the other side

by J. Wallace Oman

Editor’s Note: SFAA recently released its 2007 Residential Rental Agreement. The agreement was the result of many hours of debate and drafting by affiliate members of SFAA who are also lawyers and professional property managers. The hard work of these volunteers is greatly appreciated by SFAA.

In this issue of SF Apartment Magazine, we are pleased to present the first in a three-part critique of the agreement by tenant attorney J. Wallace Oman. The second part of his article will run in the January 2008 issue.

Oman is a well-respected tenant advocate in the legal community who has taken the time to review the agreement and to provide his opinions. As with any other article appearing in this magazine, Oman’s comments are merely his opinions. In next month’s issue, we will publish a response to Oman’s article.

I want to commend SFAA for giving me this forum. I think SFAA is extraordinary as an advocacy group to invite and publicize the opinions of the loyal opposition (me) in this way. SFAA is also extremely enlightened and smart, because by allowing me this opportunity, it sees the issues raised here in a nonlitigation context. It can then study them and take actions to prevent major problems for its constituents (landlords) and the landlords’ constituents (tenants). With this article I am being more critical of an SFAA practice than I have ever been before. I hope that SFAA members accept the constructive spirit in which I do this.

It’s no secret that tenant advocates in San Francisco heartily dislike the SFAA 2007 Form Lease (from now on, I’ll just call it the “lease”). I took a quick count of the provisions that I don’t like, either because they are illegal or arguably illegal (53 provisions); deceptive because of wording or placement (9 provisions); unfair or bullying terms taking advantage of the scarcity of affordable housing and the unequal bargaining power of landlord and tenant (24 provisions); or just badly drafted terms that will cause confusion (16 provisions). This quick count is rough and in some cases there is double counting; a provision might simultaneously be classified in two or more categories, such as illegal or arguably illegal and also unfair or badly drafted.

Because of space limitations, I will not be able to list all of the lease provisions I find most objectionable, but I will list and describe the top 20. To be fair, I should also say that, if space permitted, I would even list a few provisions that I think are helpful and fair (8 provisions). These provisions define San Francisco Rent Ordinance terms; introduce new features by contract which recognize actual practices in the real world; make up for deficits in the existing landlord-tenant laws; or structure the tenancy to minimize conflict between landlords (“owners”) and tenants.

Below, are my most hated provisions in the lease, listed in order of decreasing disfavor (in my opinion, sometimes based on the egregiousness or shock value of the provision, sometimes on the prevalence of harm to tenants, and sometimes on the potential magnitude of harm to tenants—even if the likelihood of harm is low). Because of space constraints, only numbers one through four are listed here. The list will continue in two future columns.

#1: Negotiated Agreement Provision
(¶ 48, “Entire Agreement”)
This provision is not the most harmful, but it is listed first because it is so shocking and because it tries to counteract the adhesionary nature of all the lease’s unconscionable or other illegal provisions. The lease falsely declares that, “Owner and Tenant acknowledge and agree that the drafting of this Agreement was the product of negotiations.” In fact, there are 13 pages of fine print in the form lease, with a few blank spaces for the names of the parties, address of the property, and amount of rent to be filled in by the landlord. The attempt here by the lease is to neutralize several legal principles.

One of them is unconscionability, which holds that clauses in leases and other contracts are unenforceable by courts for such reasons as the clauses are presented to consumers by the drafters of the contracts on a “take it or leave it” basis with no opportunity to negotiate, or the clauses are written and placed in preprinted form contracts to be inconspicuous. California Civil Code § 1670.5(a) codifies the principle that a court can refuse to enforce an unconscionable provision in a contract: “If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made[,] the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.”

Because this lease is an adhesion contract, many of its draconian anti-tenant provisions are unconscionable and unenforceable. For that reason, any eviction lawsuits brought for breach of one of these unenforceable lease covenants will very likely be won by the tenants, who will probably file wrongful eviction or malicious prosecution lawsuits against the landlords after that.

Another legal principle that the lease seeks to circumvent is the one that declares that, if there is an ambiguity in a contract, the contract will be construed against the drafter of it. In all likelihood, if there is a dispute in litigation over the interpretation of an ambiguous provision in this lease, the court will see the truth and interpret the provision against the landlord, who will be found to be the drafter of the contract.

