California Legislative Update (2018): AB 721: Enhanced Safety Regulations for Residential Balconies

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Following the tragic 2015 balcony collapse in Berkeley, which killed six students, California addressed concerns over similar safety issues in other buildings, adopting amendments to the Health and Safety Code requiring owners to inspect for structural soundness, no later than January 1, 2025, and every six years thereafter. AB 721 applies to buildings with 3 or more multifamily dwelling units.

The bill also amends Civil Code §1954 to include inspection of balconies among the reasons a landlord is permitted to inspect a rental unit.

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Legal Q&A: How Do I Lawfully Access My Tenant’s Unit

A. How Do I Lawfully Access My Tenant’s Unit?

Q. Even though this is your building, as soon as you lease it to your tenant, you confer a “right of exclusive possession” against you and the world. This right is not absolute, and you can access under certain circumstances. But it is important to understand the laws governing access to avoid interfering your tenant’s rights. Even at the state level, a landlord may not abuse the right of access or use it to harass the tenant. But there may also be enhanced penalties at the local level (e.g., abusing the right of entry is among San Francisco’s definitions of “tenant harassment”, which can lead to misdemeanor penalties and other potential liability.)

First, a landlord should only enter with proper notice (or express consent of a tenant). This notice should be in writing and should provide “reasonable notice”, which Civil Code §1954 defines as six days by mail, or 24 hours if you hand the notice to your tenant (or someone else at the rental unit) or leave it under the door.

A landlord can only enter for the right reasons. Section 1954 lists the following:

(1) In case of emergency.
(2) To make necessary or agreed repairs, decorations, alterations or improvements, supply necessary or agreed services, or exhibit the dwelling unit to prospective or actual purchasers, mortgagees, tenants, workers, or contractors or to make an inspection pursuant to subdivision (f) of Section 1950.5.
(3) When the tenant has abandoned or surrendered the premises.
(4) Pursuant to court order.
(5) For the purposes set forth in Chapter 2.5 (commencing with Section 1954.201) (relating to access for water utility submeters located inside the tenant’s unit);
(6) To comply with the provisions of Article 2.2 (commencing with Section 17973) of Chapter 5 of Part 1.5 of Division 13 of the Health and Safety Code (referring to balcony and deck inspection)

Finally, a landlord should only notice the entry during “normal business hours” – something Section 1954 doesn’t define. There are very few cases interpreting this statute in general, but a 2013 case – Dromy v. Lukovsky (2013) 219 Cal.App.4th 278 – took a pragmatic approach based on context. A landlord was allowed to access with his real estate agent on weekends, as those were conventional “business hours” for open houses.

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Smyth v. Berman – Lessee’s Right of First Refusal Is Not an “Essential Term” for the Purpose of Renewal of Periodic Tenancies

“Does a right of first refusal contained in a written lease expire when that leasehold ends and the tenant becomes a ‘holdover’ tenant, and when the lease specifies ‘the continuing [holdover] tenancy will be from month to month’? We conclude that a right of first refusal is not an essential term that carries forward into a holdover tenancy unless the parties so indicate.”

In Smyth v. Berman, the Second District Court of Appeal held that, when a commercial tenant has a “right of first refusal” to purchase the property, included in a term lease agreement, that right is not among the “essential terms” of the lease. Because it is not essential, it is not included among the terms and conditions of the periodic tenancy created by the tenant’s holdover and the landlord’s acceptance of rent.

“When a lease expires but the tenant remains in possession, the ‘relationship’ of the landlord and tenant ‘changes’. The ‘lessor-lessee relationship’ based on ‘privity of contract’ ends, and a new ‘landlord’-‘tenant’ relationship based on ‘privity of estate’ springs into being by the operation of law. (Civ. Code §1945.) This new ‘hold-over’ tenancy is presumed to continue under the same terms contained in the now-expired lease except as those terms may have been modified by the landlord and tenant. (Civ. Code, § 1945) This case tees up the question: If the expired lease contained a right of first refusal, is that right one of the ‘terms’ that presumptively carries forward into the holdover tenancy? We conclude that the answer is ‘no’.”

The court added that this is merely a presumption, and the parties could contract for this term to renew. But absent such intention, this presumption added to the stability of commercial tenancies, by allowing the holdover tenant to remain on a month-to-month basis, under terms and conditions that didn’t give the landlord an incentive to nullify the right of first refusal by evicting their tenant.

