the other side

By J. Wallace Oman

Editor’s Note: This is the third and final part in a three-part series on the SFAA Form Lease. The first part was printed in the November 2007 issue of the magazine, and the second part was printed in the January 2008 issue.

In this article, I finish my description of particular lease provisions (the “top 20”), which I find most worthy of criticism; this column will discuss provisions 12 through 20.

#12: Rush to Return Estoppel Certificates
(¶ 40, “Estoppel Certificates”)
This entire paragraph foments litigation rather than avoids it. This lease provision requires a tenant to return an estoppel certificate but gives the tenant only five days to sign and return it, or it is declared a “material breach” of the lease. Because there have been court decisions that held estoppel certificates to be as binding on the tenants as the underlying leases, I recommend that tenants never complete estoppel certificates—sometimes called tenancy information sheets or the like—without legal advice, usually from a tenant attorney. But the process takes some time, and the short five-day limit imposed by the lease, especially when the estoppel certificate comes without a notice of the tenant’s
right to obtain legal advice about it or a warning that significant legal consequences could flow from the information the tenant provides on the estoppel certificate, is blatantly unfair.

In addition, the lease provision requires that the tenant’s response be under penalty of perjury, but I know of no legal authority permitting or requiring the estoppel certificate statements by a tenant to be made under penalty of perjury, and the law which I have seen indicates that a landlord cannot make allegedly false tenant statements in such a document be under penalty of perjury or be punishable as a crime.

Apart from trying to protect buying landlords from fraud and negligent misrepresentation in disclosures by selling landlords, and to obtain information from tenants to compensate for poor record-keeping by their current landlords, the drafters of the lease appear to be trying to rush and coerce tenants into making statements that could well harm themselves and limit their potential claims against their current landlords, e.g. by stating that they have no disputes with the landlords or legal claims against them.

Finally, in a monument to overly broad ambiguous covenants, the lease requires tenants to “disclose, upon request, any information which Tenant believes would prevent any purchase of the Premises or would prevent Owner or potential owner from moving into the Premises.” I assume that the drafters of the lease are trying to assist real-estate agents helping buyers of the landlords’ properties by eliciting any sale-damaging facts, such as owner move-in (OMI) protected tenants, OMI units, illegal units, and so forth (and, no doubt, attempting to prevent sellers from getting sued later by buyers for failing to disclose material facts). But the majority of tenants will have no idea what to say and, even if they know what the questions are seeking, will have no motivation to compensate for the failure of the selling landlords to keep good records themselves and the failure of buyers and their agents to exercise due diligence in investigating the properties.

# 13: Limits on Guests
(¶ 13, “Occupancy”)
This provision seeks to limit the time that “guests” spend in the rental unit, but unfortunately it doesn’t define the term “guest” (although presumably it means a person who sleeps overnight at the unit). But the lease unfairly makes a tenant request permission from a landlord just for a “guest” to visit more than 15 consecutive days, even if the “guest” lives next door and merely comes over to visit and have coffee every day. The lease also requires permission for a “guest” to stay more than 30 days in any calendar year, thereby putting at risk those tenancies where boyfriends and girlfriends sleep together overnight on weekends or other days of the week more than an average of 2.5 days per month per year. Although the lease declares that, “violation of the provisions of this section shall be deemed a substantial and material breach of this Agreement and is agreed to be a just cause for eviction,” I can’t imagine a San Francisco court allowing a landlord to evict a tenant for breach of this arguably unconscionable lease provision.

#14: Catch-all Attempted Just Cause for Tenancy Termination
(¶ 46, “Invalidity”)
Among other provisions, this lease paragraph states that, “violation by Tenant of any applicable ordinance or statute shall be deemed sufficient cause for termination of tenancy.” The missing definition here is one for the term “applicable,” but no doubt this is another attempt by the drafters of the lease to scare allegedly violating tenants to vacate (“You got a parking ticket so now you must move.”), while knowing that an attempted termination of tenancy would never stand up in court and would in all likelihood draw a wrongful eviction or malicious prosecution lawsuit against the landlord. As mentioned above, a tenant cannot waive the tenant’s rights under the Rent Ordinance (per § 37.9(e)) and violating some ordinance or statute unconnected to the tenancy, unless the violation is one specifically mentioned in § 37.9(a) of the Rent Ordinance, is not one of the 15 just cause grounds for eviction.

