The 2013 legislative session closed resulting in a mixed bag of good and bad news for rental property owners. While at least one law which would have had a disastrous effect on landlords was vetoed, several others with a negative impact were passed and signed into law.
This article is an overview of the laws passed with the greatest impact on apartment owners. It is presented in numerical order rather than in order of perceived importance.
AB 10 – Minimum Wage Raise
This law implements a graduated increase in minimum wages over the next couple years from $8.00 per hour to $10.00 per hour. As of July 1, 2014, minimum wage increases from $8.00 per hour to $9.00 per hour. Then again on January 1, 2016, a one-dollar increase goes into effect, taking wages from $9.00 to $10.00 per hour.
AB 227 – Reduction of Penalties for Curing Proposition 65 Violations
The Safe Drinking Water and Toxic Enforcement Act, (Prop. 65) was enacted in 1986 as a way to inform people about, and protect them from, exposure to chemicals known to cause cancer and birth defects. It requires those owners with ten or more employees, (including apartment owners) to post warning signs in and around the property if the property contains potentially harmful chemicals. Unfortunately, the law also contained an enforcement component that allowed private individuals to bring frivolous lawsuits against business owners for failing to post the required warning signs.
AB 227 arose in response to those frivolous lawsuits and as an attempt to reduce the number of lawsuits brought by allowing the business owner to pay a reduced civil penalty of $500.00 per facility or property, provided: 1) the owner cures the alleged violation within 14 days of notice; and, 2) notifies the person bringing the lawsuit that the violation has been corrected by providing the other party a completed “proof of compliance” form. However, this remedy may only be used once in connection with the individual who filed the lawsuit. In other words, a business owner who has been sued for an alleged violation (failing to post the required disclosure notice) may correct the violation, pay the civil penalty, and serve a correction notice on the person who served notice of the violation only one time for a violation arising from the same exposure in the same facility or on the same premises.
AB 1398 (Natural Resources Committee) Solid Waste Recycling
This law defines the phrase “commercial solid waste” for the purpose of commercial recycling. Specifically, AB 1398 defines commercial solid waste to include “all types of solid waste generated by a store, office, or other commercial or public entity source, including a business or a multifamily dwelling of five or more units”. In other words, for owners of apartment properties of five units or more, the law defines the type of material that is to be recycled.
AB 1398 cannot be understood if read simply as a stand-alone law, as it was meant to be read in connection with a prior bill enacted in 2011, AB 341. Specifically, AB 341 requires that by January 1, 2020, 75% of the solid waste generated in California is source reduced, recycled or composted. Additionally, businesses, including commercial or public entity sources or multifamily residences with five or more units generating more than four cubic yards of commercial solid waste must arrange for recycling services. AB 1398 simply defines “commercial solid waste” to be consistent with the requirements of AB 341.
AB 1404 – Good Neighbor Fence Act of 2013
Because adjoining landowners are presumed to receive an equal benefit from any fence dividing their properties, both landowners will be equally responsible for maintaining boundaries and monuments between the properties. This means they will be equally responsible for costs of construction or maintenance, unless they agree otherwise in writing. This law also provides specific procedural requirements for an owner who intends to incur costs for a fence between the two properties to notify the neighboring owner of the estimated costs and other information.
SB 196 – Landlords Required to
Provide Specific Utility Rate Schedules
Existing law requires the owner of a master-metered mobile home park or apartment building to post in a conspicuous place the prevailing residential utilities rate schedule as published by the utility service provider. SB 196 amends Section 798.40 of the Civil Code so that beginning January 1, 2014, owners of master-metered mobile home parks, apartment buildings or similar residential complexes must post in a conspicuous place the applicable specific current residential gas or electrical rate schedule published by the utility service provider. Alternatively, the landlord (or management) may post the Internet Website address of the specific current residential utility rate schedule. If the landlord or management chooses to post the Internet Website address, they are also required to: (1) provide a copy of the specific current residential utility rate schedule, upon request, at no cost; and (2) state in the posting that a homeowner may request a copy of the rate schedule from management.
Furthermore, SB 196 amends Section 739.5 of the Public Utilities Code so that landlords who provide gas or electric service, (or both) in a master-metered apartment building shall charge each tenant of the service the same rate that would be charged if the tenant were receiving gas or electricity directly from the gas or electrical corporation. In other words, landlords are not permitted to “mark-up” the utility rates.
SB 269 – Consumer Protection Against Prepaid Rental Listing Services
Beginning on January 1, 2014, the California Bureau of Real Estate (CalBRE) is authorized to issue a citation to an unlicensed person for engaging in prepaid rental listing services without a prepaid rental listing service license or real estate broker license. Additionally, this law expands the enforcement powers of the Bureau of Real Estate (CalBRE) over prepaid rental listing services, authorizes consumers who are harmed by a prepaid rental listing service company to seek compensation through the Consumer Recovery Account, increases application fees for a prepaid rental listing service license to fund the recovery account, and requires the prepaid rental listing service to provide prospective clients with an explanation of consumer rights in writing.
SB 488 – Code Enforcement Officers May Now Determine Substandard Housing
As of January 1, 2014, infestations of insects, vermin, or rodents and inadequate garbage storage and removal facilities may now be determined by a local code enforcement officer where the city does not have an agreement or the resources to contract for county health services. In other words, local code enforcement officers will now be authorized to conduct pest and garbage inspections. Previously, only county health inspectors were allowed to conduct these types of inspections. Property owners will not be cited by both local and county enforcement agencies for the same violation regarding infestations or inadequate garbage storage or removal.
