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

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.

Help Stop the Trash Monopoly! – by Michael Millman, Attorney

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

(The following is an open letter sent to Athens Services and Recycle L.A.)

My family owns several Westside apartments and Athens has been our outstanding provider for many years.

Two years ago, when the City Council passed the new trash hauling arrangement, the union trade group called “LANE” agreed that small apartment owners would not have to make any special arrangements in connection with recycling or other labor-intense protocols.  The big trash hauler, which would be reduced to seven, would have the facilities at their corporate areas to remove recycled items and take other appropriate actions consistent with state law.

As you’re more than well aware, the apartment owners are not able to instruct tenants to sort or separate trash because this would be considered by the Los Angeles City Attorney’s office as a form of “tenant harassment”.

As you’re also well aware, the current annual rental adjustment on rent is restricted to 3%.  It’s based upon an arcane CPI formula which does not address or capture trash hauling.  So, there’s no money whatsoever to encourage or promote the tenants to cooperate.

State law does not require resident managers at units of less than 16.  Our maintenance and gardeners are difficult to control.  So the trash hauling companies need to provide bins or other equipment at no additional cost that will promote or help the tenants fully understand their obligations.  Remember, any activity on behalf of an owner will be viewed as tenant harassment.

LANE indicated that the union-driven big trash hauling groups that will ultimately get awarded the franchises (monopoly) will ultimately handle these items.

If you want to print signage and post it at my units, please do so.  If you want to create flyers to help the tenants, please do so.  However, we were promised at the outset that the trash hauling groups would be responsible for these activities and that our total costs would not be increased.

Again, Athens has been an exceptionally outstanding provider.  They’re very professional and were very reasonably priced.  They’re honest and appropriate.  I know they will do things that are fair for small family-owned apartment businesses.

[AOA:  As you know by now, some trash haulers have doubled what owners had been paying before our gracious Mayor and City Council members granted them and the union a citywide monopoly. Again, “monopolies cause prices to go up and service to go down”.

And would you believe that Mayors and City Council members also know this and still vote to make property owners pay the consequences.

Please support our lawsuit and help to stop these ________.  (I’ll let you fill in the blank).  Also, please fill in the blanks in the form link that follows below and try to really fill in the blanks for dollars contributed.  Also, please send a copy of this to the Mayor and/or call his office and complain loud and clear!  Mayor Eric Garcetti: mayor.garcetti@lacity.org, City Hall, 200 N. Spring Street, 90012 – phone number 213-978-0600.  Thank you, Dan Faller]

Michael Millman is an Attorney and a Mar Vista activist and can be reached at (310) 477-1201.   

Help Stop the Trash Monopoly!

Donate Now

If you haven’t already done so, please make sure you contact the mayor and your councilpersons regarding your troubles due to this new law.

What Your Residents Need to Know About Dry Drowning – by Kings III Emergency Communications

Reprinted with permission from AOA.

Have a pool on your property?  You know that presents a whole new set of safety issues that you, as the property manager/owner are liable for.  With pool season in full swing, it is no surprise that there have been an increasing amount of drownings and other pool horror stories present in the spotlight lately.  Most recently, one reported story hit close to home for us here at Kings III.

Over Memorial Day weekend a four-year old took a swim and ended up passing away a day later due to dry drowning. 

This one really shook us up, not only because it took place near our headquarters in Texas, but because it was such a young life, a tragic story and potentially preventable.  Dry drowning is a real phenomenon and it occurs more often than you think.  It is so important that you warn your residents of something they might not otherwise be aware.

What is Dry Drowning?

Dry drowning, sometimes called delayed drowning, can happen hours after a person intakes a large amount of water into the lungs or survives an underwater drowning experience.  It occurs when a person breathes in small amounts of water during a struggle, triggering their airway to spasm and close, making breathing difficult.

