Category: TSL Legal Posts

Under the ADA, a service animal has been defined as an animal that “has been individually trained to do work or perform tasks for an individual with a disability.”  The tasks performed by the animal must be directly related to the person’s disability.  This means that the pet must be trained to take specific action when needed to assist the person’s disability.  

The emotional support animal, also known as a therapy or companion animal, are not considered service animals under the ADA.  These terms are used to describe animals that provide comfort just by being with the person. That said, the vast majority of requests are not supported by evidence of a service animal, but that of an emotional support animal based on some kind of other disability.

These “invisible” disabilities include a wide variety of emotional issues such as depression, anxiety, chemical dependency, and other illnesses.

It is legal to require some kind of credible information from a professional to support the need for the emotional support animal.   

When confronted with this situation, take the time to carefully evaluate the source of the recommendation or prescription and to follow up to determine other facts.  Keep in mind, however, you may not inquire as to what the disability is, only that the tenant declares that they have a disability.  Any further questioning or probing may result in unwanted legal action from the tenant or prospective tenant.

In a move by California’s legislature, the most prolific change to landlord-tenant law has come about with the passage of AB 1482.   AB 1482 will cap annual rental increases by 5% plus the rate of inflation which, at this time, comes close to 7.5-8% for much of the state’s rental housing stock.  The new law will also apply to a “Just Cause” requirement for termination of tenancies for qualifying rental housing across California.  To give you an idea of the underpinning of this sweeping move by legislature, the new law is called “The Tenant Protection Act of 2019.”

While tenant advocacy groups may call this legislation “tenant protection,” some outspoken landlords say this new law creates a “California welfare state.”  The law takes effect January 1, 2020 and “sunsets” in 2030.  California will become the second state in the union to pass a statewide rent cap following on the heels of Oregon, which passed a similar law.  Here is a summary and legal analysis of various provisions of the new law.

AB 1482 “Occupies the Field”

This raise “occupies the field,” meaning that AB 1482, a statewide measure, states that local governments should not be allowed to impose stricter rent caps on housing regulated by this legislation.  Thus, the 5% plus inflation rent cap imposed by this state law would pre-empt local municipalities from going stricter then this allowable rental increase number.  This is something, at least for San Diego County landlords (where rent control has not been approved), that would impose stricter caps than what AB 1482 is authorized.

Vacancy De-Control Strengthened

When a tenant moves out of a unitregulated by AB 1482, the owner would be allowed to adjust the new rent to market and then resume enforcing inflation plus 5%.

Rental Increases Applied in Increments:  More Than Two Increases Per Twelve Month Period Not Allowed

The rental owner is now prohibited from increasing the rental rate for the unit in more than two increments in a twelve month period.  Two increases per year would be allowed but, remember, when you add the two raises together, they must not exceed the annual cap of 5% plus inflation.  In our experience, this is not a serious issue since most owners usually, although not required to, raise rent just once per twelve month period.

The Laws Retroactive Effect on Rent Hikes:  Rental Increases Before January 1, 2020

Lawmakers were one step ahead of us in making sure no one jumped their rents prior to the effective date of the new law.  First, all rental increases prior to March 15, 2019, are approved.  They stay as-is.  The line in the sand is a rental increase that is dated on or after March 1, 2019.  Rental increases after this date are treated as follows.  First, the Apartment Associations valiantly, and partially successfully, obtained a modified approach to this issue.  For post March 1, 2019 rental increases that exceed 5% plus inflation, the difference may be retained by the landlord and does not have to be refunded.  There is bad news, however.  On January 1, 2020, the rent must be reduced to the approved rate of 5% plus inflation.  Another way of calculating this would be to multiply the rent before the increase (that occurred after March 1, 2019) and multiply it by 107.2%.  This would then reduce the rate to the acceptable level.  In these cases, don’t forget to give tenants an advance written notice that you are decreasing the rent to the acceptable level starting January 1, 2020.

Please contact our office for additional information and informative pamphlets.

Starting September 1, 2019, there will be new rules regarding calculating the days after service of a three day notice in which the tenant has to pay rent or quit. 

