March 8, 2022 AB2557 was shelved that would have prohibited using any report to determine prospective applicants from qualifying for vacant rental homes in California. For a look a the bill more closely, click here.
Public Policy Update March 2021 Legislative Update The deadline to introduce legislation was February 19th and committee hearings are now underway. In fact, the Senate waived the 30-day in print rule so that bills can be heard immediately. Below, please find several key pieces of legislation that CalRHA will be working on this year. The deadline to amend spot bills in the Senate is March 10th and in the Assembly is March 15th.
AB 854 (Lee) - Ellis Act/Withdrawal of Accommodations Although still in spot bill format, we anticipate that AB 854 will be a problematic bill and will likely engage in opposition on behalf of CalRHA members.
AB 838 (Friedman) - Enforcement of Complaints This bill would, beginning July 1, 2021, require a city or county that receives a complaint of a substandard building or a lead hazard violation, as described above, from a tenant, resident, or occupant, or an agent of a tenant, resident, or occupant, except as specified, to inspect the building, portion of the building intended for human occupancy, or premises of the building, document the lead hazard violations that would be discovered based upon a reasonably competent and diligent visual inspection of the property and identify any building, portion of a building intended for human occupancy, or premises on which such a building is located that is determined to be substandard.
AB 916 (Salas) - ADU and Bedroom Streamlining CalRHA’s sponsored bill would alleviate burdens to ADU creation and incremental increases to density in existing housing within the state and create more housing for low-income residents. Specifically, this bill will increase the height limitation from 16 to 20 feet for ADUs. It will clearly define detached units as an ADU built anywhere outside of the existing structure envelope even if they share a wall. Finally, the legislation would create parity for new bedrooms with new ADUs and Junior ADUs, which are already exempt from the public hearing process.
AB 1188 (Wicks) - Rent Registry Although, this bill has been defeated for several years in a row, Assemblymember Wicks has reintroduced her rent registry bill. However, instead of the state administering the rent registry, this time the bill would require cities and counties to create and administer a rental registry online portal, which would be designed to receive specified information from landlords, including state and local governmental agencies that own or operate public housing, that own or operate 5 or more rental dwelling units regarding their residential tenancies and to disseminate this information to the general public. The bill would require that the rental registry online portal, and the form necessary to support it, be completed by January 1, 2024. The bill would require landlords, under penalty of perjury, to provide a variety of information regarding the location of rental property, its ownership, and its occupancy, among other things.
AB 1199 (Gipson) - Homes for Families and Corporate Monopoly Transparency Excise Tax AB 1199 would require specified rental property providers to report annually to the Secretary of State and would require the Secretary of State to create a searchable database, updated annually, on the Secretary of State’s internet website, with the information provided by the qualified entity. AB 1199 would also impose an annual excise tax upon a qualified taxpayer, as defined, for the privilege of renting or leasing out qualified property, as defined, in this state at an unspecified rate based on the gross receipts of the qualified taxpayer that are derived from rental income. The bill would require the California Department of Tax and Fee Administration to collect the tax pursuant to the Fee Collection Procedures Law and would require all amounts collected, less refunds and administrative costs, to be deposited in the Homes for Families Fund, which the bill would create. Rent Assistance Update CalRHA continues to advocate for streamlined rent assistance in the state.
The Housing and Community Development Department has secured vendors in order to have an online application process available beginning March 15th. For additional information, please visit https://www.bcsh.ca.gov/ covidrelief/
Members present were Jerad Prevost, Bruce Smith, Sara George, David Wymore, Kim Higby, Jon Kressin, Adam Pearce, Jamie Fallowfield and Jennifer Morris. The committee is looking at which goals and what to focus on in 2021 that will help make the community a better place to live for everyone.
Chico City Council’s primary focus was on sheltering homeless and affordable housing. Oroville council is working on fire and police. Butte County Board of Supervisors are discussing FEMA trailers and Rental Assistant funds ($13 million} that may be given to Butte County Housing Authority to manage. Legislative Bills are due by February 19, 2021. Bill Sheridan was asked about IREM and Co-Star and market reports. There will be discussions on market conditions, vacancies, real estate sales and building.