Resident Prevention Tips

In order to lessen the likelihood of dry drowning, advise your residents of the following:

• Know the limitations of the swimmers in your group
• Always keep a close eye on inexperienced swimmers and small children near water
• Make sure everyone in your family knows how to swim
• Learn CPR

Symptom Recognition

Dry drowning symptoms are not always easy to spot, especially in young children who may naturally be cranky or tired after a day in the sun and water.  Residents should keep an eye out for these signs of dry drowning after going for a swim:

• Sudden changes in behavior (i.e. irritability)
• Coughing
• Chest pain
• Extreme fatigue

For more symptoms and prevention tips, see our blog post “Pool on the Property?  Have You Educated Your Residents on Dry and Secondary Drownings?  (http://bit.ly/2r9GkjL)

What to Do

If residents recognize symptoms of dry drowning in themselves or someone else, the victim should be taken to the emergency room as soon as possible, as time is the most important factor for survival rate.  Dry drowning can be treated with medical observation, oxygen or ventilation if needed.  Most cases are not fatal if treated in time.

For more pool safety tips with action items for both you and your residents, see Kings III’s guide – Public Pool Maintenance and Safety (http://bit.ly/21AwmzY).

Kings III Emergency Communications is the nation’s only full service provider of emergency communication solutions.  The company has installed thousands of emergency phones through the United States and Canada.  They are fully integrated; not only engineering and manufacturing emergency phones, but also providing one-stop-shop solutions that include installation, maintenance and 24/7 emergency monitoring for emergency help phones utilized at poolside, in elevators, parking areas, stairwells and more.  For more information, visit www.kingsiii.com. 

Landlord to Pay $20,000 to Settle Pet Discrimination Case – by the Editors of Rental Housing Journal

Reprinted with permission from AOA.

The owner of several Reno, Nevada apartment complexes has agreed to pay $20,000 to settle allegations of  pet discrimination and Fair Housing Act violations involving requiring pet deposits from prospective tenants who require assistance animals, according to a release.The Silver State Fair Housing Council filed four complaints against the owner and manager of Silver Lake Apartments, Vale Townhomes, Oak Manor Apartments and Angel Street Apartments with the U.S. Department of Housing and Urban Development (HUD).  These complaints allege ERGS, Inc. and Silver Lake Apartments, LLC discriminated against prospective tenants who required assistance animals by requiring applicants who required support animals to pay a pet deposit fee.

Under the conciliation agreement, ERGS, Inc. will pay Silver State Fair Housing Council $20,500.  ERGS, Inc., and Silver Lake Apartments, LLC, will also adopt written policies that are consistent with the Fair Housing Act and provide fair housing training for all employees who interact with tenants or applicants. Kate Zook, executive director of the Silver State Fair Housing Council, told Rental Housing Journal that a woman with an emotional support animal had tried to apply at the apartments and was told they do not accept pets. The Silver State Fair Housing Council did follow-up testing on emotional support animals and rentals at the apartment complexes. She said they found, “People with emotional support animals were told they do not qualify as a service animal.”

The organization then filed the complaint against the owner and managers of the apartment complexes.

“I hate filing cases,” Zook said. But she said unfortunately sometimes it takes publicity about these issues to get people’s attention. “It is too bad. Somebody has been hurt in this.”

Both Fair Housing Act and Americans with Disabilities Act can apply in these situations.

In addition to the Fair Housing Act’s protections, HUD provided guidance in April 2013 reaffirming that housing providers must provide reasonable accommodations to people with disabilities who require assistance animals.  

Pet Discrimination and Disability

Disability is the most common basis of fair housing complaint filed with HUD and its partner agencies. Last year alone, HUD and its partners considered over 4,900 disability-related complaints, or more than 58 percent of all fair housing complaints that were filed.

HUD writes in the notice that, “An assistant animal is not a pet. It is an animal that works, provides assistance or performs tasks for the benefit of a person with a disability, or provides emotional support that alleviates one or more identified symptoms or effects of a person’s disability. Assistance animals perform many disability-related functions, including but not limited to, guiding individuals who are blind or have low vision, alerting individuals who are deaf or hard of hearing to sounds, providing protection or rescue assistance, pulling a wheelchair, fetching items, alerting persons to impending seizures, or providing emotional support to persons with disabilities who have a disability-related need for such support. For purposes of reasonable accommodation requests, neither the FHA nor Section 504 requires an assistance animal to be individually trained or certified.”

