, rent increases or passthroughs that went into effect prior to April 7, 2020 are not affected.
The temporary rent freeze only applies to annual allowable (and banked) rent increases, operating and maintenance expense rent increases, and “passthroughs” for rent-controlled tenancies under the San Francisco Rent Ordinance (i.e. – increases permitted by Rent Ordinance Section 37.3(a)).
The temporary rent freeze does not restrict any rent increase authorized by Rent Board Rules and Regulations Section 1.21, where the Rent Board has determined that there is no “tenant in occupancy” of the rental unit.
Question 4: We have six adults, with one child, applying to live in a three-bedroom condominium. Two bedrooms are regularly-sized and the remaining one was converted from an alcove office room. The other condo rooms are two baths, a living room and a kitchen. Of the six adults, five are working and able to produce paystubs verifying income. Of the six adults, only four have established credit. Their combined income meets our income requirements but as said, only four of the applicants have established credit (and these meet our FICO score requirements). They have four vehicles and we have covered space for only two; the other vehicles will find street parking. We are not thrilled with these applicants because we have not rented to so many adults in these condominiums previously. With any of the provided information, can we deny their application for residency?
Answer 4: Your situation is beyond the scope of the AOA Q&A forum, which does not allow for me to provide specific legal advice on a specific matter.
But, generally speaking, unless there is a credit-related or prior tenancy-related reason to reject an applicant, or you have more qualified applicants based on those two criteria, rejecting otherwise qualified applicants runs the risk of a claim of discrimination based, in this case, on the number of occupants. If the applicants are related, (i.e. a family), then the number in the family is arguably irrelevant (and minors likely do not count toward the number of total occupants), other than as it might exceed the occupancy limits of the unit, which would not seem to be the case here, given the “2 plus 1” rule that is the standard for evaluating whether a stated number of occupants exceeds the living space in the unit. The issue is related to familial discrimination issues, as it is against housing laws to refuse to rent to a family based on the number of occupants, other than as excepted above, particularly where there are children involved.
Question 5: I own a condo in a big complex managed by a HOA which I have been renting out since 2017 (I used the AOA rental agreement form, versions 2/2017). My tenant requested a 15% rent reduction due to amenities (jacuzzi, pool, sauna, package service, car rinse, etc.) not being available since COVID-19 in March 2020. However, my HOA dues, that also pay for these services, are unchanged. I increased rent once, 6.4% in June 2019. I am willing to reduce his rent TEMPORARILY by 10% (although I currently have a negative flow). However, I want to put this rent decrease in writing. What do I include, so that: the rent decrease is temporary (September 2020 until January 2021) and not retroactive (back to March), in compliance with the current state and local laws and regulations, does not have negative legal consequences for me or the future rent increases/rent amount on my condo, and it does not get interpreted as more than just a temporary rent decrease? Your help is greatly appreciated!
Answer 5: Rent reductions in rent-controlled cities during periods of economic downturn have been routinely considered by the governing rent boards to result in permanent reductions to the tenant’s ‘base rent’. However, generally speaking, rent reductions based on COVID-related economics are being considered legally temporary in many local cities, and I suspect Emeryville as well (my brief research did not locate any specific provision under Emeryville’s prior or COVID-related emergency declarations). I suggest contacting the Emeryville housing department (see https://www.ci.emeryville.ca.us/118/Economic-Development-Housing) and inquire as to whether they (like, for example, Berkeley and SF (see here for SF version -https://sfrb.org/topic-no-264-temporary-rent-reduction-agreements ) have a specific form that allows the landlord and tenant to agree to a temporary rent reduction that does not turn into the ‘base rent’ at the end of the temporary period. Otherwise, I think you can simply document your agreement with the tenant in simple ‘non-legal’ language, to express the terms and understanding of your agreement.
Question 6: I’ve heard from multiple sources that the CA governor through executive order has halted all rent increases for properties covered under rent control, but I cannot find that executive order anywhere online. Can you send me a link to the legal docs and/or copy of that executive order so I can review it?
