Question 1: My Oakland tenant has to be displaced due to water damage in the apartment, caused by a pipe failure. We have secured them a place in a local hotel, and we are only charging them the pro rata share of the rent they were paying. Can they lawfully demand or request that a pro rata share of their normal living expenses (e.g. P.G.&E, commute to work because the hotel is farther away than home, cable, internet etc.) be allowed as well because they have to purchase food out and are being inconvenienced? What encompasses all they can legally demand beside, hotel accommodations and waiver of rent while out of unit?
Answer 1: This kind of issue can degenerate into a long, back and forth battle between the landlord and the tenant, for obvious reasons. The tenants feel they are being dislocated and inconvenienced for nothing they had control over, and the landlord feels providing alternative housing should be good enough. I would at first suggest you involve your insurer in the mix, as some of the claims by the tenant are likely covered claims under your policy.
Strictly speaking, the landlord is obligated to provide the tenant with habitable premises in exchange for the rent paid by the tenant, in advance – that’s the contract between you and the tenant. If you are unable to do so, then the tenant can claim the breach of that duty caused the tenant to incur expenses beyond just the new (temporary) rental amount, whatever that is, for comparable housing that is no longer being provided by the landlord while the premises are being repaired.
Under contract and ‘tort’ law (see Civil Code Section 1714), the tenant is entitled to compensation for the reasonably foreseeable costs of replacing the housing they had in the interim period. This can include costs incurred for food (since most displaced tenants will claim they can’t cook in the temporary housing but must incur expense eating out), transportation, loss of time in the temporary relocation move and then in the time lost in travel to their typical obligations (e.g. costs more to drive to work, since the public transportation they previously used is no longer convenient, etc.). As you can see, there is a list of things a displaced tenant can claim as ‘damages.’
It is often a negotiation with the tenant as to what the landlord should or might cover, and I always recommend that the landlord try to make the tenant not feel they are losing out, since that is more likely to lead to a court claim whether it be via small claims or superior court.
Overall, it’s a delicate area, but one that can be navigated if both sides exercise a reasonable effort to cooperate and recognize the other side’s legitimate concerns. And again, check with your carrier about the tenant costs.
Question 2: I have a couple of security deposit deduction questions. A tenant left the place a disaster. Apparently, he was making honey oil or hash in the apartment. I had to replace carpet that was new when the tenant moved in three years ago. I also had to repair 11 large punch holes in eight walls. The rest of the walls were filthy. My questions are do I have to depreciate for the time he lived there, or due to the extreme damage that occurred can I deduct the full amount, and can I charge him the full amount to paint the unit, or only the walls that were damaged?
Answer 2: You do not mention how much the security deposit was, but one would reasonably assume it would be consumed by a carpet replacement and the wall repairs you describe, (if caused by the tenant, of course). You are entitled to deduct for the cost of those repairs. Since the carpet was new when the tenant moved in three years ago, it is not certain whether a small claims judge would permit the tenant to pay less than full cost based on depreciation for the three year period. You may need a statement from a carpet repair/replacement service as evidence of the anticipated lifespan of the carpet.
As for the remaining damages, you are entitled to charge the tenant for the reasonable cost to restore the walls to their prior condition. This may include painting the entire unit if the walls were all the same color and that color can’t be matched wall by wall. However, as with the carpet, a small claims judge would likely appreciate ‘expert’ testimony on this point from your painter (via a declaration as to that point, though ‘live’ testimony is usually preferred if possible).
If the total amount charged exceeds the security deposit, you have the right to seek the rest from the tenant in a legal action, such as a small claims case. But in any event, do not forget to provide the tenant with the accounting of the deposit required within 21 days after the tenant vacates, as described in detail in Civil Code Section 1950.5.
Question 3: We manage several non-rent-controlled units. Is it legal to charge a pet deposit and pet rent for the same animals? Also, we manage a property in which the owner enters the yard and accesses the roof without notice to the tenants, and we want to advise him as to whether this is proper. Is there a code that can be referred to in the letter?
Answer 3: If by charging pet rent you mean a rent increase based on the addition of a pet, it depends on if there is a lease in effect that either allows or does not allow pets. If there is a lease that allows pets and is silent on the rent increase or deposit, then no extra rent or security deposit can be charged, but if the lease restricts pets, then permission to have a pet can justify the additional rent and deposit. Of course, if the lease has converted to a month-to-month agreement, then it can be changed by service of a proper Notice of Change of terms of Tenancy, regardless of the initial terms.
