Watch Out for Rent Control in Pasadena and AB-1506! – by Patricia Harris

With permission from AOA (Apartment Owners Association)

Following in the footsteps of tenant groups in Glendale and Long Beach, a Pasadena group has also filed preliminary paperwork to place a rent control initiative on an upcoming ballot.

The Pasadena ballot measure would:

  • establish a city-run rental housing board
  • limit rent increases, and
  • force the city to adopt “just-cause” eviction policies — which would limit the number of reasons a landlord could evict a tenant

Glendale and Long Beach

Ballot initiative for rent control in Glendale and Long Beach were rejected in November of last year.  The petitions were deemed “deficient and invalid” for several reasons.  Submitted petitions did not include the text of the measure, several sections had pages glued and pasted on top of each other, whited out and/or violated the California Election Code. Rent control advocates in both places say they plan on refilling the paper work.

The Southern California cities that have adopted rent control ordinances are Santa Monica, West Hollywood, Los Angeles and Beverly Hills.  Over the last two years, Pasadena, Glendale, Inglewood and Long Beach have begun fighting to add their cities to that list.

AB 1506 – Costa Hawkins Repeal

The Costa-Hawkins Rental Housing Act (“Costa-Hawkins”) is a California state law, enacted in 1995, which places limits on municipal rent control ordinances. Costa-Hawkins preempts the field in two major ways:

  • First, it prohibits cities from establishing rent control over certain kinds of residential units (e.g., single family dwellings, and newly constructed units, which are both deemed exempt).
  • Second, it prohibits municipal “vacancy control”, also called “strict” rent control. In the vacancy control of an apartment, a city’s ordinance works to deny or limit an owner’s ability to increase the rental amount to new tenant(s), even in cases where the prior tenant(s) voluntarily vacated the apartment or were evicted for cause (such as failing to pay rent). In other words Costa-Hawkins, by now prohibiting vacancy control in the above circumstances, mandates that cities allow an apartment owner the right to rent it when vacant at any price (i.e., market price).

AB 156 was the biggest threat to property owners since rent control itself.  It was a proposed measure to repeal a state law that bars rent caps on units built after 1995. If it had passed, it would make it easier for these other cities to enact rent control laws.

Hopefully, they won’t continue to try and get more legal signatures.  In the meantime, tell all of your friends not to sign any of this tenant welfare nonsense when they are approached at the grocery store and other places!

Patricia Harris is Senior Editor of the Apartment Owners Association News and Buyers Guide.0

Can I Say No to Pot in My Apartments When it is Legal in my State? – by John Triplett

With permission from AOA (Apartment Owners Association)

California just became the world’s largest legal marijuana market. When pot is legal in a state, what issues does this present to property managers and landlords of rental properties? Property managers are often confused and seeking to better understand how to handle the issues of legal marijuana and medical marijuana when it comes to tenants and rental housing in their states.

Laws are changing all the time in many states, just as California did on January 1, 2018, as voters approve different levels of permission when it comes to marijuana. This leaves property managers trying to figure out what should be in their leases around the issue.

You may be able to ban smoking, but do you really know what your tenants are eating or growing in their apartments? Do you really want to know if they are good paying tenants?

Rental Housing Journal did a recent interview with Seattle, Washington attorney Bret Sachter, an expert in tracking the progression and transformation of marijuana laws, to discuss some common questions property managers have about marijuana and tenants.

“I’ve been asked this a lot,” Sachter said, “but it does not come up as often as you might think. The overarching issue here is that, with few exceptions, people can do what they want to protect their property, even if the prohibited behavior is not illegal. You can prohibit smoking, prohibit pets, but with marijuana it’s much easier because it is federally illegal. So you can pretty much prohibit it if you want to no matter what, even medical marijuana,” Sachter said.

4 Questions About Pot, Tenants and Apartment Leases

Sachter says in terms of Fair Housing issues, and the U.S. Department of Housing and Urban Development (HUD) it is a situation where HUD wants it in the lease that marijuana is illegal but enforcement is another issue, he said. It is not so much that HUD wants landlords to evict over marijuana, but that you have something in the lease language that allows for eviction in the instance of marijuana use on the property. “So it is pretty clear as far as HUD is concerned,” he said. Here are his answers to four questions on pot and apartments.

  1. 1.     Tenants With a Disability and Medical Marijuana

Question: If a tenant comes in and says I have a disability, here is a note from my doctor, I use medical marijuana, which is legal in this state, and I want to rent your apartment. Can a landlord prohibit that?

Answer: “A landlord can absolutely prohibit that because marijuana is illegal under federal law.” The landlord can say, “I understand our state allows medical marijuana but it is still a Schedule 1 drug and I prohibit it on my premises.”

  1. 2.     Marijuana is Legal in My State – But What Does the Lease Say?

Question: What if a tenant says marijuana is legal and they should be allowed to use it?

