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-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. 

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

Repeal Costa-Hawkins? Assembly Bill 1506 seeks to kill this bedrock California property rights law

In February 17, 2017, Assembly Members Chiu, Bonta, and Bloom introduced AB 1506, an effort to repeal the Costa-Hawkins Rental Housing Act—a state law that places strict limits on a city’s ability to impose rent control on housing. Prior to Costa-Hawkins, rent control ordinances had long been held to be a valid exercise of a city’s “police power”—the ability to regulate the health and safety of their residents—and five California cities (Berkeley, Santa Monica, Cotati, East Palo Alto, and West Hollywood) had “strict” rent control ordinances, imposing what is known as “vacancy control” on empty units even after a tenant voluntarily vacated. In 1995, State Assembly Member Hawkins introduced AB 1164 (with State Senate Member Costa as a co-author), advancing what they saw as a “moderate approach to overturn extreme vacancy control ordinances [that] unduly and unfairly interfere with the free market.”

Costa-Hawkins achieves several forms of decontrol on local price ceiling regulations. It prohibits rent control on new construction and on single-family homes and condos (subject to certain conditions and limitations). It also prevents vacancy control by prohibiting cities from setting prices on vacant units and by allowing landlords to impose market-rate increases on subsequent occupants, once the last “original occupant” has vacated.

While Costa-Hawkins seeks a middle ground between inflexible price controls, on the one hand, and “rent-gouging” and displacement on the other, some lawmakers have expressed concern about the consequences of vacancy decontrol in tough situations. (For instance, Supervisor Jane Kim has proposed a “compassion clause” to protect the surviving spouses/partners of recently deceased, rent-controlled original occupants.) However, Costa-Hawkins has now been on the books for over two decades, and a sudden repeal would wash away the existing case law and local regulation that navigate between these competing interests.

As with the recent proposed legislation by Assembly Members Chiu and Bloom to amend the Ellis Act (AB 982), the purpose of AB 1506 is unclear. Costa-Hawkins expressly allows cities to impose limits on evictions. Local real estate blogs, like SocketSite.com, have recently reported that rental rates in San Francisco are dipping back down to 2014 levels. So, rather than ward off climbing prices, this kind of gesture would merely seem to further cement protections for incumbent tenants, as compared to anyone else in the market for a rental unit. It may also have unintended consequences, where landlords rush to invoke the Ellis Act, which allows its own form of vacancy decontrol if a property goes back onto the rental market.

Help defeat AB 1506
AB 1506 will remain in print for 30 days (until March 21, 2017) before it goes to committee. In the meantime, you can help build political pressure by expressing your opposition to this legislation directly—make the four calls suggested in the Call to Action. (Information listed below)

CALL TO ACTION

Say “No” To AB 1506!!
AB 1506 must be defeated. Please phone both offices of
our two California State AssemblyMembers David Chiu and
Phil Ting. Each office tallies the number of calls on any bill,
so calling both will have the greatest impact.

• Assembly member David Chiu
  Sacramento: (916) 319-2017
  San Francisco: (415) 557-3013
• Assembly member Phil Ting
  Sacramento: (916) 319-2019
  San Francisco: (415) 557-2312

Also, please consider traveling with us to Sacramento in the
next few weeks to show up in numbers at the Assembly’s
Housing Committee hearing on AB 1506.We’ll let you know
when we have a definite hearing date.
The membership of SPOSFI has been instrumental in protecting the rights of small property owners in the past. In 2014 and again in 2015, Senator Leno introduced successive efforts to stifle San Francisco property owners’ use of the Ellis Act (in SB 1439 and SB 364, respectively). Members voiced their opposition (and even got on buses to Sacramento) to apply the necessary political pressure to preserve property rights. A repeal of Costa-Hawkins would take away the ability of property owners to decide the price at which they will enter the market (or to continue renting to a stranger), giving those rights to tenants and city bureaucrats instead.

Via https://www.smallprop.org/

7 Action Steps Apartment Owners and Managers Need to Do to Prepare and Get Ready for an Unlawful Detainer Trial

INTRODUCTION

Many landlords/ property managers have been involved in unlawful detainer/ eviction cases in one form or another.   Eviction cases take many forms and factual circumstances.   Some cases go smoother than others !    Some of the most common scenarios are either a tenant was not paying rent on time, or a tenant is being a problem and a nuisance and is disturbing the quiet enjoyment of neighbors in the apartment building.

