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.  

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.

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 ]

New bed bug disclosure law goes into effect soon By Gideon Kramer, SPOSFI News Editor

With permission from the SPOSFI (Small Property Owners of San Francisco)

May 19, 2017

Effective July 1, Assembly Bill 551 will place new obligations on all California residential landlords and tenants regarding the disclosure and treatment and control of bed bugs. In brief:

  • A landlord is prohibited from showing or renting a unit if bed bugs are known to exist.
  • Tenants must cooperate in the investigation and eradication of bed bugs in their unit, surrounding units, or common areas.
  • Landlords must include a statutory bed bug notice as an addendum to the lease for all new tenants. All existing tenants needn’t be noticed until January 1, 2018. This notice must provide information regarding bed bug identification, behavior, and biology as well as the landlord’s and tenant’s obligations in the event a bed bug infestation is discovered.

Our June issue of SPOSFI News will include a more detailed discussion of the new law, and why it pays to be very vigilant when it comes to bed bugs.

Los Angeles Imposes Further Restraints on Landlords! – by Sheri Swist

Reprinted with permission from AOA.

On April 19, 2017 the L.A. City Council voted 12-0 to make changes to portions of the Los Angeles Municipal Code governing the Ellis Act.  Of course, as anyone who knows how the city operates would guess, these changes further hinder landlords’ property rights.

The Old Law

Under the old law, when a landlord withdrew a building from the residential rental market pursuant to the Ellis Act and demolished the building, any new replacement rental units constructed within five years would be subject to the Rent Stabilization Ordinance (RSO).  In other words, the new units would be rent controlled.  However, if a landlord wanted to avoid having an entire new building be subject to rent control, they could either dedicate the same number of units that had been under the RSO that were withdrawn from the rental market to being affordable units, or they could dedicate 20% of the units in the new construction to being affordable units, whichever was less.

The NEW Law

Under the newly voted on changes, the replacement units in this type of scenario must be a one for one replacement of affordable units or 20% of the new building, whichever is greater.  While in some instances this change may not make much of a difference if any at all, in others the difference is drastic.

For example, a landlord who demolishes a smaller building that is under the RSO and replaces it with a much larger building that provides many more units for the community of Los Angeles could end up having a substantially higher number of units that must be affordable housing units subject to the RSO.

In addition, the new law clearly states that even if a building is completely vacant, a landlord must remove it from the housing market pursuant to the Ellis Act, with all of its requirements and limitations before demolishing it.  This goes against the purpose of the Ellis Act, since the purpose was to allow landlords who had tenants to go out of business.  If there are no tenants, there is no need to go out of business, because no residential rental business is being done.

Once again, the City of Los Angeles is attempting to thwart your rights as property owners and so far … getting away with it.  As was stated, the new law was passed already, but will not take effect until it is published and all other requirements for enactment are complete.   So, if you are thinking about going out of the residential rental business pursuant to the Ellis Act, be aware that these changes will be in effect very soon.

For more information, please call Sheri Swist at the Housing Reform Coalition of Los Angeles at 310-869-5153.

Disability Discrimination Issues and How to Handle the Needs of a Disabled Tenant who Requests a Service Pet or Comfort Pet as a Reasonable Accommodation.

How to prevent a “dog” of a case becoming a state or federal disability legal case against the landlord or property management company. 

Let’s start the discussion and analysis with a hypothetical fact pattern:

Tenant Victor wants to have a service dog in his apartment.  You are the resident manager of a mid sized apartment complex of 50 units.  Your property management company has a “no pet policy” in the apartment complex, with the exception of non-biting gold fish.   Victor appears to be the model of good health- he works out at the apartment complex fitness center every day.    You get a letter that Victor claims to have a disability that requires the need of a service pet.  Victor claims that the nature of disability is confidential.  In fact, he suffers from a psychological and emotional condition that has been diagnosed as “post Donald Trump Election stress disorder.”    He has been diagnosed by a psychiatrist with a mental illness that includes depression and stress over the election result, and suffers depression when he watches CNN, FOX, and CNBC.  The psychiatrist has diagnosed his condition as a disability that may last 4 years or 8 years depending on if Donald Trump gets reelected.  He suffered a recent strange unexpected relapse when he learned of President Obama’s speech fee which required Victor to have medication.   His neighbors, mostly registered republicans, are not fond of Victor.  He is hypersensitive to political news events and outcomes for both parties.  When he drinks tea from Starbucks he gets nervous because it reminds him of the Tea Party platform.

