Landlord/Tenant Questions & Answers

Ted Kimball, Esq.

May 2020

1.  Question:  We rent a house to a family.  My husband helped the tenant move a washing machine into the laundry room and noticed that the tenant’s defective hoses had leaked water onto the sheetrock.  We want to have the sheetrock repaired.  Can we deduct the cost from his security deposit and then send a 30-day notice for the tenant to reinstate that amount?

Answer:  You can serve a 3-day notice to perform conditions and covenants or quit to require the tenant to make repairs or to pay for the repairs.  If they do not comply with the notice, you can proceed with an eviction, or alternatively, deduct repair costs from their security deposit.

2.  Question:  I heard that if a tenant is using drugs on a property, the landlord can be charged on a drug charge, is this true?

Answer:  A landlord can be cited for maintaining a drug-related nuisance if he or she does not take reasonable steps to remove the illegal drug activity from the property.  The local enforcement agency must first advise the landlord of the nuisance.

Prediction For 2030: Government Can Help Housing By Doing Less

(This is Part 2 in a Series)

By Roger Valdez

Last month, I indulged in a prediction not just about housing in the next year, but about housing in the coming decade. My argument is that when put together, anger about housing prices, socialist activism, and an incurious media and academia will lead to so much incremental regulation that, in effect, government will be running all rental housing in the country by 2030. Why is this happening? How do housing activists end up believing that the government must intervene dramatically in the housing economy? And what’s the real solution to housing inflation?

A leading reason why we’re skidding toward government control of housing is because housing policy has been inappropriately saddled as the cause and the solution of various social ills. One of the best examples of this addled thinking is the battle over single-family housing. Lately, it’s in fashion to call single-family zoning racist. There is no doubt that in most American cities, many neighborhoods were deliberately set up to exclude African American families. This is something that is extensively documented by the Mapping Prejudice Project, a collaborative effort by the University of Minnesota and Augsburg University.

Tenant Problems:

Not taking it personal

When I started my property management business, the only owners that would take the time to work with me were owners with real headaches from tenants with whom they no longer had the patience to deal  themselves. For example, one of my first clients had a property in Beverly Hills on which he never raised rents. He brought me on to raise the rent by 10% back when rents could be increased by 10% with a 60 day notice. Let’s just say this young bright eyed property manager suddenly learned why the owner had never raised the rents. The tenants fought tooth and nail to challenge the rent increase. The owner’s headache was now outsourced to me, which was my job. In the end, the rent increase went into effect, the tenants paid and I had resolved an owner’s headache. Still, I learned just how aggressive a tenant could be when they felt aggrieved.  

After several years of being in the business, not much has changed. Tenants can still be incredibly aggressive when they feel their home, finances or way of life is being challenged. As for me, I have learned some very powerful lessons that may come in handy for owners who find themselves faced with defensive and combative tenants.

Renters Request Smoke-free Housing

Landlords Enjoy the Financial Benefits 

LOS ANGELES (May 5, 2020) – As of April 1, 2020, “60 municipalities have enacted a law at the city or county level that prohibits smoking in 100% of private units of multi-unit housing properties,” according to the American Nonsmokers’ Rights Foundation. These increasingly popular smoke-free policies are a benefit to public health and help protect the lung health of all residents. 

Secondhand smoke is a health hazard that harms tenants and makes housing units less livable. Almost half of tenants report that secondhand smoke has infiltrated in their home from elsewhere in or around the building, according to a UCLA-SAFE Multi-Unit Housing Tenant Survey.

Legal Corner

By Stephen C. Duringer, Esq., Partner, The Duringer Law Group

Question.  Most of my residents paid their rent in April, and again in May.  I know it was difficult for many due to reduced hours, furloughs, and lay-offs, but most were able to pay their rent, and many even paid early.  I have a few that didn’t, some I haven’t heard from, some haven’t returned my calls, and have kind of gone dark on me.  I know that there is an eviction moratorium in place right now, and not much I can do until it is lifted, but what should I be doing now in preparation of someday when the moratorium is over?  I can’t just sit around not knowing if they will pay or not.   I am very concerned about June’s rent, and whether my good fortune will continue.  What can and should I do?

            Stephen W., Beverly Hills

Answer.  At the time of this writing, the second week of May, the eviction courts are essentially shut down, except for limited exceptions.  There are statewide eviction limitations in place, and many cities and counties throughout California have chimed in with their own unique requirements.   Most of these restrictions are intended to protect those residents whose ability to pay their rent has been impacted by the COVID-19 pandemic.  

California Commentary: Will the Coronavirus Pandemic Lead to a Tax Increase?

By Jon Coupal, Howard Jarvis Taxpayers Association

In January, Governor Gavin Newsom presented a proposed budget for fiscal year 2020-2021 which envisioned a several billion dollar increase in spending for existing programs as well as a host of new programs. But that was before COVID-19 arrived at our shores.  In over the course of just three weeks in March, it became obvious that the original budget plan would have to be scrapped because of the most rapid economic downturn America has ever seen.

