Question 1: I have a Section 8 tenant who regularly fails to pay his very minor share of the rent. The Housing Authority pays about 90%. I am reluctant to bring an eviction action, because I have heard I can’t collect any rent during the action, or the case will be dismissed. I am very concerned about losing the entire rent chasing the tenant’s share. Do I have the right to collect rent from the housing authority while trying to evict their ‘client’?
Answer 1: Most likely, the answer is yes. While it is well established that a landlord who serves a tenant with notice of termination of tenancy, or files an unlawful detainer. and thereafter accepts rent from the tenant waives the right to terminate the lease or continue the unlawful detainer.

But in the case Savett v. Davis, (1994) 29 Cal. App. 4th Supp. 13, the court concluded that payments from the housing authority did not constitute “rent’ which the court defined as payments from the tenant to the landlord. While there are decisions to the contrary in other states, that appears to be the state of the law in California.

It should be noted that the recent state law SB 329 expands the definition of “source of income” to include Section 8 vouchers, and I assume tenants will argue that new rule should overturn or negatively affect the Savett decision. However, until a court makes such a determination, that is only a speculation.

Question 2: What new information do I need to put in my leases because of the new state rent control law (AB  1482)?

Answer 2: There are three sections that I believe all California landlords should add to their rental agreements, either by adding the provisions into any new leases they enter, or serving a notice of change of terms of tenancy to have the existing rental agreement modified to include the provisions.

The first provision is related to units that can be exempted from the law. Single-family homes or condominiums are exempt, provided that both of the following apply:

(A) The owner is not a corporation or LLC; and

(B) The tenants have been provided written notice that the residential property is exempt from this section using the following statement: (emphasis added)

“This property is not subject to the rent limits imposed by Section 1947.12 of the Civil Code and is not subject to the just cause requirements of Section 1946.2 of the Civil Code. This property meets the requirements of Sections 1947.12 (d)(5) and 1946.2 (e)(8) of the Civil Code and the owner is not any of the following: (1) a real estate investment trust, as defined by Section 856 of the Internal Revenue Code; (2) a corporation; or (3) a limited liability company in which at least one member is a corporation.”

The second provision preserves for an owner the right to move into the property if the owner intends to make the unit his or her principal residence. However, the rental agreement must include the following provision in order to preserve that right:

“Pursuant to Civil Code Section 1946.2(b)(2)(A)(i)”just cause” includes the following: Intent to occupy the residential real property by the owner or their spouse, domestic partner, children, grandchildren, parents, or grandparents. This provision of the lease allows the owner to terminate the lease if the owner, or their spouse, domestic partner, children, grandchildren, parents, or grandparents, unilaterally decides to occupy the residential real property.”

Finally, the third provision is required in all leases effective next August, and must be in at least 12 point type:

“California law limits the amount your rent can be increased. See Section 1947.12 of the Civil Code for more information. California law also provides that after all of the tenants have continuously and lawfully occupied the property for 12 months or more or at least one of the tenants has continuously and lawfully occupied the property for 24 months or more, a landlord must provide a statement of cause in any notice to terminate a tenancy. See Section 1946.2 of the Civil Code for more information.”                

Question 3: Can I ban the use of cannabis on my rental property (4-plex apartment complex) in Visalia (Tulare County)? If so, is there a specific form available or do I simply write a letter and include it as an addendum?

Answer 3:  Absent a claim that the tenant needs to have medical marijuana as a ‘reasonable accommodation,’ I am not aware of any restriction on your ability to prohibit pot smoking in the unit. You can include that prohibition in any new rental agreement, or by a formal notice of change of terms of tenancy to an existing month to month agreement, as long as the notice complies with the applicable statute – Civil Code Section 827, which may be found online here https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=827. While you could also make that information known informally, by a letter, that method is likely not to be enforceable in the event the tenant violates that provision. Formally incorporating it into the rental agreement will avoid that problem.

Question 4: I have a tenant that has a one-year contract. According to the contract, he must pay the rent by the 1st of the month and no later than the 3rd day, otherwise he has to pay a penalty of $35. Every month, he pays his rent late, close to the end of the month and doesn’t pay the penalty. Can I evict him?

Answer 4: Your lease might have a provision that three late payments in one 12-month period is grounds to terminate the tenancy, so you might review your lease for that option. Otherwise, a three-day notice to pay the rent or quit at the first late payment might prompt the tenant to be more timely with his rent. And if he fails to cure the notice, he can be evicted for non-payment of rent.

As for the late fee, I tend to focus on the late or unpaid rent and not worry about the late fee, as they are difficult to enforce, generally speaking. It can be done, but you would probably be better served by demanding rent payments timely or seeking to evict the tenant for non-payment.

Question 5: I have a question on the new rent control law and just cause eviction. Can we continue to use our regular 3-day notice to pay rent or quit when rent is late. Or do we have to use some different form?

