Below are questions asked by rental property owners regarding California rent control laws followed by answers provided by Attorney Richard Beckman.
Question 1: Is there any update on the lawsuits against the eviction moratoriums in Oakland and Alameda County?
Answer 1: Somewhat surprisingly, there is no news from the appellate court as to either of the two cases submitted to the court on a motion for summary judgment September 29th (such a motion seeks to have the court decide the case without need for a trial). As reported in last month’s article, the case Williams et al v. Alameda County Board of Supervisors is a lawsuit in the Northern District of California federal court, filed in early March, and which requests the judge to, in essence, invalidate both the Alameda County eviction moratorium and the Oakland city version.
A related case – California Apartment Association et al v. County of Alameda et al (3:22-cv-01274-LB) only against Alameda County, makes many of the same arguments, and was also set for summary judgment hearing on September 29. Basically, the argument of both cases is that the city and the county have violated various constitutional protections. The district judge heard oral argument from the parties at the hearing, and has the matter under submission. At some point, almost certainly within 90 days of the hearing, a ruling will issue. If the motions are granted, invalidating the two ordinances, the city and county will likely appeal those rulings, and the primary issue will be whether or not the moratoria remain in effect pending the appellate process.
Similarly, in the City of Alameda case against Alameda County, City of Alameda v. The Superior Court of Alameda County (which seeks to have the moratorium stricken as to incorporated areas like the City of Alameda), there have been no additional filings according to the appeals court docket. This is surprising, as the case was filed as a ‘writ of mandate’, which are normally acted on by the appellate courts quickly. So, no news to report on that case. Continue to stay tuned!
Question 2: I think I saw an AOA alert about a possible new state law that would limit my ability to garnish a former tenant’s wages to collect a judgment for unpaid rent. Do you know the details?
Answer 2: SB 1477, Enforcement of Judgments and Wage Garnishment, was passed by the state legislature and presented to the governor on September 9th, who signed it into law September 29. I think there may have been alarm bells raised over this measure, but it is a relatively minor adjustment to the existing wage garnishment law. Essentially, it reduces from 25% to 20% – the percent of wages that can be collected from an employee’s disposable income to satisfy a judgment, whatever the nature of the judgment is. In other words, it does not apply specifically to a judgment based on a former tenant’s unpaid rent.
The bill also reduces from 50% to 40% the multiplier used to determine the maximum amount of earnings subject to levy for any pay period other than a weekly pay period. These provisions become effective on September 1, 2023.
Question 3: I am getting rental applicants, and when I run credit checks, some are returning with evidence of prior unpaid rent at previous addresses. The applicants often indicate that the reason for unpaid rent was because of the impact of the pandemic. Does that make a difference in terms of my legal ability to reject them based on that credit history?
Answer 3: Yes, it does. As part of the various state laws that attempted to mitigate the impact of the economic effects of the pandemic on tenants, Civ. Code § 1785.20.4 was passed which provides that a ‘lessor, tenant screening company, or other entity that evaluates tenants for the lessor cannot use an alleged COVID-19 rental debt (Civ.C. § 1179.02) as a negative factor when evaluating a prospective housing application or as the basis for refusing to rent a dwelling unit to an otherwise qualified prospective tenant.’ So, be cautious if rejecting an applicant based on their rent payment history.
Question 4: Our previous tenant who terminated the tenancy on 8/12/22, sent a message on 8/20/22 that she had replaced the water heater eight months ago. She never informed us about any problem with the water heater or asked our permission to replace it. Now she says that we need to reimburse her for the cost ($1,100) of replacement, otherwise she will come with a plumber and remove the water heater. Are we liable for the cost of water heater replacement and can she legally now remove the water heater?
Answer 4: She would almost certainly be guilty of the crime of breaking and entering if she entered the apartment to remove the water heater, unless it is in some publicly accessible common area, and even then, she would likely be guilty of theft and trespassing rather than breaking and entering. So, you should let her know that under no circumstances is she authorized to ever come to the property to remove a fixture.
However, that said, the other approach is probably to try to negotiate a solution. Realistically, if there was a need for a new water heater and she paid for one, you might consider reimbursing her most of her expense, simply as a matter of equity. Obviously, she should not have done that without coming to you first for authorization etc. But, while you likely have no duty to reimburse legally speaking, a small claims judge might feel otherwise, and simply order you to do so. Again, for the amount of money involved, negotiating something makes the most sense.
Question 5: We had a pipe burst inside the wall of the top unit which flooded the bottom unit. What, if any, is our requirement to put the tenant into a hotel while the unit is being repairs, estimated time of 3-4 weeks.
