Legal Corner Q&A

by Various Authors

Q. We have a 90-year-old tenant who has been in our one-bedroom unit for 65 years. Four months ago, she went into an assisted living facility; her daughter continues to pay the rent but also says that her mother can no longer live alone and will not be moving back to the apartment. Under these circumstances, is there a way to reclaim the apartment without filing a formal eviction notice?

A. This scenario is becoming more and more common. Based upon figures produced by the United States Census Bureau, 14.8% of the San Francisco population is 65 years of age or older. Despite the fact that there are a growing number of elderly tenants who no longer reside in their rental units, failure to reside in the unit is not a basis for evicting a tenant or terminating a tenancy. However, the San Francisco Rent Ordinance does provide a mechanism for a landlord to decontrol a unit where the original occupant no longer principally resides in that unit and there are no other tenants in occupancy.

In June 2001, landlord Rent Board commissioners sponsored a regulation that would allow a landlord to decontrol a rental unit in situations where the tenant did not use the apartment unit as the “principal place of residence.” This rule was prompted in an effort to dissuade people from holding onto valuable rent controlled units even though they lived elsewhere. This rule also found support among tenant Rent Board commissioners, as it is consistent with the philosophy behind rent control, which was enacted in order to increase the city’s already short supply of affordable housing. The rule was codified in the San Francisco Rent Ordinance in Section 1.21 of the Rent Board Rules and Regulations. Section 1.21 requires that in order for the rent to remain at the rent controlled price, the premises “must be the tenant’s usual place of return.” If it is not, the owner can, upon a favorable determination by the San Francisco Rent Board, raise the rent to fair market value. Where, for example, the tenant’s rent is based on 65 years in occupancy, raising the rent to market rate would more than likely prompt the tenant or the tenant’s daughter to surrender possession of the unit.

In order for a landlord to increase the rent of the unit under Section 1.21, the landlord is required to petition the Rent Board for a determination that a rent increase under Section 1.21 is warranted. The landlord must file a petition with the Rent Board, after which it will hold a hearing on the issue of whether the tenant principally resides in the rental unit. In the question posed, such a hearing would no doubt be focused upon whether the tenant will return from the assisted living facility. Given the fact that the daughter has told the landlord that the mother cannot live alone and would not be returning, it seems likely that the Rent Board would decide in favor of the landlord on the 1.21 petition.

A decision by the Rent Board in a 1.21 hearing can, however, take up to 90 days to be rendered. Since any rent increase over 10% must be imposed via the service of a 60-day notice, the landlord should serve the rent increase notice immediately after the 1.21 hearing. The landlord should include language in this notice that the rent increase is based upon a determination in the landlord’s favor, to be rendered by the Rent Board in the 1.21 hearing, and will only be effective upon a determination in the landlord’s favor. If a determination by the Rent Board is not in the landlord’s favor, and the landlord does impose the rent increase prior to the decision, the landlord will be required to refund any increase paid by the tenant. However, by serving the 60-day notice immediately after the conclusion of the hearing, a landlord avoids having to wait to impose the rent increase for perhaps up to an additional 90 days, the time it takes the Rent Board to render the decision.

Although a tenant’s failure to reside in the rental unit does not allow a landlord to terminate and recover possession of that rental unit, the rent increase to market rate permitted under Section 1.21 will surely force a tenant to decide whether it is worth it to keep the rent controlled unit, especially if she is not living there. In the present question posed, it seems unlikely that the daughter would seek to hold on to the unit when the differential between the current rent and market rent is no doubt extreme. Either the daughter will surrender possession or at the very least the landlord will be collecting market rent without having to go to the time and expense of rehabbing the unit. In either case, the landlord is a winner.

– Daniel R. Stern

Q. I successfully evicted a tenant for nonpayment of rent, but he claims that I still owe him the return of his security deposit. The apartment is in good condition, but can’t I use the deposit to reimburse myself for the lost rent?

A. Unless the rental agreement imposes restrictions in regard to the disposition of the security deposit, the landlord can certainly apply it toward unpaid rents. In fact, the law (California Civil Code, Section 1950.50) defines “security deposit” as a charge imposed at the beginning of the tenancy “for any purpose.”