For many years, the method of calculating just how long the tenant has to pay after service of the three day notice to pay rent or quit, was one which included weekends and holidays.  For example, when the notice was served on a Friday, the three days to pay or quit were Saturday, Sunday, and Monday.  However the legislature has changed all that.  Now, it is required that the three days following service of the pay or quit, must be three business days-weekends and court holidays are excluded from calculating the time period to pay or quit. 

Some of the rules have not changed.  You can serve the three day notice any day of the week you want, including Saturdays and Sundays and holidays.  It’s just that in calculating the days following the service, you begin with the next business day and you will have to give the tenant the three business days following service of the notice to come up with full rent or the keys.

As an example under this new method of calculating the time in which the tenant has to pay or quit, it turns out that Monday will be the best day.  The three days when the notice is served on a Monday (without holidays interfering) would be Tuesday, Wednesday, and Thursday.  The second best option is to serve the notice on Tuesday.  The three business days to wait are, of course, Wednesday, Thursday, and Friday.

The problem that our office sees is that although you are serving a three day notice to pay rent or quit, and realize you must accept the rent if they come forward with payment in full within the three days, you really want them out and don’t want to accept the rent.  The fact is, though, they have the right to pay so as long as it is a rent in full payment, within three day business days after service of the notice to pay or quit.

 Under the new rules, it looks like Friday will be the worst day to serve the pay or quit because the three days in this case would be, Monday, Tuesday, and Wednesday.  In effect making it a five day notice to pay or quit.

As a reminder, most of the other rules still apply.  Remember to serve a pay rent or quit for rent and pure rent only, no NSF’s, no utilities (ask our office for options on alternate notices to serve to recoup these additional fees).  The rent stated on the notice must be accurate, make sure there are no partial credits carried forward on the account that are not denoted on the three day.

Historically, landlords have been unwilling to accept payments from third-parties over concerns that the third-party would claim a right to possession of the unit. 

AB 2219 provides for a landlord who accepts a rent payment from a third-party can require the third-party to sign a document acknowledging that the transaction does not make the third-party a tenant. 

Third-party payments may come from a variety of sources such as Social Services agencies, or programs created by local jurisdictions, or nonprofits.  They also may come from individuals, such as family members, caretakers, and others, all according to the Bill’s analysis. 

This Bill does not require that you take a third-party check but, if you choose to do so, you can be protected by making sure that it does not create a tenancy in the unit by the third-party payor.

Effective August 1, 2019, owners of residential rental properties located within city limits of San Diego will be prohibited from discriminating against an applicant solely by virtue of the fact that he or she is a participant in the Section 8 Housing Assistance Program with the San Diego Housing Commission and HUD.

Before this, many landlords have exercised their right to not accept the Section 8 program for a variety of reasons.  They include failure to allow rental increases and difficulty in contacting Section 8 advisors.

In looking into this issue in detail, we have been able to determine that screening rules still apply for Section 8 applicants, but you must not have a blanket prohibition against acceptance of the Section 8 participant.

So what about verification of income?  Here’s the way that Legal Aid explains this to us:  Your policy regarding minimum income is still enforceable.  Having said that, it must be based on the tenant’s portion to be paid under the Section 8 program and take into the consideration the Section 8’s portion of contribution.  In other words, if the rental portion is $500.00 per month for the tenant (their income).  If you have a three times rent standard for income, will be $1,500.00.  That would include the Housing Commission’s portion in assessing gross income.

Indeed, the income requirements are stretched when it comes to that component of the screening process.   Credit and rental history are still allowed for the Section 8 applicant.  You may still screen based on those standards, evenly applied across the board as with other perspective tenants. 

California law provides that the owner can serve a Three Day Notice to Pay Rent or Quit after the tenant defaults in the payment of rent. We think it is best to leave any late charge off of the Three Day Notice. Our reasoning is simple. We emphasize that the word “rent” because the law does not specifically state that other charges – such as late charges, interest, NSF charges, utility payments and damages – are rent. Since state law requires the Court to strictly apply the unlawful detainer law (i.e. if you make a small mistake on the Notice, you lose), it does not make sense to jeopardize your case by including a late charge on your Notice.