After speaking to Victor on the phone, he tells you that he desires to have a comfort animal in his apartment to calm his nerves, and the proposed pet is named “Vera.”  He sent you an email with a picture of Vera.   His proposed comfort animal, Vera, is a small German Sheppard with no history of dog biting and no history of loud barking.   He purchased the animal from a pet store in Berlin called Sheppardco.   The doggy was shipped in a crate from overseas to Victor’s doorstep.   Victor has taken the dog to obedient school and has made an effort to get the dog certified as a service animal to help him calm his frazzled nerves.

As a property manager, what issues should you be aware of   ??

Victor may have real disability if it can be shown with basic minimal documentation.    If the disability can be documented with a doctor’s note, you will have to allow him to have a pet like Vera even though it is a “no pet” apartment complex.    If you take a hard line and discriminate against Victor because of his alleged disability, you could be sued by Victor, or the state or federal government for disability discrimination.

What housing laws apply to this situationboth state and federal laws and regulations  ?? 

California State Housing Laws that Protect Disabled Persons

Individuals with physical and mental disabilities have the right under state law to rent, lease, or buy housing accommodations free from discrimination due to a disability.  (See Chapter 1 for definitions of disability; Cal. Civ. Code, ” 51, 54, subd.(b), and 54.1; Cal. Gov. Code, ” 12926, subds. (i) and (k), 12955 and 12955.3.)

Cal. Civil Code Section 54.1 states in pertinent part,

“(6) (A) It shall be deemed a denial of equal access to housing accommodations within the meaning of this subdivision for a person, firm, or corporation to refuse to lease or rent housing accommodations to an individual who is blind or visually impaired on the basis that the individual uses the services of a guide dog, an individual who is deaf or hard of hearing on the basis that the individual uses the services of a signal dog, or to an individual with any other disability on the basis that the individual uses the services of a service dog, or to refuse to permit such an individual who is blind or visually impaired to keep a guide dog, an individual who is deaf or hard of hearing to keep a signal dog, or an individual with any other disability to keep a service dog on the premises.”

(C) (i) As used in this subdivision, “guide dog” means a guide dog that was trained by a person licensed under Chapter 9.5 (commencing with Section 7200) of Division 3 of the Business and Professions Code or as defined in the regulations implementing Title III of the Americans with Disabilities Act of 1990 (Public Law 101-336).

(ii) As used in this subdivision, “signal dog” means a dog trained to alert an individual who is deaf or hard of hearing to intruders or sounds.

(iii) As used in this subdivision, “service dog” means a dog individually trained to the requirements of the individual with a disability, including, but not limited to, minimal protection work, rescue work, pulling a wheelchair, or fetching dropped items.

Federal Housing Laws that Protect Disabled Persons

Federal disability laws and regulations also apply to this situation.

The Fair Housing Act, 42 U.S.C. 3601 et seq., prohibits discrimination by direct providers of housing, such as landlords and real estate companies as well as other entities, such as municipalities, banks or other lending institutions and homeowners insurance companies whose discriminatory practices make housing unavailable to persons because of race or color, religion, sex, national origin, familial status, or disability.

The Fair Housing Act prohibits discrimination on the basis of disability in all types of housing transactions.   The Act defines persons with a disability to mean those individuals with mental or physical impairments that substantially limit one or more major life activities. The term mental or physical impairment may include conditions such as blindness, hearing impairment, mobility impairment, HIV infection, mental retardation, alcoholism, drug addiction, chronic fatigue, learning disability, head injury, and mental illness.  The term “major life activity” may include seeing, hearing, walking, breathing, performing manual tasks, caring for one’s self, learning, speaking, or working. The Fair Housing Act also protects persons who have a record of such an impairment, or are regarded as having such an impairment.