Answer 5: As the owner, you have a duty to provide the tenant with habitable premises, which a burst pipe would prevent (unless the tenant was the cause). I don’t believe there’s any legal requirement that you provide the tenant with alternate housing, but the tenant would be entitled to claim damages for the breach of the obligation to provide the habitable premises. That might include the cost to them of staying in alternate housing etc. I would anticipate your insurance company would be involved as this would be a claim that they would be defending should the tenant bring it. But, when all is said and done, working with the tenant to provide them temporary housing, which again, should be an insured expense, makes the most sense.
Question 6: I have one lease with tenant A and he had been there for about 6-7 years. The property is in Oakland. He has been behind on his rent for about six months now. About one month ago, he called and said he hasn’t lived in this property for over five years (1st time I am aware) and said his partner subleased to an individual and this individual isn’t paying rent. Tenant A bought a rental house about three months ago and said he can’t afford to continue to pay rent now, I am dealing with two individuals plus maybe partners living in the property without a lease and original lessee who no longer lives in the property. Rent is past due for six months.
If the sublet tenants request the water heater to be fixed and the master tenant requested me to fix it, can I have them pay for it and deduct from their rent?
Answer 6: It is easy to understand your frustration with your situation. However, because Oakland and Alameda County continue to be subject to an eviction moratorium, the subtenants who were allowed to move in by your master tenant are protected from eviction unless they constitute a public health and safety concern. The original tenant who allowed them to move in likely remains responsible for the rent, as he has not turned over possession to you. I suggest that you work with that person to try to get the subtenants to either vacate or pay the rent.
As to the water heater issue, that is complicated. Ordinarily, the landlord’s covenant of quiet enjoyment and warranty of habitability do not extend to a tenant’s sublessee … because landlord and sublessee are not in privity of contract. However, the case law is not completely clear on this issue, and the result is otherwise if the landlord expressly agreed to the sublease; in such event, the sublessee is a third-party beneficiary of the rights in the original rental agreement and, therefore, has the right to proceed directly against the landlord for its breach.
The repair and deduct provisions are set out in Civil Code Section 1942, and your suggestion is a very interesting one. Ordinarily, that provision comes into play when the landlord has refused to provide a necessary repair within a reasonable time after the tenant has requested it. In your case, you want to tell the tenant-subtenants that they can use that provision to repair it themselves and deduct the cost from the rent (that they are not paying). While the ‘legality’ of such an approach is unclear, I would be inclined to do the same.
Question 7: I have a tenant who was paying rent using a cashier’s check since he moved in April 2019. After his initial lease expired, he has been on a month-to-month basis. The original lease did not have a specific clause regarding not accepting personal checks. His rent was raised in September with a 30-day notice and within the 10% increase limit. He is not happy with that increase. I had offered him a one-year lease along with the rent increase but he refused to sign the lease so he is still on a month-to-month basis. He unexpectedly paid his October rent with a personal check. I have returned the check marking it void and offered to reimburse him for his cost of getting a cashier’s check or money order for the rent. Also, his personal check had a different address than his rental address. He is saying that with the current rent amount, he will only pay with a personal check. I have had bad experience in the past with personal checks and do not want to accept it. Can I serve him a change of terms 30-day notice stating that NO personal checks will be accepted? What other options do I have?
Answer 7: I am unclear why you would reject a personal check, which is obviously a convenience to the tenant as opposed to having to go to a financial institution to secure a cashier’s check or money order. If the check bounces, then you have a different scenario. In that case, you can demand payment by cash pursuant to the statute copied below. Even without a bounced check, you can notify the tenant that payment of rent should be by cashier’s check, cash, or electronic funds transfer, and not by personal check. That would require a 30-day notice of change of terms of tenancy.
“Rental payments may be made in cash, by check or money order, or in any form previously accepted by the owner or the owner’s agent, unless the form of payment has been specified in the oral or written agreement, or the tenant has been notified by the owner in writing that a particular form of payment is unacceptable. [Civ.C. § 1962(d)(3)]
The landlord (or agent) must allow a tenant to pay rent (or security deposit) by at least one form of payment that is neither cash nor electronic funds transfer … except cash may be demanded or required as the exclusive form of payment where the tenant (i) previously attempted to pay with a check drawn on insufficient funds or (ii) put a stop payment on a check, draft, or order for the payment of money. In the latter circumstances, cash may be required as the exclusive form of payment for no more than three months following the tenant’s stop payment order or attempt to pay with an insufficient funds check. [Civ.C. § 1947.3(a)(1) & (2)]
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.