Tuesday, March 27, 2012

Landlord/Tenant Issues: Banning Smoking for Residential Tenants

If you are a landlord and you want to make your building a non-smoking building, then you can thanks to a new California law in effect January 1, 2012. However, if your leases currently allow smoking in certain areas of the property then you may have a problem. The new law makes clear the owner’s right to limit smoking in units, but also makes clear that an existing right to smoke is a material provision of the rental agreement, whether it is stated as material or not.

For new tenants, the lease or rental agreement should specify the areas on the property where smoking is prohibited. For existing tenants, a ban on smoking cigarettes or other tobacco products in any part of the property in which smoking was previously allowed does constitute a change of the terms of the tenancy, which requires adequate notice in writing. Therefore, tenants on a month to month rental agreement can be given 30 days’ notice of the smoking ban.

If existing tenants are under a longer term tenancy, then the parties would need to enter into a new agreement on expiration of the existing agreement or modify the existing agreement in writing. It is clear, now landlords have legislative authority to ban smoking if they choose to. This ban can decrease the risk of accidental fires and can even reduce fire insurance premiums. 

Tuesday, March 20, 2012

Landlord/Tenant Issues: Sale of the Property and Terminating the Tenancy

Many homeowners are in the process of short selling their property. This is of particular concern for tenants living in a home that is the subject of the short sale. Many landlord/owners will simply give the tenant a 30-day notice to vacate. Usually this 30-day notice is perfectly fine if the landlord has contracted to sell the unit to a purchaser and has established an escrow with a licensed escrow agent or licensed estate broker; the purchaser is a person (not a company); and the purchaser in good faith intends to reside in the property for at least one year after termination of the tenancy. The notice must also be given to the tenant no more than 120 days after the escrow has been established.

However, California law does require that a residential non-fixed term tenant be given at least 60 days’ notice of termination if the tenant has resided in the property for at least one year. If the tenancy is not terminated when the property is sold, the new owner becomes the new landlord. The new landlord retains all of the previous landlord’s rights under the rental agreement. Therefore, new landlord/owners may serve a 30/60 day notice to terminate the tenancies created with the previous landlord. The new landlord/owner can also pursue an eviction action based on 30/60 day notice served by the previous landlord prior to sale.

As for foreclosed upon property, a tenant has the rights under the lease entered into before the notice of foreclosure to occupy the premises until the end of the remaining lease term. However, the successor in interest may terminate the lease effective on the date of the sale to a purchaser who will occupy the unit as a primary residence, subject to a 90-day notice.

Whether the new owner purchased the property through a voluntary sale by the previous owner, or whether the property was foreclosed upon, California law provides tenants with protections.

Tuesday, March 13, 2012

Landlord/Tenant Issues: Too Many People in One Unit

Imagine you are a law abiding landlord with a vacancy and a potential renter fills out your application form. The vacancy is for a two bedroom, one bathroom, and one half bathroom unit. You read over the application and are astounded to find out that the potential tenant is requesting eight people live in the unit with her. You feel like that is too many people and want to reject the application, but you still want to be a legally responsible landlord.

There is actually no legal formula for the amount of people that can live in one unit. You as the landlord can take a safety approach, and reject the application because it just wouldn’t be a safe living condition to have eight people living in a two bedroom unit. As long as you are not practicing illegal discrimination, you can set a limit on the amount of people living in the unit. However, that number must be a reasonable number.

The best thing to do is limit your occupancy to whatever number the government has set for a comparable unit. The FHA authorizes federal, state or local restrictions regarding the maximum number of occupants permitted to occupy rental units. Enforcement of reasonable occupancy limit laws does not amount to discrimination based on familial status. Just make sure to apply it uniformly without regard to family composition. As a guide, the FHA policy is that occupancy of two persons per bedroom is presumptively reasonable and not unlawful discrimination.

The Los Angeles Municipal Code makes it unlawful to refuse to rent to or discriminate against any person based on age, parenthood, pregnancy or the potential or actual tenancy of a minor child; or to include a provision in the rental or lease agreement that the tenant shall remain childless, shall not bear children or shall not maintain a household with a person of a certain age.

Check your local ordinances to make sure you are not violating the law and acting discriminatorily.

Tuesday, February 21, 2012

What to do with tenant’s abandoned personal property – Landlord Tenant Tuesday

There are legally outlined steps that every landlord must take to deal with property left behind by tenants who have moved out. Any landlord should follow these steps in order to protect themselves from claims by the tenant who has moved out – claims that could allege the landlord destroyed or even stole the tenant’s property.

Many landlords are familiar with performing clean up and repairing damage to a unit after a tenant vacates voluntarily, or with aid of the sheriff or marshal. Often times, landlords must also deal with disposing of a pile of random personal items left behind. Sometimes the things left behind can be recognized as ordinary trash, so there is usually no problem with tossing it. However, be careful what you characterize as trash because something that looks like trash to you could be an expensive “vintage” item.

In some instances, the landlord may have a judgment against a tenant for unpaid rent or damages to the premises, and this tenant left behind valuable property that she never claims. In that case, the landlord can safely have the property sold and the money applied to pay the judgment, but only if the landlord follows the legal procedures outlined below.