Current users of illegal controlled substances, persons convicted for illegal manufacture or distribution of a controlled substance, sex offenders, and juvenile offenders are not considered “disabled” under the Fair Housing Act, by virtue of that status.   The Fair Housing Act affords no protections to individuals with or without disabilities who present a direct threat to the persons or property of others.   Determining whether someone poses such a direct threat must be made on an individualized basis, however, and cannot be based on general assumptions or speculation about the nature of a disability.

42 U.S.C. Section 3604(f) states in pertinent part that “as made applicable by section 3603 of this title and except as exempted by sections 3603(b) and 3607 of this title, it shall be unlawful—

(1)   To discriminate in the sale or rental, or to otherwise make unavailable or deny, a dwelling to any buyer or renter because of a handicap of—

(A)   that buyer or renter,

(B)   a person residing in or intending to reside in that dwelling after it is so sold, rented, or made available; or

(C)   any person associated with that buyer or renter.

It shall be unlawful to

(2)   To discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection with such dwelling, because of a handicap of—

(A)   that person; or

(B)   a person residing in or intending to reside in that dwelling after it is so sold, rented, or made available; or

(C)   any person associated with that person.

(3) For purposes of this subsection, discrimination includes—

(A)   a refusal to permit, at the expense of the handicapped person, reasonable modifications of existing premises occupied or to be occupied by such person if such modifications may be necessary to afford such person full enjoyment of the premises except that, in the case of a rental, the landlord may where it is reasonable to do so condition permission for a modification on the renter agreeing to restore the interior of the premises to the condition that existed before the modification, reasonable wear and tear excepted.

(B) a refusal to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a dwelling; or

Note that the language of the federal statute uses the term “handicap,”   Pursuant to 42 U.S. Code Section 3602 (h)

(h) “Handicap” means, with respect to a person—

(1)   a physical or mental impairment which substantially limits one or more of such person’s major life activities,

(2)    a record of having such an impairment, or

(3)   being regarded as having such an impairment . . . “

What is a “reasonable accommodation” for purposes of the Act that a landlord has to provide to a disabled person  ?

A “reasonable accommodation” is a change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with a disability to have an equal opportunity to use and enjoy a dwelling, including public and common use spaces.   Since rules, policies, practices, and services may have a different effect on persons with disabilities than on other persons, treating persons with disabilities exactly the same as others will sometimes deny them an equal opportunity to use and enjoy a dwelling.   The Act makes it unlawful to refuse to make reasonable accommodations to rules, policies, practices, or services when such accommodations may be necessary to afford persons with disabilities an equal opportunity to use and enjoy a dwelling.

To show that a requested accommodation may be necessary, there must be an identifiable relationship, or nexus, between the requested accommodation and the individual’s disability.

Are there any instances when a provider can deny a request for a reasonable accommodation without violating the Act  ?

Yes.   A housing provider can deny a request for a reasonable accommodation if the request was not made by or on behalf of a person with a disability or if there is no disability-related need for the accommodation.   In addition, a request for a reasonable accommodation may be denied if providing the accommodation is not reasonable – i.e., if it would impose an undue financial and administrative burden on the housing provider or it would fundamentally alter the nature of the provider’s operations.     The term is “reasonable accommodation,”  not “every accommodation.”

The determination of undue financial and administrative burden must be made on a case-by-case basis involving various factors, such as the cost of the requested accommodation, the financial resources of the provider, the benefits that the accommodation would provide to the requester, and the availability of alternative accommodations that would effectively meet the requester’s disability-related needs.

When a housing provider refuses a requested accommodation because it is not reasonable, the provider should discuss with the requester whether there is an alternative accommodation that would effectively address the requester’s disability-related needs without a fundamental alteration to the provider’s operations and without imposing an undue financial and administrative burden.   If an alternative accommodation would effectively meet the requester’s disability-related needs and is reasonable, the provider must grant it.

An interactive process in which the housing provider and the requester discuss the requester’s disability-related need for the requested accommodation and possible alternative accommodations is helpful to all concerned because it often results in an effective accommodation for the requester that does not pose an undue financial and administrative burden for the provider.