When unlawful detainer cases are filed, under state law, they receive “trial setting” priority in the courthouse- usually are set quickly within 21 days after a Memorandum to Set for trial is filed by the plaintiff landlord in Court.    If your property is in a rent control jurisdiction like the City of Los Angeles, the grounds for unlawful detainer are set forth in the local rent stabilization ordinance, which is part of the municipal code.     If your property is not in a rent control city- lucky you !  You have more flexibility in terms of serving a notice to terminate the tenancy, although you must comply with state law notice requirements, case law, and the local rules of court.

To get you through the process of being a party in an unlawful detainer action with a level of comfort and confidence, there are a few things that you should do to prepare for the unlawful detainer trial so you are organized and mentally prepared for the process and the trial.  Here is a useful checklist to review with your attorney:

 

1. REVIEW THE COMPLAINT AND ANSWER:   Review the complaint, summons, and defendant’s answer, and all the exhibits. Does your complaint need amending ?    The tenant’s answer sets forth affirmative defenses that the tenant may try to argue at trial to win the case.    Make a list of what facts and exhibits you can present to counter and defeat the tenant’s affirmative defenses.

 

2. REVIEW THE EXHIBITS:    Review your Notice to Terminate the tenancy, the proof of service of the Notice to Terminate the tenancy, the rental agreement,  rental payment history, and the calculations to determine how much rent, daily damages, and costs is due on the date of trial.   It is a good practice to bring to court as an exhibit your business license, and proof of registration with the local city housing department if you are in a rent control city because a tenant may argue as a defense that you are not registered with these agencies.  If you are running your business as a corporation or LLC, you should confirm that your entity is in good standing with the Secretary of State.  Your attorney should bring a sufficient amount of exhibit copies to court.  

 

3. WITNESSES SHOULD BE READY TO TESTIFY:    Compile a witness list, and have your attorney serve subpoenas if necessary to third party witnesses.  Review the case and the complaint with your attorney and primary trial witness.     If you are involved in an unlawful detainer situation where the tenant is alleged to be a nuisance- you should serve trial subpoenas to any neighbors who will testify in your favor to help prove the nuisance allegations.  You have the burden of proof.  If the tenant is contesting proper service of the notice to terminate the tenancy, please have your process server or the person who served the notice to terminate the tenancy appear in court as your witness to counter these allegations. 

 

4. JURY TRIAL:   Check to see if the tenant has posted jury fees, and filed a counter memorandum to request a jury trial.    If so, you should have your attorney prepare appropriate jury instructions and special verdict forms to bring to the trial so you are prepared for a jury trial.   If you have time, you may want to file a Motion for Summary Judgment against the tenant to try to get an early judgment, and avoid a jury trial.  

 

5. IS POSSESSION OF THE PREMISES AT “ISSUE” ?: The primary issue in an unlawful detainer case is possession of the property.  Before the trial date, check to see if the tenant has “caved in” and has vacated the premises.  Please check with your property manager or neighbors to confirm whether possession is at issue.    If possession is no longer at issue- then you may convert the case into a collection case if the tenant owes back rent and other charges,  and is collectable.

 

6. WHO WILL BE THE TRIAL JUDGE  ?:        On the day of trial you will have to face either a judge pro tem, a Court commissioner, or a fully credentialed  judge who will conduct your trial and will decide your case.    Certain judges or commissioners may have a bias that favor either tenants or landlords- you should discuss with your attorney whether you want be in front of a judge, commissioner, or a judge pro tem.   Ask your attorney whether your attorney has had a case with the proposed judge in the past, and what happened in that case.   You can also look up the judge or commissioner on line to see if there is any information on the person, and whether it is positive or negative.  If you want to have a fully credentialed judge try your case, then don’t agree to have a commission or judge pro tem hear the case- your case will be assigned to a judge.  You may have to wait in the hallway before a judge is available to hear your case !!