Housing providers are to evaluate a request for a reasonable accommodation to possess an assistance animal in a dwelling using the general principles applicable to all reasonable accommodation requests. After receiving such a request, the housing provider must consider the following:

• Does the person seeking to use and live with the animal have a disability — i.e., a physical or

mental impairment that substantially limits one or more major life activities?

• Does the person making the request have a disability-related need for an assistance animal?  In other words,

does the animal work, provide assistance, perform tasks or services for the benefit of a person with a disability,

• or provide emotional support that alleviates one or more of  the identified symptoms of a person’s existing disability?

If the answer to those two questions is “yes,” then the housing provider is to modify or provide an exception to a “no pets” policy.

RentalHousingJournal.com, an interactive community of multifamliy investors, independent rental home owners, residential property management professionals and other rental housing & real estate professionals, is the most comprehensive source for news and information for the rental housing industry. This 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.  Reprinted with permission.

Don’t Let Your Estate Plan Be a Hazard for Your Family! – by Kenneth Ziskin, Attorney

Reprinted with permission from AOA.

My wife, Hinda, who helps me with planning for clients, and I  have been lucky enough to meet hundreds of wonderful apartment owners though the AOA seminars we have done throughout California.  The majority of them planned ahead years ago and build living trust based estate plans to protect their families.

Unfortunately, almost all the plans we reviewed (some just a few years old, and some decades old) have now become “HAZARDOUS TO FAMILY WEALTH.”

Many of these “hazards” result from changes in the tax environment which were not anticipated when plans were originally drafted.  Others result from changes in the family.  Many others just reflect the growth in family wealth, which is a “good problem” to have.  And, a few of the “hazards” are the result of “one size fits all” drafting which, without customized planning, rarely optimizes for “your” goals and unique situation.

The vast majority of our apartment owner clients had a net worth of only a few hundred thousand dollars when they started out.  So, it was hard for them to justify the cost of doing good planning and their main goal was probate avoidance.

However, today, the vast majority have built multi-million dollar portfolios, which DO justify the cost of careful, customized planning.

Changes in the Tax Environment

Most of the old (and, sometimes, not so old) plans we review for apartment owners focused on avoiding probate and making sure that estate tax exemptions were optimized.

But, major changes in estate/death taxes, income taxes and the effect of property taxes have now made it more important for most owners to focus on the income and property tax consequences of their estate plans.

• First, the lifetime exemption (now, an exclusion) from estate and gift taxes grew from $600,000 in 1997 to $5.49 MILLION in 2017!  That means a married couple can now pass nearly $11 million to their heirs free of estate taxes.
• Second, the estate and gift tax rate on wealth over the exemption actually fell from 55% to 40%.
• Third, one spouse was finally allowed to leave his or her exemption to the other spouse (we all this “Portability”).
• Fourth, the top Federal income tax rates rose from 35% in 2003 to 43.4% in Obama’s second term (including the “Net Investment Income Tax”).
• Fifth, adding insult to injury, California increased its top rate from 9.3% to 13.3%.
• Sixth, while property tax exemptions under Prop 13 did not change much, massive inflation in income property values made it important to preserve and maximize your ability to prevent reassessment when you die.

Combining all of these factors meant that most apartment owners, even after inflation, no longer needed to worry about estate and gift taxes.  Those who did need to worry (we think this is about 25-30% of our owner clients) faced less estate and gift tax exposure, both due to the increased exclusion from tax, and the reduced rates. 

Changes in the Family

Many old plans were written when owners’ children were still in school, or had not yet built their own families.  So, they gave little thought to how wealth should be left to maximize benefits for adult children and for grandchildren. Rarely was any effort made to protect the inheritance for generations from creditors and predators (i.e., potential ex-spouses!).  

Changes in Wealth

Very few old estate plans anticipated leaving as much wealth as our clients now expect to have.  In many cases, the amount of wealth could now, if not properly handled, change the life of heirs in a negative way, destroying incentives and motivations for heirs.

