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

Question          I drove by my apartment building the other day and noticed that one of my tenants put up a satellite dish antenna, not just one, but three.  I just put a new roof on about a year ago. This tenant had the nerve to bolt them right through the new roofing shingles.  Looks terrible.   I’m concerned about water leakage, mold and possibly voiding my roof warranty.  Can they do that legally?

Answer                        No.  Your standard apartment association rental agreement most likely includes a provision prohibiting the tenant from making modifications or alterations to the premises without the landlord’s prior written consent.  The tenant is in breach of the agreement and most courts would agree that the breach is a curable one.  Depending upon the extent of the damage to the roof, the tenant’s conduct may rise to the level of waste, a non-curable breach.  You have at least two options. First, you may remove the satellite dish antenna from the exterior of your building and repair the damage.  You would then deduct the reasonable out of pocket costs from the tenant’s security deposit.  You can then demand reimbursement by serving a three-day notice to perform covenant or quit by demanding that the tenant replenish the security deposit for the amount charged.  A second option would be to serve a three-day notice to perform covenant or quit, by demanding that the tenant return the premises to their original condition by removing the satellite dish and repairing any and all damage to the building.  This option is not preferable because you do not want to instruct the resident to climb on your roof and perform the roof repair himself.  Under either scenario, you would be well advised to document the breach by taking pictures of the unauthorized satellite dishes and the damage that was caused by its installation.  Keep in mind, California law allows tenants to maintain a satellite dish antenna on their patios and balconies, within areas exclusively for the use of the tenant.  These do not, however, give the tenant the right to affix an antenna to your roof or install an antenna in the common areas.

Question          I just received the most curious letter.  Seems my local police department has identified one of my residents as an undesirable, they say he’s suspected of being in a gang and is dealing drugs.  They say that if I don’t evict him, the police will prosecute me for allowing a criminal to operate on my property.  I may even lose the property!  The family has been there for several years, other than a couple bounced checks they have been model tenants.  Help, I cannot afford a vacancy right now, what do I do?

Answer                        In this upside-down world we live in today, this is a growing trend in law enforcement.  Rather than prosecute the criminal, many law enforcement agencies are taking the lazy way out and threatening the law-abiding landlord, forcing them to evict the resident. Rather than locking up the bad guys, just shuffle them off to another community. If the police are certain he is dealing drugs, why isn’t he in the “gray bar hotel”?  If the letter you received is inconsistent with your experience with your resident, follow up with the police department by asking for documentation supporting their claim.  Have there been arrests on the property?  Have illegal drugs been found there?  Ask other residents in the building, gather independent information.  If the information you gather supports your resident’s involvement in criminal activity, act immediately.  Consult your attorney to determine if you have enough facts to support a three-day nuisance notice, or if a thirty day or a sixty-day notice is appropriate.  Remember, a letter from the police department is not enough evidence in court to base a nuisance notice on, testimony from percipient witnesses will be required.              

Question          I’ve been doing my own prospective resident screening for quite a while now.  I think I’m thorough, but I’m just not sure any more.  I’ve been noticing more and more inconsistencies in the applications I review, and I even came across one who out and out lied about who she was!   I’m concerned about all the stories I’ve heard about identity theft.  I just can’t afford to make a mistake.  What can I do to weed out these undesirables and minimize my chances of being fooled?

Answer                        Identity theft has been a growing problem for several years.  Landlords have increasingly been victimized by prospects posing as someone else, using false or fraudulent information.  Often these thieves take advantage of a desperate landlord, eager to fill a vacancy, or a newbie landlord, who hasn’t gone through the school of hard knocks yet.  Completed and signed applications by all adults are a must.  Verify the information provided.  Personally, inspect some form of U.S. government issued photo identification.  Take a photo copy of the ID and keep it secured with your file.  Verify that the social security or the tax ID number provided by the prospect is his number and is valid.  Run and thoroughly review, an eviction and credit check through your apartment association.  If practical, go outside to the prospect’s vehicle, and verify that the license number on the car he just drove, matches the license number he just wrote down on the rental application.  Many ‘hands on’ owners will visit the prospect’s current residence unannounced, prior to approval to ensure the prospect lives there, and doesn’t just sleep on the couch.  You’d be amazed at what you will learn by a simple visit.  Inform all prospective applicants that you have a policy of taking a picture of all residents for the tenancy file.  Follow through with this policy and take a picture of all proposed occupants and keep the picture in your tenancy records. When verifying employment, and residency, ask for a description of the person, and compare the description with the person who filled out the application.  Ask for original utility bills, electric, telephone, cell phone, cable, anything with his name on it.  All of these are tools that may be used in proper screening to avoid renting to an identity thief.  Use these tools consistently, and apply them equally to all applicants, and your risk will be dramatically reduced.

