Question 1: Have there been any recent changes to the law about whether I can refuse Section 8 applicants for my rentals in San Jose, CA?  Also, are there forms and rules for handling tenant security deposits, reporting to the IRS, setting up a savings account and interest to the tenants?
Answer 1: I am not aware of any recent change in the state or federal rules relating to the owner’s obligation to accept a Section 8 applicant, which has historically not required a lessor to accept a Section 8 housing voucher.

However, there have been cases in which the applicant was a recipient of Section 8 housing assistance due to a disability that prevented the applicant from working, and so the applicant argued that accepting Section 8 was a ’reasonable accommodation,’ which lessors are obligated to consider, and in appropriate cases, agree to when the applicant is disabled. Also, there are, in some jurisdictions, local laws such as the San Francisco Police Code Section 3304,  that make it illegal discrimination to reject an applicant based on ‘source of income.’ However, that particular local law may be subject to challenge as being preempted by state and federal laws.

The short answer is that the issue remains in flux, but a lessor is generally not obligated to accept a Section 8 applicant.

As to interest on the deposit, there is no state law requirement that tenants are entitled to receive interest on their deposit, though certain cities, such as San Francisco, have such a requirement (San Jose apparently does not). As to the forms etc., for handling security deposit, and reporting to the IRS, that might be better directed to your accountant. The security deposit should be held separately from your personal funds, so it can easily be accounted for, but there is no obligation it be held in a trust account.

Question 2: We have a tenant that wants to put handicap grab rails into the shower/tub tile. We would like them to pay a licensed contractor to install correctly and would like to know our responsibilities.
Answer 2: Per Civil Code 54.1(b), a landlord must allow a tenant with a disability to make reasonable modifications to the rental unit to the extent necessary to allow the tenant “full enjoyment of the premises.” The tenant must pay for the modifications. As a condition of making the modifications, the landlord may require the tenant to enter into an agreement to restore the interior of the rental unit to its previous condition at the end of the tenancy. The landlord cannot require an additional security deposit in this situation. However, the landlord and tenant may agree, as part of the tenant’s agreement to restore the rental unit, that the tenant will pay a “reasonable estimate” of the restoration cost into an escrow accountCivil Code Section 54.1(b)(3)(A). While the tenant is entitled to the modification, she would be required to comply with all legal aspects of the modification, including using a licenced contractor and securing a permit if one is needed.

Question 3: As a property manager, I rented a house to three occupants with two of them named as tenants. The named tenants applied together and were accepted with the understanding that both were named as tenants on the lease. When time came for signing and payment, tenant #2 disappeared and nobody could reach him. The owners decided they wanted to move forward anyway, with the notion that tenant #2 would later sign. Suddenly, I find out that tenant #2 is living there. Tenant #1 says that he is too mentally unstable to sign. It seems to me that tenant #1 only used tenant #2 to help qualify for the unit since tenant #2 has a much stronger application, but never intended on having him sign the lease. What are my options if tenant #2 won’t sign?
Answer 3: Generally, once the occupants have taken possession, it is a challenge to seek to revise or revisit the rental agreement, including by insisting an occupant sign the lease. The primary difference is the tenant who does not sign may – depending on the facts – not be liable for the lease terms, including the rent. However, tenant #1 may be motivated to get #2 to sign, since if you have to seek payment of the lease amount in the event of a breach, you will be looking solely at #1, who may want to have some help on that from #2. But that is mostly between them, and the owner may be stuck with his decision to go forward without having #2 sign the lease before moving in.

Question 4: I added a roommate to an existing contract, but she gave notice and moved out. Should I redo the original contract so it shows only the existing resident? Also, I have a lease agreement with another tenant that will end on April 30, 2017. When do I have to let the tenant know that I will not be renewing the lease, and is there a form in the AOA forms list that I can use?
Answer 4: As to the first question, I see no reason not to make the documentation reflect the actual current status of the occupants.