Can you request information and records about Victor’s claimed disability

If a disability is not obvious, what kinds of information may a housing provider request from the person with a disability in support of a requested accommodation  ?

This is a sensitive topic to be dealt with kit gloves.  A housing provider may not ordinarily inquire as to the nature and severity of an individual’s disability.   However, in response to a request for a reasonable accommodation, a housing provider may request reliable disability-related information that (1) is necessary to verify that the person meets the Act’s definition of disability (i.e., has a physical or mental impairment that substantially limits one or more major life activities),   (2) describes the needed accommodation, and (3) shows the relationship between the person’s disability and the need for the requested accommodation.   Depending on the individual’s circumstances, information verifying that the person meets the Act’s definition of disability can usually be provided by the individual himself or herself   (e.g., proof that an individual under 65 years of age receives Supplemental Security Income or Social Security Disability Insurance benefits or a credible statement by the individual).

A doctor or other medical professional, a peer support group, a non-medical service agency, or a reliable third party who is in a position to know about the individual’s disability may also provide verification of a disability.   In most cases, an individual’s medical records or detailed information about the nature of a person’s disability is not necessary for this inquiry.

Once a housing provider has established that a person meets the Act’s definition of disability, the provider’s request for documentation should seek only the information that is necessary to evaluate if the reasonable accommodation is needed because of a disability.   Such information must be kept confidential and must not be shared with other persons unless they need the information to make or assess a decision to grant or deny a reasonable accommodation request or unless disclosure is required by law (e.g., a court-issued subpoena requiring disclosure or a lawsuit is filed that puts the nature of the disability at issue.).    So, as a property management company and landlord, specific disability information should be kept confidential from other residents and should be kept “under seal,” or labeled “confidential” so to speak, in the property management office.   Use good professional judgment in keeping the file sealed and confidential.

In Victor’s case, it is important to obtain some basic information about the specific nature of the disability – this may be in the form of a doctor’s letter.  If you don’t know anything or understand about the nature of the disability then you cannot assist and accommodate the tenant to be in compliance with the law.    Some disabilities may be obvious- others are not.  A mental, psychological, or emotional disability condition may be the hardest to notice or fully understand without a medical opinion.  The tenant may not want to discuss the condition unless he or she must do so.    You should maintain limited confidentiality of the medical information if the tenants requests that you do so.   Also, if the tenant does not provide any documentation, the tenant may be claiming a disability fraudulently, just to get around a “no pet policy.”   The claim of a bogus disability is more common than you think, as some tenants may take liberties to get special privileges at the apartment complex.

Can you request information about Vera’s demeanor as a service pet   ? ?

It is a smart idea to do some investigation and ask the tenant to verify in writing whether the dog has any history of  biting, snapping,  or loud barking as to cause a nuisance to other tenants.   Has the dog itself been a victim of abuse ?    Has the pet had multiple owners or was ever abandoned ?    Ask the tenant if there were any issues with the dog at their prior residence, which may have been the city dog pound.    Has the dog been formally trained ? If a dog is properly trained and certified as a service dog, usually the dog is well behaved.   Don’t judge the dog based on the fact it is cute or adorable.   But you don’t get to know the dog’s personality until the dog stays at the property. You will learn a great deal about the personality of the dog after 30 days.   You should see and meet the pet to get an idea of the pet’s personality.

If a doctor has diagnosed Victor with a mental disability or handicap, can you enforce the no pet policy to stop Victor from housing Vera the doggy as a service animal or comfort animal   ?

No, you are required by law to allow the pet if the pet is not a knowingly dangerous or a nuisance to other residents.    Monitor the situation- you won’t know the pet’s personality until the pet has been tested in its new environment.

If you can verify Victor’s disability condition with some reasonable certainty, and don’t allow Victor to house Vera as a service dog, what can Victor do  ? 

