The San Francisco Rent Board has published the minutes for its March 2016 meeting. It also published its agenda for its next meeting.
Jane Kim Amendment Thwarts Incomplete Unlawful Detainer Complaints
The San Francisco Housing Court has begun sustaining demurrers to unlawful detainer complaints that fail to allege compliance with the “dominant motive” requirement of the Section 37.9(c) of the Rent Ordinance and/or attach termination notices that do not include the Rent Board’s Form 1007, containing multi-language advice to tenants about the Rent Board.
These new requirements – imposed by the “Jane Kim Amendment” to the Rent Ordinance – have been catching some practitioners off guard (which, to some degree, may have been the point). While it is a simple enough task to amend the complaint to state that “collection of rent” (or whatever) is the landlord’s “dominant motive” (as is now required by the amended Section 37.9(c)), the missing Form 1007 is more problematic.
Section 1166 of the Code of Civil Procedure, requiring landlords to attach termination notices, does allow amendment of the complaint upon failure to attach a copy of the notice (or, unless leave to amend is futile, a complete copy of the notice). Unfortunately for landlords, Form 1007 must be attached to the notice, the service of which is a prerequisite to an unlawful detainer cause of action.
Following the recent Borsuk decision, Delta Motions To Quash no longer appear to be a viable pleading challenge to test the sufficiency of a cause of action for unlawful detainer. Nonetheless, this kind of defective pleading would seem to appear on the face of the unlawful detainer complaint, making it appropriate for demurrer. And, where a properly-served and legally sufficient notice of termination is a prerequisite for unlawful detainer standing, leave to amend is not likely to rescue the lawsuit.
SCOTUS Preserves CA State Supreme Court Decision Upholding San Jose’s Inclusionary Housing Law
Today, SCOTUS declined to hear an appeal from the California State Supreme Court decision upholding San Jose’s inclusionary housing ordinance. This ruling keeps the State decision intact.
RENT BOARD PUBLISHES MINUTES OF ITS REGULAR FEBRUARY 2016 MEETING
California Legislative Update (2016): SB 655 Creates Heightened Standards for Dealing with Mold in Residential Rental Units
SB 655, effective January 1, 2016, will place a stronger emphasis on the existence of mold in regulating standards for habitability in residential rental property. Existing law already required landlords to ensure that property was habitable when initially leased to a tenant and to “repair all subsequent dilapidations thereof”. It also allowed tenants to “repair and deduct” from their rent if landlords were not timely addressing these problems.
Out of a concern for the detrimental health consequences of mold in the home, the California legislature added California Civil Code §1941.7, which explicitly adds mold to the list of habitability concerns that implicate these rights and obligations.
Section 1941.7 works a compromise for landlords, however, where obligations do not arise where either the landlord has no notice or the tenant has failed to keep the unit clean and sanitary. The statute also adds mold to the list of reasons a landlord can notice entry into a rental unit for inspection.
Chen v. Kraft: Illegal Hotel Use Not Mitigated by Illegal Contract
In Chen v. Kraft, a rent-controlled tenant used her apartment for “transient occupancy” (listing it on Airbnb), and her landlord was successful in enforcing provisions of the Los Angeles Municipal Code, prohibiting bed and breakfasts in “R1 Zones”.
The Appellate Division of the Superior Court reasonably found a violation of law where someone (whether tenant or not) uses their dwelling unit as a hotel in violation of zoning law. (Compare, for example, San Francisco, whose “Airbnb law” constituted a city-wide zoning change in favor of short term rentals.)
However, the language of the opinion suggests a gross misunderstanding of unlawful detainer law. Generally, under the unlawful detainer statutes, a landlord will have to serve a three-day notice for, e.g., non-payment of rent, breach of lease or illegal use. The tenant’s lease required a ten day notice period (which is fine) for breaches of covenants of the lease (including non-payment of rent). It is not clear whether one of these covenants included using the apartment for “legal purposes”.
The tenant understandably opposed the landlord’s motion for summary judgment in seeking to prove a case, other than what was put at issue by the complaint – specifically, whether the tenant was making an illegal use of the apartment, as opposed to, e.g., breaching a provision of the lease prohibiting illegal use. And, while this may seem like a distinction without a difference, the unlawful detainer statutes provide for specific bases for standing to bring an action for unlawful detainer. The court upheld the trial court determination that the landlord had standing under Cal. Code Civ. Proc., §1161(4) (for illegal use). However, among the three distinct notices to cure or quit that the landlord served, not one of them was under section 1161(4). Where the unlawful detainer statutes are supposed to be strictly construed, this ruling was incorrect as a matter of law.
Now, a three day notice based on illegal use (under section 1161(4)) is the only such notice that cannot be “cured”. (The Appellate Division also got this wrong, concluding that one element of this claim was that the “defendant continued to use the premises for an unlawful purpose after expiration of the period stated in the notice”. As this notice cannot be “cured”, it doesn’t matter if the tenant ceases the offending behavior.) Therefore, in the long term, the landlords would most likely have prevailed in a second action to recover the unit based on Airbnb use. But this should not have mitigated the failure to correctly plead a case for unlawful detainer based on illegal use, and the court’s conflation of illegal use and breach of covenant pervaded its analysis.
For instance, the tenant offered as a defense a lease addendum, executed by the prior landlord, authorizing Airbnb use. The Appellate Division correctly noted that Cal. Civ., §1598 regards contracts with a single unlawful object as void. However, it was not clear that the addendum was an insular contract (as opposed to a revision of a broader contract for leasing the property), making suspect the wisdom in completely ignoring it. More importantly, if this truly were a “breach of covenant” case, the landlord (or successor) should probably have been estopped from enforcing conduct he condoned under a theory of breach. Again, this would unlikely vindicate the illegal use itself, and a subsequent, correctly pled case for unlawful detainer under the proper statute would seem to have been successful, but this kind of “shotgun” pleading and prosecuting, based on three three-day notices, none of which was for 1161(4) illegal use, has no place in strict compliance “five day land” (as we call it in San Francisco).
San Francisco Legislative Update (2009): Abandoned Buildings Ordinance
Ordinance 194-09 amends the Building Code to require landlords to register vacant and abandoned buildings and equips the Building Department with enforcement tools. Section 103A.4.1 of the Building Code now defines a vacant and abandoned property as one that is:
(1) is unoccupied and unsecured,
(2) is unoccupied and secured by boarding or other similar means,
(3) is unoccupied and unsafe as defined in Section 102A of this Code,
(4) is unoccupied and has multiple code violations, or
(5) has been unoccupied for over 30 days.
To comply with the statute, landlords must annually register with DBI and pay the registration fee. They must also post a notice (with the current name, address, and phone number of the owner of record), obtain liability insurance, maintain the property and secure it against unauthorized entry. However, a property will not be considered vacant and abandoned if if it does not contribute to blight, is ready for occupancy and is actively being offered for sale or lease.
RENT BOARD PUBLISHES MINUTES OF ITS REGULAR JANUARY 2016 MEETING
Borsuk Rule Makes Its Way Up North
With the recent Borsuk decision, a divided Second District left an open question in the appellate courts about whether a tenant could challenge the sufficiency of an unlawful detainer complaint with a motion to quash. San Francisco’s Housing Court has already begun demonstrating its approval of the rationale in Borsuk. Given how often defendants file writ petitions challenging the denial of these motions, it seems that it will only be a matter of time before the First District establishes its own rule for the now-endangered Delta Motion.
