AB 2219 adds Section 1947.3 to the Civil Code to create new requirements for the form of tender of rent payments, landlord’s rights when tenants bounce checks, and the ability of tenants to pay via third parties. This last change is a rent-control red flag, but Section 1947.3 includes requirements to protect landlords from creating new rent controlled tenancies at the historic rental rate of another tenant.
First, a landlord must accept rent in at least one form that is neither cash nor EFT. Second, if the tenant bounces a check, a landlord can require payment in cash for up to three months (provided that they change the terms of tenancy formally, if this is not already in the lease).
Ostensibly to allow greater flexibility for tenants (but with little legislative history to suggest this is a significant concern), a landlord must now accept rent from a third party, at the tenant’s election. The mechanics of this call to mind the classic waiver trap of a subsequent occupant trying to pay rent to her master tenant’s landlord to directly establish a rent controlled tenancy. However, the landlord is only required to accept payment from a third party who is not a “tenant”. The landlord may (and really should) have the third party sign an acknowledgement that includes the following:
I, [insert name of third party], state as follows:
I am not currently a tenant of the premises located at [insert address of premises].
I acknowledge that acceptance of the rent payment I am offering for the premises does not create a new tenancy.
(signature of third party) _____
These new rules do not require a landlord to accept rent after a “three-day notice to pay or quit” has expired. They also do not require a landlord to enter a public housing contact with a Section 8 tenant. However, San Francisco landlords should be cautioned that explicitly refusing to enter such an agreement may now be actionable.
SF Gate reports on the defeat of Prop. 10 at the ballot. The measure to repeal the Costa-Hawkins Rental Housing Act “fell behind early and continued to trail by a margin of about 65 percent to 35 percent throughout the night”.
Proposition 10 followed AB 1506 (2017), a legislative attempt at repeal, which failed to get out of committee.
For now, cities remain capable of implementing new rent control ordinances. However, Costa-Hawkins will continue to limit the extent of local price controls (as cities cannot impose price ceilings on “new construction”, apply “strict” vacancy control to empty units, or extend rent control to new tenancies in single family homes and condominiums).
Assemblymember Chiu’s AB 2343 is signed into law, extending three important deadlines in the unlawful detainer statutes by excluding “Saturdays, Sundays and judicial holidays”. Effective September 1, 2019, both three day notices to pay rent or quit and three day notices to cure breach or quit will no longer include these “off days” in calculating their deadlines.
Under current law, a notice served on a Wednesday would count Thursday (day 1) and Friday (day 2), however, they cannot expire on a holiday/weekend, so the “third” day would be Monday. At least with payment of rent, this rule makes sense, because a tenant may need to go to a bank to obtain funds. (Still, this calendaring has arguably led to confusion and harsh results for some.)
The amended unlawful detainer statutes will also exclude these off days when counting the response date to the unlawful detainer five-day summons.
The Chronicle reports that Senator Scott Wiener’s SB 827 failed to receive the majority votes required to advance out of the Senate Transportation and Housing Committee this week.
The bill would have increased density and height limits for projects within half a mile of major transit hubs. (This would have significantly impacted San Francisco, given its dense transit lines.) The Chronicle notes that, having been the subject of much debate, “Wiener amended the bill twice since introducing it in January in hopes of getting it through its first committee. He lowered the allowable height of buildings from eight stories, made the implementation date 2021 instead of 2019, and included a minimum number of affordable units that projects would have to include . . . He also agreed to stipulate that any tenant forced to move because of a project approved under SB 827 could return to the property when it was finished, at the same monthly rent. The developer would have had to cover rental assistance during construction for up to 3½ years.”
Senator Wiener expressed an interest in making changes to the bill to introduce it in the 2019 legislative year
Assemblymember Bonta has introduced AB 2925, providing for “good cause” for evictions. Originally, this was stated to be a “just cause for eviction” measure. Currently, most “just causes” for eviction are implemented at the city level (with the exception of the Ellis Act). “Just cause” means that a tenant has a substantive defense to an eviction if the landlord did not serve the eviction notice/terminate the tenancy with an allowable “just cause” (like nonpayment of rent or the desire of the owner to move in).
The meaning of “good cause” is a bit more vague. The current text of the bill would add Section 1946.2 to the Civil Code, to read:
“A landlord shall not issue a notice to terminate a tenancy pursuant to Section 1946 or 1946.1 except upon good cause, as set forth with particularity in the notice. This section is in addition to, and does not supersede or preempt, any other state or local law requiring the showing of good cause prior to the termination of a tenancy.”
This would merely seem to reiterate a protection that tenants already have at the state level – a defense against retaliatory evictions. As the California Supreme Court put it: “The retaliatory eviction doctrine is founded on the premise that a landlord may normally evict a tenant for any reason or for no reason at all, but he may not evict for an improper reason”. (Barela v. Superior Court (1981) 30 Cal. 3d 244, 249.)
In 2009, the Second District issued the opinion Palmer/Sixth Street Properties, L.P. v. City of Los Angeles (2009) 175 Cal.App.4th 1396, which vindicated a Los Angeles developer’s challenge to the city’s development plan requiring “vacancy control” for new rental units built in a development project that would remove 60 units of low income housing. The developer contended that the ordinance was preempted by Costa-Hawkins and, that even though Costa-Hawkins did create a carve out where a city provides density bonuses, the developer was not even building to authorized density. The Palmer court noted that, “the issue is whether requiring Palmer’s involuntary compliance with section 11.C’s affordable housing requirements is hostile or inimical to Palmer’s right under the Costa–Hawkins Act to establish the initial rental rates for the project’s dwelling units. We conclude that it is”.
Effective January 1, 2018, AB 1505, referred to as the “Palmer fix”, now authorizes cities to adopt ordinances that require, as a condition of development, that the development include a certain percentage of below-market rate rental units (or alternatives for in-lieu fees or off-site units).
San Francisco has had density bonus “accessory dwelling unit” ordinances, that provide property owners to exceed density limits in adding additional units, on the condition that they record agreements to subject the units to the Rent Ordinance. In response to AB 1505, the Board of Supervisors is also working on implementing the Palmer fix at the local level, with several changes to the Planning Code to amend the Inclusionary Housing Ordinance.