AOA Legal Q&A - Gavel

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Below are questions asked by rental property owners regarding California rent control laws followed by answers provided by Northern California landlord/tenant law attorney Richard Beckman for the November issue of the AOA Magazine

 

Question 1:   As always, any updates on the state of the courts and unlawful detainers?

Answer 1: As reported in last month’s article, California again updated its comprehensive state law directed at protecting tenants from eviction for non-payment of rent. Originally passed as AB 3088 in August 2020, updated by SB 91 in January, AB 832 was passed June 28 and essentially extends all the provisions of the earlier versions, set to expire June 30, through September 30. 

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As with AB 3088 and SB 91, AB 832 provides the comprehensive procedure and rules regarding nonpayment of rent cases through, at this point, September 30th, 2021. It added additional restrictions on unlawful detainer actions seeking unpaid rent that accrued during the period April 2020 and September 2021. It creates a new law known as the Rental Housing Recovery Act, which imposes similar restrictions on actions seeking rent that comes due after October 1, 2021. As a benefit to the property owner, it also increases the amount of rent reimbursement from the previous 80% cap to 100% of the tenant’s unpaid rent if the tenant qualifies. The details of those changes and additions will be the subject of a pending AOA seminar.

As described in a prior article, arguably the Legislature left it to local jurisdictions to address eviction protections not related to rent payment issues. I say arguably because the language of AB 832, as with SB 91, is open to two competing interpretations. In one (the one I subscribe to) the relevant language seems to make it clear that any local ordinance or measure passed after August 19, 2020 “to protect tenants from eviction is subject to all of the following: Any extension, expansion, renewal, reenactment, or new adoption of a measure, however delineated, that occurs between August 19, 2020, and September 30, 2021, shall have no effect before October 1, 2021.”  To me, this is clear. No local eviction control measures passed after August 19, 2020 can take effect until October 1, 2021.

However, many local jurisdictions seem confused about whether they can pass continuing eviction protections or not. Some jurisdictions with pending eviction protections withdrew them once the state law was continued to September 30 from June 30, content to let the state law provide the framework for such protections. However, the state law allows for evictions for cause other than non-payment of rent (e.g., breach of lease, owner occupancy etc), while some of the more restrictive jurisdictions (most notably, Alameda County and San Francisco) passed very restrictive ‘no evictions for any reason other than public health and safety issues’ versions, which remain in effect.

 

Question 2: I read that San Francisco was going to extend its comprehensive eviction moratorium from the end of September through the rest of the year. I have been waiting for over a year to do an ‘owner move in’ for the property I bought to live in. Is there relief in sight?

Answer 2: I can only imagine how frustrating it must be to be ‘locked out’ of your own intended home due to a broad prohibition on evictions that, while well meant, has had the foreseeable consequences of imposing more hardship on an innocent owner than reasonably necessary. The San Francisco moratorium does not require the tenant to have experienced any economic hardship related to Covid or otherwise to avoid being evicted. It is just a blunt instrument, that could have been tailored more effectively to achieve the goal of protecting vulnerable tenants while allowing owners a modicum of rights as well. 

As to the most recent effort to extend the existing moratorium through the end of the year, it appears the SF Board of Supervisors have finally considered the possibility that any such effort would be preempted by the current state law. At the Supervisors’ meeting August 13 to take up the proposed ordinance, they were notified by staff counsel that ‘issues of possible preemption’ (i.e., the state law won’t let us do this) recommend passing that matter to the next Board meeting September 6, which is what the board voted to do. So, it will be interesting to hear the analysis of the Board at that next hearing. The August 13 hearing can be seen here: https://sanfrancisco.granicus.com/MediaPlayer.php?view_id=10&clip_id=38952&meta_id=885457

 

