Hello everybody.  Tape recording telephone calls is back in our legal news.  On October 7, 2020 the California Court of Appeal not only reaffirmed the existing laws, but expanded them in a most interesting way.  

But let’s review the basics and start with a True/False Pop Quiz as to whether landlords may tape record or otherwise electronically record (collectively “record”) conversations they have with their tenants.  

True or False?

  1. It is never legal for a landlord to record a tenant’s communications with the landlord.
  2. It is always legal for a landlord to record a tenant’s communications with the landlord.
  3. It is only legal for a landlord to record a tenant’s communications with the landlord if the tenant expressly consents to the recording.
  4. If the tenant objects to a recording, it is nevertheless legal for a landlord to record a tenant’s communications so long as the landlord advises the tenant in advance that the landlord will be recording it.
  5. It is legal for a landlord to record a tenant’s communications with the landlord, whether or not the tenant knows he is being recorded, if the communications can be easily overheard by others who are not parties to the conversation, such as in an elevator.
  6. A landlord can legally record a tenant’s communications with the landlord without the tenant’s knowledge or consent if the landlord reasonably believes that the communication will provide evidence that the tenant intends to extort money from the landlord or kidnap his children.
  7. It is always legal for a landlord to record a tenant’s communications with the landlord if the landlord will need that recording to win an unlawful detainer eviction action in court.
  8. It is always legal for a tenant to record a landlord’s communications with the tenant if the tenant will need that recording to successfully defend an unlawful detainer action in court.

The answers to these True/False statements appear at the end of this article.  But if you read the article carefully, you should have no problem getting all 8 answers correct!

The General Rules

Whether the eight statements above are true or false is determined by whether the communications were or were not “confidential.”  The California Penal Code makes it a crime punishable by a fine of up to $2,500.00 and imprisonment in state prison for one year for the unlawful recording of confidential communications.  The statute provides: “Every person who, intentionally and without the consent of all parties to a confidential communication, by means of any electronic amplifying or recording device, eavesdrops upon or records the confidential communication … by means of … a telephone or other device is guilty of a crime.”  (Penal Code Section 632(a))

Thus, if the conversation is “confidential” then the electronic recording of it, whether by a tape recorder, a digital recorder, or by similar devices is illegal.

The expression “confidential communication” is defined as “any communication carried on in circumstances as may reasonably indicate that any party to the communication desires it to be confined to the parties thereto, but excludes the communication made in a public gathering … or in any circumstance in which the parties to the communication may reasonably expect that the communication may be overheard or recorded.”  (Penal Code Section 632(c))

Thus, in a face to face meeting between the landlord and tenant in the presence of a group of people who are likely to be able to overhear the conversation, the tenant’s discussion does not fall within the definition of “confidential.”  That is because others in the group may hear it.  Accordingly, the landlord can lawfully record that conversation.  Examples would be discussions held in elevators and at the front desk of an apartment building lobby where others are nearby.

Another instance where a recording is lawful is where the landlord advises the tenant that the landlord is going to record the conversation.  Once the landlord so notifies the tenant, the legal right to record the conversation exists regardless of whether the communication is face to face or by telephone.

Some readers may have noticed that the first sentence of Penal Code Section 632(a), as quoted above, provides that the intentional recording of a conversation “without the consent of all parties to a confidential communication” is unlawful, and therefore might interpret that to mean that the tenant must then expressly consent when the landlord advises the tenant that the conversation will be recorded.

The California Supreme Court addressed that very issue in Kearney v. Salomon Smith Barney (39 Cal.4th 95).  There, the high court held that if the person (i.e., assume a tenant) is advised that the conversation is being recorded, the discussion does not fall within the definition of a “confidential” communication, and therefore does not require the express consent of the tenant.

To justify its decision, the Supreme Court explained that the statute only prohibits a party from “secretly or surreptitiously” recording the conversation without first informing all parties to the conversation that it is being recorded.

The court then observed that if, after being so advised, the other party does not wish to participate in the conversation, he or she may simply decline to continue the communication.

The California Supreme Court also held in the Kearney case that a business that adequately advises all parties to a telephone call at the outset of the conversation of its intent to record the call, would not violate the statute when recording the conversation.  That is why so many companies now have a recording at the beginning of any call a customer makes to it that says:  “This call may be monitored or recorded for quality assurance.”  “Monitored” means that others at the company may be eavesdropping on the discussion. “Recorded” means that it will be electronically recorded.

Another type of lawful recordings are voicemail messages.  If a tenant telephones a landlord but the landlord’s voicemail picks up, the recorded message that the tenant then leaves would not be a “confidential” communication.  That is because the definition of a confidential communication does not include any conversation which the speaker expects will be recorded, as when a person leaves a voicemail.

As defined, a confidential communication between two parties would only be confidential if the party not recording the discussion reasonably expects that the communication would not be overheard or recorded by others.  Thus, if two people are speaking to one another at one end of a football field and a third party stands at the other end with a sound device that can overhear and record the conversation, that recording would violate law as the parties to the conversation would not reasonably expect that they would be overheard by someone 100 yards away.