Question          I’m getting conflicting advice about whether I must rent to some one that does not have a valid social security number, nor an official picture ID.  Seems like most of the attorneys and the Fair Housing guys say I ‘cannot discriminate’ and that I must rent to all, regardless of whether or not the prospect can prove who he is, or verify his tenancy history, or his ability to pay the rent.  I have been following that advice for years, and now have a building full of undocumented people, that I could never find in a million years if I ever had to collect from them.  The rent usually gets paid, but the building, and the neighborhood, look like hell.  I want to take my building back, and only rent to persons that qualify, that have verifiable identities and credit, and are good credit risks.  What are my rights?

Answer                        The dirty little secret is that our industry has passively allowed this erosion to occur over many years.  Many landlords have looked the other way, in favor of the quick rental, the cash payments, the full building, the reduced confrontation, we’ve taken the easy way out.  Landlords have been wary of lawsuits claiming discrimination and have believed the bullying taunts and threats from the tenant and immigrant rights activists, that we have just taken the easier and less confrontational course of allowing it to happen.  We blame our government for not addressing the illegal immigration issue; one side of the aisle wanting cheap labor, the other wanting cheap votes.  We blame employers for hiring, and our ‘welfare state’ for creating the magnet that keeps drawing.  Landlords are part of the problem as well. By succumbing to the short-term temptation of the quick rental to the unverified, the undocumented, we are contributing to the problem.  Many landlords are realizing that rather than just complaining, they can be a part of the solution.  Landlords have absolutely no obligation whatsoever to rent to an individual who is unable to independently verify his identity, his past tenant history, and his ability to comply with the terms of the rental agreement, including his financial ability to pay the rent.  Our system of society is built around a numeric social security or tax ID number.  Our life history, good and bad, is reported more often than not, into a data base that is organized by, and sorted by the social security number.  Names are common, but social security numbers are unique.  No two people should share the same number.  Credit as well as criminal convictions are reported similarly.  These very basic requirements should be applied uniformly to all applicants, regardless of race, national origin or ethnicity.  It is just good business sense.  With average rents over $1600 a month, landlord investment of $200,000 or more per rental unit, and a litigation climate that is out of control, landlords must know who their residents are, must reduce their risk of financial loss and must know how to recover from a breaching resident.

This article is presented in a general nature to address typical landlord tenant legal issues.  Specific inquiries regarding a specific situation should be addressed to your attorney.  Stephen C. Duringer is the founder of The Duringer Law Group, PLC, one of the largest and most experienced landlord tenant law firms in the country. The firm has successfully handled over 285,000 landlord tenant matters throughout California and has collected over $200,000,000 in debt since 1988. The firm may be reached at 714.279.1100 or 800.829.6994.  Please visit www.DuringerLaw.com for more information.                                     

Widget’s Way featuring Patti “Widget”

There are so many moving parts to managing an investment property. One of the more challenging items to address when creating your rental agreement is trying to figure out what the amount of the late fee should be. The reason for a late fee is not to make money. The reason for a late fee is a deterrent from paying the rent late.

There is no state law that specifically addresses late fees, and courts vary in their rulings on late fees.  Take note that a late fee cannot be charged unless it is established and executed in a written rental agreement.  So if you have an oral rental agreement you can’t collect a late fee.

The industry standard for late fees seems to be 10% of the monthly rent.  The Department of Fair Housing states that 6% of the monthly rent is the best practice. I am going to guess that everyone in this industry you ask will give you a different answer.

I know that I am not giving you a rock solid answer either and that is because there is not one.  I can share with you that more recently courts in the Los Angeles rent control areas late rent fees are being challenged in an unlawful detainer trial. Stating there is no merit to the fee and it is gouging the resident. Landlords can be asked to prove the actual expense incurred by the owner associated with the fee.  So if your rent is $2500.00 a month and your late fee is 10 % or  $250.00 and the late fee on your mortgage is $35.00 how do you explain the $215.00 charge to the tenant?

When setting your late try to remember that this is a deterrent from paying the rent late. So you don’t want to make it to low, you need to figure out the balance so that it does the job. You also don’t want a daily rental late fee that’s just a recipe for disaster, make it a set fee that applies on a certain date and avoid all the unnecessary calculations. There is too much room for a human error using a daily late fee amount.