#2: Owner Move-In Provision
(¶ 29, “Termination”)
This provision attempts to have the tenant agree at the outset that the landlord has the right to recover possession of the unit for the landlord’s occupancy as a principal place of residence. This provision is not legal, given the law on the subject dictated by San Francisco Rent Ordinance § 37.9(a), which requires that a landlord, in order to evict a tenant from a rental unit covered by the eviction control provisions of the Rent Ordinance, must have “just cause” as defined by the Rent Ordinance. Owner move-in (OMI) is one of the just causes for eviction (Rent Ordinance § 37.9(a)(8)), but there are many conditions attached by law to that eviction ground, which must be met by the landlord. Moreover, Rent Ordinance § 37.9(e) declares that any waiver by a tenant of any rights under the Rent Ordinance shall be void as contrary to public policy.

#3: Owner Exculpatory Clauses (¶ 32, “Hold Harmless”)
These provisions attempt to shield a landlord (and the landlord’s agents) from liability for claims of personal injury to a tenant or third person or, especially, for claims of personal property damage (such as leaks from rain and plumbing) by declaring that the landlord is not liable unless, for the former, there was an intentional or unlawful act by the landlord or, for the latter, unless there was gross negligence (apparently irrespective of any ordinary negligence by the landlord). Perhaps the lease doesn’t recognize that Civil Code § 1714(a) declares that, “Everyone is responsible, not only for the result of his or her willful [intentional] acts, but also for an injury occasioned to another by his or her want of ordinary care or skill in the management of his or her property or person, except so far as the latter has, willfully or by want of ordinary care, brought the injury upon himself or herself [via contributory negligence, comparative negligence].”

The lease provisions certainly are void to the extent that they conflict with Civil Code §§1953(a)(5) and 1668. Section 1953(a)(5) declares that a lease provision is void as contrary to public policy if it seeks to have a tenant agree to modify or waive the tenant’s right to have the landlord exercise a duty of care to prevent personal injury or personal property damage where that duty is imposed by law (as it is by Civil Code § 1714). In addition, Civil Code § 1668 declares: “All contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.” Finally, there is a general judicial antipathy toward exculpatory clauses in residential leases, perhaps best expressed by the California Supreme Court in Henrioulle v. Marin Ventures, Inc. (1978) 20 Cal.3d 512, 519, which held that ”exculpatory clauses in residential leases violate public policy.”

#4: Landlord Entries
(¶ 26, “Entry and Inspection”)
This provision attempts to define “normal business hours” for landlord entry as 7 a.m. to 7 p.m. all seven days of the week. To explain, Civil Code § 1954 prohibits a landlord from entering a rental unit, unless it is an emergency or an abandoned unit, or unless the tenant has consented, except “during normal business hours.”

This lease provision purportedly obtains the tenant’s blanket consent for entry in advance, for all times in that 7-to-7 time period. But by its unreasonable assertion of business hours, the provision arguably is void as contrary to public policy in violation of Civil Code § 1953(a)(1), which prohibits such lease provisions modifying or waiving the tenant’s rights under Civil Code § 1954 (although landlords may argue that the provision is not void because the lease was presented to the tenant before the tenant took actual possession of the rental unit, under Civil Code § 1953(b)).

My thoughts about the lack of wisdom of this provision and the easy way for landlords and tenants to create a compromise solution are described in my August 2007 column, “Avoiding Unit Entry Problems.” I find it notable that even the lease’s “House Rules” for noise and behavior, Rule 1, states that, “Special consideration must be exercised before 8:00 AM...” So long as the unreasonable 7-to-7 provision is in the lease, it is a trap for unwary landlords, who now have no excuse for not responding almost 24-7 to repair requests by tenants and who have no excuse for not scheduling work on days that are not regarded as nonbusiness days, for example on Sundays, for backed-up sewer lines.

Editor’s Note: Parts Two and Three will discuss more of the SFAA Lease provisions.

The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of the 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. J. Wallace Oman is a San Francisco attorney specializing in tenant representation. Before that, for almost 20 years he was a staff attorney with the local, federally funded legal services program. He is a coauthor of California Eviction Defense Manual, Second Edition (CEB California Continuing Education of the Bar, 2007). He can be reached at
walloman@aol.com. Copyright © 2007 by J. Wallace Oman and SF Apartment Magazine. All rights reserved.