Feature
by David Wasserman and Saul Ferster
During the spring and summer of 2001, attorneys Clifford Fried, Saul Ferster, Jonathan Bornstein, and Dave Wasserman, in conjunction with Michelle Horneff and past-PPMA president Eric Andresen, CPM, spent countless hours revising, editing and modifying the PPMA Lease. The end result, the “PPMA Residential Tenancy Agreement (2002),” was recently published and is now available for use. Please discard your old lease, for the new 2002 PPMA Lease contains many language refinements that further enhance protection of the landlord from typical tenant abuses, current Rent Board trends, and provisions prompted by recently enacted state and local rental laws. Also, beware of cheap imitations circulated by other organizations. For a small sum, you should use the real thing!
The following is a partial list of some of the important new revisions and additions:
Introduction (Paragraph 1) has been changed because some local judges held landlords of non-rent controlled units (e.g., units built after June 13, 1979), whose leases contained references to rent control laws, to the requirements of the SF Rent Ordinance. Now the 2002 Lease states that if the unit is not rent controlled, no reference in the lease to any rent control law will subject the tenancy to rent control. This should eliminate the Court’s confusion regarding non-rent controlled units.
Security Deposit (Paragraph 5)
has been modified to permit the owner, upon notice, to increase
the security deposit at any time to the maximum permitted by law.
This provision allows the owner to keep the security deposit balance
consistent with the then current rent, as rent is increased over
the years.
Late Payments (Paragraph 6) continues to provide a definition
of habitual late payment of rent for eviction purposes (five days
after Due Date on three separate occasions within any 12-month period)
and protection from the tenant who bounces checks (the owner may
require future payments with certified funds, or evict after three
checks are returned within any 12-month period). A new addition
to this paragraph is a provision that indicates payment of a late
charge does not cure the late payment for purposes of establishing
habitual late payment of rent. This clause is directed at the tenant
who believes that he or she is entitled to pay the rent late, as
long as the late fee is paid. In the tenant’s mind, it is simply
the cost of the “privilege” of late payment. The new provision
will give the owner ammunition to disabuse the tenant, or the court
if necessary, of this fallacious assumption.
Returned Checks (Paragraph 7) now
makes all the provisions and consequences of habitual late payment
applicable to dishonored checks, so that they may be treated completely
the same, or in combination with the former. For example, two late
payments and one dishonored check in a 12-month period can be the
basis for an eviction.
Use/Occupancy (Paragraph 11) has been modified to
extend the maximum stay by a guest to 15 consecutive days, or 30
days in a calendar year, which is a more realistic approach than
the seven and 15 days, respectively, found in the prior PPMA Lease.
This paragraph, similar to one in the previous lease form, explicitly
makes the original tenants individually responsible for all obligations
until all of them have vacated the premises, thereby preserving
the landlord’s right under the Costa Hawkins Rental Housing
Act. This paragraph also states that guests staying more than 15
consecutive days or more than 30 days per year without the owner’s
consent will constitute a breach of the lease and warrant an eviction.
This clause should assist owners seeking to evict based on an unlawful
sublet or assignment. The paragraph also provides that if any owner-approved
commercial activity takes place in the unit, the owner may require
that the tenant obtain liability insurance covering the owner.
Roof/Fire Escapes (Paragraph 14) adds fire escapes as
an area that may not be used, except for an emergency. Previously,
only the roof was included.
Storage & Parking Spaces (Paragraphs 16 and 17)
contain more precise language that limits the monetary value of
these services in the event the landlord must withdraw or modify
use of these services, and the tenant petitions the Rent Board for
a corresponding decrease in rent. As many of you know, tenant petitions
that seek a decrease in rent due to withdrawn parking or storage
spaces have become popular and troublesome for landlords because
Rent Board staff often assign an inflated value for these services.
There is greater detail in the lease regarding the prohibition of
storage on fire escapes and in common areas, as well as a provision
that covers the owner’s right to inspect storage areas. The
parking provisions also make clear that no automotive cleaning,
washing or maintenance is permitted, in addition to the “mechanical”
work specified in the prior form.
Utilities (Paragraph 18) deletes the authorization permitting more than one telephone line per unit at the tenants’ expense.
Maintenance & Repairs (Paragraph 19) contains a new clause that supports landlords who are seeking eviction for nonpayment of rent:
“The Premises shall be rebuttably presumed to be in a sage and habitable condition unless and until written notice to the contrary is received by Owner.”
As many of you know, tenants have a way of raising the issue of
defects in their unit when they forget to pay rent and are sued
for unlawful detainer. This provision should help shift the burden
to the tenant on habitability issues. Also, this paragraph contains
a provision implementing a court decision that an owner’s performance
of necessary maintenance and repairs does not ordinarily warrant
a reduction of rent due to a decrease in services, even if the tenant
suffers a temporary loss in the use of part of the premises (habitability
issues not necessarily included).
Entry & Inspection (Paragraph 23)
specifies that the owner may enter “to inspect for possible
health risks, defects, code violations, necessary repairs or maintenance
or to exhibit the unit to real estate professionals for purposes
of sale.” The previous form did not delineate this specification.
Termination (Paragraph 26) beefs
up the termination provisions of the agreement. Now, tenants must
give 30 Days’ Notice of their intention to vacate. The old
agreement imposes no such requirement, thereby allowing tenants
to simply leave without notice once their lease ended. This paragraph
also makes the tenant liable for damages incurred by the landlord
when the tenant fails to vacate, after giving notice of termination,
and the landlord has already re-rented the unit to someone else.
This provision should help eliminate the problem of the tenant who
changes his or her mind late in the game.
Mold Disclosure (Paragraphs 32 and 33)
contains the updated lead disclosure statements and the new mold
and mildew notification. As we all know, mold is the new liability
trap for landlords. Although not yet required, this mold disclosure
in the 2002 Lease may limit or reduce a landlord’s liability
for a mold claim.
Hazardous Material Disclosure (Paragraph 35)
states the “hazardous material disclosure” language now
required in California. The PPMA recommends that owners place warning
signs in common areas that alert occupants and maintenance personnel
to the existence of hazardous materials.
Estoppel Certificates (Paragraph 37) adds new language that provides detailed and explicit requirements for a tenant to answer and return estoppel certificates and to disclose pertinent information about the tenancy that any prospective purchaser would need. After Proposition G, the need for estoppel certificates has dramatically increased.
House Rules (Page 7) have been supplemented and amended. Of particular interest is number 6, which requires residents to cooperate with each other in order to resolve disputes. It further absolves the landlord from any liability arising out of conflicts between residents.
Mold Notification (Page 9) is a further attempt to limit the landlord’s liability for mold and mildew in the unit. We believe that this “notification form,” although not yet litigated, wi1l minimize a landlord’s exposure to a toxic mold lawsuit, to the fullest extent possible.
Lead Disclosure (Pages 10 and 11) includes statements on federal and San Francisco requirements for lead-paint disclosure. These forms are absolutely required and should never be overlooked during the lease signing process.
The above summary contains only a partial analysis of the new changes
contained within the 2002 Lease. Questions about a particular tenancy
or issue, as with any legal matter, should be directed to a qualified
legal professional. Remember, always use the 2002 Lease and beware
of old leases or forms circulated by organizations outside of the
PPMA or SFAA. Nowadays, the lease means everything, so make sure
you have the right instrument.
The opinions expressed in this article are those of the author and do not necessarily reßect the viewpoint of the SFAA or the SF Apartment Magazine. The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. David Wasserman is with Wasserman & Taxman, 567-9600. Saul M. Ferster can be reached at 863-2678. © Copyright 2002