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SF Examiner Reports on Sup. Peskin’s Efforts To Put “Vacancy Tax” on November Ballot

The SF Examiner reports on the efforts of Supervisor Peskin to put a rental unit “vacancy tax” on this November’s ballot, for both residential and commercial properties. (San Francisco already requires registration and fees for vacant buildings.)

According to the Examiner, “Details are still being worked out, but the intent is to apply the tax to residential properties with three or more units. After six consecutive months of a vacancy, the property owner would pay $250 a day until the unit is leased”.

San Francisco’s ongoing efforts to create more housing has manifested in interesting ways over the years. Turning vacant units into residential rental units would obviously add to the rental housing supply. But whatever the actual language of the law, it is difficult to imagine that a special tax on those who refuse to enter the residential rental business is not a violation of the Ellis Act. (Buildings of this size would also need to register for the City’s gross receipts tax if they are used as rentals.)

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Justin Goodman Featured in SF Apartment Magazine Legal Q&A for January 2019

Justin Goodman was featured in the Legal Q&A for the January 2019 issue of SF Apartment Magazine – the official publication of the San Francisco Apartment Association.

Justin explored a landlord’s options when a tenant installs an electric vehicle charging station, without the landlord’s approval, seemingly to take advantage of an “all utilities included” lease agreement. Justin also notes for readers of Costa-Hawkins.com that landlord-tenant law moves quickly, and sometimes the submission deadline for a print magazine can be far enough out that the law changes in the meantime. Starting January 1, 2019, state law actually requires landlords to allow charging stations (with some conditions).

Justin also wrote a feature article for the January 2019 issue, titled “A Fair Fight”, where Justin predicted the future of San Francisco landlord-tenant law in a post-Proposition F era, based on his experience with San Francisco’s existing, well-funded, legal aid clinics.


SFAA is dedicated to educating, advocating for, and supporting the rental housing community so that its members operate ethically, fairly, and profitably. SFAA’s is a trade association whose main focus is to support rental owners by offering a wide variety of benefits that address all aspects of rental housing industry.

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Justin Goodman Featured in SF Apartment Magazine Legal Q&A for December 2018

Justin Goodman was featured in the Legal Q&A for the December 2018 issue of SF Apartment Magazine – the official publication of the San Francisco Apartment Association.

Justin discussed liability “what happens next” after a landlord unwittingly enters an agreement with their tenant to vacate, without realizing that San Francisco now heavily regulates this conversation.


SFAA is dedicated to educating, advocating for, and supporting the rental housing community so that its members operate ethically, fairly, and profitably. SFAA’s is a trade association whose main focus is to support rental owners by offering a wide variety of benefits that address all aspects of rental housing industry.

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Dr. Leevil, LLC v. Westlake Health Care Ctr. (2018): Title Must Be “Duly Perfected” Before Service of Unlawful Detainer Three-Day Notice, Despite Retroactive Perfection of Title Under Nonjudicial Foreclosure Statutes

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In Dr. Leevil, LLC v. Westlake Health Care Ctr., a property owner leased its property to a skilled nursing facility and later obtained a secured loan. It defaulted. Dr. Leevil, LLC purchased the defaulted loan and initiated a nonjudicial foreclosure sale, ultimately buying the property at the trustee’s sale. Dr. Leevil, LLC served a three day notice to quit the next day, but did not record title for five more days.

Serving the notice before becoming “record owner” seems counterintuitive. However the nonjudicial foreclosure statutes arguably condoned the practice. Cal. Civ. Code § 2924h(c) states, “the trustee’s sale shall be deemed final upon the acceptance of the last and highest bid, and shall be deemed perfected as of 8 a.m. on the actual date of sale if the trustee’s deed is recorded within 15 calendar days after the sale, or the next business day following the 15th day if the county recorder in which the property is located is closed on the 15th day.”

The unlawful detainer statutes refer to the nonjudicial foreclosure statutes, in setting forth cases of post-foreclosure evictions. Applicable here, “a person who holds over and continues in possession of . . . real property after a three-day written notice to quit the property has been served . . . may be removed therefrom . . . Where the property has been sold in accordance with Section 2924 of the Civil Code, under a power of sale contained in a deed of trust executed by such person, or a person under whom such person claims, and the title under the sale has been duly perfected.” Cal. Code Civ. Proc., §1161a(b)(3).