 

7. WORK OUT A SETTLEMENT WITH THE TENANT IF POSSIBLE:

At Court when all parties are present, before the trial is about to commence,  is the perfect time to negotiate a settlement, and enter into a written and signed stipulation for entry of judgment with the tenant.   Perhaps you may need to give the tenant a few extra days to move out or a small rent concession.  You should have a well drafted, specific, and clear stipulation and  agreement that applies to all parties and all issues.    Having a well drafted stipulation for judgment and settlement with a “drop dead date” to vacate the premises, that binds all tenants in the unit, and that allows for a sheriff’s lock out after a date certain is truly in your best interest.    If the tenant does not have an attorney, ask the judge to make sure the tenant understands all of the terms of the stipulation, and make sure that the tenant personally signs and dates the stipulation, and make sure the Judge signs it as well.  

CONCLUSION- Be Prepared and Confident

This seven point list is not an exhaustive list for preparing for your day in eviction court, but is just a starting point to get you ready for an unlawful detainer trial.  You should consult with your attorney on all issues, questions, procedures, and dealing with uncertainties.   If you follow the steps on this checklist you should have a level of comfort going into the trial. When you let a judge or jury decide your case, there is no guaranty of victory. Try to settle the case in writing with your tenant if you can. If there is any problem, you can request a continuance from the Court, but for most garden variety non payment of rent eviction cases, you should be able to complete your business in the first go around !!  

The author of this article, Nate Bernstein, Esq., is the Managing Counsel of LA Real Estate Law Group, and a member of the State Bar of California and his practice concentrates in the areas of complex real estate litigation, commercial litigation, employment law,  and bankruptcy matters. The contact number is (818) 383-5759, and email is natebernstein44@gmail.com.   Nate Bernstein is a 22 year veteran Los Angeles real estate and business attorney and trial lawyer.   Mr. Bernstein also has expertise on bankruptcy law, the federal bankruptcy court system, creditor’s rights and debtor’s bankruptcy options.    He previously served as Vice President and In House trial counsel at Fidelity Title Insurance Company, a Fortune 500 company, and in house counsel at Denley Investment Management Company.      Nate Bernstein created www.laquiettitleattorney.com, a leading educational resource on quiet title real estate litigation.     Nate Bernstein is a local expert on real estate law and economic trends in the real estate and leasing market, business law, bankruptcy law.    Nate has personally litigated more than 40 major real estate trials, and has settled more than 200 complex real estate and business cases.

By  Nate  Bernstein, Esq.   –  Managing  Counsel, LA Real Estate Law Group

New For 2017 – LA’s Rent Registry

Due to a recent amendment to Chapter XV of the Los Angeles Municipal Code, beginning in January 2017, the City will collect rent rates for all units subject to the Rent Stabilization Ordinance (RSO). Previously, landlords were only required to pay the annual registration fee and provide an emergency contact. The Los Angeles City Council enacted the City’s Rent Registry Program (Ordinance #184529) effective October 4, 2016. This ordinance provides that, in addition to paying the annual registration fee, landlords must also provide the rent amount for every rental unit subject to the RSO by the last day of February of each year. Registration is complete only when all outstanding registration fees have been paid and all required rental amount and tenancy information, including emergency contact information, is provided.

All necessary information and will be included in the materials mailed by HCIDLA with the annual RSO/SCEP bill. The 2017 annual RSO/SCEP bill will now include a two-page double-sided Rent Registry form. An online Rent Registry Portal has also been created at registerLArent.org to provide Landlords a more effective and efficient means to ensure accuracy and avoid any mailing delays. The Rent Registry Portal includes an online downloadable excel template, which will be especially helpful for owners and managers of larger properties. This template can be downloaded and, once information has been entered, the information entered on the template can be uploaded automatically to the online rent registry portal. Landlords who pay their annual registration and submit their completed Rent Registry form online will receive their Annual Statement of Registration (Certificate) within minutes of online submission. Much of the information entered in 2017 will be automatically saved for registration in future years.

The RSO allows a landlord to pass-through 50% of the registration fee to the tenant as a lump sum surcharge. Beginning in 2017, this fee will be eligible to be collected in the month of August due to the recent amendment in the RSO (in prior years, surcharge could only be collected in the month of June). Registration Statements (Certificates) issued in 2017 will be valid from May 1, 2017 to July 31, 2018. Subsequently, the Registration Statements will be effective from July 1st to June 30th of each year, reflecting a fiscal calendar year.