Landlord/Tenant Questions & Answers
Ted Kimball, Esq.
1. Question: I have a month-to-month rental agreement with a tenant and have given a 60-day notice to vacate. Since the service of the notice, the tenant has not paid the rent so I served him with a 3-day pay rent or quit notice. Did that void the 60-day notice?
Answer: The 3-day notice would not invalidate the 60-day notice unless you asked for rent that went beyond the 60-day period.
2. Question: The present rental agreement is for two tenants. One has passed away. Do I need to write a new rental agreement with the remaining tenant?
Answer: You are not required to write up a new lease, the current tenant is still responsible for the full rent and other lease terms.
3. Question: We rent our detached in-laws quarters in the back yard of our property. Can we specify in the “house rules” that no visitors are allowed on the property? Also, can we specify “no smoking” in or around the unit?
Answer: You could prohibit smoking, since it is a health and fire hazard. Restricting visitors would most likely violate the tenant’s constitutional rights of freedom of association.
4. Question: We have a tenant who gave us verbal notice to vacate the premises. How do we calculate the rent owed?
Answer: A verbal notice is of no legal effect. The time begins to run when the written notice was served.
5. Question: Can you require that a guarantor for a rental applicant own property or be on the title to real property?
Answer: Since you do not have to accept a guarantor, you can subject the guarantee to conditions such as requiring the guarantor to own property in California, and/or live in the city where the rental is located.
6. Question: I have tenants whose lease ends at the end of this month. Can I begin to show prospective tenants the unit while my current tenants are still under a lease?
Answer: You can show the property to prospective tenants at any time during the lease, upon giving reasonable written notice of intent to enter (24 hours is presumed reasonable under the law) and the entry is done during normal business hours.
7. Question: If one tenant moves from one unit to the other unit within one building, can I deduct the security deposit to cover the damages and fix up for the old unit, then ask them to redeposit the amount of money to make up the security deposit for the new unit?
Answer: Yes. In cases of transfer, in addition to leases or rental agreements for both the old and the new units, landlords may want to use a written transfer agreement to address issues that arise in transfers, such as termination of the old lease and the security deposit. As to the security deposit, landlords have two options: (1) transfer the security deposit from the old lease to the new lease (and specifying the tenant’s obligations if a portion of the security deposit needs to be applied to amounts due for the old unit) or (2) requiring the tenant to pay a new security deposit for the new unit.
8. Question: I have recently purchased a 20-unit apartment building. Must I have an apartment manager on site 24 hours a day, 7 days a week?
Answer: California law requires that you have a manager, janitor, housekeeper or other responsible person reside on the premises representing the ownership when there are 16 units or more. They do not have to be working 24/7.
9. Question: We had two tenants move out and deduct their security payments as a last month’s rent. We have accrued expenses for damages and cleaning. What can we do?
Answer: If you can locate the former tenants, you can sue them in small claims court to get a judgment which is valid for 10 years. As an alternative, you can turn the matter over to a collection law firm that is experienced in collections against former tenants.
10. Question: How long does an unlawful detainer judgment stay on the tenant’s record?
Answer: As with all judgments, it is valid for 10 years as far as collection goes, but the credit reporting agencies keep this information for seven years. The judgment also accrues interest at 10% per annum, and can be renewed for an additional 10 years.
11. Question: I represent an owner of several buildings who has a few tenants that are past due on their rent. Instead of evicting them, he is offering the tenants a payment plan, if they are willing to sign a promissory note detailing the arrangement. If the tenant defaults on the promissory note, will he have to start a new eviction proceeding with a 3-day notice?
Answer: If a tenant will remain in possession, instead of a promissory note, the landlord may wish to utilize a well-drafted payment plan agreement that specifies failure to pay will be a breach under the lease or rental agreement, allowing the landlord to pursue any remedies allowed by law, including (but not limited to) possession of the property and a money judgment through an unlawful detainer action.
