Legal Corner Q & A

Giving Notice to Tenants Due to Repairs or Deaths

By Various Authors

Q. What are my obligations to prospective tenants, in terms of reporting a suicide that previously occurred in one of my rental units?

A. Pursuant to Section 1710.2 of the California Civil Code, an owner, lessor and/or agent for an owner of real property must disclose to potential tenants the “occurrence of an occupant’s death upon the real property” and “the manner of death” if such a death occurred within three years of the tenant’s offer to rent the unit in question. Also, this section of the code provides immunity from liability for failing to disclose that a prior tenant was either HIV positive or died from AIDS.

In the case of a prior suicide, the owner must disclose that it occurred within three years of the tenant’s offer to rent the unit. As set forth in the above-mentioned code, an owner may not make an intentional misrepresentation after a direct inquiry from the prospective tenant, even if the death occurred outside of the three-year window. For example, if the suicide occurred ten years ago, then the owner is not obligated to disclose this fact. On the other hand, this same owner may not make an intentional misrepresentation if a prospective tenant asks about a prior death in the unit. If asked, the owner must then honestly disclose the existence of an earlier death in the unit. As in the case of any legally mandated disclosure requirement, when in doubt it is always more prudent to make an unnecessary disclosure rather than fail to make a mandated disclosure.

This disclosure requirement is just one of various disclosures that must be made either before entering into a rental agreement, as part of the rental agreement itself or after execution of the rental agreement. Other mandatory disclosures include:

Federal lead paint hazards (42 U.S. Code, Sections 4851-4856)
Shared common-area utilities (California Civil Code, Section 1940.9)
Carcinogenic material—Prop. 65 (California Health and Safety Code, Section 25249.5-25249.13)
Manager and agent for service of process and notices (California Civil Code, Section 1962[a])
Automatic lease renewal (California Civil Code, Section 1945.5)
Notice of negative credit report (California Civil Code, Section 1785.26)
Location of ordinance (California Civil Code, Section 1940.7)
Megan’s Law—Residential Lease disclosure (California Civil Code, Section
2079.10[a])
Structural Pest Control Notice (Civil Code section 1940.8)

The best way to ensure that you provide all the necessary disclosures either before or at the time of executing the rental agreement is to use professionally prepared lease forms such as those offered by the San Francisco Apartment Association or those distributed through other similar professional property management organizations.
– Jak Marquez

Q. I am planning a major reconstruction of a building I own, and it requires the temporary displacement of most of the tenants. What are my obligations under the law, and how do I proceed?

A. San Francisco’s Rent Ordinance provides a just cause to temporarily evict tenants for the purpose of renovating the building if it is under rent control and eviction control. Just cause for capital improvement or rehabilitation work is contained in San Francisco Administrative Code §37.9(a)(11).

The landlord’s obligations and the procedures for temporarily evicting tenants are fairly well defined. First, you can only temporarily terminate tenancies if the capital improvement or rehabilitation work would “make the unit hazardous, unhealthy, and/or uninhabitable while work is in progress” (see §12.15(a) of the Rent Board’s Rules and Regulations). If you own a multi-unit building and only certain units are going to be renovated or improved in a manner that would render them uninhabitable, then you may only temporarily terminate the tenancies in those units. You cannot temporarily displace tenants in your other units, unless the work would render shared common areas uninhabitable and/or would prevent safe access to and from the building.

Second, before you can serve notices temporarily terminating tenancies, you must secure all the necessary permits from the city and county required for all phases of the improvement/rehabilitation work. In addition, you must secure your permits prior to serving any termination notices, provide copies of all permits to the tenants at or before the time you serve the termination notices, and state in the notices that the tenants have the right to review your applications for permits (to the extent applications were necessary) at the Central Permit Bureau of the Building Department. To secure all the necessary permits, work closely with your architect and/or contractor to make sure that you properly inform the city of the full scale, scope, and nature of the work to be done. You must keep in mind that you should always act in good faith and without ulterior intent.

Assuming you have all your permits in hand, you can serve temporary tenancy termination notices (a 30-day notice is used; however, beginning January 1, 2003, a new state law mandates that 60-day notices be used—see page 17) on the tenants in those units rendered uninhabitable by the work. The tenancy termination notice must include copies of all necessary permits, a description of the anticipated work, and a reasonable approximation of the date (month and year) when tenants can expect to reoccupy their units. Furthermore, the temporary relocation of tenants is only for three months or less. You can, however, petition the Rent Board and get an extension if necessary. Once you have regained possession of the units, you must perform all work diligently and without unreasonable delay.

Last, in order to assist your displaced tenants in finding temporary replacement housing, the Rent Ordinance requires you to pay no more than $1,000 in actual relocation costs to each of these tenants. These payments can cover transportation, storage, insurance, installation of utilities and rent differentials. The actual cost must be paid to your tenants no less than 10 days prior to the repossession of the units by the landlord and/or within 10 days of each tenant establishing the actual cost of moving.