First of all, a landlord cannot touch a tenant’s property until the landlord has legally gained possession of the premises. Gaining possession legally can mean when a tenant voluntarily leaves, whether or not she gives the landlord the keys, or when the tenant is physically evicted by the sheriff. If a tenant leaves personal property behind, and doesn’t demand his property then a landlord can face serious liability for disposing of the junk, unless the landlord uses a Notice of Right to Reclaim Abandoned Property. This is called for in Civil Code sections 1980 through 1991.

Action One: Inventory
A landlord must take an inventory of the abandoned property and write down a list of everything that is found. If there are containers left behind, just list the unopened container, do not open the container or locked trunk. A landlord may be able to get away with opening a container to check on the value of the property since the method of disposing of the property depends on the total value of that property.

Action Two: Decide the Value
A landlord must decide whether the value of the property is more than $300. Typically, you would judge the value by how much you think the item would go for at a flea market or garage sale.

Action Three: Notify the Tenant(s)
A landlord must send the former tenant(s) the Notice of Right to Reclaim Abandoned Property. There is no deadline for this like there is for an accounting of a security deposit, but the landlord cannot legally dispose of the property until this process begins with the notice. The Notice of Right to Reclaim Abandoned Property should list:
-          The name of the tenant and any other person who could have an interest in the property
-          The address of the premises
-          A description of the property (“in a manner reasonably adequate to permit the owner of the property to identify it” per Civil Code section 1983(b)).
-          A place where the property may be claimed.
-          The value of the property; whether the property, in your opinion, is worth more or less than $300
-          Your signature and date the Notice was mailed.

The Notice should be mailed to the last known address of the tenant. The postal service will forward the notice if the tenant left a forwarding address.

The landlord must surrender the property if the tenant contacts the landlord within 18 days after the Notice was mailed. Even if a Notice wasn’t mailed, the landlord must surrender the property within 18 days after the tenant has left where the tenant demands her property. Before returning the property, a landlord has the right to charge moving and storage costs, and any out-of-pocket costs the landlord incurs for renting storage space. If a landlord has a court judgment, in order to properly keep the property to have it sold and applied against such a judgment, the landlord must have the sheriff seize the property and auction it off.

If the former tenant or other owner of the property left behind doesn’t contact you within 18 days of mailing the Notice, you may keep, sell, give away, use or do anything else you wish with the property, IF it is all worth less than $300. If the property is worth more than $300, then you must arrange for the property to be sold at a public auction and then publish a notice in the newspaper announcing the auction. The ad must be published at least 5 days before the auction. You must also hire a licensed and bonded public auctioneer.

The ad must be in a newspaper of general circulation that has paid subscribers in the county. The ad must also describe the property in the same way you described it in the Notice of Right to Reclaim Abandoned Property. Proceeds are first used to pay reasonable costs of storage, advertising and sale. Anything left over goes to the county. To use the balance to satisfy a judgment against the tenant, a landlord must give the judgment and a Writ of Execution to the sheriff to levy the funds in the county’s control.

Following these procedures will protect a landlord from any liability in the event the tenant or other owner of the property left behind shows up later and sues for unlawful conversion of her property.

Tuesday, February 14, 2012

Landlord-Tenant Tuesday: Fair Housing in Rental Ads

Alright, so I have a thing for theme-day posts. Anyway, let’s learn something. If you are a landlord or management company and currently have a vacancy, did you know that one misstep could subject you to a Department of Employment and Fair Housing violation? That comes with a hefty fine.

I will start with listing just a tidbit of some interesting findings from an Apartment Owner’s Association article. Tomorrow I will be at one of their Fair Housing seminar and I’ll write a more substantive blog then.

So, did you know there are certain words or phrases that have already been deemed “highly” or “marginally” offensive and could result in a violation of fair housing in included in your rental advertisement? “Highly” offensive words include: adult building, walk-in closets, or singles only. Remember, these words show that the advertisement (and thereby the landlord) is leaning towards a preference for a particular class while discriminating against a protected class. Designating a building as adult is discriminatory against both the young and families with children. The same goes for singles only, it discriminates based on a familial status which a big no-no. Walk-in closets, isn’t so obvious to those of us that can walk. However, it is offensive to the disabled or other individuals who wouldn’t be able to enjoy the “walk-in” part of the closet.

Here are some “marginally” offensive phrases you also shouldn’t use in advertising: no pets, exclusive, senior or military discounts. These are offensive for the same reason, they hint at a discrimination against a protected class, such as individuals with disabilities.

So now you are ready to type up your ad for that vacancy, and you want to place it on craigslist.com, what phrases can you use? Some acceptable phrase include: gated, residential area, parks nearby, assistance animals only, and large closets.

Stay tuned for more tidbits late this week. Parts of this article were pulled from the original AOA publication here.

Thursday, December 22, 2011

2012 Laws for Landlords and Tenants

Well, we have about a week left in 2011, time that maybe you as a landlord or tenant can use to get acquainted with what is coming in 2012.