Landlord/Tenant Questions & Answers
Ted Kimball, Esq.
1. Question: In our lease agreements we require tenant’s to pay their rent on the first of the month. If the first falls on a holiday, such as Labor Day, do you have to give the tenant’s until midnight on the second to pay the rent or can you still enforce the late fee as of midnight on the first?Answer: Rent is not delinquent unless one business day has expired from the date the rent is due. So if the first is a weekend or holiday, the rent is not late until after one business day has expired.
2. Question: I own a fourplex. Unit B has two cars, one is broken down. What kind of demands can I place on B about the broken down vehicle?
Answer: You can create a lease term by requiring all vehicles to be in operable condition or they will be towed. To put this into place, you need to either serve a thirty day notice of change of terms to a month to month agreement, or wait until the lease expires and have the new condition in the renewal lease.
3. Question: I rented a condominium unit to a couple on a year’s lease. After one month, they had to move out to take a job out of state. My daughter wants to move in and that’s all right but she will not be paying me rent. Does the tenant still owe me the rent for the lease?
Answer: Under California law, a tenant who vacates early is liable for the remainder of the lease period up until the time the premises are re-rented or otherwise taken back by the landlord. When your daughter moves in, the tenant is relieved from further payment.
4. Question: Can I bill my tenant for excessive water usage if I can prove they neglected to fix two leaky faucets for over three months?
Answer: Most rental agreements and California law require the tenant to maintain the premises in good condition and repair. Failure to meet their obligations would therefore be a breach of the lease and you should be able to recover all losses suffered, provided you have sufficient proof.
5. Question: New tenants moved in last month. The wife now wants me to take her name off the lease because she is moving out and getting a divorce. They agreed to a one-year lease. What can I do?
Answer: You are not legally required to release the wife from liability under the lease. If you do, and the husband is unable to pay or declares bankruptcy, you would not be able to pursue your losses from the wife.
6. Question: What can you do about a tenant being cruel to an animal such as keeping a large dog in small quarters outside with the dog crying in the rain, cold and heat?
Answer: You have a right to report any criminal or inhumane acts occurring on the rental property. If the mistreatment constitutes a crime, you could evict the tenant for carrying on illegal activity on the premises.
7. Question: Is a phone text an official written notice for a 30-Day Notice?
Answer: A 30-Day Notice must follow statutory requirements, and should be served in the same manner as a Notice to Pay Rent or Quit, personal, sub-service or post and mail, although service by certified mail is permitted by California law.
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.
© 2021 Kimball, Tirey and St. John LLP
By Jennifer Morris
1. Fully qualify your prospective applicants prior to approving and moving them in.
2. Take move in pictures and properly document the condition of the home at the beginning of the tenancy.
3. Communicate what the rights and responsibilities of both parties are.
4. Were maintenance issues dealt with in a timely manner?
5. Did you perform at least one interior inspection to check for preventative maintenance concerns, smoke and carbon monoxide inspections annually?
6. When notice of termination was given was an initial pre-move out inspection disclosure provided to allow the residents to know of the condition prior to moving in and what to prepare for at move out?
7. Did you perform the final move out inspection with the residents?
8. Did you itemize an accounting of the residents security deposit within the 21 days after receiving possession of the home?
9. Did you mail to the last known address and include receipts for charges against the deposit?
10. If you are saying no to any of the questions above please reach out to the NVPOA office at 530-345-1321 and let us point you in the right direction.
One of the many benefits of being a member of NVPOA is to be able to walk into our office, send an email, or call and run your current scenarios by either Chelsie or Jennifer. We hope you feel comfortable taking advantage of this support during your membership and please feel free to let others you know about this benefit as well. We are not attorney's but could most likely point you in the right direction and provide you with peace of mind. We know it can be scary not knowing what your rights or responsibilities are so just ask us. We are here to support you!