Answer: “If your lease prohibits smoking and prohibits use of illegal drugs, then the legality of marijuana at the state level is irrelevant because under federal law marijuana is illegal. If your lease does not have those types of clauses, you should talk to an attorney in your state or city to find the best solution for your lease.” There is no law about reasonable accommodation for marijuana users, federal laws do not require it. As far as the federal government is concerned it is not ok.

“One thing I would say, and it is important, I would encourage landlords just to make everything clear,” in the leases, he said. “Clarify in a lease that you must abide by all laws both state and federal.” That is the case in residential. He said it can be different in commercial.

“But in residential it is not as tricky, and I am speaking very generally here,” Sachter said. “The states may have their own thing going on with legal marijuana laws, but it is still federally illegal. Make it crystal clear in your leases is my best advice,” he said. “How can you attract tenants in a state where it is legal yet protect the owners of the property? You cannot have it both ways.”

“I know in Seattle there are Airbnb bed and breakfasts that specifically market themselves accordingly, as part of marijuana tourism to come and stay in our place where it is legal.” But if a property manager doesn’t want that going on, then they have to be up front in the lease.

“If your tenant is Airbnbing to a tenant who is then using marijuana – well if you can’t catch them you cannot do anything about it. You have to prove they are doing this.  They are going to be using marijuana regardless of what the lease says.”

  1. 3.     What if the Tenant Using Marijuana is a Well-Paying, Good Tenant?

“Landlords can certainly put a no-waiver clause in the lease. If I say, ‘Here is a list of prohibited things’ and if you do these prohibited things in the lease, you are subject to eviction,” he said.

“However, any time I waive any of these things does not constitute an overall waiver. It basically means you should not ever do it again,” he said. “Just because you get away with it once, does not mean you get away with it every time,” Sachter said.

  1. 4.     Can I say ‘no pot in my apartment

“Usually if you say, ‘No pot in my apartment’ and you find a tenant using marijuana and you haul them into court, more than likely the judge is going to say, ‘Have you stopped?’ to the tenant and ‘Are you going to do it again?’ and the tenant is going to say ‘No.”  And then judge will say, ‘Ok, dismissed.”

To put a more legalistic term on it, usually a court will be in favor of “allowing the tenant to cure the defect,” rather than evict for most things like that, Sachter said.

Technically, in Washington, a landlord would serve a 10-Day notice to comply or vacate with the terms of the lease.  This process, therefore, gives the tenant a chance to “cure” the violation before the landlord can evict. Check your local state laws on this.

 

What One Experienced Property Manager Says About Pot

Sam Driver, Product Director for Buildium.com, and an experienced property manager, said as far as marijuana use in apartments, due to the newness of the legislation, the federal laws that supersede state and county laws, and liability concerns, it is not a topic that comes up a lot – yet.

“Generally, the safest solution is to choose the most conservative path-impose a no-smoking policy, which can in some cased cover outside areas, and a crime provision that includes local, state and federal laws. In many states, there are setbacks from doors, and it is particularly important if the building is a place of work which a multi-unit apartment building certainly is. So your lease should contain a provision explicitly banning smoking and illegal activity. Because the feds still outlaw it, this should be sufficient,” Driver said.

“This of course only covers the smoking angle. If a resident consumes it in another way, you’d likely never know,” he said.

 

Growing Marijuana Could Put a Power Load on Your Apartments

“As for growing, that’s less clear. But in general, unless the electrical system is designed for it, the loads grow lights put on the apartment unit could be excessive. I’d consider a reasonable use clause that specifies all high load equipment, including lights, air conditioners and any kind of pump be approved by you.

“This would put you in a position to take action if they are putting too much load, without specifically calling out the use of the equipment. Pumps are a good area for monitoring, because of the intermittent load, they trip breakers, and anyone who is using a hydroponic system would need several,” Driver said.

 

What if I Want to Market My Apartment to Marijuana Users?

“If, however, you wanted to roll the dice and market to this crowd assuming your state laws allow it, remember that the federal laws would cover any bank deposits from proceeds,” Driver said.

“In this case, you’d be able to do it, assuming no federal intervention, in compliance with local laws. No insurer would provide EO&E (errors and omissions excepted) insurance to you, and you wouldn’t be able to deposit any funds into a federally-accredited bank. So you’d have to self-insure, and run an entirely cash business, but you could do it, risking only federal enforcement.

“The big question is, ‘Would the premium rents be worth the risk of forfeiture?’ If you run afoul of the federal drug laws, the asset seizure possibility is a huge risk. You could lose the building.
“If you’re managing other owners’ properties, then you’d be risking their assets even if you used different leases, unless you kept fully separate books, bank accounts, and co-mingled nothing. So I’d say it would be all-or-nothing,” he said.

“The timing is tricky, too. Leases contain a provision that stipulates that the contract is in force in a specific jurisdiction. If they change the laws rendering your lease out of compliance, what happens during the remaining time of the lease? Is it invalidated? Or does the contract remain in force until it expires? “Good questions for your lawyer,” Driver said.