Occasionally, in residential rental agreements, the owner will give a discount if the rent is paid by the first. Let’s say the monthly rent is $1,000.00 a month, but the tenant is entitled to a $50.00 discount if he/she pays on or before the first, for a net of $950.00 per month. If rent is not paid by the first, the owner naturally serves a Three Day Notice to Pay Rent or Quit for the $1,000.00. The Court, however, may construe this as a “reverse” or hidden late charge, concluding that the net pay is really $950.00 a month and not $1,000.00. The Court would say this difference is a disguised late charge if not paid by the first. If you do discounts, it is better to serve a Three Day Notice to Pay Rent or Quit for the lower figure.

As part of our commitment to San Diego’s apartment community, our office carefully monitors and tracks legislation pertaining to landlord/tenant law in California. Below is a summary of the breakdown for new laws affecting rental owners and other real estate professionals in 2019.

Landlord Protection from Liability in Marijuana-Cultivation Law: A newly-signed law intended to curb illegal marijuana cultivation now offers law-abiding landlords protections against liability. Under AB-2164, cities can choose to immediately penalize individuals accused of violating local cannabis laws-without first getting a hearing or a chance to remedy the problem. As originally drafted, the Bill would have unintentionally left innocent rental property owners vulnerable to immediate penalties without appeal.

Battery Backup Required for New Automatic Garage Door Installations: Beginning next summer, landlords and other property owners will no longer be able to install automatic garage doors unless they have a battery backup function designed to operate during electrical outages. While property owners will not need to proactively install new automatic garage doors, any replacement door installed on or after July 1, 2019, must have a battery backup feature. This Bill also provides for a civil penalty of $1,000 for a garage door not installed in compliance with the law.

Protections for Domestic Violence Victims: AB-2113 will prohibit local agencies from penalizing property owners or residents if they call law enforcement to report domestic abuse or other crimes or emergencies at the property. The Bill, however, will also prohibit landlords from evicting or otherwise penalizing tenants simply because they call authorities to get help.

Balcony Inspections: Governor Brown signed into law SB-721. This Bill came in response to tragic balcony and stairwell collapses in two apartment buildings several years ago. The Bill requires new periodic inspections of certain apartment balconies, stairwells and other elevated structures.

Third-Party Payment: The recent Bill allowing the tenant’s ability to pay through a third-party also contains protections for landlords. Historically, landlords have been unwilling to accept payments from third-parties over concerns that a third-party would claim a right to possession of the unit.

Fast Track Housing for Homeless Including Homeless Youth: AB-2162, by Assemblyman David Chiu, D-San Francisco, will expedite the approval of affordable housing developments with a certain percentage of “supportive housing.” Supportive housing means housing with no limit on length of stay, that is occupied by persons with low incomes or who have one or more disabilities including mental illness, HIV or AIDS, substance abuse, or other chronic health condition.

The Law Office of Ted Smith Law continues to monitor both current and pending legislation, at both the state and local levels.

The City of San Diego strikes again! Last year, the San Diego City Council approved a ban on discrimination against recipients of Section 8 Housing Vouchers. The measure passed on a 6:1 vote with two councilmembers absent. For those of you with residential rental properties within the City of San Diego, you cannot say “no” to an applicant based solely on whether they pay rent with a government subsidy. This is a blow to San Diego City rental property owners who formerly had the freedom as to whether to participate in the Section 8 Program or not.

