Legal Corner Q & A

New Laws for 2004

by Various Authors

Q. Which of the new 2004 laws should concern me, as a landlord?
A. Sadly, after we spent so much time and energy on the offensive at the local level, Sacramento has been busy passing a series of laws that, for the most part, adversely impact the rights of property owners. A lot of this legislative flurry can be traced to the pre-recall desperation of ousted Governor Davis coupled with the aggression and power of Senator John Burton and other lawmakers seeking to please their liberal constituencies. On Thursday, January 15, 2004, at 7:00 p.m., landlord attorney Jeffery Woo and I will be teaching the 2004 legislative update seminar at Fort Mason. For those who cannot attend, the following is a brief synopsis of the new 2004 landlord-tenant laws.

The first law is actually good for the industry, for it allows owners to enter a unit without written notice to make repairs or other agreed-upon services if the tenant makes the request. Thus, owners no longer have to serve a written notice 24-hours in advance when the tenant calls in a repair. You should still document the entry in writing for your records and leave written notification inside the unit informing the tenant when you or your agent entered and what repairs were done.

There are two new laws that increase penalties for landlords who “defraud” a tenant or use force, threats or menacing conduct. In addition, the court may fine a landlord up to $5,000 if the landlord increases the rent on a unit that has outstanding Notices of Violation from the Department of Building Inspection. Undoubtedly, these laws will be used frequently in San Francisco.

Another new law authored by our own Assemblyman Mark Leno withdraws the right to use the Ellis Act for operators of residential hotels in San Francisco, Los Angeles and San Diego. Formerly, any property owner could go out of business by withdrawing all of the units in a building from the rental market through invocation of the Ellis Act. This new law prohibits single-room-occupancy and residential-hotel operators in these three cities from using the Ellis Act if the Ellis Notice has not been served prior to January 1, 2004. (The Board of Supervisors must impose this law locally, and I am fairly sure that our board will implement this restriction immediately.)

The third series of laws has to do with security deposits. First, no move-out inspection will be required when the tenancy is terminated through the use of a three-day notice (for example, a Three-Day Notice to Pay Rent or a Three-Day Notice to Cure Breach of Lease Covenant). In 2003, owners were justifiably confused when terminating a tenancy with a three-day notice and then needing to serve the pre-move-out inspection form that allowed a tenant to request a move-out inspection two weeks before leaving. The timeline did not make sense in the three-day eviction context, so this law really helps. The second security deposit law mandates that owners provide tenants with receipts, invoices or a vendor price list for any labor or materials that the owner purchases and then deducts from the tenant’s security deposit. Tenants, however, may waive the right to receive these receipts via a written waiver, and total expenditures under $125 are exempt. SFAA President Eric Andresen wrote an article on this law that appears on page 9 of this issue.

Last, there is new legislation that requires business owners who negotiate a transaction in Chinese, Tagalog, Vietnamese or Korean to provide copies of contracts in these languages. This is a comportment to another law that requires contracts or agreements negotiated primarily in Spanish to be translated into Spanish prior to the contract’s execution. Rules and regulations governing a tenancy and inventories of furnishings provided by the business are not included in the term “contract” or “agreement” and need not be provided in Spanish. However, SFAA is advising its membership not to negotiate lease agreements or any other aspect of the tenancy in a foreign language. Because of these laws and potential interpretations by the courts, members are advised to keep lease negotiations in English, as well as all lease addendums, common area signs and change-in-terms-of-tenancy notices. This consistency, which comports with the English-language PPMA lease, will serve the landlord well.

Don’t forget that the new PPMA 2004 lease is set for release this spring. The new lease incorporates most of the recent legislative changes (both locally and statewide) and also includes many of the membership’s suggestions. Please make sure you are using the most current version when signing up a new tenant
– David Wasserman

Q. I am considering renting only to tenants with dogs, a suggestion made by a fellow landlord who uses this approach. He loves dogs, but apparently also gets a bit higher rent from dog owners. Is there anything I should worry about regarding discrimination issues?
A. During these times of decreasing rent, this is an interesting hypothesis. However, it is also a time when landlords are having trouble renting their units at all, so restricting yourself to dog-owning tenants may limit you to too small a population of potential renters.

To answer your question, strictly speaking you can legally discriminate against potential tenants on the grounds that they don’t have a dog. The categories of illegal discrimination are: race, creed, color, religious affiliation, disability, country of origin, age, sexual orientation, marital status, family size (provided it is not in excess of allowable state law), source of income (Section 8), or moving in a water bed (CC 1940.5). But even though you are discriminating against potential tenants on a legal basis, you should be concerned about unintentionally creating the impression that you are discriminating against potential tenants for illegal reasons. See “Avoiding False Claims of Illegal Discrimination,” in the San Francisco Apartment Magazine, July 2003.

From a practical point of view, I suggest that you simply market your unit as you always have, but add the statement that dogs are welcome. If, in fact, your friend’s hypothesis is correct, you might attract dog owners who are willing to pay a higher rent than the non-dog owners who apply. If your friend’s hypothesis is not correct, you will not have scared away the vast majority of the tenant market that does not have a dog.
– Jeffery P. Woo

The opinions expressed in this article are those of the authors and do not necessarily reflect the viewpoint of the SFAA or the San Francisco 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, 415-567-9600. Jeffery P. Woo is with the law firm of Woo Associates, 415-705-6470 . Copyright © 2004.