Rich Triplett is a writer for the RentalHousingJournal.com which is an interactive community of multifamliy investors, independent rental home owners, residential property management professionals and other rental housing and real estate professionals. It is the most comprehensive source for news and information for the rental housing industry. Their website features exclusive articles and blogs on real estate investing, apartment market trends, property management best practices, landlord tenant laws, apartment marketing, maintenance and more.  

AB 1506 IS DEFEATED IN COMMITTEE

A MESSAGE FROM AAGLA EXECUTIVE DIRECTOR, DAN YUKELSON

COSTA-HAWKINS IS SAVED…
FOR NOW. TO BE CONTINUED.

Today is a great day for the multifamily housing industry. An Assembly bill introduced by Richard Bloom (D-Santa Monica), AB 1506, to repeal the Costa-Hawkins Rental Housing Act of 1995 (“Costa-Hawkins”) has been defeated. In a meeting today in front of the Housing and Community Development Committee, a 5 member committee, two members were in favor, two were against, and one member, Ed Chau, abstained; therefore, preventing the Bill from moving forward to the General Assembly.

Just prior to today’s Housing and Community Development Committee meeting on AB 1506, your Apartment Association of Greater Los Angeles and its affiliated associations mobilized and encouraged their members to email and call Ed Chau’s offices urging him to Vote No on AB 1506. As a result, calls and emails flooded into Ed Chau’s offices and eventually, Ed Chau shut off his phones! We sent busloads of sign-carrying housing providers to today’s meeting in Sacramento to urge the Committee to Vote No on AB 1506. And, it worked! Ed Chau abstained, which is the same as a No Vote.

Advocacy works!
Your efforts paid off. Thank you all that contributed to the effort to defeat AB 1506.

Costa-Hawkins is a landmark, California state law that places many protective limits on local rent control ordinances. Costa-Hawkins provides two major benefits: (i) first, it prohibits municipalities from establishing rent control over certain types of housing units such as single-family homes, condominiums and newly constructed rental units; and (ii) second, it permits “vacancy de-control”, or in other words, it allows rental housing providers to set their rents at the prevailing market following a tenant’s vacancy. Without Costa-Hawkins, rental housing providers in cities such as Santa Monica and West Hollywood could not raise their rent to market under any circumstances. It is Costa-Hawkins that mandates cities to permit an apartment owner to rent an apartment, when vacant, at any price (e.g., market price). AB 1506 would have repealed Costa-Hawkins entirely.

Although we have won today’s major battle, it is likely that AB 1506 will return in a different form by “chipping away” at some of the protections we have under Costa-Hawkins instead of the full repeal sought by Bloom. In addition, we are faced with a statewide ballot initiative that has been filed by well-funded, price control extremists that, if passed, would repeal Costa-Hawkins in its entirety. The proponents of the initiative have raised nearly $20 million to assure its passage.

We must all continue to join in the battle against these dangerous threats to the rental housing industry in California. The only way that we can defeat the initiative or other attacks on Costa-Hawkins is with money and your involvement.

IT IS IMPORTANT THAT YOU GIVE GENEROUSLY TO THE AAGLA POLITICAL ACTION COMMITTEE TODAY.

If you have the means, please give generously. Now more than ever, we need those that can afford to, to write $1,000, $2,5000, $5,000 or even $10,000 or more checks. If we lose the battle to save Costa-Hawkins, we could lose billions of dollars in lost rental income and property value. If we lose the battle over Costa-Hawkins, many of our members will end up in financial peril.

Now more than ever, stay involved, advocate and give to the AAGLA POLITICAL ACTION COMMITTEE. The Apartment Association of Greater Los Angeles is your regulatory insurance. AAGLA is constantly working on your behalf to ensure your voice is heard and your property rights are protected. We always have your back every step of the way. Support us and we will win.

GIVE YOUR SUPPORT

BLOWING UP COSTA-HAWKINS: WHAT IS IT AND WHY SHOULD YOU CARE?

It is Not Just Your Apartments, But Single-Family Homes and Condominiums Will Also be Impacted

By Daniel Yukelson and Stevie Funes

Although a great deal has already been said about it, there is much more discussion and debate to take place this year regarding the Costa-Hawkins Rental Housing Act of 1995 (“Costa-Hawkins”). Anyone that owns a residential property here in our golden State of California, whether new or old, or whether multi-family, single family or even a condominium needs to be informed and care about Costa-Hawkins.

Costa-Hawkins is a landmark, California state law that places protective limits on local rent control ordinances. Costa-Hawkins provides two major benefits: (i) first, it prohibits municipalities from establishing rent control over certain types of housing units such as single-family homes, condominiums and newly constructed rental units; and (ii) second, it permits “vacancy de-control”, or in other words, it allows rental housing providers to set their rents at the prevailing market upon a tenant’s vacancy. Without Costa-Hawkins, rental housing providers in cities such as Santa Monica and West Hollywood could not raise their rent to market under any circumstances. It is Costa-Hawkins that mandates cities to permit an apartment owner to rent an apartment, when vacant, at any price (e.g., market price).