Lack of Customized Planning

Good estate plans need to be customized to meet your goals.  That requires your estate planning lawyer to help you understand your planning options, tease out your goals and desires, help you make important planning decisions and then take the time to draft customized documents to get results you want for your family.

Very few lawyers have the experience to do this while focusing on the special needs of California apartment owners.  Furthermore, even those who have the experience often price their services at a level that discourages them from spending the time with clients that is needed to do really good planning and draft custom documents.

However, given the larger estates that apartment owners now have or expect to have at life expectancy, good planning is now much more important than ever before.  Now, larger estate sizes, the benefits of good planning more than justify the cost.

Most Common “Hazards”

While we do see some well written trusts, most of the time we see some combination of the following hazardous features (as well as others which appear less often) in trusts and related estate plans that we review.

• Trusts for married couples that mandate funding of a credit shelter, bypass, exemption or “B” trust.  This then prevents getting a second increase in income tax basis when the surviving spouse passes, and can cost millions in unnecessary capital gains taxes for your heirs.  With “portability” of your estate tax exclusion between spouses, this “old style” planning is no longer necessary to save estate taxes for most couples.
• Failure to properly document that jointly owned property, (even in the trust) as community property so that both halves get a new, higher income tax basis when either spouse dies.
• Failure to structure the trust so that the property tax exemption of the first spouse to die can be passed to children after the second spouse’s death.
• Failure to structure property ownership in the trust to avoid reassessment even when the first spouse dies.
• Failure to protect assets left for a surviving spouse from creditors.
• Failure to protect the surviving spouse from undue influence that can redirect property away from your natural heirs.
• Use of LLCs or partnerships to hold buildings in ways that cause unnecessary increases in property taxes on the first or second death.
• Failure to provide enough flexibility in your trust regarding allocations of income and principal which can, in turn, lead to higher income taxes after your demise.

Sound Estate Planning Is Also About Opportunities to Better Benefit Your Heirs

We get great pleasure when we can help clients articulate not just what they will leave to heirs, but howthey will leave it in order to enhance the lives of their heirs.

In some cases, that means combining protection from creditors and predators, with provisions that will prevent heirs from misusing their inheritance before they develop enough maturity to manage it themselves.  None of our clients want their children or grandchildren to be “spoiled” by their inheritance, or to dissipate a substantial inheritance early in life and wind up impoverished in later years.

This almost always requires a lot of discussion with property owners about their goals and family.  Then, we teach them about some of the ways they can fulfill such goals.  Finally, we spend significant time doing custom drafting to reflect the decisions the owners made.  And, we follow that up with explanations of the drafting to make sure it reflects the owners’ desires.

Sometimes this includes provisions to encourage or mandate keeping some or all of the family real estate business together, either for a period of time or permanently.

It can also include provisions that help pass values about hard work, accomplishment, thrift or even community service to your heirs.

The fact is, the opportunities to benefit your heirs, protect them and pass values are only limited by your imagination.  We get great satisfaction from educating our owner clients about strategies that have worked for other clients (or not worked) in order to help them think about their planning choices 

Opportunities to Enhance Benefits During Your Life

Although most estate planning revolves around benefits for your heirs, it also provides strategies to help you live a better life yourself. This can include strategies to enable you to sell property without paying capital gains taxes.  One of those strategies is the Capital Gains Bypass Trust (“CGBT”).  We wrote about CGBTs in the July, 2016 issue.

For most owners, with properties valued at currently low cap rates, a CGBT can avoid current taxes on the sale of appreciated buildings (some of which can otherwise face income taxes of nearly 40%).  If can also substantially INCREASE currently spendable cash flow, obtain income tax deductions that can offset gains or income from other properties and give substantial financial and non-financial benefits to your heirs.

Just as important to many clients, the CGBT can enable them to get rid of the burdens of property management.

The upcoming seminar in Torrance will explore the CGBT strategy in greater detail, and include new material on how to use it even for properties that are encumbered with debt.  The seminar will include case studies to help pique your interest and understanding.