#15: Discovery by Landlords at Rent Board Hearings
(¶ 47, “Rent Board Petitions”)
Landlords’ lawyers seek by this lease provision to obtain “discovery” of specified tenant documents relating to motor vehicle registration address, driver’s license address, voter registration address, and the like. The lease provision even amazingly seeks, “the address of any property for which the Tenant has slept overnight for more than thirty (30) days in the twelve months prior to the date of the filing of any petition with the [Rent Board].” No doubt landlords are seeking documents to win a Rent Board Regulation 1.21 petition or a Costa Hawkins Act petition alleging that the tenants’ principal places of residence are not the subject rental units. But the attempt to invade tenants’ privacy (and perhaps force tenants to avoid long vacations) is offensive and legally improper.

Attorneys for both tenants and landlords are regularly frustrated by the lack of discovery and subpoena power for parties at Rent Board hearings, but it is unconscionable for landlords to try to use this lease language to give themselves, but not tenants, such power of discovery. The unconscionable nature of the provision in this adhesion contract is demonstrated by the unilateral nature of the provision, which only gives power to landlords and not to tenants. I seriously doubt that a Rent Board Administrative Law Judge would penalize a tenant for refusing to produce documents demanded by a landlord because of this lease provision, or that the San Francisco Superior Court would allow the eviction of a tenant solely for breach of this privacy-invasive lease provision, particularly since, for the latter lawsuit, the landlord would have discovery powers, including the use of the subpoena, to obtain evidence of any underlying significant lease or law violation by the tenant.

#16: Owner Exculpatory Clause for Damage or Destruction of Premises
(¶ 25, “Damages to Premises”)
This provision declares that the tenancy is terminated if any cause (such as fire, flood or earthquake) renders the unit uninhabitable, unless the unit is restored pursuant to law. That is current state law. What the lease provision fails to mention is that, for units covered by the Rent Ordinance, Rent Board Regulation 12.19(a) requires that, “If a tenant is forced to vacate her/his unit due to fire or other disaster, the landlord shall, within 30 days of completion of repairs to the unit, offer the same unit to that tenant under the same terms and conditions as existed prior to her/his displacement.” Also, Regulation 12.19(d) declares: “The landlord who attempts to rerent a unit, but refuses to allow a tenant to return to her/his home under this section shall have wrongfully endeavored to recover or wrongfully recovered said tenant[‘]s rental unit in violation of Section 37.9 of the ordinance and shall be liable to the displaced tenants for actual and punitive damages as provided by Ordinance Section 37.9(f).”

This Rent Board regulation doesn’t alter existing law; it just states that, if the rental unit is rebuilt, it must be offered to the tenant. By not stating the applicable local law, this lease provision apparently seeks to deceive tenants into not realizing that they might have claims to reoccupy their rebuilt rental units.

#17: Presumption of Elements of Malice for Statutory Damages in Eviction
(¶ 30, “Holding Over”)
Before it was amended, the unlawful detainer statute allowed a prevailing landlord to be awarded a judgment for treble damages if the court found malice by the tenant in holding over. One of the elements of malice was a willful and deliberate holdover. Besides moving up the vacate deadline from midnight to 7:00 p.m. (an action of dubious legality but still perhaps generally and practically helpful to both landlord and tenant), this lease provision attempts to bootstrap in a malice finding by stating that, “Should Tenant fail to vacate by said time [7:00 p.m. on the termination date of this tenancy] the hold-over shall be presumed to be willful, deliberate, and without the consent of Owner and Owner shall be entitled to damages for the hold-over period.” Code of Civil Procedure § 1174(b) allows a court in an unlawful detainer proceeding where malice is shown to award up to $600 statutory damages in addition to regular unlawful detainer damages. But for the many tenants who do not vacate their units by the termination dates because they cannot find affordable replacement housing, it is unfair to presume that the holdover is malicious. Arguably, this lease provision is void as contrary to public policy under Civil Code § 1953(a)(4), which invalidates any lease provision which abridges a tenant’s procedural rights in tenancy litigation and which would therefore leave it to the court trier-of-fact, judge or jury, to determine if there is any malice in the tenant’s holdover.

#18: Rental Application Misrepresentation as Ground for Eviction
(¶ 41,“Application”)
This lease paragraph provides that, “any misrepresentations contained therein [in any Rental Application or related form submitted by Tenant] shall be considered a material incurable breach of this Agreement and may be a just cause for eviction.” But it is not clear what covenant in this agreement is being breached, and it is patently unfair for the provision not to state that the misrepresentation must be a “material” misrepresentation, not an irrelevant, unimportant misrepresentation. Rare would be the misrepresentation that would support an eviction, particularly if the tenancy were a long tenancy where, for example, the tenant’s initial statements of income and assets supporting credit worthiness had become stale and irrelevant over time. This provision should have a phase-out time of one or two years, so it is not a burning fuse leading to a bomb waiting to be exploded on a long-term tenant in good standing for a landlord (most likely a new landlord) who wants to find a way to create a unit vacancy.