Upon completion of the improvement or rehabilitation work, you must immediately notify your displaced tenants that the work has been completed, and that they may reoccupy their units. Do not delay in giving notice to your tenants that the work is completed. Furthermore, take all reasonable steps to notify the tenants that they can move back into the unit, lest you create a basis for wrongful eviction liability. Unfortunately, both the Rent Ordinance and the Rules and Regulations do not address the question of how long a landlord must wait for a tenant to move back into the renovated or improved unit before concluding that the tenant does not intend to return. This lack of clarity could cause a delay in the landlord’s effort to rent the unit to a new tenant at market rent. Consult an attorney if you have completed the repairs, notified the tenant that he/she can return, received no response from the tenant, and now find yourself with a vacant unit that is no longer generating income.

I cannot overemphasize that prior to serving any termination notices for capital improvement and rehabilitation you must secure all permits necessary to complete the work in each of the affected units. This requires thorough and candid discussions with the city’s Building Department about what you intend to do with the property. Missing one permit to do one minor aspect of the work can be the basis for a complete defense to an eviction and create a potentially serious liability for wrongful eviction under the Rent Ordinance. You need to make sure your architect and/or contractors are thorough.

If your post-renovation, long-term objectives involve withdrawal of the building from the rental housing market (and, for example, selling renovated units as TICs), you could evict the tenants under the Ellis Act but could not rent or lease any of the renovated units after withdrawal (unless you were willing to suffer pretty harsh consequences for doing so). The tenants only have the right to return to the building if you decide to rent or lease the withdrawn units, and they also had previously given notice at the time they were initially evicted regarding their interest in the units if ever re-rented. If your objective, though, is to renovate the units and continue to operate the building as rental income property, then you use temporary evictions under §37.9(a)(11) of the Rent Ordinance.
– Curtis Dowling

Q. Can you explain the Leno law on subletting? What happens if your lease agreement prohibits subletting?

A. For San Francisco rent-controlled tenancies, the Leno law has been in effect since 1998. Named after its sponsor, Supervisor Mark Leno, the legislation effectively prevents the practice of landlords who refuse to allow a replacement roommate and in that way force the remaining tenant to move because of an inability to pay the rent.

In instances where the original lease agreement allows two or more tenants (for example, A and B), Leno plays a substantial role. Under Leno, an eviction is prohibited notwithstanding any lease covenant to the contrary, when a tenant sublets and the landlord has “unreasonably withheld the right to sublet following a written request by the tenant.” This means that if B moved out, and A wants to sublet, A must be given the right to replace B. Leno requires a “one-for-one” replacement and further mandates that an original tenant must still be in occupancy. Thus, there is no prohibition against evicting a tenant for unlawfully attempting to assign the lease agreement (A and B both move out and hand over the lease to C).

Leno again reaffirms the importance of good lease drafting. The new PPMA Lease has a provision that specifies which individuals are the original occupants. The PPMA Lease also gives landlords the option of prohibiting any subletting. Although most landlords choose this option, note that Leno overrides the lease agreement.

Some landlords take the position that they can circumvent Leno by renting only to one original tenant and prohibiting any subletting. However, the Rent Board has legislated that the number of occupants allowed at the inception of the tenancy will constitute the benchmark of this “service” throughout the tenancy. Therefore if the landlord allows three people to occupy the unit and then fails to allow a replacement roommate at some point during the tenancy, the remaining two tenants may receive a substantial rent reduction as a result of a decrease of services (what this means for you is that if only two persons live in the unit where once there were three, the rent may be reduced by one-third.)

The Rent Board has enacted a series of regulations to address the procedures for subletting in the wake of Leno (see Rules and Regulations, Sections 6.15A and 6.15B). These regulations expound further on Leno’s statement that failure of the landlord to respond within 14 days to the tenant’s request to sublet will be seen as approval to sublet.

Regulation 6.15A basically states that an absolute prohibition in post-May 1998 lease agreements must be set forth in enlarged or boldface type and separately initialed by the tenant. In addition, the landlord must provide the tenant with a written explanation of the meaning of the absolute prohibition. This regulation also states that even if the lease allows for specific occupants (i.e., two), and if the behavior of the landlord is to allow more than this number (i.e., three), then the tenants are not unlawfully subletting by maintaining the tenancy at the higher number (three).

Regulation 6.15B addresses instances of a lease that requires the landlord’s consent before granting permission to sublet. This regulation first prohibits an eviction if the landlord “unreasonably” withholds consent to sublet, and then defines what constitutes a “reasonable” request of the tenant. In essence, if the proposed person who plans to sublet fills out the landlord’s application and meets the typical credit and income criteria, then the application should not be denied.

There is nothing in Leno that prohibits or inhibits the service and effect of 6.14 Notices. In fact, the existence of Leno places more importance on the timely service of 6.14 Notices because subletting without 6.14 protection may make this person an original co-tenant. Consequently, manage your units carefully, keep a stack of 6.14 Notices on hand, and consult a qualified professional before even thinking of evicting a tenant for unlawful subletting.
– David Wasserman

The opinions expressed in this article are those of the authors and do not necessarily reflect 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. Jak Marquez is with MacDonald Beckman, LLP, 956-6488. Curtis Dowling is with the Law Offices of Andrew M. Zacks, LLP, 956-8100. David Wasserman is with Wasserman & Taxman, 552-8230. © Copyright 2002.