Before Costa-Hawkins, rental housing providers in many jurisdictions were often forced out of business and faced bankruptcy. Prior to the protections provided under Costa- Hawkins, a rental housing black market formed, and apartment buildings became dilapidated due to deferred maintenance as owners suffered financially. It was not that long ago when the City of Santa Monica was referred to as the “Skid Row by the Sea” because housing providers could no longer afford to upkeep their properties.

Causes Leading Up to Rent Control

Rent control policies first appeared in the early and mid- 1900s during the World Wars in reaction to these two national emergencies. It was then during the late 1970s that various municipalities throughout California and nationwide began enacting rent control ordinances due, in part, to rising real estate values and surging interest rates, which had made single family homes in California less and less affordable. As a result, people began moving into apartments in larger numbers causing a rental housing shortage. At the same time, municipalities were making poor land use decisions by restricting construction of new housing units. As the demand for rental housing increased and the supply decreased, rental housing providers increased rents – it’s just the “old” supply and demand. And, to make matters worse, in the “perfect storm,” state and federal low-income housing assistance fell, inflation increased, and yet at the same time, wages and salaries fell.

The City of Berkeley became the first California city to adopt a post-war rent control ordinance in 1972. In 1976, Governor Jerry Brown, vetoed state legislation (AB 3788) that would have prohibited local rent control laws. AB 3788 was supported the California Housing Council (CHC), a real estate trade association. Subsequently, the CHC was able to get an initiative to prohibit rent control laws on the ballot in 1980, Proposition 10, but this initiative was soundly defeated.

In the meantime, in June 1978, Proposition 13 had been approved by a two to one margin by California voters. Prior to the election, Proposition 13 proponent, Howard Jarvis, and the California Apartment Association, had suggested that landlords would lower rents if Proposition 13 were to pass. Apparently, numerous voters were said to have thought that by lowering landlord property taxes, Proposition 13 would automatically mean lower rents. The CHC, then became fearful of a tenant backlash if landlords failed to follow through in lowering rents, and decided to oppose Proposition 13. Despite post-election efforts by Governor Brown and the CHC, few landlords lowered their rents.

Across California, tenants quickly began to feel their numbers and formed local groups, which quickly grew in intensity and strength. Tenant activists organized political agitation directed at state and city government. Governor Brown’s newly created ‘tenant hot line’ was at one point, getting 12,000 calls per day. Due to continuing tenant pressure, rent strikes, and adverse news coverage about rent increases and angry tenants, especially seniors, the Los Angeles City Council passed a six-month rent freeze in August 1978. By 1988, fourteen California municipalities had adopted full rent control ordinances.

While the strength of the tenant activism eventually began to dissipate, later attempts to repeal rent control at the state level failed. Today, approximately two-dozen out of 482 California cities have enacted rent control laws.

The Birth of the Costa-Hawkins Rental Housing Act

Authored by Jim Costa, a Democrat Senator from Fresno, and Phil Hawkins, a Republican member of the Assembly from Bellflower, Costa-Hawkins was first introduced in the Senate and eventually became Assembly Bill 1164. After several negotiated changes, it was passed in both chambers. Republican Governor, Pete Wilson, then signed AB 1164 into law and Costa-Hawkins was born.

Although Costa-Hawkins placed limitations on rent control, which was an agenda more favored by Republicans, quite a few Democrats supported the Act. The pro-tenant Western Center on Law and Poverty (WCLP) requested several amendments to the bill such as the prohibition of rent increases “if serious health, safety, fire, or building code violations were discovered and not corrected for six months.”

Costa-Hawkins was later amended in 2002 to close a loophole and clarify the law related to condominium conversions. It prevented owners of apartment buildings, who obtained a certificate for conversion, to an exemption to rent control laws, without selling any such apartments as condominiums.

Life Before Costa-Hawkins and the Passing of the Ellis Act

Without vacancy-decontrol afforded under Costa- Hawkins, municipalities can control the rental marketplace in its entirety. Some cities, such as Santa Monica before the passage of Costa-Hawkins, have exercised “vacancy control” by limiting what rental housing providers can charge for their units once a tenant vacates. Without the protections of Costa-Hawkins, rental housing providers simply could not keep up with the increasing costs to profitably operate their property. As a result, some owners decided to leave the multi-family housing business entirely, while others converted their properties to other uses, such as condominiums.

In the mid-1980’s, California passed the Ellis Act, a law to protect the right of owners to go out of the rental housing business so that they would not be forced to continue operating them at a loss. The Ellis Act was in response to the City of Santa Monica’s challenge to the right of property owners to stop offering their rental housing, and in essence, attempted to compel owners to operate rental housing, even at a loss.