When you are attempting to collect the late or need to enforce payment of a late fee it does have a process and procedure.  A three day curable breach of covenant or aka three day notice to perform covenant or quit (they are the same document) is the correct notice to use to address this issue.  You would reference the paragraph of the rental agreement that defines the rules regarding the late fee and then reference the time period for which the late fee is owed and the total of those fees in the event we are asking for multiple months of late fees.

You cannot put late fees on a three day notice to pay rent or quit.  That type of notice is for rent only and if you put late fees on that notice it voids the notice and makes your eviction case invalid. So please don’t do that! Even if your rental agreement states that all past due balances become rent, you should not put late fees on a 3 day notice to pay rent or quit for residential dwellings. It can completely destroy a court case.

The three day curable breach of covenant is the same notice that you use for a violation of the written rental agreement, unauthorized occupants, unauthorized modifications to the property, unauthorized pets etc.

In the event that the tenant doesn’t comply with the notice after the three days are up then contact your legal counsel for the further direction.  Your attorney may say to start an eviction or advise you to serve a second time to show the court you even asked twice. Again the next step is up to your attorney.

Patti “Widget” is the marketing director for Fast Evict.com Law Group. She has 22 years’ experience as a regional property manager. Patti teaches several training classes, and has published articles for various apartment associations.

by Jamie Sternberg, Esq.

Kimball, Tirey & St. John LLP

May 2019

Recent changes to Proposition 65’s safe harbor warning guidelines may impact residential landlords.

• Effective July 1, 2019, new Sections 25607.34 and 25607.35 will become effective. They require Proposition 65 warnings be provided to new tenants and other adult occupants (and again each year during the tenancy). The warnings must be in a specific format (which is new) and delivered in specific ways.
• Additionally, effective August 30, 2018, new warning signs were required to be posted in:
  • enclosed parking facilities; and
  • designated smoking areas.

California residential landlords should discontinue Prop. 65 signage and/or lease language that they previously utilized, and instead follow the safe harbor warnings specified in the new safe harbor warning guidelines.

Background

California requires businesses with ten or more employees to warn employees and the public regarding potential exposures to chemicals known to cause cancer, birth defects, or other reproductive harm. The California Office of Environmental Health Hazard Assessment (OEHHA) maintains and updates a list of chemicals requiring warnings. There are hundreds of chemicals on the list, available at https://oehha.ca.gov/proposition-65/proposition-65-list. Some of the Prop. 65 chemicals are contained in items common in residential buildings, such as automotive exhaust, building materials, fireplaces, tobacco smoke, and vinyl miniblinds manufactured before 1997.

Violating businesses can be fined up to $2,500 per day per violation.

Additional Resources:

• Notice of Amendment to Article 6, Clear and Reasonable Warnings Residential Rental Property Exposure Warnings
•  Initial Statement of Reasons, Amendments to Article 6, New Sections 25607.34 and 25607.35
• Final Statement of Reasons, Amendments to Article 6, New Sections 25607.34 and 25607.35

 Any questions may be directed to Jamie Sternberg at (619) 744-0863 or jamie.sternberg@kts-law.com.

Kimball, Tirey & St. John LLP is a full service real estate law firm representing residential and commercial property owners and managers. This article is for general information purposes only. While KTS provides clients with information on legislative changes, our courtesy notifications are not meant to be exhaustive and do not take the place of legislative services or membership in trade associations. Our legal alerts are provided on selected topics and should not be relied upon as a complete report of all new changes of local, state, and federal laws affecting property owners and managers. Laws may have changed since this article was published.  Before acting, be sure to receive legal advice from our office. For contact information, please visit our website:  www.kts-law.com.  For past Legal Alerts, Questions & Answers and Legal Articles, please consult the resource section of our website.

                                                       © 2019 Kimball, Tirey and St. John LLP

By Daniel Bornstein, Esq.

Bornstein Law warned the rental property industry that the defeat of Costa-Hawkins repeal would by no means deflate resilient tenant advocates who would surely bring their agenda to local municipalities, and if statewide rent control was too ambitious, owner rights would be chipped away in piecemeal, as if watching a candle slowly melt away.

By all accounts, our predictions have come to pass, but this agenda has now taken a turn by an inventive movement to unionize tenants, and this perversion of labor law is gaining steam in California’s statehouse.

In an earlier article that surveyed many proposals by tenant advocates that are advancing under the dome of the Capitol, we chimed in on SB 529, dubbed the “Tenant associations: eviction for cause: withholding payment of rent.” This measure would allow tenants to withhold rent payments in protest when rent hikes exceed the rate of inflation.