The Rent Registry Program will build a historical data of rent trends for the City’s rent-stabilized housing stock and deter unlawful rent increases while simultaneously assisting new or prospective landlords who may inherit or buy property through foreclosure or from property owners who fail to provide rent records or tenant estoppels upon the sale of occupied rent-stabilized properties.

The Los Angeles Housing + Community Investment Department (HCIDLA) is working to make this new program as easy as possible for landlords. Workshops will be offered throughout the month of January to assist landlords in understanding and complying with this new requirement. Additionally, a “Drop-In” session is available on the first Tuesday of the month from 2:00 to 4:00 by calling (213) 928-9075 to request an appointment. To learn more about the new Rent Registry Program, please visit registerLArent.Org or call (866) 557-(7368).

Reprinted with permission of AAGLA (Apartment Association of Greater Los Angeles)

AAGLA EXPO APRIL 19, 2017, FREE REGISTRATION AAGLAexpo.com

Help Protect Your Building From Sewage Backups And Overflows – by Greg Martin

Most homes in the Bay Area were built decades ago and still have their original pipes that connect the home to the sewer line in the street. Over time, these Private Sewer Laterals (PSL), crack which allows your sewage to seep out into the ground around your home.  It also allows rain water that has absorbed into the earth to seep into the sewer system. If your private sewer lateral is cracked, winter storms can fill your pipes with water, tree roots and mud. Those things can clog your pipe and, farther down the line, can lead to sewage spills into the San Francisco Bay, polluting our ocean.

A private sewer lateral (PSL) is the pipe that carries waste from the plumbing in a home or business to the sanitary sewer main, usually located in the street. It consists of two sections: an upper lateral, which connects the building cleanout to the curbside cleanout, and a lower lateral, which connects the curbside cleanout to the sewer main. Property owners are responsible for maintaining the entire PSL, except in Alameda and Albany where that responsibility is for the upper lateral only.

Backups can also occur in your sewer lateral due to washing and flushing items that don’t belong down the drain. Items like fats, oils and grease (FOG) and products labelled “disposable” or “flushable,” wipes, household cleaning and personal hygiene products should never be flushed. Often those non-flushable items get tangled with hair and debris, creating massive sewer backups or creating a clog or blockage in your plumbing system. An overflowing toilet can ruin a home in an instant. What can be flushed? Only three things: poo, pee and toilet paper. All other items should be disposed of in the trash.

In 2009, the United States Environmental Protection Agency (EPA) and the California Regional Water Quality Control Board ordered the East Bay Municipal Utility District (EBMUD), the six cities that make up the greater Bay Area and one sewer district to fix old, cracked sanitary sewer pipes. Many pipes are in need of repair to prevent the infiltration of rainwater, which can overwhelm wastewater treatment facilities and lead to the release of partially treated wastewater into the Bay. The EPA’s mandate compelled EBMUD and its partners to phase in a Regional Private Sewer Lateral (PSL) Ordinance beginning in 2011. Affected property owners must obtain a certificate from EBMUD certifying that all of their PSLs are leak-free. So by law, you now must prove your sewer line is leak-free when you sell or remodel your building or when you change the size of the water meter. But if you’ve had to call a plumber to come unclog your drains, that might mean your pipe is cracked and fixing it now could save you the inconvenience and, in the long-run, money on plumbers.

Visit www.ebmud.com/wastewater/private-sewer-laterals for more information on certifying that your sewer line is leak free and or call a Sewer Specialist who can run a camera to assess the buildings sewer lateral condition. Help protect the San Francisco Bay!  Fix your sewer laterals today!

Greg Martin is with Streamline Plumbing and can be reached at  510-481-0380 or www.streamlineplumbingco.com.

Reprinted with permission of AOA (Apartment Owners Association, Inc.)

Urgent Tax Alert for Apartment Owners with Larger Estates! Last Chance to Use Discounts to Save Estate and Gift Taxes? – By AOA Member and Estate Planning Attorney, Kenneth Ziskin

If you have, or expect to develop, a “taxable” estate (more than the estate and gift tax exclusion amounts which now protect nearly an $11 million estate for a married couple), newly Proposed IRS Regulations make it IMPERITIVE that you consider advanced estate tax planning NOW.  The new Proposed Regulations, released in August, are designed to take away the ability to use many discount strategies that can eliminate (or substantially reduce) estate and gift taxes for those of you who would otherwise face these taxes.   