Make Your Estate Plan Work Well for Your Family

Making your estate plan work well begins with understanding the planning you have and your planning opportunities.  Generally, this should begin with having an experienced estate planning attorney who understands, and works regularly with, the problems and opportunities of apartment owners.

But the real key is good planning.  That is why my motto is: “If you fail to plan (well), plan to fail”.

The tax environment, your wealth, and your family have probably changed a great deal since you completed your planning.  The odds are high that your existing plan does not reflect your current goals for your wealth, nor does it avoid tax risks that changes in the law and your situation have produced.

In order to prevent your estate plan from being a HAZARD to you and your family, get your estate planning reviewed now by a lawyer who will help you articulate your goals, and then put your goals first in any planning you want done.  You will get peace of mind, and your heirs will gain substantial benefits.

To learn more, register to attend Ken Ziskin’s seminar on “Estate Planning for Apartment Owners”: 

• Tuesday, September 12, 10 AM, Torrance Holiday Inn, 19800 S Vermont Ave, and
• Wednesday, September 13, 10 AM at AOA’s main office, 6445 Sepulveda Blvd. in Van Nuys. 

These seminars will include coverage of the Trump proposals to change income taxes on apartment owners. Ken also offers FREE CONSULTATIONS FOR AOA MEMBERS. To register for one of these seminars, call (800) 827-4262 today! 

Kenneth Ziskin, an estate planning attorney, focuses on integrated estate planning for apartment owners to save income, property, gift and estate taxes.  He holds the coveted AV Preeminent peer reviewed rating for Ethical Standards and Legal Ability from Martindale-Hubbell, a perfect 10 out of 10 rating from legal website AVVO.Com, and is multiple winner of AVVO’s Client Choice Award. .  See Ken’s website at www.ZiskinLaw.com or call (818) 988-0949.  This article is general in nature and not intended as advice for clients.  Please get advice from counsel you retain for your own planning.

AB-2330 Walk-through – the Initial Move-Out Inspection – by Grayce Long, Attorney

With permission from AOA

When was the last time you had a walk-through with your tenant prior to them vacating the unit? The law regarding having a pre-inspection with your tenant was passed in 2003 however, many of you are still not following the proper procedures. Did you know that the number one reason a landlord is sued by their tenant is because of the landlord’s retention of the tenant’s security deposit?  You need to be very vigilant in your dealings with your tenant during their tenancy so that you have no problems and you protect yourselves from future litigation.   This article will outline the procedures that you must follow in order to comply with AB-2330.

Move-in Procedure

The first thing you always need to do is to take pictures of your unit prior to renting to the tenant.  Make sure that you have these dated and keep them in your property file.  If you accept a tenant, make sure that you go through the unit with them and you do a move in/move out checklist. This form can be obtained from AOA.

Move-Out Procedure

When does the AB-2330 kick in?  Normally, it is when either the owner or the resident gives notice to terminate the tenancy or the lease is about to expire.  You must, within a reasonable amount of time after the notice is served, inform the resident of their option to request an inspection and option to be present.  You can send them AOA’s form 135 entitled “Right to Request Initial Move-Out Inspection”.

Once the tenant receives the form they either request an inspection or do not request one.  If the tenant denies the inspection then there is no further action required by landlord!  However, if the tenant requests an inspection, then you must schedule an inspection on a mutually agreeable date that needs to take place no sooner than two weeks prior to the date the tenant vacates.  You can either agree on a date for the inspection, or if you don’t agree on a date, you still must do the inspection.  It is imperative that you give that resident at least a 48 hour written notice that you are going into their unit to do the inspection.   The notice can be waived but the waiver has to be in writing so it is best just to give notice of the date.

If the tenant withdraws the inspection then you do not have to do anything further.   If the inspection goes forward, the tenant has the option of being present at the inspection or not.  Either way the landlord can proceed with the inspection.