Question 3: My tenant living at a duplex stopped paying his full rent since March 2020. He paid partial here and there. At this time, he owes us $19,570 in back payments. He skipped out on us end of last month without notice. He left the place a mess! I had applied for rent relief assistance online but unfortunately, he never did. I am finding out the hard way that without his application, I will not be eligible for any government assistance. My question is, how can I track him down and get him to complete his online application?
Answer 3:  That is too bad, and a flaw in the system in which the tenant’s cooperation is required, which may not be forthcoming, as in your situation. However, unless you have some sort of forwarding information from the tenant, I suspect you will need to employ a private investigator to locate your former tenant to let him know that you will pursue him through court for the back rent, but that if he cooperates with the rent reimbursement program, any amounts received will be credited to his account and reduce the amount that he owes, possibly to a zero balance (or close enough that pursuing him further is not worth it) He should have enough sense of self-preservation to understand that opportunity and work with you to get reimbursement. However, locating him is the first step, so good luck finding the right service to help you with that effort.

 

Question 4: If there are two people listed on the lease agreement, do we have to issue the security deposit refund check in both of their names, or can the two tenants give us written instructions saying to issue the refund 50/50 in each of their names?

Also, if a tenant (John Doe) dies, do we have to issue the security deposit refund check to the Estate of John Doe or can we write the check to John Doe?
Answer 4: Without needing to analyze the legal obligation as if it were to avoid litigation, the simplest thing would simply be to ask the tenants how they would like the security deposit returned. If they refuse to answer, or give conflicting instructions, then you would have an option of issuing the check to them both, requiring both to sign, or sending them the deposit in equal shares, with a cover letter in either case as to their refusal to designate the deposit refund preference. However, if the tenants no longer live together, issuing separate checks would be the most practical for them.

As to the deposit refund of a deceased tenant, ideally, someone would contact you to identify themselves as the deceased tenant’s legal successor, such as an executor under the tenant’s will, or an administrator if the tenant dies without a will and the court appointed someone to handle the tenant’s estate. Proof of the person’s legal role is paramount and would include a copy of the will or a court order confirming the executor or administrator, and proof of identity of the person claiming to be the appointed successor. If, as is not unusual, the tenant’s estate was not submitted to a probate proceeding, which is where a judger would appoint the executor or administrator, then your situation is a bit more challenging, and may require consultation with qualified counsel. 

 

Question 5:  Can I use AOA’s credit report ranking to qualify Section 8 applications? Currently, I require an “A” credit rating from the other applicants. Also, I ask for their income to be three times the rent. How do I handle Section 8?
Answer 5:  Basically, you consider the Section 8 voucher as part of the tenant’s income. As long as your income requirements are applied evenly to every applicant, and are not so out of line with what are called industry standards, (i.e., monthly income at three times monthly rent) as to invite scrutiny as a subterfuge to avoid ‘low income’ tenants, I’m not aware of any restriction on your requirement that the successful applicant have an “A” credit rating. 

 

Question 6: I have a tenant who moved in in late 2020 on a month-to-month lease. They started paying late and have not paid since January. I have not served them the 15 days’ notice yet because I am worried that they may send the declaration back and only pay 25% of the rent. I would like them to move out, so I am thinking of sending them 30 days’ notice to vacate but then I need to provide a reason. Either I move back or sell the house even though I have no plans to do so. Do I really to move in or sell the house? In this case, can you please advise what my best option is if I want the tenant out asap?
Answer 6: You should not try to terminate a tenancy on a ‘pretend’ ground, such as stating an intent to move in when you really have no such intention. That is one of the surest ways to be sued by a tenant who vacates in reliance on that stated intention, and later finds out it was not true. You are always free to sell the house with the tenant in place, in which case, most likely, the buyer would be legitimately able to terminate the tenancy for that owner’s residential use. As for the non-paying aspect of the tenant, you should be aware that the state of California has created a reimbursement fund for owners whose tenants are unable to pay rent, and who qualify for such assistance by being in a particular financial category. Additional information about the new state or local rental assistance programs, including more information about how to qualify for assistance, can be found by visiting http://housingiskey.com or by calling 1-833-422-4255.

 

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.