Division Four Disagrees with Delta Imports: Could Borsuk Lead to the Death of the Delta Motion?

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“The question is whether the tenant may challenge the landlord’s alleged failure to comply with this requirement by moving to quash service of summons under section 418.10. We conclude that the tenant may not, and in doing so we disagree with the leading case on the point, Delta [Imports v. Municipal Court].”

On November 23, 2015, Division Four of the Second Appellate District interpreted a long-standing doctrinal procedure for attacking an unlawful detainer complaint: Borsuk v. Appellate Division of the Superior Court of Los Angeles County (2015) 242 Cal.App.4th 607 has the potential to eliminate the “Delta Motion” and change how unlawful detainer actions are litigated.

Continue reading “Division Four Disagrees with Delta Imports: Could Borsuk Lead to the Death of the Delta Motion?”

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Oakland Considering Expanding Required Ellis Relocation Payments

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The East Bay Express reports on the Oakland City Counsel’s proposed amendment to the rent ordinance, which would expand the payment of relocation assistance when tenants are displaced by the Ellis Act. Currently, only low income tenants receive relocation assistance of roughly $8,000 per unit (plus $2,500 for homes with minors, seniors and disabled tenants). The amendment would expand this payment to apply to all displaced tenants, regardless of income level.

This expansion would track a 2003 amendment to the Ellis Act. As the First District Court of Appeals noted, in the case Pieri v. City and County of San Francisco, this amendment removed the limitation that these payments only be given to low income tenants. In that case, the Pieri court upheld a San Francisco ordinance, similarly expanding the required relocation payments to all tenants displaced by the Ellis Act, finding the amount of that payment “reasonable”.

And, while there are certainly limits on what constitutes a “reasonable” relocation payment, the East Bay Express notes that the legislative intent is to allow “displaced renters cover the first and last month’s rent for new apartments . . . and help with other fees and expenses associated with moving in to a new place”. Where Oakland is now the fourth most expensive rental market in the country, these dollar amounts seem to stand a good chance of being “Pieri reasonable”.

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San Francisco Rent Prices “Only” Increased by 4.5% in 2015 (Zumper)

Zumper reports that San Francisco prices increased 4.5% in 2015. While this means that the most expensive housing market in the country got even more expensive, after a 13.5% increase in 2014, this may suggest that prices are approaching their limit – particularly given that prices went down in November of this year.

Zumper also notes that a few neighborhoods in San Francisco actually saw price drops this year.

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Supervisor Peskin Aims for Costa-Hawkins Reform To Effect Local Rent Control Changes

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The San Francisco Business Times reports on newly elected Supervisor Aaron Peskin’s plan to reform rent control by amending state law (i.e., Costa-Hawkins). While a broader affordable housing agenda has developers keying certain sales to income levels, cities generally cannot require property owners to dedicate new construction to rent ceilings because of preemption by Costa-Hawkins.

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San Francisco Average Rent Prices Go… Down?

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Zumper.com reports that the average cost of a one-bedroom apartment in San Francisco actually dropped to $3,500 in November of 2015, from an all time high of $3,670 in October. Also noteworthy in the report is that Oakland became the fourth most expensive rental market in the country for the first time.

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San Francisco Legislative Update (Archives): Affordable Housing Priority

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Chapter 47 of the San Francisco Administrative Code provides for affordable housing unit priority for various categories of tenants. Originally, the stock of affordable units was allocated to applicants who obtained “Certificates of Preference”.

In 2013, San Francisco enacted Ordinance 277-13, which added a category for tenants displaced by the Ellis Act. In 2015, the City enacted Ordinance 204-15, which included tenants displaced by owner move-in evictions under Section 37.9(a)(8) of the Rent Ordinance.

Currently, the Board of Supervisors is evaluating adding another category for people who live or work in San Francisco.

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Parties in Boston, LLC v. Juarez Go To Trial Over Curable Breach; Appellate Division of Los Angeles Superior Court Praises Plaintiff for Being “Technically Correct”.

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“Given the statutory basis of unlawful detainer law, parties must comply with the statutes, including the time periods specified therein, with exactitude”.

In Boston, LLC v. Juarez (2015) 240 Cal. App. 4th Supp. 28, the Appellate Division of the Los Angeles Superior Court explores the application of a “forfeiture clause” in a residential lease.

Defendant Juan Juarez was a tenant of a residential unit covered by the Los Angeles Rent Stabilization Ordinance, who first moved in under a 1999 lease. That lease had two provisions relevant to the dispute: one required that he obtain renters insurance (which he didn’t do). Another stated that all lease covenants were “material”. (This means that instead of having a jury decide the materiality of a breach, the court can just decide – yes or no – if there was a breach.)

There are several important defenses available in an unlawful detainer action based on breach of a lease covenant. (For example, where the defendant had been in possession for a decade and a half, waiver is the most obvious choice.) And, while this lease also had an anti-waiver clause, the court declined to explore waiver of the anti-waiver clause, as the defendant had not adequately preserved the argument for appeal.

The court did opine that “unconscionability/adhesion” might have been an effective defense, were it raised. But then it moved on to explain how interpretation of statutes and contracts are a matter of law, how clear and explicit lease provisions govern, and how, if a lease has a “forfeiture clause”, the materiality of the breach is irrelevant. The dispute becomes a binary issue of law: did the defendant breach the provision or not.

The defendant’s main defense concerned substantial performance: where the breached provision of the lease required him to obtain renters insurance, and he obtained it seven days after receiving a three day notice, that should be considered “close enough” to cure the notice. The appellate division correctly pointed out that “substantial compliance” would only be relevant in measuring performance in the context of an uncurable breach (unlike this provision, where he easily could have obtained renters insurance within the three day notice period). Moreover, there is no basis in law to suggest that a tenant is allowed to comply with a three day notice in seven days, as this would somewhat defeat the point of having a statutory time period for unlawful detainer notices.

Boston, LLC v. Juarez will be satisfying for those who have had the frustrating experience of being technically correct but advised against proceeding on the merits. Given the cost of litigation and the chance of losing, this kind of case most often results in a private settlement agreement where the tenant does better than a complete forfeiture of their rights. Further, a tenant can generally obtain relief from forfeiture – even after an adverse judgment – if they are capable of curing the breach and making the plaintiff whole. Where this tenant actually had cured the breach (and before he even had to respond to the complaint), it is unusual that this case would have fully litigated.

In San Francisco, this outcome is all the less likely, following the new Jane Kim Amendment to the San Francisco Rent Ordinance. The Rent Ordinance now requires that, where a lawsuit is based on violation of a lease covenant, the violation must be “substantial”. This would likely thrust such a controversy back into the purview of a jury, “forfeiture clause” notwithstanding. At the very least, Boston, LLC v. Juarez tells us definitively that a three day notice is not a seven day notice (unless of course you serve it on the Monday before Thanksgiving).

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