You then need to fill out the Initial Move-out Inspection Record which is part of AOA’s Form No. 135.  The inspection record requires you to go through each and every room and item and determine the condition of the item.  Once you do the inspection, you will need to do an itemized statement specifying repairs’ or cleanings that are proposed to be the basis of any deductions from the security deposit you intend to make.  The itemized statement must include the following statement:

“State law permits former tenants to reclaim abandoned personal property left at the former address of the tenant, subject to certain conditions. You may or may not be able to reclaim property without incurring additional costs, depending on the cost of storing the property and the length of time before it is reclaimed.  In general, these costs will be lower the sooner you contact your former landlord after being notified that property belonging to you was left behind after you moved out.”

The tenant then shall have the opportunity during the period following the initial inspection until they vacate to fix any of the identified deficiencies.   This is a landlord’s nightmare giving the tenant the right to make their own repairs and fix the unit.  Be advised that if the tenants work is not acceptable by a reasonable person’s standard, you can still deduct for the cost of the repair.  You are not stuck with accepting the tenants repairs if they are inferior.  Also, you are not limited to what you do on your initial inspection.  If you find something else that you missed on the pre inspection, you can still deduct from the security deposit for repairs.  Remember to attach the receipt for the work with the name and phone number of the person who did the work or estimate.   Also, you are not required to do the work in or deduct the estimate from the security.

Make sure that you take pictures of the damage and the subsequent repairs to the unit and keep those in your file for the tenant.  If the tenant sues you in small claims court for failure to return their security deposit, you will be well armed with all evidence to support your claims!  Make sure that if you do get sued that you file a defendant’s claim for all the money the tenant owes you and also specify any damages to the property.  Further, do not stipulate to a judge pro tem always ask for a judge or commissioner.

[Editor’s Note:  AOA members may download form 135, the AB-2330 Walk-through (at http://www.aoausa.com) which includes instructions and required forms to perform the initial move-out inspection.] 

Attorney Helen Grayce Long is an attorney at Fast Eviction Service. She attended UC Berkeley and graduated with a bachelor of arts.  She then attended the University of San Francisco School of Law.  Grayce has been an attorney for 25 years and specializes in Real Estate Law.  She’s done landlord/tenant work throughout the state of California with an emphasis on Rent Control law.  For more information, call (800) 686-8686, email hglongatty@fastevict.com or visit www.fastevictionservice.com. 

HUD Sues Landlords for $16,000 for Discrimination Against Veteran with Assistance Animal – by the Editors of Rental Housing Journal

Reprinted with permission of  the Apartment Owners Association

Landlords who refused to waive the pet deposit for a combat veteran with an emotional support dog have been charged with discrimination and violating the Fair Housing Act, by the U.S. Department of Housing and Urban Development (HUD), according to a release.

The veteran was renting a single-family home in Moore, Oklahoma, and asked that the $250 pet deposit be waived because his dog was an emotional support animal needed to assist him with his disability. The veteran provided landlords a letter from his doctor, according to the complaint. Under the law, assistance animals are not considered pets.

According to the charge, the combat veteran is diagnosed with service-connected Post Traumatic Stress Disorder (PTSD) and Major Depressive Disorder (MDD). These mental impairments substantially limit his personal, work, and social life. His disability symptoms include anxiety, isolation, avoidance, and a difficulty in public, as well as difficulty with interpersonal relationships and insomnia. He is an individual with a disability as defined by the Fair Housing Act.

In the letter to the landlords, the doctor stated that the veteran was diagnosed with PTSD following a combat tour of deployment and he was being treated at Oklahoma City Veterans Administration Medical Center. The letter further stated that dogs can often provide combat veterans support when PTSD symptoms escalate, and that veteran’s dog often keeps his PTSD symptoms in check.

The complaint says the dog, an emotional support animal, improves the veteran’s insomnia, gets him out of the house because he has to walk the dog, improves his mood, and provides comfort and support because he has a limited social system.

The tenant complained that AMH 2015-1 Borrower, LLC, and its management company, AH4R Management – OK, LLC, refused to waive their pet deposit fee. The leasing agent told the veteran, according to the complaint, “Unfortunately my broker said only service dogs are waived. I’m sorry I tried.”