The bill’s author, Sen. Maria Elena Durazo (D-Los Angeles) says that rent increases qualifies as a “grievance” to go on a rent strike with impunity. In essence, the legislation would insulate protesting tenants from eviction, so long as the nonpayment of rent is part of a peaceful assembly.

Sen. Durazo is well versed in labor law, with deep experience in union work that propelled her to a senior role with the Los Angeles County Federation of Labor, AFL-CIO. Her distinguished service on the National AFL-CIO Executive Council should be recognized.

During the Labor Day holiday weekend, Bornstein Law has made it a longtime tradition on social media to pay homage to labor leaders who have advocated for safety and the fair treatment of workers, so we, for one, applaud the progress made in the storied history of organized labor.

What leaves us scratching our heads in the abstract is how hard-fought protections of workers can be extended in any stretch of the imagination to the unionization of tenants who have entered into a rental agreement. Even more disturbing, though, is the prospect of a landlord losing rental income in a process whereby tenants can simply come together in a smoke-filled room and allege a grievance or complaint without any due process or requirement that deferred rent is actually owed to a landlord’s breach of the rental agreement or violation of the law.

SB 529 would create a hardship for rental property owners not based on the merits of the dispute or the transgressions of the landlord, but on the ability for disgruntled tenants to form a mob to level grievances about the owner, however unfounded or undebated, and take the law into their own hands to deny rent.

One of our followers astutely noted that rental housing providers cannot protest their mortgage, another poses the question of why developers would build more housing if the measure is passed, and yet another observer likened the proposal to thievery.

Undoubtedly, there are some actual wrongs that can be righted based on legitimate grievances, and we have said in many venues that while there are always some bad apples, we operate on the working presumption there are good landlords and bad landlords and in like fashion, there are good tenants and bad tenants.

Yet, there are already mechanisms in place to arbitrate who are good or bad actors, in a more thoughtful, deliberate process. Tenants have the prerogative under state law to withhold rent so long as they follow the procedures in Civil Code 1942. Tenants have the unfettered right to form an association without any restriction from the state. Tenants certainly have many venues to air out grievances to housing situations, whether by seeking help from housing departments, a phalanx of housing inspectors, mediation programs, rent boards, or the courts, as the California Apartment Association has pointed out in this letter opposing the bill.

This requirement will lead to significantly higher rents and put good tenants in danger by making it extremely difficult to remove bad tenants who are engaged in illegal and nuisance activity.

~ CAA

We are encouraged that the latest iteration of legislation to institute statewide rent control has stalled, but as we said in our introduction, there will be more insidious means to advance the tenants’ rights agenda, and SB 529 is a case in point.

Tenants have no right to vote among themselves to withhold rent based on an alleged and undefined grievance they have with the landlord, and we trust that no such misplaced right is afforded with new laws. Just as with labor laws that protect not just workers but employers as well, landlords should have some protections in a balancing act.

There are many layers of safeguards for tenants, and we should trust that these institutions will correct any grievances. Let the system work without holding rent hostage.

More than a practitioner in landlord-tenant law, Daniel Bornstein is the Broker of Record for Bay Property Group, a property management company that protects and optimizes the investments of landlords. He is also renowned for his educational seminars and is called upon as an expert witness in complex real estate litigation matters. To avoid or resolve friction within rental units and cauterize risk, Daniel is happy to dispense informed advice to owners, property managers, and other real estate professionals looking to survive and thrive in today’s challenging and litigious rental housing market. Call 415-409-7611 or email daniel@bornstein.law. ​

For additional insights and legal news germane to Bay Area rental housing providers, subscribe to our email list or follow us on Facebook.

LOS ANGELES, May 23, 2019 — With Memorial Day just around the corner, it is just about time to light up the grill, pack up the family van and take advantage of another sunny California summer. To make sure that everyone gets to enjoy a worry-free season, the American Red Cross has some safety tips to keep you going all summer long.

WATER SAFETY

Before going in, on or around the water, every family member should become “water smart.” This starts with learning to be safe, making good choices and achieving basic water competency skills. Everyone should be able to enter the water, get a breath, stay afloat, change position, swim a distance and then get out of the water safely. A variety of water safety courses and resources are available at redcross.org/watersafety.

