Legal Corner Q & A
by Various Authors
Q. What is the legal definition of a “bedroom” for real-estate purposes?
A. The San Francisco Association of Realtors (SFAR) does not have an official glossary or dictionary of terms that defines bedroom. I spoke with several SFAR members, and they all agreed on a general definition that has evolved over time, custom and practice: “a room inside of a residence that has a closet inside the room.”
The California Association of Realtors (CAR) likewise does not have an official glossary or dictionary that defines bedroom. I spoke with one of CAR's staff attorneys who agreed with SFAR's definition and concurred it's been an evolving one.
Bedroom also is not specifically defined by the San Francisco Housing Code, the San Francisco Building Code or even the San Francisco Rent Ordinance. However, at least the housing code is instructive: “Where terms are not defined, they shall have their ordinary accepted meanings within the context with which they are used. Webster's Third New International Dictionary of the English Language, Unabridged, copyright 1986, shall be considered as providing ordinary accepted meanings.” Although the particular version of Webster's Dictionary cited was unavailable at press time, Webster's Online Dictionary provided the following definition: “a room used primarily for sleep, rest or sexual activities. It may or may not contain a bed.”
The housing code includes specific definitions of basement, guest room, kitchen and pantry, none of which come close to Webster's definition of bedroom. However, the code defines habitable room as “any room or space in a structure for living, sleeping, eating or cooking. Bathrooms, toilet compartments, closets, halls, storage or utility space areas are not considered habitable space.” There are specific dimension requirements for habitable rooms, but that is an article for a different time.
Suffice it to say, for real-estate purposes, the common denominator seems to be that for a room to be a bedroom, it must have an interior closet. An armoire placed inside a room or a hallway closet immediately outside the door of a room does not make that room a bedroom. And interestingly, all the realtors and attorneys I spoke to seemingly agreed with Webster's definition—none of them mentioned the need to have a bed in the bedroom.
– Stephen K. Lightfoot II & Shannon H. Sagum
Q. In the process of verifying my records for a capital-improvement petition, I noticed a discrepancy: 10 years ago, a rent increase was imposed that was over the allowable limit at the time. What should I do, and will this affect my petition?
A. You are right to be concerned. The San Francisco Rent Board, in reviewing your rent-increase petition, will examine the entire rent-increase history. If the Administrative Law Judge finds an error, your resulting monetary loss could be substantial. The ALJ will invalidate the erroneous rent increase and all subsequent rent increases, and roll the tenant's rent back to the last legal level. That is, the amount that the tenant was paying before you imposed the erroneous rent increase, which could have been many years ago. In addition, the ALJ will order you to refund to the tenant the total amount of rent paid during the preceding three years that exceeds the last legal rent. You will retain the rent overage paid for any period before the three-year Statute of Limitations period. This will be the result except in the case of minor, good faith “rounding up” errors, in which the ALJ will simply readjust the rent in order to erase the effect of the error. See Rent Board Rule 4.12, “Banking.”
So what are your options? You could duck the issue, bury your head in the sand like an ostrich, drop your rent-increase petition and hope that the tenant moves out before anyone notices the illegal rent increase. After all, neither you nor the tenant had noticed the error before. And sometimes tenants under rent control do move out. Really. Seriously, I certainly do not recommend this option. As long as the tenant remains in possession, you will have to live with the fear that the tenant could file a Rent Board petition at any time. And the problem will only get worse as time passes because the difference between the last legal rent and the actual rent will probably increase over time.
Therefore, I think that the smart option is to admit your mistake, calculate the rent overage that the tenant has paid for the past three years and voluntarily reduce the rent to the last legal level and refund the rent overage to the tenant. Then you could serve a new rent-increase notice, taking all your banked rent increases since the last legal rent, effective upon the legal rent-increase anniversary date. After the new, legal rent becomes effective, you could file your petition for a capital-improvement-rent increase based upon the new, legal base rent. Since a capital-improvement-rent increase is generally limited to 10% of the base rent, you will obtain a larger rent increase and recover your capital-improvement expenditure more rapidly if the legal base rent is higher at the time you file your petition. See Rent Board Rule 7.12 on capital-improvements rent increases.
-Michael C. Hall
Q. Is it wise to impose late charges when the rent check arrives after the dute date?
A. That depends primarily on two things: your rental agreement and your ultimate intentions. In the absence of a written rental agreement allowing for a late fee, you have no right to collect one. Moreover, California law disfavors penalties, so late charges defined as penalties may not be enforceable. A well-drafted rental agreement, such as the local PPMA Residential Tenancy Agreement, defines a late fee as a liquidated damage. A liquidated damage is a sum that the parties agree approximates the injury to a landlord resulting from late payment, where the actual damage would be impracticable or extremely difficult to fix. Such a provision should be enforceable, provided the amount is reasonable.
Late fees compensate your costs caused by late payment, including but not limited to added bookkeeping, cash-flow costs and your time. Fifty dollars is a common late fee, though sometimes a percentage of the rent due is applied instead of a fixed figure. But in an era of high rent, a rent percentage may produce an unreasonable result. For example, a 10% late fee on a $2,500 rent installment would generate a late fee of $250—difficult to justify.
If you are going to impose a late fee, do so uniformly for all your tenants—don't single out one or two for late charges, giving everyone else a break if they're late. There is no harm in waiving the late charge for a tenant who normally pays on time, and paid late just once, but a waiver should not be your practice if you intend to enforce late fees.
Finally, don't confuse your right to a late fee with your right to terminate a tenancy for habitual late payment. Imposition of a late fee is not enough to position you to evict a habitually late-paying tenant. Too often I have seen landlords who want to evict for habitual late payment, but have created a paper trail merely requesting a late fee. This can appear to an outsider—like a jury—that the landlord is willing to make a trade: late fee for late payment. You should make clear in your correspondence that paying a late fee does not entitle the tenant to pay rent late, and that despite paying a late fee, the tenant may be evicted for habitual late payment of rent. Additionally, you should also make clear that the period between the rent-due date and the date the late fee takes effect is not a grace period.
—Saul M. Ferster
The opinions expressed in this article are those of the authors and do not necessarily reflect the viewpoint of 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. Stephen K. Lightfoot II and Shannon H. Sagum are with Bledsoe, Cathcart, Diestel & Pedersen, LLP, www.bledsoelaw.com, 415-981-5411. Attorney Michael C. Hall specializes in all aspects of real-estate and landlord-tenant legal consultation and dispute resolution. He can be reached at 415-512-9865. Attorney Saul Ferster can be reached at 415-863-2678. Copyright © 2005 by the San Francisco Apartment Magazine. All rights reserved.