Tenants Smoking Ban: Beginning January 1, 2012, a residential landlord can prohibit the smoking of cigarettes and other tobacco products on the property, including any dwelling unit, building, other interior or exterior area, or the premises on which the property is located.  For new tenants on or after January 1, 2012, the areas where smoking is prohibited must be stated in the lease or rental agreement.  For preexisting tenants before 2012, a new provision prohibiting smoking is a change in the terms of tenancy that requires adequate written notice, depending on whether the tenancy is month-to-month or for a fixed term. 

Tenants Displaying Political Signs: Effective January 1, 2012, a residential tenant can generally display political signs related to elections, legislative votes, initiatives, and other political matters as specified, but the landlord can make reasonable restrictions as to location, size, and duration of display.  In a single-family dwelling, a tenant’s political signs can be displayed from the yard, window, door, balcony, or outside wall of the leased premises.  In a multifamily dwelling, a tenant’s political signs can be posted in the window or door of the leased premises.  A landlord can restrict the size of a political sign to six square feet.  A landlord can also prohibit a tenant from displaying political signs that violate local, state or federal law, or a lawful provision in an HOA’s governing documents.  A tenant must remove political signs in compliance with time limits set by local ordinance, or absent such time limits, the landlord can reasonably restrict the posting of a sign to 90 days before an election or vote, and its removal within 15 days after the election or vote. 

Tenants Recycling Rights: Commencing July 1, 2012, a multifamily residential dwelling of five or more units (or a multifamily residential dwelling or business that generates more than four cubic yards per week of commercial solid waste as defined) must arrange for recycling services.  The intent of this law is to address the challenges local governments are facing in reducing solid waste disposal in multifamily properties.  The required recycling services are to be consistent with state or local laws, to the extent that these services are offered and reasonably available from a local service provider.  The property owner of a multifamily residential dwelling may require tenants to source separate their recyclable materials to aid in compliance with this law. 

So, landlords start issuing notices of a ban on smoking now. Tenants, find somewhere else to smoke. Is it a coincidence that the law on tenants displaying political signs goes into effect in an election year? Interesting. Well, I guess we will be seeing a lot of Obama campaign signs and….Romney…Gingrich…who knows – signs. As for recycling services, it shouldn’t be too hard to comply with this law. Most residences have that blue and green garbage can designated for recyclables. Landlords can call their local city sanitation unit to get more bins.

Merry Christmas, Happy Hannukah, and Happy New Year!

Wednesday, September 28, 2011

Foreclosure on Your Rental Unit

An estimated 10% of homes in the Unites States are in the process of being foreclosed upon. So what do you do if you are a tenant in a home or building that is being foreclosed upon?

The Tenant's Right to Possession
Long ago, the California Supreme Court held that the foreclosure of a mortgage ended not just the leasehold but the lessee's (tenant's) right of possession. This is because there is no contract that is entered into between the new purchaser (whoever buys the building from the bank) and the tenant. The purchaser may, therefore, treat the tenants as an occupant without right, and maintain ejectment for the premises (eviction).

California code of civil procedure section 1161a also allows the buyer at a foreclosure sale to bring an unlawful-detainer (eviction) action against the former homeowner or their tenants following service of a notice to quit. That same code section requires 60-days notice to quit for rental housing units. The notice also needs to have a cover sheet explaining the procedure for eviction. If the notice to quit gives at least 90-days notice, the notice may explain the eviction process instead of including a cover sheet.

The Protecting Tenants at Foreclosure Act of 2009 mandates 90-days notice to many residential tenants. This applies to a foreclosure on a federally-related mortgage loan or on any dwelling or residential real property after the date of enactment of the Act. This Act gives a tenant facing an eviction action a defense to raise if the new purchaser did not provide proper 90-days notice.

The Tenant's Liability for rent to the New Owner
Because foreclosure extinguishes the landlord-tenant relationship, the buyer has no contract with the occupying former tenant and cannot demand rent.  This means the buyer cannot evict a tenant on the basis of a three-day notice to pay rent or quit before the 90- or 60-day notice period expires. If the new owner accepts rent, this creates a new month-to-month lease.

The Security Deposit
California civil code section 1950.5 governs the disposition of the security deposit. Landlords whose interest in their properties terminate may do two things. They may either transfer the security deposit to the new owner, and notify the tenant, or they may return it to the the tenant after making lawful deductions. If the landlord elects to return the security deposit to the tenant, it must be returned with an accounting of deductions made.

It is important to note that landlords often lose their rental properties to foreclosure because they do not have money, so the landlord may not be able to come up with the tenant's security deposit.

The important take-away: Most residential tenants will require 90-days notice under federal law. Other residential tenants will still require 60-days notice. Foreclosed tenants also owe no rent to the new buyer.

New purchasers and banks will often not follow the law and try to evict tenants without proper notice, or with no notice. If you are a tenant facing eviction due to foreclosure please contact The Law Office of Veronica R. Guzman.

Portions of this article are excerpted from "Your Rental Unit is in Foreclosure: Now What?" a publication of the State Bar of California. www.calbar.org