Victor’s rights and remedies under California state law include, a person discriminated against on the grounds of disability pursuant to Cal Civil Code section 54.1 can ask the local district attorney, city attorney, the Department of Rehabilitation acting through the Attorney General, or the Attorney General to bring an action to enjoin the violation, civil penalties, damages, or to seek other remedies, or he or she may bring  his own private legal action. (Cal. Civ. Code 55 and 55.1.).  The prevailing party in the action shall be entitled to recover reasonable attorney’s fees.

An aggrieved person may commence a civil action in an appropriate court not later than two years after the occurrence or the termination of an alleged discriminatory housing practice, or the breach of a conciliation agreement entered into, whichever occurs last, to obtain appropriate relief with respect to the discriminatory housing practice or breach. The computation of the two-year period shall not include any time during which an administrative proceeding under this part was pending with respect to a complaint under this part based upon the discriminatory housing practice or breach. (Cal. Gov. Code, 12980 and 12989.1.)

Under the dual federal law track, Victor may either file a lawsuit or may file a complaint with U.S. Department of Housing and Urban Develeopment  (HUD), not later than one year after the discriminatory act has occurred and HUD may pursue legal remedies on his behalf. (42 U.S.C. Section 3610 and 3612.) Vera may also pursue an action through the Civil Rights division of the U.S. Department of Justice as a referral from HUD to file a complaint on behalf of the United States in federal court.

42 U.S. Code  3612 (p) provides attorney’s fees and costs for the prevailing party for a discrimination complaint filed with HUD, an administrative law judge,  or federal court.

This section provides, “ In any administrative proceeding brought under this section, or any court proceeding arising therefrom, or any civil action under this section, the administrative law judge or the court, as the case may be, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee and costs. The United States shall be liable for such fees and costs to the extent provided by section 504 of title 5 or by section 2412 of title 28.”

Just a word of comfort – even if you get sued by the government for a disability discrimination claim, the claim can be settled if the government is reasonable.   Most governmental offices want to settle cases with written settlement agreements, and not a lot of protracted litigation.  The government does not have unlimited resources, and may want your company to implement a better management policy with respect to tenants who claim disabilities.   However keep in mind, that plaintiffs can seek damages, penalties, and attorney’s fees and costs.

Should you charge Victor a pet fee for hosting Vera  ?

No.  Landlords may not require applicants or residents to pay a pet deposit for a service dog, psychiatric service dog, or support animal, even if they do so for other applicants or residents.

This is based on the policy statement contained in the Joint Statement of the Department of Housing and Urban Development and the Department of Justice Reasonable Accommodations under the Fair Housing Act.

 This is a strange rule because a service or comfort animal can destroy an apartment as much as a regular pet that is housed by a non-disabled tenant- shouldn’t the landlord be protected if the tenant moves out and the apartment has major damage from the pet ?    The law and authorities tend to view the pet fee as a discriminatory penalty.

If your real estate company approves Vera as a comfort or support animal, and  Vera starts snapping or biting other residents in the complex or barking loud in the complex, what can you do ?

Although you are making every effort to reasonably accommodate Victor with his pet request, Victor is not the only person that you should be concerned with at the apartment complex.   Other residents have rights of quiet enjoyment under their rental agreements.   If the Veras of the world are being a “nuisance,” and posing a risk of harm to others,  you should speak to the tenant about the issue, and you should follow up and send the tenant a letter requesting to get control of the dog.    The dog may need additional training or additional supervision.

Have positive and friendly communication channels with the tenant that is not adversarial.    If that does not work, and you have to put the hammer down, you can also send the tenant a three day notice to perform covenant or quit to request that the tenant control the animal.     If the tenant does not get control of the dog, or the tenant is snapping or biting, then you can call animal control authorities to file a complaint.

How can you prepare and train your employees and staff for these kinds of situations    ?   

The fact scenario presented about Victor and Vera is more common than you think.  Now you have a flavor for the issues and state and federal disability laws.  More and more tenants are trying to use the disability laws to obtain special accommodations.  Some requests are legitimate and lawful, and others are manipulative and fraudulent.    It is important to educate yourself on the issues so you are ready for this type of situation, and have a plan for dealing with it.