SB 612 – Protection of Victims of Human Trafficking
Currently, Civil Code 1946.7 permits a tenant to terminate their tenancy upon 30 days’ notice where they notify the landlord, in writing, that he or she (or a household member) is a victim of an act of domestic violence, sexual assault, stalking, or elder abuse. This revision expands the categories of individuals who may terminate their tenancy under the code by adding “victims of human trafficking” as a newly protected class. Additionally, it expands the type of documentation a tenant may use to establish their claim of abuse.
While the current law requires victims to present the landlord with either a court order (restraining Order) or a police report, this revision expands the category of acceptable evidence to include “documentation from a qualified third party based on information received by that third party while acting in his or her professional capacity to indicate that the tenant or household member is seeking assistance for physical or mental injuries or abuse resulting from an act of domestic violence, sexual assault, stalking, human trafficking, elder abuse, or dependent adult abuse”.
Of course, that begs the question as to who or what, exactly, constitutes a “qualified third person”. SB 612 defines a “qualified third person” as one “…who meets the requirements for a sexual assault counselor, domestic violence counselor, or a human trafficking caseworker only if the documentation displays the letterhead of the office, hospital, institution, center, or organization, as appropriate, that engages or employs, whether financially compensated or not, this counselor or caseworker.”
The law also prohibits a landlord from terminating a tenancy, or failing to renew a tenancy of a victim if: 1) documented by a police report or protective court order; and, 2) the wrongdoer is not a tenant of the same dwelling unit. The landlord, however, may terminate the tenancy if, after invoking protection under this law, the tenant allows the wrongdoer named in the police report or protective order to visit the property, or the landlord reasonably believes that the wrongdoer poses a physical threat to other tenants or to the tenants’ right to quiet possession.
Finally, SB 612 also prohibits landlords from disclosing any information provided by a tenant to a third party unless the disclosure is consented to in writing or is required by law or an order of the court.
While the addition of the category “victims of human trafficking” has no expiration date, the additional “qualified third party” documentation protection is set to expire December 31, 2015. My experience leads me to believe that it will still be with us after that date.
SB 745 – Smoke Detectors Specifications Changed
A couple months ago, I wrote an article about this law which generated a bit of confusion among landlords due to the fact that my article was written prior to, but published after changes were made to the law after it was initially passed.
The way the law was originally passed, beginning on January 1, 2014, the State Fire Marshal would not approve a smoke alarm unless it was capable of doing all of the following:
(1) displays the date of manufacture on the device;
(2) provides a place on the device to display the date of installation; and
(3) incorporates a hush feature; incorporates an end-of-life feature that provides notice that the device needs to be replaced.
However, the law was amended to reflect that and these features will not be required until July 1, 2015 and, in fact, the “end-of-life” feature has been eliminated entirely.
However, as of July 1, 2014, the State Fire Marshall will not approve a battery-operated smoke alarm unless it contains a non-replaceable, non-removable 10-year battery. An exception to this rule applies to smoke alarms ordered by, or in the inventory of, an owner, managing agent, contractor, wholesaler, or retailer on or before July 1, 2014. However, the exception only lasts until July 1, 2015, at which time all devices used in the rental units will be required to meet the standards set forth above. [Failure to comply with any of the law is an infraction resulting in a fine of $200 per violation.]
Miscellaneous Employee Protection Laws
This year, the legislature enacted a slew of new laws with the intent of protecting employees. Some are designed to protect the employee’s specific conduct, while others are designed to protect the employee themselves. While space limits prohibit me from writing in detail about each law, I will give a very brief outline of several of them below. The new laws protecting employees conduct include:
- AB 263 and SB 666 – claiming unpaid wages;
- SB 263 – updating personal information;
- SB 288 – taking off from work to appear in a court proceeding involving the employee as a victim of certain offenses;
- SB 400 – being a victim of domestic violence, sexual assault, and stalking;
- SB 435 – not working during meal or rest periods for non-exempt employees;
- SB 496 – disclosing information reasonably believed to be a violation of law;
- SB 633 – voluntarily providing CPR or other emergency medical services; and,
- SB 530 – not disclosing a criminal conviction that has been judicially dismissed or ordered sealed as specified.
Additional new employee protection laws:
- AB 263 – protects an employee against unfair immigration-related practices;
- AB 556 – includes military or veteran status as a protected class of people who cannot be discriminated against in employment;
- AB 1386 – allows the Labor Commissioner to place a lien against an employer’s real property to secure payment under a final order;
- SB 390 – protects employees against an employer’s willful failure to remit withholdings from wages to the proper agencies by punishing such behavior as a felony;
- SB 422 – entitles employees to liquidated damages for receiving less than minimum wage; and,
- SB 462 – protects employees against liability for a prevailing party’s attorney fees if the employee sues in good faith.
You can look up specific bills on which you would like additional information by going to www.leginfo.legislature.ca.gov.
The foregoing information is presented and intended to address the topic(s) covered above in a general nature. Specific situations and their facts should be presented to your attorney for review. The Brennan Law Firm is one of the most experienced landlord-tenant law firms in Southern California, representing landlords exclusively in evictions, negotiations, and judgment enforcement. Mr. Brennan may be reached at (626)294-0500, or toll free at (855)285-2230. Visit our website at www.MBrennanLaw.com for more information.