Question 1: What is the latest on the COVID-19 eviction restrictions?
Answer 1: As you have likely heard by now, the California legislature passed and Governor Newsom signed SB 91, just as the provisions of AB 3088 were about to expire January 31st. Primarily, SB 91 – christened the Tenant Relief Act – simply extends the provisions of AB 3088 (the Tenant Relief Act of 2020), in terms of the relationship between residential landlords and tenants and unpaid rent. 

In brief, a landlord is still required to serve a 15-day notice for any tenant who is behind in the rent, along with specific disclosures and instructions to the tenant regarding rights under the Act and how to avoid eviction by notifying the landlord that the tenant is unable to pay the rent because of pandemic related economic impacts. The tenant is now given until June 30, as opposed to January 31, to pay at least 25% of any rent that accrued. 

The primary, and most likely only benefit to the landlord in SB 91, is the inclusion of in the Act of a “State Rental Assistance Program”, which seeks to allocate federal pandemic relief funds to tenants who qualify, with the goal being to offer landlords of such tenants the opportunity to be paid 80% of the accrued unpaid rent during the covered period from April 1st, 2020 through March 31st 2021, on the condition that the landlord waives any remaining balance. Landlords who refuse to accept this opportunity, if it is made available, can face some consequences in an effort to collect such unpaid rent from the tenant, either through a collection action, or an unlawful detainer action. The landlords who refuse this opportunity, again if it is made available, will have to file declarations with any legal action attesting to their attempt to cooperate with the rental assistance program. 

Further, though not clearly stated, the court is allowed to “reduce the damages awarded for any amount of COVID-19 rental debt, as defined in Section 1179.02, sought if the court determines that the landlord refused to obtain rental assistance from the state rental assistance … if the tenant met the eligibility requirements and funding was available.”

Again, that provision is not explained in the body of the Act, so it is difficult to anticipate how a court will apply it in any given case.

Another provision limits the recovery of legal fees in cases brought by the landlord to recover COVID- related rent, either by unlawful detainer or by a collections action. Such fees are limited to $500 for an uncontested case (i.e., default) and $1,000 in contested cases, unless the court finds that the case was litigated outside what is called ‘ordinary circumstance.’ There are various factors for the court to consider when making that determination, but one factor is “whether the tenant or the landlord, or both the tenant and the landlord, would have been eligible to receive a rental assistance payment from the governmental entity, or other third party…”

In other words, the Act is clearly seeking to motivate landlords to participate in the rental assistance program.  

Also, on or before February 28, 2021, a landlord should have provided, in at least 12-point type, the new “one-time” Notice from the State of California” to tenants who, as of February 1, 2021, have not paid one or more rental payments that came due during the covered time period.   [AOA has this and all the necessary forms to comply with SB 91 on their website at www.aoausa.com.]

Question 2:  I have a brief question regarding the legality of including a tenant’s obligation into a lease. Recently, I rented my furnished house in San Mateo County and my lease contains a clause that upon vacating, the tenant will have my area rugs professionally cleaned and kitchen floor stripped and rewaxed. The tenants signed the lease and now assert this requirement is illegal. Is it?

Answer 2: It is unclear whether that requirement in your contract, i.e., the lease, is enforceable. The reference from the tenant is most likely to the Civil Code section 1950.5, which governs the return of the security deposit. Under that particular law, the unit must only be cleaned to the standard it was provided to the tenant. 

Unless the rugs required professional cleaning because of the condition the tenant left them in, I suspect a small claims judge, the person most likely to hear a dispute between you and the tenant if one were necessary, would not require the tenant to incur the expense of professionally cleaning the rugs, despite the contract provision. Similarly, unless there was some indication the kitchen floor was left in a condition that required professional stripping and rewaxing, I suspect the court would also only require the tenant to leave it as clean as they found it. It might be similar to a provision that said the tenant was obligated to repaint the interior of the unit upon vacating, regardless of the condition. I believe a court would find that provision unenforceable. 

However, that is just simply a guess, and it is likely there is not a cited case law on point for that particular issue to provide guidance to the court. It may also matter as how long the tenants were in possession. Possibly the longer they were in possession the more likely your contract provision might be enforceable. 

Question 3: I need to know what is the legal limit to which we can raise rents for our duplex right now? 5%? 6%? 5% plus CPI? What is the CPI??

Answer 3:  Unless your rental unit is subject to some form of local rent control, either temporary based on the pandemic, or as a matter of its regular housing policy, you would almost certainly be subject to the statewide rent control law passed in 2019, AB 1482. That is the law that would restrict rent increases to 5% plus the annual CPI for the region in which your property is located. As for the CPI in your region, please contact your AOA representative, who should be able to provide the information to you. 

Question 4: A tenant has only been making partial rent payments due to financial hardship caused by COVID-19. When can I ask for the unpaid balance of the rent? How many months is the tenant allowed to pay the past due amount if they cannot pay the full amount due?  