As for the owner’s entry to the roof, it may depend on the owner’s purpose in seeking such access. The statute on owner-entry to rental units (CC 1954) is not clear on accessing the rented premises outside the unit, such as the roof. I suggest contacting the tenants and explaining the need for roof access, and a proposed date and time. If they have any objection, they will let you know, and you can then discuss a next step to achieve the owner’s need for access (which may be a three day notice, or a dialogue with the tenants to simply work it out).
Question 4: I have a couple of questions about my Oakland rental unit:
1) Can I send a 24hr notice of entry to the tenant’s email address, and can I have the tenant email me things like repair requests?
2) I do an annual inspection, what do I do if the tenant won’t let me inspect the garage or a certain part of the unit? Do I send them a warning notice?
Answer 4: Notice of entry by email is not one of the permitted methods under Civil Code 1954, but if you and the tenant agree that you can use such method, then that will satisfy the statute that governs landlord’s entry requirements. You can also agree to receive notices from the tenant as to repair requests etc.
As to the annual inspection, there is no ‘right’ to require entry to conduct an annual inspection, other than to check the operation of the smoke and carbon monoxide alarms. Currently, smoke alarms are required to be installed on every floor or level of a multi-story dwelling, (including basements) on which a sleeping room exists, as well as centrally located outside each sleeping area (e.g. the hallway). Owners of all residential rentals with an attached garage or a fossil fuel source are required to install carbon monoxide alarms within the home.
Take note, however, that effective January 1, 2016, owners of rental units intended for human occupancy are required to install additional smoke alarms, as needed, to ensure that the devices are located in compliance with local building standards in effect at that time, even if they are more stringent than State standards. Currently, California’s Building Code §310.9 already requires a smoke detector to be installed in each bedroom as well as the hallway outside the bedroom. I don’t know if any local law requires a detector in the garage, but you can call the OFD and inquire. But other than (possibly) the garage, your annual inspection of the detectors will allow you to visually inspect much if not all the house. You can, also, request the tenant’s approval for you to do an annual inspection of the entire property, and ask them if they have any problems etc. Always a good thing and then you and the tenants both have the same understanding of the condition of the unit.
Question 5: I have a tenant that is paying her rent late, but does not pay the $35.00 late fee. Can I refuse to accept the rent unless the late fee accompanies it? If so, what is the ordinance that allows me to do so?
Answer 5: Late fees, as you know from reading this column, are problematic. You can’t refuse the rent without the late fee unless your lease specifically identified late fees as additional rent, which residential leases do not, generally (it’s not clear if such a provision would even be enforceable). Late fees can be enforced via a three day notice to cure or quit (the breach being the obligation to pay late fees). Also, note that in Oakland you are required to provide the tenant with a ‘pre-notice notice’, or prior opportunity to cure the problem before you serve a three day notice. However, that may be sufficient to get the tenant to pay the late fee. If it does not, you have to decide if bringing an unlawful detainer is warranted (though I suggest you review the case Orozco v. Casimiro (2004)121 Cal.App.4th Supp. 7 for the legal difficulty in having a court agree with you). Small claims court – once she accrues several months of late fees – might be an option.
Question 6: I own and live in a pre-1979 San Francisco single family home in which I rent out two of the ground floor rooms. Rooms are fully permitted and home status as a single family residence was not changed/updated when rooms added on. I have lived here since initial remodeling of home and when tenants/roommates started living here.
My question is, am I subject to rent control? My understanding is that SFHs are not subject to rent control, but I wasn’t sure if that applies to me since I live in the home and these tenants are perhaps technically considered roommates. My tenant responded to me when I notified her in writing of my requested increase ($400) and pointed me to some information in the SF Rent Board site that does seem to say that a legal in-law unit of a SFH makes it a two unit building and subject to the rent ordinance. There was also a part regarding a boarding house situation that is somewhat unclear. I guess I need to understand how a boarding house situation is defined.