Answer 5: If your existing form is effective, it will be fine to use going forward. You are referring to the new law (AB 2343) that took effect September 1. That law only affects the amount of time the tenant is given to respond to the Notice. Until September 1, the law allowed the landlord to count weekends and holidays as part of the three-day notice period. Thus, a notice served on the tenant on Friday would expire the following Monday (the three days being Saturday, Sunday and Monday). While a notice cannot expire on a weekend or holiday, meaning a notice served on Wednesday or Thursday would still expire the following Monday (or Tuesday if Monday happens to be a holiday), the new law removed weekends and holidays from the three day counting period, meaning a notice served on Friday will not expire until the following Wednesday (or Thursday if the week includes a holiday). It did not impose any additional language requirements on the Notice, so an existing proper Notice will require no changes.

Question 6: Can I bill my new San Francisco tenant for half of the water use? I, as owner, live in the upstairs unit, and the rental unit is downstairs.

Answer 6: If the water was provided as part of the initial tenancy, it is a ‘housing service’ and may not be removed without a corresponding rent reduction for the value of the service being withdrawn (some services such as parking and storage require ‘just cause’ to remove the service). Thus, changing an existing rent-controlled tenancy’s terms is sometimes challenging, but in practically any event will require a rent reduction.

If it is a new tenant, then the lease can contain a provision that the tenant shall pay part of the water bill as part of the rent, billed separately (based on some formula usually related to the number of persons in the two units, for example), though it is generally easier to just average out the prior 12 month use and build that amount into the rent. And it should be noted that in San Jose (and possibly other cities), the shared utility bill concept (sometimes called RUBS – Ratio Utility Billing System – has been made illegal, and any utility that can not be billed separately is included in the rent.

Question 7: My neighbor just tore down an old fence that existed when I purchased the property in 2003 and built a new one. It’s their fence but it runs along my driveway and separates their backyard from my property. The new fence was moved about a foot in my direction and now my tenant can’t fit his car in the driveway. The lease states he gets the parking space. Neighbor claims the new fence is on their property line. They did not consult with us before moving the fence, so we discovered this situation after the fact. Please advise.

Answer 7: There are both ‘party fence’ and property border issues involved, but the property line is the most important given your situation. It is too bad the neighbor did not consult with you before moving the fence, or that the change in location was not detected while the fence was being built. But at this point, you will likely need specific legal assistance if the goal is to get the neighbor to undo the relocated fence and move it to the prior line. Without knowing the specifics, it is impossible to say if that would be a successful effort, but certainly on the face of it (moving the property line 16 years, at least, after it was established, without consulting the affected neighbor) your case should be reviewed.

Question 8: How do I figure out the inflation factor for the new rent control? I raised some rents in 2019.

Answer 8: The new law defines “Percentage change in the cost of living” to be the percentage change from April 1 of the prior year to April 1 of the current year in the regional Consumer Price Index for the region where the residential real property is located, as published by the United States Bureau of Labor Statistics. If a regional index is not available, the California Consumer Price Index for All Urban Consumers for all items, as determined by the Department of Industrial Relations, shall apply.” 

Pursuant to the website https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-region.htm the regional Consumer Price Index for the West region provides an annual CPI increase of 2.9%. I believe AOA will include an annual update on the index in April 2020.   [Note:  Regarding the CPI calculation- based on AOA’s research, the author of the legislation, Assemblyman David Chiu, indicates that the provision regarding the applicable measure of the CPI increase is being misinterpreted, in that Chiu says he meant “areas” and not “region.” Chiu has indicated an intention to seek to amend the bill so that the CPI will match specific “areas” and not the Western Region. However, until such time as the statute is clarified by amendment or court interpretation, AOA recommends applying the CPI provision as the law actually states – by the region.]

 

Question 9: I submitted a 60-day notice of change to terms of rental agreement’ to my tenant for a rent increase, but have since negotiated a reduced amount with the tenant. We are near the 60 day timeframe for the original rent change. Do I need to re-send them the same form with the amount changed?  Or do I need to send anything else?

Answer 9: Given the revision to your formal noticed rent increase amount, based on the agreement reached with the tenant to reduce the original amount, I would certainly send them a reminder of the increase. Ideally you would have gotten a written agreement regarding your revised rent increase. If you did, the increase would probably be enforceable, by a notice to pay rent or quit if the tenants failed to pay the increased amount. That is not a certainty, as the tenants would likely argue you needed to serve a new rent increase notice showing the reduced amount, but I doubt that argument would be successful. If you did not get a written agreement, your right to enforce the increase is probably a bit more questionable, unless the tenants admit that they reached that agreement with you. That is why a reminder may avoid confusion later.

Question 10: My San Jose tenant has filed a petition for a housing services reduction, and is seeking a rent credit. The tenant lived in my building 10 years, then moved out and filed this petition. What are my options?

Answer 10: At this point, your options would appear to be to oppose the petition, or work with the tenant to reach an agreement that allows him to withdraw the petition. If you do not work out a deal with the tenant first, you will have an opportunity to submit opposition to whatever the tenant is claiming, and a hearing officer will make a decision on the evidence. There is usually an appeal process, but in my experience, the appeal process is rarely effective. So your best effort should be presented at the hearing. The local rent board will have a written procedure governing such petitions, and you need to learn that process, including deadlines, so you can effectively oppose the petition.

NOTE: I would like to wish all AOA members a very happy New Year’s and best wishes for 2020! May it bring you all the health, wealth and wisdom possible.

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 415-871-0070; email rbeckman@bfc-legal.com or by visiting the website www.bfc-legal.com.