Feature
by David Wasserman
For property owners, 2006 was relatively quiet on the state legislative front. While certain pro-tenant lawmakers actively sought to enhance tenants’ rights, Governor Arnold Schwarzenegger vetoed many of these bills, and responsible legislators voted against numerous others, thereby preserving the ability of California apartment owners to control their properties. Thus, while landlords have been hit hard on the local front, not a lot came out of Sacramento this year.
60-Day Notice
Three pieces of legislation that did get signed into law will significantly impact our industry. The first piece of legislation is the 60-day eviction notice requirement for certain tenants. This law, known as Assembly Bill 1169, came from legislation first enacted in 2003 that expired on December 31, 2005, without being renewed. The law was initially implemented because several large apartment operators in the North Bay and Sacramento areas generated a wave of negative publicity when they evicted large numbers of tenants. As a result, the California State Legislature stepped in and passed a law requiring that tenants who have resided in their unit for more than one year be allowed 60, as opposed to 30, days to vacate their apartment when evicted through no fault of their own (a “no fault” eviction).
A “no fault” eviction means that the tenant’s lease is terminated not because the tenant breached the lease, but rather because the lease term has expired and the landlord does not wish to renew it. In places without rent control, the landlord is free to terminate the tenancy upon lease expiration provided that the owner is not discriminating against the tenant for unlawful reasons such as the tenant’s race, religion, ethnicity, gender, sexual orientation or national origin. However, in San Francisco, a no fault eviction must also be expressly permitted by the rent law; as such, no fault evictions are generally limited to owner/relative move-ins, removal of illegal units, substantial rehabilitations, sale of condominium units and, for a temporary displacement of tenants with the right to return, lead abatement or capital improvement work to the unit.
“Fault” evictions are governed by a separate statute requiring the tenant to vacate after three days if the breach is not cured or, in some instances, without any opportunity to cure. In California, fault evictions include nonpayment of rent, breach of a lease covenant, commission of waste and/or nuisance, or using the dwelling for an illegal purpose. San Francisco’s rent law imposes additional requirements on owners doing fault evictions, but passage of AB 1169 will have no impact on this area.
With the passage of this law, effective January 1, 2007, landlords serving notice for no fault evictions on tenants of more than one year must comply with the 60-day notice requirement. Like its predecessor, this bill expires in three years unless renewed. It also does not apply to tenancies that have existed for less than one year when the eviction notice is served; in those instances, the traditional 30-day notice is still available.
However, AB 1169 goes further than the previous 60-day notice law and states that the 60-day requirement shall not apply if any tenant or resident has resided in the unit for less than one year. The legal staff at the California Apartment Association (CAA) interprets this clause to mean that the one-year “clock” restarts if a new tenant/subtenant/roommate is added to the lease agreement. Such an interpretation may apply outside of San Francisco, but given the local rent law’s liberal stance on what is permissible subletting regardless of additions to the rental agreement, San Francisco owners are advised to consider giving 60-days’ notice for tenancies longer than one year—even if there have been subsequent occupancies that are less than twelve months in duration.
The other exception contained in this bill is an exemption for single-family homes or condominiums that are being sold to natural persons for owner-occupancy. If notice is given less than 120 days after escrow has been opened, the historic 30-day notice is allowed. For structures in San Francisco that are governed by the rent law, this exemption has no application, as sellers cannot evict their tenants for the purpose of emptying the unit for sale. Indeed, AB 1169 ends with the following warning: “This section may not be construed to affect the authority of a public entity that otherwise exists to regulate or monitor the basis for eviction.”
CAA understandably opposed AB 1169 because it represents a further erosion of landlords’ property rights. Yet local practitioners generally found the additional notice period to be inconsequential or even helpful in San Francisco’s extremely restrictive rent and eviction control framework. For example, because the city’s rent laws impose major barriers on owners terminating tenancies for no fault, coupled with the fact that many of these no fault evictions are contested and eventually wind up before pro-tenant judges and juries, allowing tenants more time to vacate may be seen as a plus for owners who are otherwise vilified. Indeed, a jury may be more inclined to award the owner possession if the tenant was given 60 or more days to vacate, rather than just one month’s notice. As the governor stated when he signed this bill, “being asked to move involuntarily is never easy, and moving is especially difficult for the elderly and persons with disabilities.”
Finally, the San Francisco Rent Ordinance contains several hybrids of fault and no fault just cause provisions for eviction that may be impacted by AB 1169. For example, many practitioners believe that the just cause grounds for terminating a tenancy due to a tenant denying lawful access into the unit or paying rent habitually late fall outside of the three-day notice statute—even though these types of evictions are predicated on the tenant’s fault. As such, the hybrid just causes usually invoke the longer 30-day notice period, which will be extended to 60 days in light of AB 1169 for tenancies longer than one year.
Towing and Day Care
Two other noteworthy bills were also signed into law. AB 2210 clarifies a landlord’s right to remove vehicles illegally parked on residential property. It allows an owner or another tenant to, in certain circumstances, have a vehicle towed that is parked in an unauthorized space, and further permits the towing company to redact the name of the party requesting the tow from the towing authorization form. This redaction may reduce retaliation against the resident or property manager who ordered the tow. AB 2210 also states that the persons authorizing the tow can do so without being present at the tow site as long as they are at the property; however, this requirement does not apply to buildings consisting of less than 16 residential units with no resident manager. In these buildings, written authorization (which can be faxed or emailed) can be given to the tow company instead.
San Francisco landlords should be very careful about towing vehicles. If the tenant or the tenant’s guest is parked in an unauthorized space, the owner should serve proper notice under the rent law. The temptation to tow may result in an expensive lawsuit against the owner claiming that the tenant was wrongfully displaced from a parking privilege without the benefit of due process under the Rent Ordinance. Moreover, as the local law was recently amended to prohibit landlords from severing parking privileges without a permitted just cause, a tenant whose car is towed may have a substantial claim for wrongful eviction damages. Consequently, if the car belongs to a tenant or a tenant’s guest in the building, the owner should consider the more time-consuming eviction process before calling the tow company.
Finally, AB 2865 requires owners and managers to notify tenants operating a day care facility that they are applying pesticides at the property. This legislation compliments existing law that requires owners who contract for pest control to provide a notice of the pest control company’s practices at the property to all new tenants. The new law represents good public policy and will only protect landlords from liability should someone claim injury from pesticides. It also serves as a reminder to landlords that they should be posting Proposition 65 warning signs in common areas and distributing Proposition 65 pamphlets with their new lease agreements.
Landlords should thank the governor for vetoing certain detrimental bills, including one that would have allowed tenants to post political signs and banners in their rental units and another that would have eased restrictions on sex offenders moving into rental housing. Legislators on both sides of the political aisle have also been receptive to the industry’s concerns, as voiced by CAA lobbyists working tirelessly at the capitol. In 2006, CAA continued to fight ongoing assaults by pro-tenant elected officials to curb the use of the Ellis Act and to limit the application of Costa-Hawkins. To this end, it is imperative that members of the local chapters, such as SFAA, continue their financial support of CAA by making, at a minimum, the suggested contributions to CAA set forth on the annual membership dues statement. Absent this funding, neither the governor nor members of the Legislature can be apprised of the adverse effects created by irresponsible legislation.
The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of SFAA or SF Apartment Magazine. David Wasserman is the president-elect of SFAA and serves on the Government Affairs Committee of CAA. He can be reached at Wasserman-Stern, 415-567-9600. Copyright © 2006 by SF Apartment Magazine. All rights reserved.