It is clear that Costa-Hawkins has been a great lifeline to the rental housing industry and to property owners who have been able to make-up for some of the lost rental income “ground” once units are vacated. Without Costa-Hawkins protection, rent control laws would expand and California would return to the “dark ages” when the worst effects of rent control were allowed to thrive without abatement while at the same time driving owners out of business, creating a decaying housing stock and drastically reducing housing supply.

Some price control extremists have suggested only certain portions of Costa-Hawkins be modified by, for example, removing only the prohibition on new construction, which excludes from rent control properties built 1995 or later. The multi-family housing industry considers any attempt to alter Costa-Hawkins similar to allowing the “camel’s nose under the tent,” and any change, no matter how extensive, can only lead to a moving the goal post until it is ultimately repealed in its entirety. When it comes to Costa- Hawkins, any modification is the proverbial red line in the sand.

Threatening Costa-Hawkins

Costa-Hawkins is now being threatened with repeal both in the state assembly, and by well-organized, and extremely well-funded tenants’ rights groups who have submitted a ballot initiative. We, as rental housing providers, are under attack! If repealed, many municipalities would dramatically expand rent control.

A bill, AB 1506, that has been proposed by Assembly Member Richard Bloom, a Democrat from Santa Monica, would repeal Costa-Hawkins. However, that bill has been temporarily put on hold by its author amid fierce opposition from the rental housing industry. AB 1506 proposes a simple, one-line repeal of Costa-Hawkins. Bloom’s bill must pass the Assembly by the end of January, but even if it fails, it is likely that another legislative attack will be introduced in early 2018. The simple text of the bill is as follows:

“THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 2.7 (commencing with Section 1954.50) of Title 5 of Part 4 of Division 3 of the Civil Code is repealed.”

In addition to the Bloom bill, a new threat being led by tenant advocacy groups and Michael Weinstein, president of the AIDS Healthcare Foundation. These rent control zealots have proposed a ballot initiative that would repeal the Costa-Hawkins. This group is well organized and well- funded, and have raised, by some accounts, more than $20 million to ensure this initiative gets on the ballot and is passed. The proponents of this initiative submitted a letter to the California Attorney General requesting a title and summary for the initiative on October 23, 2017, which at the time this article was written, was pending issuance by the California attorney general’s office, but expected on December 27, 2017. The proponents will then need to gather the required 365,880 valid voter signatures in order to get on the November 2018 ballot.

Your Apartment Association of Greater Los Angeles and its allied rental housing associations have been able to defeat similar attacks against our industry at the State level many times before. However, this initiative and the bill proposed by Assembly Member Bloom are some of the most awful and egregious political threats to the rental housing industry in AAGLA’s 100-year history! We ask that each of our members be informed, attend Apartment Association meetings, write letters to your legislature, and actively help us to overcome the looming threat to our property rights. You need to care about Costa-Hawkins.
Together we can win!

Credit to AAGLA.com

10 Ways to Express Resident Appreciation – by Trish Harris

With permission from the Apartment Owner’s Association (AOA)

In the multifamily industry, we often think of apartment community residents in the collective.  However, these communities comprise of individuals with diverse lives, unique personalities and a broad range of hopes and dreams – just as any other group of people does.  When we think of our residents in this way, we can better consider the impact appreciation can have on them and their lives.

The truth is that we all desire and sometimes even need to be appreciated, to be recognized, to know that we matter.  It’s a part of the human condition to want that warm and fuzzy feeling we have when we know somebody cares!  In fact, an important part of community building is expressing and encouraging gratitude and appreciation.  So what can property managers and owners do to endure their residents feel that way?

We’ve compiled a list of ideas and strategies designed to help get your creative juices flowing, but first, how about adopting an attitude of gratitude?

Designate a Yearly Resident Appreciation Week

Find a time of the year that is not crowded with commitments and plan a unique act of appreciation for each day that week in honor of your residents.  Sample activities for your week:

  • Snack bag giveaways to residents
  • A small plant and note left at each resident’s door
  • A fair for the children with bouncy house, cotton candy, donkey rides
  • A Saturday or Sunday afternoon cookout with outdoor family games
  • After-school candy throw with employees tossing hard candies
  • Morning coffee and doughnut stations at the apartment community exits
  • A local band performance on a weekend night

Pay Attention to Their Needs

Ensure the staff recognizes and accommodates any special needs of residents

Conduct Monthly Birthday Parties

Designate a particular day and time (i.e. the first Sunday at 4 p.m.) for residents to gather for cake in honor of all resident birthdays during that month.  Present a birthday card to each honoree.  Mail cards to those unable to be present.  For some residents, your card may be the only recognition of their birthday.

Honor Their Passions and Diversity

Survey your residents to find out their hearts’ desires and design events featuring their unique talents and interests.  For example, have an art show showcasing crafts and works that residents have crated.  Ask each artist to share his/her story to post to your website or include in your newsletter.