Answer 6: Single family homes are exempt from rent control, and since you own and occupy your home, the occupants are also not – generally – subject to the eviction control laws, meaning you do not need ‘just cause’ to terminate their tenancy. However, renting separate areas of a SFD to tenants complicates the analysis, and determining the status of the tenants is beyond the scope of the Q&A forum. However, you might submit the matter to the rent board on a petition to increase the rent, which would eliminate the guess work. The rent board could find the tenants occupy separate units, unless you and they share your common living areas, like kitchen and living room. In that case, the arrangement would be closer to roommates than boarders or independent units.
According to the SF Rent Board’s information on its website, “A single-family dwelling with a legal in-law unit constitutes a two-unit building and is not exempt from the Ordinance. A single-family dwelling with an illegal in-law unit also constitutes a two-unit building and is not exempt, unless both units are rented together as a single tenancy. A house occupied by an owner who rents out more than one room as separate rental units, in a situation akin to a boarding house, may not qualify for exemption as a single-family dwelling.”
Question 7: I need to return my vacating tenants’ security deposit. They want me to deposit via their bank’s app. Do I legally need to send a paper check to them, of course within the 21 days? They are leaving the country.
Answer 7: There is no obligation to comply with a demand by the tenants that you return the balance of their security deposit by direct deposit to their bank. You and the tenant can agree to do so, but I don’t see any penalty for not agreeing. See the provision from 1950.5 below. However, as an accommodation, why not?
Civil Code Section 1950.5(g) No later than 21 calendar days after the tenant has vacated the premises, but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy under Section 1946 or 1946.1, Section 1161 of the Code of Civil Procedure, or not earlier than 60 calendar days prior to the expiration of a fixed-term lease, the landlord shall furnish the tenant, by personal delivery or by first-class mail, postage prepaid, a copy of an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and shall return any remaining portion of the security to the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and tenant may mutually agree to have the landlord deposit any remaining portion of the security deposit electronically to a bank account or other financial institution designated by the tenant.
Question 8: My husband and I have an apartment property. Tenants send their rent payments payable to me and my husband’s name. Recently, we transferred the property to a LLC and want the tenants to send rent payment to the LLC’s name. Do we need to sign a new paper or contract with the tenants to do this?
Answer 8: You can just send the tenants written notice that going forward rent should be made payable to the name of the LLC. If they have any objection or fail to do so, you can make it a formal change of terms of tenancy and seek to enforce it. But initially, a courtesy request should be sufficient (though they may forget or overlook it, rather than refuse, so keep that in mind).
ALERTS AND UPDATES:
New Laws for 2017 Affecting Residential Rentals:
Surprisingly, only one new law seems to be in place as of January 1 that will impact residential tenancies, and only ones that end in litigation. Prior to this new law, an eviction lawsuit (unlawful detainer) would be ‘masked’ from the public records at the courthouse for the first 60 days. If the case was not resolved by then in the tenant’s favor, the court record would be made available to the public, which meant primarily the credit reporting agencies who then publish the information to the tenant’s credit report. This situation provided the landlord an opportunity to offer to keep the case ‘masked’ in cases where the two sides could reach an agreement, and it was an incentive for the tenant to accept the landlord’s offer of settlement, as the continued masking of the case often allowed the tenant to seek new housing without the credit report impact of the unlawful detainer (basically, a ‘death sentence’ for future rental applications by the tenant). As of January 1, the law is changed to make the masking permanent unless the landlord prevails within 60 days. This eliminates that bargaining chip, and reduces the landlord’s negotiating leverage in settlement discussions.
Update on Richmond Rent Control
As readers will know from the last edition, Richmond’s rent control ordinance (Measure L) was approved by voters and went into effect December 30, 2016. While areas of the law remain unsettled, including the formation of the authorized rent control board, one aspect that every owner must be aware of is the provision that appears to mandate a return of a covered unit’s current rents to the amount of rent charged as of July 21, 2015 (or the amount of rent first paid if the tenancy began after July 21, 2016). While surprising, the Measure appears to be clear in this aspect. In effect, the landlord must notify tenants whose rent exceed the now-permitted amount that the rent is reduced effective January 1, 2017 to that prior amount, and refund any excess rents received after January 1, 2017. However, owners are not being required to refund any excess rent received since July 21, 2015.
Richard Beckman, of Beckman Blair, LLP has been practicing landlord-tenant law for over 24 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 [email protected] or by visiting the website www.beckmanblairllp.com.