AOA members who are also attorneys may wish to review Rojas v. HSBC Card Services (20 Cal.App.5th 427) which discusses phone recordings in more depth.

The most recent case discussing recorded telephonic conversations was decided by the California Court of Appeal on October 7, 2020.  There, Gruber v. Yelp (No. A155063) held that even if a business uses software only to record the words spoken by their employees, but not the words by their customers on the other end of the phone line, such recordings are unlawful. Customers of such one way recordings who are unaware that the employees’ side of the conversations are being recorded can sue the company for illegal recordings even if the employees knew that only their words were being recorded. 

Exceptions to the Rules

There are exceptions to the prohibition of recording confidential communications.  One exception occurs when the recording party has reason to believe that the confidential communication will provide evidence relative to the commission by the other party of extortion, kidnapping, bribery, or any violent felony against the individual.  (Penal Code Section 633.5)

Another and frequently occurring exception is the recordation of such conversations by law enforcement, such as police officers, the California Highway Patrol, sheriffs, district attorneys or anyone acting pursuant to the direction of such law enforcement officers.  (Penal Code Section 633)

Prohibited Eavesdropping

Closely related to prohibited recordings is “eavesdropping” on a confidential conversation even if it is not recorded.  Eavesdropping without consent (express or implied) is prohibited regardless of whether the person speaking expects that the party who is listening may later reveal the conversation to a third party.

Thus, if a landlord who is talking on the telephone to his tenant pulls the phone away from his ear so that the landlord’s friend, as a “witness” to the conversation, can hear what the tenant is saying, or the friend picks up an extension telephone receiver to listen, that eavesdropping is prohibited and carries with it the same potential criminal sanctions as recording the communication.

Of course, the law is reciprocal such that the tenant cannot allow a third person on his end to listen in on a telephone discussion the tenant has with the landlord.

Civil Damages

As noted previously, not only is recording a confidential communication a crime (as is eavesdropping) and carries a potential fine of up to $2,500 plus incarceration, but parties whose rights are violated may recover from the violator, in a civil action, the greater of $5,000 or three times the actual damages for each such violation.  (Penal Code Section 637.2)

Summary

In general, electronic recording of a confidential communication between a landlord and tenant, or for that matter, any two parties, is unlawful under California law.  A common exception is where the party being recorded has no reasonable expectation of privacy, such as where other persons are around who can easily overhear the conversation.

The landlord may also record a tenant’s conversation, even if the tenant objects, if the landlord advises the tenant in advance that the conversation will be recorded.

The laws restricting recordings by a landlord are equally applicable to a tenant who wants to record a conversation he is having with the landlord.

Generally speaking, a recorded confidential communication cannot be offered in court as evidence against the recorded party unless the party that was recorded either knew that the recording was taking place (in which event it would not be “confidential” as defined), or that the conversation could be overheard by others in the immediate vicinity.

Here are the Answers to the True/False questions:

1: False; 2: False; 3: False; 4: True; 5: True; 6: True; 7: False; 8 False.

 

BREAKING NEWS ABOUT LAUNDRY LEASES!!

This is terrible news for apartment owners.

On September 25, 2020, the California Court of Appeal ruled that the automatic renewal clause extending the term of a Dadson Washer Service (“Dadson”) laundry lease which Dadson prepared was valid and enforceable by Dadson.  In that case, the lease had an initial term of 10 years and would automatically renew for two additional 10-year terms unless Dadson elected not to renew it.  So essentially, Dadson could have a 30 year lease!

The appellate court held that Civil Code Section 1945.5, which might allow the owner of the building to void the renewal clause if the laundry room was “residential” real property, did not apply to the Dadson lease on the theory that the laundry room was not “residential” property.

The attorney representing the owner is now petitioning the California Supreme Court to review the Court of Appeal’s decision so that, hopefully, the Supreme Court will reject the appellate court’s determination that a laundry room in an apartment building is not residential real property and instead rule that a laundry room is residential real property.  That type of petition is long shot, but it is certainly worth a try.  More about this in my future columns. 

In any event, my recommendation to AOA members is never to approve a lease with Dadson or any other laundry company that contains an automatic renewal clause.  Insist that it be removed, or find another laundry service which does not require an automatic renewal.

Dale Alberstone is a prominent real estate attorney who has specialized in real property and resident manager law for the past 40+ years.  He is also a former arbitrator for the American Arbitration Association.  

Mr. Alberstone has been awarded a 5-Star AV rating from Martindale-Hubbell, the 125 year old national rating service of attorneys.  A 5-Star AV rating is the highest possible rating bestowed and reflects an attorney who has reached the heights of professional excellence and who is recognized for the highest levels of skill and ethical standards.

The foregoing article was authored on November 1, 2020.  It is intended as a general overview of California law only and may not apply to the reader’s particular case.  Readers are cautioned to consult a lawyer of their own selection with respect to any particular situation.

Questions of a general nature are warmly invited.  Address correspondence to Dale S. Alberstone, Esq., ALBERSTONE & ALBERSTONE, 269 S. Beverly Drive, Suite 1670; Beverly Hills, California 90212, or phone: (310) 277-7300.