Say “Thank You” in a Personal Note

When a resident does something kind for the staff, write a personal, handwritten note of appreciation.

Enlist Their Participation

Generously publicize all events for your apartment community so that no resident will be left out of the loop.  Make everyone feel included and welcomed.

Plan Calendar Celebrations

At the beginning of the year, flag special days, (Valentine’s Day, Martin Luther King Day, Groundhog Day, etc.) and brainstorm with staff tactics the management team can put in place to commemorate these days for the residents.

Cater to the Kids

If you really want to do something nice for someone, pay attention to their children!  Invite the kids to participate in such fun and simple activities as sidewalk chalk drawing, outdoor games, pet shows and noise parades, (i.e. banging on pans, blowing horns, singing.)

Little Things Mean a Lot

Remember how important the little things are in creating a caring and appreciative culture.  Look your residents in the eye.  Speak with compassion and be alert to little things that you can do to make them feel that they matter.

Smile with an Attitude of Gratitude

A good attitude is contagious.  So are smiles!  Make friendly greetings a mandate for your employees and staff as a part of your commitment to serving your community.

What Landlords Should Know About Section 8 – Myths vs. Facts – by Kristin Maithonis

With permission from the Apartment Owner’s Association (AOA)

The Housing Choice Voucher Program (commonly known as Section 8) is a federally funded program providing monthly rental assistance to very low income tenants renting units in the private market. The rental assistance is provided through a local housing authority.

Myths about the Section 8 program continue to prevent Section 8 participants from finding landlords willing to rent to them. Below is a list of common misconceptions about the program to help you make a more informed decision about whether to give a Section 8 tenant a chance.

Myth: Section 8 tenants are problem tenants.

Fact: Most Section 8 tenants live in the same place over a long period of time (7-8 years on average). You should screen a Section 8 tenant the same way you screen all other tenants. By conducting thorough and consistent screening, you are less likely to end up with a problem tenant, Section 8 or otherwise.

Myth: If you accept one Section 8 tenant, then all your units must be rented to Section 8 tenants.

Fact: If you own multiple units, you may choose to have one or more of your units occupied by Section 8 tenants. Just because you accept one Section 8 tenant does not mean that you have to rent your next available unit to a Section 8 tenant. If a Section 8 tenant moves out, you are not required to rent the vacant unit to another Section 8 tenant.

Myth: The landlord is responsible for a lot of paperwork.

Fact: Most of the paperwork the landlord is required to complete is at the beginning of a new lease. This paperwork includes the Request for Tenancy Approval form, W-9 form, Lead Warning Statement and Lease Agreement. The Housing Authority will assist with completion of these documents if needed. From time to time, the landlord will receive letters, amending the rent portions, inspection reports, newsletters, and other program materials. The landlord does not need to complete these forms.

Myth: You cannot evict a Section 8 tenant.

Fact: If a Section 8 tenant has violated your lease agreement, you may evict the tenant in accordance with State law. Please note that if you want a tenant to move after the initial term of the lease but do not want to state the cause for the termination of tenancy, then you must give the Section 8 tenant a 90-day written notice. When a notice without cause is issued, the Housing Authority will provide the tenant with a new voucher to relocate.

Myth: The Housing Authority has very tough inspection requirements.

Fact: The Housing Authority inspects the unit before a contract is signed with the landlord and annually or bi-annually thereafter. The Housing Authority checks the unit for any health and/or safety problems. The Section 8 inspection is not a code enforcement inspection. The Housing Authority checks the working order of smoke detectors and carbon monoxide detectors, water heaters, appliances, exits, window and door locks, fans, outlets, plumbing fixtures, heaters, and light fixtures.  The presence of trip and fall hazards, structural defects, rodents or roaches, peeling paint, excessive dirt or clutter, broken windows and the like are also checked. These are all items that most landlords would want to inspect themselves before renting a unit.

Myth: Evicting problem tenants on Section 8 does not accomplish anything.

Fact: The tenant may lose their Section 8 Voucher if they are evicted for lease violations. This ensures that problem tenants are not recycled to other unsuspecting landlords and acts as an incentive for participants to comply with their leases in order to continue participation in the program. Once a participant loses their Section 8 assistance, it is very difficult, if not impossible, to get back on the program.

Myth: Section 8 tenants are all on welfare and do not contribute to society.

Fact: Section 8 tenants come from all walks of life. In California, 61% of Section 8 participants are elderly or disabled, and 33% of Section 8 households are wage earners. Most housing authorities offer participants a chance to participate in the Family Self Sufficiency (FSS) Program. The goal of FSS is to assist participants with obtaining the education and skills they need to secure high wage jobs, start their own businesses, move off of assisted housing, and become homeowners.

Myth: The landlord cannot raise the rent.