In other words, Dr. Leevil, LLC believed it could serve the notice to quit first, because it was already the owner, and title could be (and ultimately was) retroactively perfected as of the actual purchase date. The Court of Appeal adopted this interpretation.
Continue reading Dr. Leevil, LLC v. Westlake Health Care Ctr. (2018): Title Must Be “Duly Perfected” Before Service of Unlawful Detainer Three-Day Notice, Despite Retroactive Perfection of Title Under Nonjudicial Foreclosure Statutes

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California Legislative Update (2018) – Cities with Rent Control No Longer Exempt from State Mandate on Authorizing EV Charging Stations for Existing Tenancies

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Effective January 1, 2019, AB 1796 amends California’s existing law on mandating electrical vehicle charging stations for existing tenancies, upon tenant request.

The revised Civil Code §1947.6 will require a landlord’s consent, but with some helpful conditions: The tenant must provide a written request, along with their consent to a written amendment to the lease. This amendment must include your requirements for the “installation, use, maintenance, and removal” of the charging station, as well as their obligation “to pay as part of rent for the costs associated with the electrical usage of the charging station”. The tenant must also maintain general liability insurance with the landlord as an additional insured.

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Ballinger v. City of Oakland: Pacific Legal Foundation Sues City of “Relocation Assistance Payments”

The Ballingers, a military couple, leased their single family home in Oakland when they were reassigned to Washington D.C. for service. Anticipating they would return to the Bay Area within a few years, they negotiated a term lease that would become a month-to-month tenancy around that time. However, after they leased their home (but before they had planned to move back in), the City of Oakland instituted a “relocation assistance payment” regulation, requiring them to pay their tenants in order to terminate the tenancy and move back in.

The Pacific Legal Foundation represents the Ballingers in their lawsuit against Oakland, alleging that the ordinance constitutes a taking/exaction of private property and that it violates their rights under the Ellis Act.

However, relocation assistance payments that are reasonable have been upheld as consistent with the Ellis Act (cities are actually allowed to mitigate the adverse impacts of Ellis Act displacement, provided the payments do not impose a “prohibitive price“).

That said, the case law interpreting the mitigation payments addresses the Ellis Act only, not the 5th Amendment, so there may be something to the claim that taking money from a landlord to give to a tenant in exchange for allowing the landlord to retake possession of her property is an unconstitutional “taking”. And PLF may have to focus on the constitutional claims, rather than violations of state law, as their clients actually performed an “owner move-in” eviction rather than an Ellis Act eviction.

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Zacks, Freedman & Patterson, PC To Join MCLE Panel on the Ellis Act in San Francisco

Justin A. Goodman of Zacks, Freedman & Patterson, PC will join a panel of attorneys (who represent both tenants and landlords), as well as the Senior Advisor at the Office of the Mayor, to teach a continuing legal education course on the Ellis Act. The course will include preparing for withdrawal of residential property from the housing market, the transactional process leading to termination of tenancy, common defenses, and the lasting effect on the property after ‘going out of business’.

The MCLE course is presented by the Bar Association of San Francisco, and will take place on December 10, 2018 at 12:00pm in the BASF Conference Center, located at 301 Battery Street, 3rd Floor, San Francisco, California.

Moderator
Tiffany R. Norman, trn Law Associates

Speakers
Andrew Wiegel, Wiegel Law Group, PLC
Thomas E. Drohan, Staff Attorney Legal Assistance to the Elderly
Justin A. Goodman, Zacks, Freedman & Patterson, PC
Jeff Buckley, Senior Advisor for the Office of the Mayor

The Bar Association of San Francisco has been providing San Francisco legal professionals with networking and pro bono opportunities in order to better serve the community since 1872.

Its mission is to champion equal access to justice and to promote humanity, excellence, and diversity in the legal profession. It provides legal services to disadvantaged and underserved individuals in San Francisco and creates opportunities for legal service in the community, encouraging participation by its members.

It advances professional growth and education, and elevates the standards of integrity, honor, and respect in the practice of law. It also cultivates diversity and equality in the legal profession, provides a collective voice for public advocacy, and pioneers constructive change in society.

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Residential Rent and Eviction Control Resources