Answer 6: I originally responded to your question by attaching the Governor’s emergency order that set out eviction protections for tenants affected by the pandemic. There was no rent increase provision. While such provisions have been placed in many of the local laws that have passed in response to the pandemic, there was no similar provision in the Governor’s Emergency Orders (there have been several). However, it then occurred to me, when you responded, I must be overlooking something, that you were likely referring to a separate state law that does impose rent increase restrictions based on any given state of emergency. While this statute – Penal Code 396 (the ‘anti-price gouging’ law) – does not prohibit rent increases, it does limit them, with exceptions, to no more than 10%. And unlike other rent increase restrictions, it also applies to new tenancies during a time of emergency. I reprint a pertinent portion of the statute below:
(e) Upon the proclamation of a state of emergency declared by the President of the United States or the Governor, or upon the declaration of a local emergency by an official, board, or other governing body vested with authority to make that declaration in any city, county, or city and county, and for a period of 30 days following that proclamation or declaration, or any period the proclamation or declaration is extended by the applicable authority, it is unlawful for any person, business, or other entity, to increase the rental price, as defined in paragraph (11) of subdivision (j), advertised, offered, or charged for housing, to an existing or prospective tenant, by more than 10 percent. However, a greater rental price increase is not unlawful if that person can prove that the increase is directly attributable to additional costs for repairs or additions beyond normal maintenance that were amortized over the rental term that caused the rent to be increased greater than 10 percent or that an increase was contractually agreed to by the tenant prior to the proclamation or declaration. It shall not be a defense to a prosecution under this subdivision that an increase in rental price was based on the length of the rental term, the inclusion of additional goods or services, except as provided in paragraph (11) of subdivision (j) with respect to furniture, or that the rent was offered by, or paid by, an insurance company, or other third party, on behalf of a tenant. This subdivision does not authorize a landlord to charge a price greater than the amount authorized by a local rent control ordinance.
Question 7: The owner of a San Mateo rental property I manage has passed away. Being a single-family dwelling (SFD), it is not under rent control. However, with COVID, can we legally give them a 60 Day Notice to vacate, so the Owner can prepare the home to put on the market?
Answer 7: There are several issues in your question. First, even SFDs are covered by the state law AB 1482 that went into effect January 1 this year, unless the tenants have been provided the required notice as to the property’s exempt status.
Second, assuming state-wide eviction control does not apply, there is a moratorium on evictions in San Mateo County currently through the end of August. It allows for evictions based on ‘owner move in’, or tenant breach of the lease, but not for a ‘no-fault’ reason such as the one you have. No such notice can be served while the ordinance is in effect.
However, assuming the above two items are satisfied, you should be able to begin the termination process with a proper notice. But you would be well advised to consult with competent local counsel to confirm your legal right to terminate the tenancy.
Question 8: I have a one year lease ending 8/31/2020 that will roll over into a month-to-month rental agreement September 1, 2020. My daughter and her new husband are moving back to Santa Cruz and I want to provide them housing at this rental property. I intend to give the occupant a minimum of 60 days written notice, if not more, to give them as much time as possible to locate another residence. Any advice would be helpful to minimize the chances of this transition not going smoothly
Answer 8: Generally speaking, absent some form of rent/eviction control (which now exists statewide as of January 1), an expiring lease means the tenancy is over, and unless the parties agree to continuation of the tenancy, the tenant is unlawfully detaining the premises the day after the lease expires. However, it is not clear that you want the tenants to vacate that soon, and in any event, the advent of AB 1482 (along with current eviction moratoria) would likely prevent requiring the tenants to vacate at the end of the lease. I recommend that you review your local area’s emergency COVID-19 related eviction rules to see if there are any current restrictions on serving the 60-day notice. If not, and you are in compliance with local (if any) eviction control laws, and with AB 1482, then you should be able to proceed.
Richard Beckman, of Beckman Feller & Chang P.C., has been practicing landlord-tenant law for over 26 years, primarily in rent-controlled jurisdictions such as San Francisco, Oakland and Berkeley. He represents clients in a broad range of real estate-related disputes, including partition of co-ownership interests, purchase contract disputes, insurance coverage analysis and land use. Mr. Beckman also specializes in all aspects of landlord-tenant issues, representing landlords and tenants in residential and commercial matters. He can be reached at 510-548-7474; email [email protected] or by visiting the website www.bfc-legal.com.