The veteran then provided a link to websites with information on emotional support animals in rental housing units that included an example demonstrating landlords should not charge pet deposits for assistance animals and included the statement “Landlords cannot… [a]sk a tenant to pay a deposit, fee, or surcharge in exchange for having a service or emotional support animal, even if they require such a practice from owners who wish to obtain pets in their dwelling,” the complaint states.

After the company refused, the veteran paid the pet deposit and moved into the property.

The rental management told the veteran they had been advised by their attorney that the deposit had to be paid and that he “accepted their decision to not waive the pet deposit fee when he signed the lease and moved into the property,” according to the complaint.

The veteran replied that he was not OK with that decision, and he filed a complaint. The management company has since refunded his $250 deposit.

However, in the complaint HUD is asking for $16,000 in civil penalties from the management company for discrimination and violation of the Fair Housing Act “when they refused to waive the pet deposit for complainant’s emotional support animal,” according to the complaint.

Fair Housing Act and pet deposits for tenants with disabilities

The Fair Housing Act prohibits housing providers from denying or limiting housing to persons with disabilities, or from refusing to make reasonable accommodations in policies or practices for people with disabilities. This includes waiving pet fees for persons with disabilities who use assistance animals.

Disability is the most common basis of fair housing complaints filed with HUD and its partner agencies, according to the release. Last year alone, HUD and its partners considered over 4,900 disability-related complaints, or more than 58 percent of all fair housing complaints.

HUD’s charge will be heard by a United States Administrative Law Judge unless any party to the charge elects to have the case heard in federal district court. If an administrative law judge finds after a hearing that discrimination has occurred, he or she may award damages to the complainant for their loss as a result of the discrimination. The judge may also order injunctive relief and other equitable relief, as well as payment of attorney fees. In addition, the judge may impose civil penalties in order to vindicate the public interest. If the case is heard in federal court, the judge may also award punitive damages to the complainant.

Matthew Wildman from The Humane Society of the United States provided this question and answer on pets:

Question:  I am confused over the terminology of service animal, assistance animal and companion animal. Tenants use different terms such as these to refer to their pets. How do I as a landlord know which is which?

Answer: “Companion animals” or “companion pets” are interchangeable terms with the most common term, “pets.” For some reason, the term “companion animal” is perceived by many in the multifamily housing industry to mean something different than a “pet,” but there is no difference.  The terms that are of relevance to housing providers encountering requests for reasonable accommodation are “assistance animals” (also commonly referred to as “emotional support animals”) and “service animals.” An assistance animal can be any animal who is commonly referred to as a pet, but the difference is that their owner has a disability for which the animal is needed to either provide assistance in managing activities of daily living, and/or provides support that alleviates the symptoms or effects of the person’s disability. An “emotional support animal” is a type of assistance animal that provides emotional support that improves the symptoms of an individual’s disability.

According to the Department of Justice, a “service animal” may be a dog or miniature horse who has been trained to perform a specific task(s). Under the Americans with Disabilities Act, individuals living with a disability are legally entitled to bring these animals into places of public accommodation as well as their residence regardless of any pet restrictions. The most common example of a service animal is a Seeing-Eye dog, but not all disabilities requiring service animals are obvious. For example, individuals suffering from PTSD may need their dog with them at all times. This dog may be trained to sit calmly beside their owner.

It’s helpful to keep in mind that service and assistance animals are not considered pets, meaning that pet rules – such as no-pet policies, breed and size restrictions, pet deposits and fees – don’t apply to them, but owners are responsible for any damage they cause.

RentalHousingJournal.com, an interactive community of multifamliy investors, independent rental home owners, residential property management professionals and other rental housing & real estate professionals, is the most comprehensive source for news and information for the rental housing industry. This 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.  Reprinted with permission.

Los Angeles City Rent Stabilization – Reminders and Updates – by Patricia A. Harris

Hopefully, if you own apartments in the City of Los Angeles and are under the L.A. Rent Stabilization Ordinance, you have already paid your building’s registration fees of $24.51 per unit which was due by February 29, 2017.  Serving a timely notice, you may collect one half of those fees from your tenants.  Note:  You used to collect this fee in the month of June, but for 2017, it has been changed to August. 