Fact: Landlords may raise the rent for a Section 8 tenant after the initial lease term with proper written notice to the tenant and the housing authority. The housing authority does not have a pre-determined annual percentage rent increase. The rent increase requested must be reasonable when compared with similar units in the neighborhood. For multi-unit buildings, the rent for the Section 8 unit cannot be the highest rent in the building.

Section 8 vouchers help low-income people in your community afford a decent place to live. Without landlord participation in the program, more people would be forced to live in overcrowded and unsafe conditions or on the streets. For more information about how you can benefit from being a Section 8 landlord, please contact your local housing authority. To locate your housing authority, visit the U.S. Department of Housing and Urban Development website at https://portal.hud.gov/hudportal/HUD?src=/states/california/renting.

 

Kristin Maithonis, is Housing Manager for the City of Norwalk Housing Authority and former President of the California Association of Housing Authorities.

Happy Renters AND Safe Properties for the Holidays – by D.L. Graham

With permission from the Apartment Owner’s Association (AOA)

The holiday season is a time to bring out the best in human nature. But, it can also be a time of increased stress, short tempers, and rude behavior. How can you best keep an atmosphere of harmony and good will at your property, while still preserving the safety of your residents and your property?

Management often posts lists of rules at this time of year, and renters frequently perceive them as unreasonable, inconsiderate or onerous. Management desires sensible safety precautions, and renters just want to have fun. Here are some easy steps you can take to prevent tensions before they begin. It is often the little things that make all the difference between a frustrating holiday season, and one that is filled with joy and goodwill toward all.

Set Reasonable Holiday Policies

If possible, meet with your residents to discuss holiday safety precautions and the reasons behind any special rules during the holiday season. If a meeting isn’t feasible, communicate your policies in writing early in December. Keep the tone of your policies positive, and avoid producing a list of “thou shalt not’s”.

Be sure to give clear notice of where and to whom to ask questions and request clarification. Additional telephone numbers, such as for taxi service, nearby garages, nearby hotels for out of town guests, a telephone number for Christmas tree pick-up and so on, will create an air of mutual generosity that will keep residents happy during what can be an otherwise stressful time.

Parties and Noise

Since there are more parties during the holiday season than at other times of year, remind your residents to be considerate of their neighbors. Noise levels must be kept reasonable. If your building rules state that parties must conclude by a certain hour, the party givers should adhere to the rule. If you wish to make an exception, such as for New Year’s Eve, inform all residents about it far in advance.

Parking

At most rental properties, parking space is at a premium. Remind the residents where their guests are to park. Ask them to tell their friends not to infringe on the rights of other residents. They should know you will have illegally parked vehicles towed, if necessary. Be firm about this, but not threatening.

Responsibility for Guests

Remind your residents that they are responsible for the actions of their guests. Encourage them to have their guests use taxies or other transportation if they have too much to drink.

Security

If your property has a controlled entrance, ask the residents to notify management about their holiday parties in advance. If possible, the guest list should be given to the manager or guard.

Holiday Decorations

Perhaps the most controversial area of disagreement can be the subject of holiday decorations. The property owner who sets extremely strict rules limiting or forbidding decorations may be perceived as the worst Scrooge of the season, even if he was only thinking of the safety of the residents and the property. Be realistic about any rules you make, and be sure to communicate them to the residents well in advance. If decorations are permitted on windows, let your residents know by what date they must be removed. If wreaths or other decorations are permitted on doors, let them know what types of fasteners can be used.

It is unrealistic to establish a policy prohibiting lights on Christmas trees. Most residents find this completely unreasonable, no matter how much the owner may explain that it is a fire safety precaution urged by his insurance company. The same reaction greets the rule that only artificial trees are permitted. There are many sources for Christmas tree safety tips, which you can distribute to your residents. If your building has a common area, you can decorate it according to your approved guidelines to show how beautiful and creative decorations can be and still fall within good safety practice.

The urge to decorate for the holidays should be encouraged, because it makes for a more cohesive and stable population of renters, a good idea by anybody’s measure.

In summary, good, positive communication regarding your rules and expectations at holiday time can greatly increase the safety and awareness of your residents, add to their respect for you as their rental property owner, and keep the holidays safe and happy for everyone.

 

The information in this article is intended as general information only, and not for specific direction as to your individual property. You must choose to apply any information of this nature according to the circumstances that prevail at your property.

Legal Corner

WRITTEN BY MICHAEL A BRENNAN, EVICTION ATTORNEY 

Question: I just received a phone call from one of my tenants asking me whether she can pay her rent for this month in two payments. I don’t like doing it, but she has been a great tenant over many years and this is the first time she has made such a request. While I want to help her, I don’t want to create any legal problems for myself. What are your thoughts on this situation?

Answer: Generally, I’m not a fan of allowing tenants to make partial payments, as it sets up expectations that you will do so in the future. However, in your case, the tenant has been there quite a while and actually took the time to notify you in advance that she is short on rent. Based on her responsible behavior (which seems to be more and more rare these days), you might decide to allow her to pay rent in payments. Before you make that decision, be sure to check your rental agreement for a “nonwaiver” provision which states your decision to accept rent in two payments does not waive your right to insist on the entire amount on its due date in the future.