The Civil Code goes on to enumerate several specific purposes for which a security deposit may be used, and the very first one is the “compensation of a landlord for a tenant’s default in the payment of rent.” Thus, using the security deposit for reimbursement of unpaid rent is expressly authorized under California law. The security deposit may be applied toward unpaid rent during the tenancy or after it has been terminated.

Other specifically enumerated uses for the security deposit in the Civil Code include the repair of damage to the rental unit beyond ordinary wear and tear, and cleaning of the rental unit at the end of tenancy. Of course, it is always a good idea to list uses for the security deposit in the rental agreement to avoid a dispute, particularly if the deposit is intended for any other use than those expressly authorized under the Civil Code.

A limitation imposed by the Civil Code is that the landlord may claim only those amounts reasonably necessary to cover the amount of unpaid rent, or to make repairs. The Civil Code also expressly precludes use of the security deposit to remedy damages that pre-existed the tenant’s tenancy, including cumulative wear and tear. In other words, if a tenant of five years vacates, the landlord may use the security deposit to clean the 20-year-old carpet, but not to replace the same carpet if it is worn out from 20 years of use.

Remember that a landlord must return, by personal delivery or first-class mail, the security deposit, or any unused portion of it, along with an itemized statement, within three weeks of the tenant vacating. The landlord must also include copies of any receipts, or other documentation, showing the charges for which deductions have been made, unless the total deduction is $125 or less, in which case no supporting documentation is required.

– Fredrik Emilson

Q. Someone called saying they were trying to find an apartment for a registered sex offender. Do I have to let them turn in an application?

A. It is noteworthy that you discovered the applicant is a registered sex offender from a phone call, and not from the Megan’s Law website maintained by the California Department of Justice. This is an important distinction. Megan’s Law (Penal Code 290.46) generally provides that the use of information obtained from the website for purposes relating to housing or accommodations is unlawful. Inappropriate use of the website subjects an offending landlord to a judgment for the actual damages, and any amount that may be determined by a jury or a court sitting without a jury, not exceeding three times the amount of actual damage, and not less than $250, plus attorneys’ fees, exemplary damages, or a civil penalty not exceeding $25,000.

No court decision has yet determined whether a landlord may discriminate against a registered sex offender on information obtained from a source other than the website. However, in a 2006 opinion, the California Attorney General decided that the prohibition against unauthorized use of website information does not qualify registered sex offenders as a “protected class” for purposes of housing discrimination under the state’s Fair Employment and Housing Act. The FEHA prohibits housing discrimination on account of “race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income or disability,” or on any basis prohibited by California’s Unruh Civil Rights Act. The Unruh Act bars discrimination on the basis of “sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation” as well as additional, non-enumerated classifications recognized by the courts.

Thus, if registered sex offenders are not a protected class, the landlord should be free to discriminate based on that status, and you should not be required to take the application. The fly in the ointment, of course, is the opportunity for someone to claim you discovered his sex offender status from the website, and then sue. I seriously doubt that any jury or court would award significant damages to a sex offender, but because attorneys’ fees are awardable, you know that some lawyer will take the case for that reason alone. Therefore, even though you have the legal right to refuse the application, should you take the application and process it to avoid the charge that you violated the website proscription?

Many registered sex offenders have other problems, such as poor credit or a more extensive criminal history, and processing an application may turn up more grounds for rejection, such as a felony record. Even where the information was obtained from the website, housing may be denied “to protect a person at risk” or for some other reason authorized by law. Your tenant profile, e.g. children, may justify rejection for a history of pedophilia. Finally, even if nothing else shows up, and you decide to reject based upon registered sex offender status alone, you are no worse off than if you had refused the application.

Of course, while legal caution may suggest taking more information, your personal sense of security may dictate if you want anything to do with the offender. Thus, the proper course really depends on what makes you comfortable, and how much work you want to do.

– Saul M. Ferster

The opinions expressed in this article are those of the authors and do not necessarily reflect the viewpoint of SFAA or SF Apartment Magazine. The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Daniel R. Stern is with Wasserman-Stern and can be reached at 415-567-9600. Fredrik Emilson is a principal with Cornerstone Law Group and can be reached at 415-357-2099. Saul M. Ferster can be reached at 415-863-2678. Copyright © 2007 by SF Apartment Magazine. All rights reserved.