Advocates of the ban claim it was necessary. In pushing the Council to pass this measure, pro-tenant groups suggested that the current policy of “allowing legal discrimination of Section 8 Voucher holders in the private rental market actually exacerbates the homeless problem, because people are unable to use [the voucher].” The measure ignores the fact that it is a risky proposition to accept a tenant who qualifies for Section 8. There is a huge bureaucratic process that can delay the receipt of rent checks. Allowing the tenant to receive Section 8 Housing Assistance is an indirect way of saying that the landlord will take welfare as the source of income. Make no mistake: Discrimination based on income is not allowed. But, requiring the landlords to take Section 8 Housing, creates a layer of forms and complications. This includes the risk that the tenant has no other or limited means of income. Also, from the eviction attorneys’ standpoint, the Section 8 Housing evictions are much more complicated and procedural than your ordinary termination of a month to month tenancy. It is very frustrating for the rental owner to have to wait for a response in getting the Housing Commission’s approval for certain things. For example, rental increases must be approved. You may not terminate the Section 8 tenancy at any time unless you have a material violation or other good cause. All of these good and sound reasons fell on deaf ears with the City Council of San Diego. Therefore, effective in 2019, it will indeed be discriminatory for City of San Diego rental owners to say no to the Section 8 Program. That said, keep in mind that you have the right to screen the Section 8 participant on the other issues that are commonly done with all applicants, such as a review of rental history and credit check. A list of Do’s and Don’t’s: Don’t do any advertising or marketing stating that Section 8 recipients are not accepted. Don’t tell any perspective applicant that it is your policy not to accept Section 8 tenants. Don’t discriminate in any way solely by virtue of the fact that the applicant is a participant in the Section 8 Program. Do upon inquiry by the tenant, agree that you will take Section 8 subject to your usual screening requirements that apply to all prospective residents. Do carefully evaluate the Section 8 tenant’s rental history and credit report. Allowing Section 8 does not necessarily rule out your ability to deny rental based on a FICO score that’s applied across the board. There should be no double standards in favor of Section 8.

Our office has some clients that extol in a positive way the virtues of Section 8 Program in that the Housing Commission’s portion of rent comes in like clockwork. Others say it’s not worth the risk. With this rental market, the landlord does not want to add a layer of bureaucracy to an otherwise positive rental market. We encourage you to go online and read the Ordinance enacted by the City of San Diego for yourself. The text of the Ordinance can be found at Chapter 9, Article 8, of the San Diego Municipal Code. It adds a new Division 8, Sections 98.0801, 98.0802, 98.0803, 98.0804, 98.0805, and 98.0806. In these sections, the drafter of the Ordinance lays out the purpose and intent of the Ordinances, definitions, addresses prohibited activity, states the exceptions for owner-occupied rental units, describes the effect on other laws, and sets forth the enforcement and remedies available to the aggrieved perspective or existing resident who has suffered discrimination based on denial of the Section 8 Program. If you would like a free copy of the new Ordinance, please contact our office.

Trading rent for service can lead to major problems. For example, suppose you need to have some bushes trimmed and one of your tenants volunteers to do the job in exchange for a one-time rent reduction of $50.

This is all verbal. Your tenant promises to trim the bushes and haul the clippings to the city’s refuse disposal area.  He or she has their own ladder and hedge trimmers and will use their own vehicle for hauling.  Sounds harmless enough, right?

What happens if you don’t think your tenant has done a satisfactory job? Are they still entitled to the $50 credit?

If you believe the work performed is only worthy of a $25 credit and they take the full $50 credit of their next month’s rent, would you be able to serve them with a three day notice to pay rent or quit for the remaining $25 you believe is still due? And suppose that while they trimmed the bushes, there was a slip and fall incident, or a traffic accident while on their way to the dump? Of course, this is what insurance is for, but what if your worker’s comp policy won’t cover it?  The next time you might be tempted to trade rent for services, be sure to consider the risks involved and the problems it could cause.

Q: I have two issues with the tenant. One is nonpayment of rent, and the other is occupancy by others stated in the lease and an unauthorized pet. May I serve a three day notice to pay rent or quit and a three day notice to cure breach or quit at the same time?

A:  Yes. You have to separate violations that need to be taken care of: 1) the failure to pay rent, and 2), curtailing the over-occupancy and removing the pet. As two separate and distinct violations, the two three day notices could be served simultaneously to address each issue. In order to maintain tenancy, the tenant would have to comply with both notices within the three day period. Payment of rent cures the three day notice to pay rent or quit but does not cure the over-occupancy notice. If necessary, an unlawful detainer could be filed on one or both of the notices.