#19: Definition of Nuisance
(¶ 31, “Nuisance”)
This provision attempts to provide a contractual definition of nuisance, although nuisance is actually a tort doctrine. Thus, although the provision is perhaps helpful to deter tenant misbehavior, it also is not likely to be rigidly enforced by a court in an eviction lawsuit if the alleged tenant misconduct doesn’t qualify as a statutory or common law nuisance. This lease paragraph declares that, “Three complaints against Tenant, Tenant’s guests or invitees in any twelve-month period shall be deemed a nuisance, is a substantial violation of a material term of the tenancy and is a just cause for eviction.” It is true that nuisance is a just cause for eviction, but a lease cannot abridge a tenant’s right to have a court determine whether or not the tenant’s conduct constitutes a nuisance. For example, were this a valid lease provision, then, in a tenant-versus-tenant dispute, particularly where the landlord sided with one of the tenants, it would be possible for that favored tenant and landlord to persuade two other tenants to file complaints against the disfavored tenant, thereby creating a possible (and possible frame-up) slam-dunk nuisance eviction under the lease. However, Civil Code § 1953(a)(4) invalidates any lease provision that abridges a tenant’s procedural rights in tenancy litigation.

#20: Late Rent Payments and Returned Rent Checks
(¶ 6, “Late Payments” and ¶ 7, “Returned Checks”)
These paragraphs perhaps provide helpful starting definitions for “habitual late payment of rent” and “frequently returned checks for insufficient funds” but, as discussed above, in an eviction action the court itself will ultimately decide what constitutes habitual late payment of rent or what constitutes frequently returned checks, under Civil Code § 1953(a)(4), as described above. The lease definitions suffer from their failure to allow for good-cause late payment or returned rent check, e.g. from bank error, which occurs fairly frequently. To illustrate the one-sided and double-standard nature of the lease, it is not surprising to see that ¶ 28, entitled “Interruption of Services,” attempts to shield the landlord from liability to tenant “for any interruption or reduction of utilities or services [including all housing services, I presume] caused by someone other than Owner, or by Owner due to circumstances beyond Owner’s reasonable control.” For the lease to be fair, this same standard should be applied to tenants’ payment of rent.

Finally, for the last item of criticism, I offer the common-sense principle that a lease that contains many provisions that none of the parties can understand is an invitation to anarchy or conflict. This lease contains much legalistic terminology which is unnecessary, archaic and ill defined. For example, ¶ 2 uses the anachronistic term “save,” although it would be much clearer simply to say “except for.” Also, ¶ 12 twice uses the term “severally” without explaining the concept to the tenants, who often are not legally sophisticated enough to know about that term. In fact, I am sure that many landlords don’t know the meaning of “severally” (separately) or what it means in the phrase “jointly and severally.” Also, the term “invitee” is used in several places in the lease (as in ¶ 13) and should be defined. And another anachronistic term, “consign,” is used in ¶ 19; why doesn’t the lease state “transfer custody or entrust” instead so that the term will be understood by all?

I know that landlord lawyers feel compelled to practice defensive law to protect
their clients from those (few) abusive tenants at one extreme end of the landlord-tenant spectrum. But many of the “solutions” in the lease won’t cure or deter the problems at which they are directed. I would hope that the attorneys who draft the next version of the SFAA lease will use their creative power to protect the vast numbers of landlords and tenants in the middle who are operating in good faith: landlords simply trying to run a business and make a fair, not exorbitant, profit, and tenants trying to live their lives. I would hope that the drafters of the next SFAA lease will not subject all those good tenants to punitive lease provisions, which are more designed to punish than to help and which give the power to abuse tenants to the unscrupulous landlords.

Unfortunately, it appears that many illegal, arguably illegal, deceptive, or unfair provisions in the lease are cynically placed there because the landlords and their attorneys know that many tenants will accept them at face value, without obtaining legal advice to learn that many of these provisions are legally void and will not be enforced by the courts. As SFAA’s lawyers consider future revisions of their form lease, I hope that they will keep in mind that, in the past, lawsuits for unfair business practices have been brought against publishers of rental agreements that contained unconscionable or unlawful terms applied as contracts of adhesion. They should particularly review all those lease provisions void under Calif. Civil Code § 1953, and they should also remember that some lease provisions not expressly made void by that statute are still void as violations of public policy.

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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. 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 co‑author of California Eviction Defense Manual, Second Edition (CEB California Continuing Education of the Bar 2007). He can be reached at
walloman@aol.com. Copyright © 2008 by J. Wallace Oman and SF Apartment Magazine. All rights reserved.