1. Prevent unsupervised access to water. Fence pools and spas with adequate barriers, keep a constant eye for any water dangers such as portable splash pools/slides, buckets and bathtubs.
2. Adults should actively supervise children and stay within arm’s reach of young children and new swimmers. Kids need to follow the rules.
3. Always wear a U.S. Coast Guard-approved life jacket when on a boat and if in a situation beyond someone’s skill level.
4. Swim as a pair near a lifeguard’s chair – everyone, including experienced swimmers, should swim with a buddy in areas protected by lifeguards. Designate a ‘Water Watcher’ to keep a close eye and constant attention on children and weaker swimmers in and around the water until the next Water Watcher takes over.
5. Download the Red Cross Swim App for kid-friendly games and activities and water safety information for parents and caregivers of young people learning how to swim. Download the app for free by searching for “American Red Cross” in your app store or at redcross.org/apps.

GRILLING SAFETY A recent Red Cross survey showed three-in-five adults have walked away from a grill while cooking, which is one of the leading causes of grilling fires. Grilling fires cause more than 9,000 home fires on average each year. To avoid this, the Red Cross offers these grilling safety tips:

1. Always supervise a barbecue grill when in use. Don’t add charcoal starter fluid when coals have already been ignited.
2. Never grill indoors – not in the house, camper, tent or any enclosed area.
3. Make sure everyone, including pets, stays away from the grill.
4. Keep the grill out in the open, away from the house, deck, tree branches or anything that could catch fire. 
5. Use the long-handled tools especially made for cooking on the grill to help keep the chef safe.

BE SAFE IN A CROWD 

If summer plans include places where crowds may gather, such as at an amusement park or concert, people can expect to wait in lines and possibly face extra security measures, along with the possibility of getting separated from their group. The Red Cross has safety steps to follow:

1. Have a few different methods to communicate – cell phone, tablet, calling card for a landline phone. Stay with the group – don’t go off alone. All adults should have a cell phone and exchange numbers with the others in the group. Plan where to meet should someone become separated.
2. Find out what is allowed when it comes to items such as coolers, backpacks, etc. to avoid having to throw them away.
3. Dress appropriately and in layers to be ready for any change in the weather. Stay hydrated. Apply sunscreen regularly.
4. Watch the weather and seek shelter if any severe weather warnings are issued. Know where the exits and shelters are.
5. Be on the lookout for suspicious activity and don’t be afraid to report suspicious people or packages.

Accidents and Emergencies Happen

The Red Cross has several resources to help people learn how to treat bee stings, burns and heat emergencies including training courses (redcross.org/takeaclass), a free First Aid App and a First Aid Skill for Amazon Alexa-enabled devices. 

Right now, the Red Cross has a critical shortage of type O blood – the most needed blood type in the hospital. Type O negative is the universal blood type and what emergency room personal reach for in the most serious situations when there is not time to determine a patient’s blood type. Donors are encouraged to schedule a blood donation appointment today by using the Blood Donor App, by visiting RedCrossBlood.org, or calling 1-800-RED CROSS. Individuals can also open the Red Cross Blood skill on an Alexa-enabled device with a selection of prompts such as, “Alexa, open Red Cross Blood Skill” and ask, for example, “Alexa, find a blood drive.”

About the American Red Cross:

The American Red Cross shelters, feeds and provides emotional support to victims of disasters; supplies about 40 percent of the nation’s blood; teaches skills that save lives; provides international humanitarian aid; and supports military members and their families. The Red Cross is a not-for-profit organization that depends on volunteers and the generosity of the American public to perform its mission. For more information, please visit redcross.orgorcruzrojaamericana.org, or visit us on Twitter at @RedCrossLA or@CruzRojaLA.

by Becky Bower

The first quarter of 2019 has been exceptionally busy for legislators drafting acts, bills, and ordinances intended that would have impacts on the rental housing industry. From the increasing congressional popularity of “Just Cause” evictions laws and rent control, to the implementation of a statewide rental registry – take a few moments to update yourself on what’s new and pending in California legislation.

California’s 2019 state legislative session has a projected end date of September 13, 2019. Keep in mind that this state has full-time legislators, allowing the legislature to meet throughout the year after adjourning their regularly scheduled sessions. Most of the state pending bills are still in Committee.

by Nick Schoch

Should you write-off almost anything? Maybe not if you want to refinance your property and get access to your hard-earned equity. Consider that for every $1 reduction in reportable income, you could decrease your potential loan amount by $11-13.

By Elaine Simpson

Typical emergency situations, in property management lingo, cover “fire, flood or blood”.  Take a look at the headlines this month and most of our country has suffered from some type of disaster or emergency situation: wildfires, hurricane caused high winds and flooding, earthquakes, tornadoes, bomb threats, renegade shooters, and the list goes on.  One of the duties of a property management company and its staff is to have a contingency plan in case of an emergency situation.