Answer 4: To avoid an eviction based on non-payment of rent related to the pandemic, tenants have been given an extension to pay from January 31st to June 30th. Best, you are not allowed to bring an action for non-payment of rent that is pandemic-caused until at least July 1st 2021. For any rent which came due between March 1, 2020 and August 31st 2020, the tenant need only return the declaration of covert hardship to avoid being evicted for any unpaid rent during that time. For rent in arrears from September 1st through June 30th, 2021, the tenant is obligated to pay at least 25% of the unpaid rent by the end of June, if the tenant is properly served the 15-day notice and returns the required declaration. This does not take into account the issues discussed above regarding the State Rental Assistance Program.

Question 5:  I have property in Sonoma County. In 2017, a State of Emergency (SOE) Proclamation with anti-gouging restrictions was issued due to the fires, and then for COVID-19. I have not raised rents since 2017. What are the Proclamations independent of each other in its restrictions, or were/are they a continuous restriction that still restrict rents to 2017 levels?  Of course, any rent increase would all be as per the rent caps allows. The state has not provided guidance. I understand if they were separate, then the limit to any price increase is 10% per proclamation, is that correct?
Answer 5:  As you may know, the ‘anti-gouging’ governing statute is Penal Code Section 396(a), which is set out in part below, and states the 10% rent increase restriction during SOEs. It does not mention what happens if you don’t take advantage of annual rent increases (which is known as ‘banking’ in rent-controlled cities) during a prolonged SOE, but my guess is that Section 396 would not allow it. In other words, you would be permitted one annual increase not to exceed 10%.

However, even the 10% rent increase may be subject to the rent increase restriction set out in AB 1482, which may apply to your jurisdiction, if it does not have a stricter local form of rent control. Also, there may be local pandemic-related rent increase restrictions limiting increases to the current CPI, as is in place in certain Bay Area cities and counties. However, the state of emergency based on the pandemic remains in force, and would continue the 10% restriction, to my understanding, regardless of the status of the states of emergency that were imposed based on the fires in the last few years. 

396(e) Upon the proclamation of a state of emergency….it is unlawful for any person, business, or other entity, to increase the rental price…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.

Question 6: Can I evict a tenant for destroying my property? She ripped my linoleum, left hair in my garbage disposal from her salon business, and left lots of garbage outside her front door?
Answer 6:  Generally, your lease should have provisions that will allow you to serve a notice to the tenant asking or demanding the tenant cure her default whether it be destroying the property, by restoring it to its prior condition or paying the cost, or refraining from activity that damages the property, as you described. If the tenant fails to honor the notice, and the court concludes that it was a material violation of the lease, and not something trivial, then you should be entitled to evict the tenant through the unlawful detainer procedure. 

Question 7: We purchased the property in October 2019. We received a lease agreement stating that the tenant was responsible for 50% of garbage bill. The tenant submitted a tenant estoppel certificate at close of sale that noted that the landlord will pay for all of the trash. Will the lease trump the estoppel in this case to allow us to charge the tenant for 50% of the garbage bill? Thank you!
Answer 7:  Good question, and one with no clear answer. One argument is that having received the tenant’s estoppel statement prior to close of escrow, you were on notice that there was a dispute between the lease you were provided by the seller and the tenant’s understanding of the garbage payment responsibility. That would have allowed you to clarify that issue with the seller and the tenant prior to close of escrow, avoiding the problem. 

It is unclear how a court would handle the issue. The estoppel statement is simply the tenant’s personal understanding of the tenancy terms, while the lease is the contract between the parties. So, in that simple analysis, the lease would prevail. However, because the tenant would argue that you were on notice of the tenant’s disputed understanding of his or her responsibility for the utility bill, you are now ‘estopped’ from trying to enforce the lease terms. I don’t know how a court would handle this. It may depend on facts that are not apparent from your brief facts.

Like many of these relatively small monetary disputes, they are generally best handled informally by negotiating a compromise, and if that is not possible, and you want to pursue it, then either a rent board petition for clarification, or possibly even a small claims action seeking the unpaid utility payment. If a court ruled in your favor, then you would likely have established the payment responsibility going forward. 

Question 8:  My 6-unit apartment building is located in Millbrae. My question is what is the amount that I can have the tenant pay when another tenant moves in with him during the lease as a roommate? Is there any percentage or an amount that it is negotiable?
Answer 8:  Unless your lease provides a specific such additional amount, there is no prescribed amount to charge a tenant who adds a roommate. There are also some restrictions on the right to do so, depending on if your tenancy is covered by a local rent and eviction control law. I do not believe Millbrae has such a local ordinance, so your tenancy would likely be subject to the state law AB 1482. That law limits your ability to increase the rent on an existing tenancy to 5% plus the annual local CPI increase for the preceding year. There may also be local restrictions on rent increases based on the pandemic legislation that has been passed at local and state levels. However, you would need to check your local jurisdiction for those specific potential restrictions. 

Otherwise, assuming no such local or state restrictions on a rent increase at this time, and if your lease is month to month, presumably you would be able to notify the tenant of the rent increase by providing a proper 30-day notice of the rent increase amount. You may want to consult local counsel to make sure that your notice is both permitted and properly done. 

 

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.