Assuming your rental agreement has such a provision (most modern agreements do), you can allow her to pay rent in payments without worrying about waiving your rights. Additionally, avoid putting anything in writing indicating the payment is for any specific period. Instead, simply provide her with a receipt (if you provide receipts) indicating the payment is a “partial payment” for the entire amount owed with a “balance due” for the unpaid amount. You can either issue a three day notice at the time she makes the partial payment, with a promise you won’t file eviction until the day after the date on which she has agreed to pay the balance (provided she fails to do so) or you can wait to serve the three-day notice until after the date on which she agreed to pay.

Either way, you are able to accept the partial payment without creating legal problems for yourself, keep control over the situation, and keep the relationship intact by accommodating her needs this month.

A Whopping 130 Housing Bills Make for a Very Busy 2017

Reprinted with permission of the Small Property Owners of San Francisco Institute.

State legislators are sponsoring a record setting 130 housing-related bills during this legislative session. Below are the most important. 

Abolishing the Costa-Hawkins Act

AB 1506 (Bloom, D-Santa Monica, Chiu (D-San Francisco) and Bonta (D-Alameda), would repeal the state Costa-Hawkins Rental Housing Act, giving all cities and counties the power to impose rent control ordinances, including vacancy control without limits. The bill’s authors decided not to move forward with the bill in 2017, but will take it up again in 2018. Position: Oppose 

Weakening the Ellis Act

AB 982 (Bloom, D-Santa Monica), would expand the number of tenants entitled to receive a year’s notice from a landlord before that owner closes a building as allowed under the Ellis Act. Under current law, tenants who have lived in the unit for at least one year and are at least 62 years of age or are disabled are entitled to a year’s notice. Other tenants are entitled to a 120-day

notice. AB 982 would extend the one-year notice requirement to all tenants, regardless of age or disability. Position: Oppose 

Undercut the Bonus Density Law

AB 915 (Ting, D-San Francisco) would allow San Francisco to count added density bonus units when calculating the total number of affordable units required for a development. The state’s density-bonus law incentivizes developers to include affordable housing in their projects. In exchange, developers get to build more market-rate units, helping their projects “pencil out.” AB 915, however, would force developers to price a portion of their density-bonus units at below market rate, thereby removing the very incentive that these bonuses are intended to create. The bill would undercut the state’s density-bonus law and make housing in San Francisco even more expensive. Position: Oppose 

Labor-Related Bill Onerous to Rental Industry

AB 1008 (McCarthy, D-Sacramento) would make it unlawful for an employer to include on an employment application any question that seeks disclosure of an applicant’s criminal history, and bars employers from asking about any convictions until the employer makes a conditional job offer. The ability to screen for past criminal activity is particularly important in the rental housing industry, as employees work around children at rental properties and are granted access to tenants’ units and personal possessions. Position: Oppose 

Curbing Ballot-Box No-Growth Measures

AB 943 (Santiago, D-Los Angeles) would require a ballot measure proposed by the voters to curb, delay, or deter growth or development to be approved by 55% of the voters instead of a simple majority. Position: Support 

Fast-Tracking Housing Construction

SB 35 (Wiener, D-San Francisco) would move housing more quickly through the building permit process when developers meet certain standards. Position: Support 

SB 540 (Roth, D-Riverside) would streamline the approval process to spur housing construction by having cities identify where housing needs to be built and adopting specific, upfront plans and conducting all necessary environmental reviews and public engagement. Position: Support 

Boosting Housing Near Public Transit

AB 73 (Chiu, D-San Francisco) would incentivize local governments to complete upfront zoning and environmental reviews, and rewards them when they permit housing on infill sites around public transportation. Position: Support 

Encouraging Affordable Housing

SB 2 (Atkins, D-San Diego) would establish a permanent funding source for affordable housing through a $75 fee on recorded documents; it exempts owner-occupied residential real-estate sales. Position: Support 

SB 3 (Beall, D-San Jose) seeks to provide $3 billion through a statewide housing bond to fund affordable housing programs in California. Position: Support 

SB 62 (Jackson, D-Santa Barbara) would create the Affordable Senior Housing Program under the Department of Housing and Community Development to guide the development of affordable senior housing dwelling units. Position: Support

AB 291 – IMMIGRANT TENANT PROTECTION ACT

California Apartment Association

Gov. Jerry Brown has signed a bill that will deter landlords from discriminating against any tenant based on their immigration status. AB 291, introduced by Assemblyman David Chiu, D-San Francisco, is set to protect tenants from unethetical landlords who seek to intimidate them by threatening to report them to immigration authorities, or those who seek to acquire possession of the premises based off a tenants’ inability to provide proof or documentation of their immigration status. [ Learn More ]