If your real estate company or property management company in Southern California needs counsel and additional in office training and administrative and legal support on the laws and regulations of disability and fair housing,  please contact LA Real Estate Law Group to schedule a training session in your office.  

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 http://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, and 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.  

Legal Q & A Tenants Operating Day Cares

By Franco Simone, Esq. Reprinted with permission from the author via AOA of California, INC.

Q:  My tenants informed me that they plan on running a small day care business out of their apartment. However, my rental agreement strictly prohibits operating a business out of the apartment and the area in which the apartment building is situated is not zoned for commercial businesses. Can I prohibit my tenants from starting the day care?
A: No, you cannot prohibit your tenants from starting the day care. Under California law, houses, condos, and apartment units may be used to run a small family day care business. These laws were passed in order to make childcare more readily available for working parents in residential neighborhoods.  Further, running a small day care home is not considered a “business use of the property.” Thus, your tenants can run the small day care regardless of the language in the rental agreement prohibiting business operations.

Q:  What does this mean for the provisions I have included in my rental agreement?
A: This means that any provision in your rental agreement that aims to prohibit utilizing the premises as a small family day care business is invalid.

Q:  What type of notice is my tenant supposed to give me before he opens a small family day care business?
A: A tenant wishing to open up a small family day care business out of their rental unit is expected to give the owner of the property 30 days’ written notice of their intent to start the business. However, many prospective day care providers fail to provide written notice to the owner. Additionally, failure to give notice is not considered grounds to refuse operation of the day care opening because it is not mandatory for the tenant to obtain approval from the owner before starting the business.

Q:  What can I do as a landlord to ensure that my property is well maintained?
A: Once you are made aware that your tenant intends on running a small day care business out of the property, you may increase your tenant’s security deposit amount due to this new business endeavor. You may demand an increased security deposit amount even if you charge your other tenants a smaller amount. However, the total security deposit amount you charge your tenant running the day care cannot, under any circumstances, surpass the maximum amount permissible under present law.

Q: My tenant told me that she wanted to start a daycare business out of the house she rents from me. I told her no because I do not want my property damaged and I do not want to be liable. Are there any repercussions for denying the day care business?
A: Yes. Your tenant has the right under California Law to run a small family day care business out of her rental unit, even if you disapprove of it. Denying this right could open you up to a lawsuit.

Q:  Is there any criteria my tenants must meet in order to open the small family day care?
A: Yes, the California Department of Social Services has to assess the conditions of the home as well as your tenant’s qualifications before licensing your tenant as a family day care provider. If the home is approved by the Department your tenant can supervise up to six children at a time or up to eight children if landlord approves in writing. Furthermore, it is mandatory that the day care provider carry either: (1) liability insurance of $100,000 per occurrence and $300,000 per year; or (2) affidavits by all parents acknowledging the lack of insurance. It may also be a good idea for you to request that you be named as an additional insured if your tenant does happen to carry insurance. However, property owners are responsible for any increases in insurance premiums as a result of being added as an additional insured. Lastly, it is always a good idea to require tenants to have renter’s insurance in addition to liability insurance and/or a bond. While the same rules that apply to other tenants are the same for day care providers, one should be cautious when assessing breaches of the agreement or when considering taking action to correct the violation because such action may be viewed as retaliatory.

Q: My tenant gave me thirty days notice that she plans to operate a daycare business out of her apartment. I told her that she could only supervise four children because my insurance will only cover daycare businesses up to four children. She is now caring for six children. Can I tell her that she can only watch four because of my insurance policy?
A: No. Your tenant is allowed to watch up to six children under California Law. If she is in compliance with the other conditions she should have liability insurance of liability insurance of $100,000 per occurrence and $300,000 per year, you can request to be named as an additional insured. It may also be a good idea for you to look at different insurance policies that cover up to six children or more.

Attorney Franco Simone, of the Landlords Legal Center and has been doing evictions for 20 years.  He is also an adjunct law professor at the University of San Diego.  Mr. Simone’s office is open Monday- Friday from 9:00 AM to 5:00 PM .-  Tel: 619-235-6180, website: www.landlordslegalcenter.com or email info@landlordslegalcenter.com