 

Q:  How about serving a sixty day notice and a three day notice to pay rent or quit at the same time?

A:  Do not do that. The combination of a sixty day and three day together is different than the question above. That was two three day notices served simultaneously. This, however, is a sixty day and a three day notice to pay rent or quit served together. The two, read together, are ambiguous. One makes it clear they are to be out; the other gives the impression that if you pay, you may stay. That is why we recommend serving one first, then the other, but don’t serve these two notices together. Pick the one you want to go with first and then, only if necessary, follow a few days later with the other.

 

Q: The guarantor, the tenant’s father, signed a guaranty agreement. The lease has now expired and converted to month-to-month. He claims he is no longer responsible. Is that true?

A:  No. The standard guaranty agreement covers the lease and any extended periods. When the lease rolled to month-to-month, the guarantor did, indeed, remain jointly and severally responsible along with the named tenant for payment of rent.

 

Q: The sex offender openly admits his status during the screening process. In an unusual twist, he and his wife confirm the wife was the victim of his rape many years ago. They made up and later got married. Would his marriage to the former victim, now his wife, terminate his status as a registered sex offender? May I legally reject their application solely by virtue of the fact that he is still a registered sex offender?

A:  No to both questions. Under a specific California law, you may not deny rental to the applicant just because he is a registered sex offender. The law is that, although he ended up marrying his victim, the registration as a sex offender carries on. His marriage to the victim is irrelevant. Of course, he is not entitled to special treatment and needs to qualify, just like everybody else, as to rental history, credit, and income. Caution: As a matter of practice, you should not go on the sex offender website at all during the resident screening process.

 

Q:       Our apartment community has a process for sending out lease renewal options towards the end of the initial term. For example, we have various prices for a one-year renewal, sixth months, and month-to-month. If the resident does not respond to any of the options. The language is to revert the lease to month-to-month. That increase would be more than 10% of the lease rate. Does that notice have 10 be more than 60 days out, and, is the lease renewal notice indicating the month-to-month rate as one of three options legal service of the notice of rental increase?

A:  The answer to both questions is yes. Since the resident has not responded to any of the options, the language reverts the lease to month-to-month. In this case, the resident has not selected either a one-year or a six-month lease. This means that the month-to-month option, by default is accepted. And because of that, it is a sufficient notice of the rental increase for the month-to-month tenancy rate. Failure to pay the month-to-month rate upon expiration of the lease will result in a three day notice to pay rent or quit at the month-to-month rate.

 

Q: Payment Allocation. My resident picks and chooses how he wants partial payments to be credited against an ongoing balance of accruing rent and late charges. She insists that credit should be given during the months received leaving, an old balance due, is she right?

A:  No. The standard rental property accounting principle is to apply all payments to the oldest rent and related charges first, then carry the balance forward on a running account. When doing this, you  need to clarify his intention, given the receipt for the oldest balance first. I recommend wording in all leases so that there is no misunderstanding on payment credits that goes like this: Lessor may apply any payment made by lessee to any obligation of a NFC notwithstanding any days or other direction from a NFC which accompanies any such payment. Said payment will be applied to oldest charges first, including late charges, older rent, late charges and current rent. Any attempt by lessee to allocate payment any other way, either be Mello, on the check, or restrictive endorsement, shall be null and void.”

 

Q:   I want the tenant out. How about serving a 60-Day Notice on a month-to-month tenancy and a Three-Day Notice to Pay the now due rent at the same time?

A:  Do not do that. A combination of a 60-Day and a Three-Day served together, makes the two of them ambiguous. When a Three-Day Notice is served simultaneously with a 60-Day Notice, the message the Three-Day carries with it is, if you pay, you may stay. You’re looking at the Sixty Day Notice, it says get out period. So the two read together are ambiguous. One makes it clear that they ought to be out, the other gives the impression that if they pay, they may stay. That is why we recommend serving one first, then the other. Pick which one you want to go to first, and then, only if necessary, follow with the other notice a few days later.