So. it was with great interest that all those who follow California politics were watching last Thursday, May 14, 2020 as Governor Newsom released the “May Revision Revise” of the budget. To no one’s surprise, the huge dive in state revenues forced the Governor to slash $19 billion from January’s initial plan. According to the Governor’s Department of Finance, the budget deficit is now $54 billion. But this figure may be overstated in order to present to the public the worst possible case. The non-partisan Legislative Analyst projected the deficit to be as low as $18 billion with a worst-case scenario of $31 billion.  The question is whether the budget shortfall will lead to a demand for tax increases. Taxpayers can also take some comfort that there are no immediate plans for broad-based tax increases. The Governor proposed two tax hikes, a suspension of a business deduction for what are known as “net operating losses” and a tax on vaping products.

The CARES Act: Help for Landlords Through the Small Business Administration

By Matt Williams, Founder, Williams Real Estate Advisors

COVID-19 has thrown the multifamily industry into a tailspin. With local cities empowering renters to not pay rent during the emergency period and giving them six to twelve months, and maybe longer, to pay back deferred rent, owners are finding themselves in a tough spot and struggling financially. They now have less money coming in but almost the same amount of expenses going out.

As a property manager, my clients call me daily asking what can they do? The truth is there is very little they can do in relation to the renter non-payment other than work with then in line with the local jurisdiction’s  ordinance or Governor’s Order.  However, there are other options such reducing operating cost, prioritizing bills, asking lenders for mortgage deferment or forbearance, and now with the recent passage by Congress of the CARES Act, looking at possible Small Business Administration (SBA) Loans available during an emergency like this. Out of the four options listed above, we are going to give a brief overview of the two SBA Loans: Economic Injury Disaster Loan Program (EIDL) and Paycheck Protection Program (PPP)

Tips for Collecting Early and On-Time Rent Payments

by SherRon Marcek | PayRent.com

Late rent payments are a costly and pesky problem for many landlords. Aside from adding late fees, which may further delay payment, here are some positive strategies to help you collect rent on-time and keep you from pulling out your hair.

1-Report Payments to Credit Bureaus

Reporting rent payments will not only boost on-time payments, but it will also reward good tenants who are trying to improve their credit scores.  There are multiple services you can use to report payments to the credit bureaus, such as Rental Kharma or  Rent Reporters.

2- Make rent payments automatic

Eliminate the human error aspect of getting paid on time and have your renters signup for automatic payments. In a recent renter’s survey, PayRent found that 4 out of 10 renters actually prefer to automatically schedule their rent payments. They cited convenience as their primary motivator. To get more renters on-board, you could offer a discount for enrollment.

3- Accept credit card payments

Since rent due dates and paychecks don’t always line up the availability of money can delay rent payments. Give your tenant some wiggle room by allowing them to pay rent with a credit card. You’ll collect rent on-time and they won’t have to worry about expensive late fees or bouncing a check. 

Prediction For 2030: A Government Take Over Of Rental Housing

(This is Part 1 in a Series)

By Roger Valdez

Keeping a resolution is difficult and so is making an accurate prediction about the year ahead; I tend to avoid doing both at the New Year. But I have a prediction about housing. The United States may see the nationalization of private rental housing by the end of this decade. Through apparently disparate and incremental steps, housing is becoming the new health care, the subject of fundamental debate about whether everyone should have access to it regardless of ability to pay. The ideological and economic implications of this debate are no less consequential to our future; will we become a socialist country or will we keep a free market.

What do I mean by “nationalization” of housing? I mean that by 2030 we could see a housing economy in which federal, state, and local government set such limits on rental housing – its financing, development, and management – that, in effect, government will own and operate most rental housing in the United States. But isn’t this a drastic assessment or hyperbole? Here is why I think it isn’t.

Opportunities to Challenge California’s Rent Control Ordinances Under the Fifth Amendment’s Takings Clause under the U.S. Constitution

By Frank A. Weiser, Esq.

On October 8, 2019, Governor Gavin Newsom signed Assembly Bill 1482 enacting rent control as a statewide measure in California.  Once the law goes into effect on January 1, 2020, the state will begin to regulate how much tenants’ rent can increase every year, limiting it to 5 percent, plus the regional rate of inflation. The rules, however, will vary for municipalities and local governments that already have rent control laws. Governor Newsom has stated that with Assembly Bill 1482, California will have the “nation’s strongest statewide renter protections.”

At the same time, property owners throughout the state are pushing back with new legal challenges to recently enacted rent control laws, including the state’s Assembly Bill 1482, on the basis of multiple constitutional challenges in federal district courts and in the United States Court of Appeals for the Ninth Circuit (“Ninth Circuit”). The challenges include claims that the government rent control regulations either unreasonably interfere with the economic value of a property in violation of the Just Compensation Clause of the Fifth Amendment Takings Clause of the United States Constitution or constitute, under some tenant relocation fee payment laws, “private takings” of property in violation of the Public Use Clause of the Fifth Amendment Takings Clause of the United States Constitution.