Collect $12.25 Registration Fees in AUGUST

The Los Angeles Rent Stabilization Division allows owners to pass-through one half of these fees ($12.25) with a 30-day notice, collectible in the month of August only.  That means you MUST serve the notice of the one time annual rent increase (found on the following page) in the month of July in order to collect this annual fee from your tenants.  AOA recommends you serve the notice on July 1^st to collect this fee along with the rent due on August 1^st.

IMPORTANT NOTE:  The notice of the one-time annual charge must be accompanied with a copy of your Rent Stabilization registration certificate to show that you paid the fees.

Code-Enforcement Pass-Through Fees

The SCEP fee of $43.32 per unit charge for the Housing Department’s code-enforcement inspection fee may also be passed through to your tenants.  This fee, however, must be amortized over a 12 month period and is collectible at a monthly rate of $3.61.  A 30-Day Notice of Change of Terms of Tenancy must be served to each tenant after you pay your bill before you can collect this fee.  That means with proper service, you can legally raise your rents (as long as you paid your bill!), $3.61 per month. Every little bit helps!  Your tenant may elect to pay this fee all at once, however they will not be awarded a refund should they move before the end of the year.  Also, if your building IS NOT under rent control, you may request and collect the fee in its entirety after serving the 30 day notice.

Other Los Angeles Rent Stabilization Updates

• SECURITY DEPOSIT INTEREST:  Please note that the required 2017 interest that must be paid on security deposits for units in L.A. City is 0.12 percent. A landlord may pay tenants the actual rate of interest earned if security deposits are kept in a separate account by providing a copy of the bank statement showing the actual interest rate earned for the year.

• ALLOWABLE ANNUAL RENT INCREASE:  The Los Angeles Rent Control’s annual rent increase is currently 3% through June 30, 2017.  As of this printing, the July 2017 rental increase percent was not yet determined but we were told it will most likely remain the same.  The actual amount should be made available to us in June. 

Via https://www.aoausa.com/

New Landlord Requirements Regarding Bed Bugs – by Patricia A. Harris

AB551 prescribes the duties of landlords and tenants with regard to the treatment and control of bed bugs.  The below describes in general, a landlord’s responsibilities.

What Must a Landlord Do?

• On and after July 1, 2017, prior to creating a new tenancy for a dwelling unit, a landlord shall provide a written bedbug notice to the prospective tenant. [Note: Tenant acknowledgement of this notice is now included in the revised AOA Rental Agreements – please download and use the new rental agreements for new tenancies.]

• This same notice shall be provided to all other tenants by January 1, 2018.

• The notice shall be in at least 10-point type and shall include, but is not limited to, the following: General information about bed bug identification, behavior and biology, the importance of cooperation for prevention and treatment, and the importance of and for prompt written reporting of suspected infestations to the landlord. (AOA Members may download the form “Information About Bedbugs” for FREE in the forms alphabetical listings at www.aoausa.com.)

• The landlord shall notify the tenants of those units inspected by the pest control operator pursuant to Section 1954.604 of the pest control operator’s findings. The notification shall be in writing and made within two business days of receipt of the pest control operator’s findings. For confirmed infestations in common areas, all tenants shall be provided notice of the pest control operator’s findings.

• Entry to inspect a tenant’s dwelling unit shall comply with Section 1954(2) – (to make necessary or agreed repairs …) with a 24-hour notice to enter the premises. Entry to inspect any unit selected by the pest control operator and to conduct follow-up inspections of surrounding units until bed bugs are eliminated is a necessary service for the purpose of Section 1954. Tenants shall cooperate with the inspection to facilitate the detection and treatment of bed bugs, including providing requested information that is necessary to facilitate the detection and treatment of bed bugs to the pest control operator.

• A landlord shall not show, rent, or lease to a prospective tenant any vacant dwelling unit that the landlord knows has a current bed bug infestation.

For more information, visit http://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201520160AB551

Via https://www.aoausa.com