As to the second question, there is no form to notify a tenant that their lease is expiring soon. As a practical matter, lessor’s may send a letter to the tenant before the lease expires, usually 30-60 days before, letting them know if the lessor intends to offer to renew the lease, or expects the lease to terminate and the tenant to move out at the expiration date. Such communication helps avoid any confusion between the parties as the lease reaches the end of the original term. The tenant might not know they have a duty to vacate when the lease expires, thinking it will automatically ‘roll over’ into a month to month lease, which will happen if they stay, tender rent and the lessor accepts it.

Question 5: My tenant passed away last month. His daughter agreed to move his belonging out of the apartment. But it is almost four weeks; she is doing nothing and does not return my phone call. The tenant’s belongings are worth about $500.00 (an old sofa set, mattress, and miscellaneous.) What do I do?
Answer 5: When a month to month tenant dies, the lease terminates as of the last day rent was paid. I would try to get the daughter to cooperate, but if she will not, then you need to retake possession of the unit and dispose of the remaining possessions according to Civil Code Section 1980-90 (service of notice of right to reclaim abandoned property once you recover possession).  However, because the right of the lessor to retake possession in such situations is fact-dependent, there may be other facts that would affect that right, and a lessor in that situation would be advised to seek legal assistance to insure he or she is not violating the (presumably) deceased tenant’s estate rights.

Question 6: I am renting to a Section 8 Tenant. We have a one year lease agreement, and are six months into the lease. Can I require this tenant to have Renter’s Insurance?  If so, can I give written notice to the tenant now, or must I wait until the lease is up?

Also, when a tenant turns in their 30-day notice stating they will be moving, we, in turn, serve a 30-day notice to vacate so that if for some reason they do not leave as stated and there is a need, we can begin the eviction process. If the tenant has lived in the unit for more than 12 months, should we be serving the 60-day notice to vacate instead?
Answer 6: It is unlikely you can require the tenant to get renter’s insurance during the term of the lease. A Section 8 tenant may not want or be able to pay for such a policy even if a good idea. And a case came out not long ago that said even if the tenant breaches the lease by not having renter’s insurance, it’s not a basis to terminate the tenancy.

As to the second question, CCP 1161(5) provides that if the tenant provides written notice of intent to vacate, and then fails to do so, you can proceed immediately to the unlawful detainer. However, it is not a bad idea to also send them confirmation that their notice to vacate is accepted, and you will expect them to be out prior to that date or unlawful detainer proceedings may follow immediately. You should also take that opportunity to serve notice to the tenant about the right to a pre-move out inspection under Civil Code 1950.5 (f) and (g).

Question 7: I have had a tenant for five years paying $2,350.00 per month. They signed a lease which expires April 30, 2017. I would like to raise the rent to $2,600.00, which is market value. Is there a law that states that there is a limit (%, $$) on raising rents? The rental is located in Brentwood.
Answer 7: As there is no rent control in Brentwood, you can increase the rent to market rate. The only caveat is if the increase exceeds 10%, a 60 day notice is required, rather than 30.

Question 8: A tenant reported that their bathroom sink was clogged so our plumber cleared it for $140.00. The tenant is refusing to pay this bill, so to be fair, we decided to only charge him half. He still doesn’t want to pay. Since he is moving out, can we deduct this from his security deposit?
Answer 8: If the tenant caused the clog, then he or she is responsible for the cost to clear it. But if the tenant’s regular use of the plumbing results in a clog, that may be the owner’s responsibility. Whether or not to try to charge tenants for such items often depends on how clearly it can be shown that they are clearly at fault. But if the tenant is moving out, you can charge them for the plumbing cost if you believe they are responsible.

ALERTS AND UPDATES:

Regarding Richmond’s Rent Control law passed in November 2016 -Contra Costa County Superior Court Judge Judith Craddick denied a requested preliminary injunction on Feb. 1st, meaning the law will proceed as enacted for now. In summary, Measure L, which applies to pre-1995 multifamily apartments, requires rents to be returned to the amount in effect in July 2015, and limits future increases to increases in the inflation index. It also imposes eviction controls on all units and establishes a five-member rent board to enforce rent control.

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 rich@beckmanblairllp.com or by visiting the website www.beckmanblairllp.com.