To beat the adverse effect of these regulations, you MUST complete transfers to your heirs or specialized trusts before these Regulations are finalized (probably around year-end).  The loss of these discounts could cost a family with $16 million in property that does not do proper advanced planning now as much as $2 million in unnecessary estate and/or gift taxes.  The loss would be far more costly to larger estates. 

In August, the IRS finally published the Proposed Regulations it has threatened since May, 2015.  These Proposed Regulations were designed to limit the use of discounts in family (and maybe other) transactions that sophisticated clients and estate planners had used to reduce estate and gift tax exposure.  We have helped owners do dozens of transactions to take advantage of these discounts to save millions, and expect to do many more before the Proposed Regulations limit their use.

The BAD NEWS is that these Proposed Regulations will preclude the effective use of discounting strategies that advanced estate planners have employed to help clients save billions of dollars in estate and gift taxes over the past few decades. As a result, millions of dollars of value that apartment owners want to pass to family members and other heirs will, instead, be confiscated by the estate and gift tax system.

However, the VERY GOOD NEWS (but ONLY for those who plan in time) is that the IRS proposes that these Regulations become effective 30 days AFTER Final Regulations are published in the Federal Register.

Since the Proposed Regulations contemplate allowing for a 90-day comment period and a public hearing on December 1, 2016, it is virtually impossible for them to become final before the end of this calendar year.  If Hillary Clinton is elected, the IRS may not finalize the Proposed Regulations until early in her administration.  However, if Donald Trump is the winner in November, we expect the IRS may seek to finalize the Proposed Regulations before the end of the Obama administration.

The deferred effective date gives us time to review the Proposed Regulations carefully in order to better understand the impact they will have on transactions after the effective date, and gives you a short period of time to commence planning to “beat the regs.”  I got an advanced copy of the Proposed Regulations and have already scheduled to participate in a conference call with other advanced estate planning colleagues regarding the Proposed Regulations.

The best strategies for taking advantage of discounting strategies before the Proposed Regulations become final will usually involve putting property into carefully structured LLCs or limited partnerships (or to restructure such entities to maximize tax and non-tax benefits) as soon as possible.  Then, apartment owners will want to transfer interests in these entities to Family Security Trusts, Grantor Retained Annuity Trusts, other irrevocable trusts or family members a few months later, but before year-end.  To do this in the best way, owners need to begin the process as soon as practical.

NOTE:  Some of you may have created Family Limited Partnerships or LLCs and retained most of the ownership thereof in anticipation of getting the benefit of discounts when they are transferred after your death.  Much, or all, of this benefit will be lost if you die after these Proposed Regulations become final.   

The only way to avoid the additional taxes these Proposed Regulations are intended to impose is to make completed gifts or transfers of interests in these entities BEFORE the effective date of the regulations.  When done with care by an experienced estate planning attorney specializing in advanced strategies, these gifts and other transfers can be structured to provide substantial income to the original property owners during their life, preserve parent-child property tax reassessment exemptions, retain control for such members, keep the ability to get a step-up in basis at death, and still to maximize wealth transfer to your chose heirs.  But, to maximize the ability to use the discounts, you need to start planning very soon, and then you need to complete transfers of entity interests before the Proposed Regulations are finalized.  These Proposed Regulations mean I need to adjust my Family Wealth Strategies motto to “If you fail to plan WELL and SOON, plan to FAIL!” 

Ken Ziskin is a member of AOA and focuses his practice on integrated estate planning to save income, property, gift and estate taxes for owners of apartments and other income properties.  He has served as an Adjunct Professor of Law at USC, is rated AV Preeminent by Martindale-Hubbell and a perfect 10 out of 10 on legal website www.AVVO.COM.  For more information on the impact which the Proposed Regulations would have on your estate, or to begin the planning process to “beat” the Regulations, contact Ken Ziskin at 818-988-0949, or email him at KenZiskin@Gmail.com  You can see real client reviews of Ken’s services at www.avvo.com/attorneys/91423-ca-kenneth-ziskin-151823.html or on Ken’s website at www.ZiskinLaw.com

Reprinted with permission of AOA (Apartment Owners Association, Inc.) and the author.