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

With permission from AOA (Apartment Owners Association)

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

The Pasadena ballot measure would:

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

Glendale and Long Beach

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

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

AB 1506 – Costa Hawkins Repeal

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

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

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

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

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

Legal Corner

WRITTEN BY MICHAEL A BRENNAN, EVICTION ATTORNEY 

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

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

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

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

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

Reprinted with permission from AOA.

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

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

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

What is Dry Drowning?

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

Resident Prevention Tips

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

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

Symptom Recognition

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

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

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

What to Do

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

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

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

The Legality of Using Criminal Background Checks in Light of HUD’s 2016 Guidance Memo – by Eviction Attorney, Michael A. Brennan

With permission from AOA

In April, 2016, HUD issued a Guidance Memo concerning the applicability of the Fair Housing Act to the use of information found in criminal background checks to deny housing to applicants with criminal histories. While some believe the Guidance Memo has raised more questions than answers, the truth is that landlords may still use criminal background checks for screening purposes and will not likely face any liability for doing so, provided they follow the requirements set forth therein.

While space limitations prevent an in-depth analysis of the topic, this article will address several key topics in connection with the use of criminal background checks during the screening process, including those criminal background policies strictly prohibited by Fair Housing, those specifically permitted, how to narrowly tailor your policies in connection with the use of criminal background checks, strategies to use when developing your screening policy, and a few mistakes to avoid to diminish the likelihood that you will be found to have discriminated when you do, in fact, deny an applicant housing due to their criminal past.

HUD’s Prohibited Practice

HUD has a single prohibited practice in connection with criminal background checks. Simply stated, landlords are strictly prohibited from using “arrests” without a corresponding conviction as a basis for denying housing to an applicant. The basis for the prohibition is that arrests are simply that; an arrest. Without a corresponding conviction, an arrest means nothing more than the applicant was suspected of committing some type of infraction or crime. The theory is that without a conviction, the individual is, theoretically, innocent.

The problem I see with that belief is that there are a multitude of reasons an individual could be arrested but not convicted when, in fact, they were guilty. For example, there are pretrial diversion programs which place otherwise guilty people on probation and, provided they don’t get in any trouble during their probation period, the case is dismissed. Additionally, it is not uncommon for someone to be arrested yet not tried in exchange for their cooperation with the prosecutor in landing a “bigger fish”. Regardless of the above situations, the use of arrests without corresponding convictions as the basis of a denial is prohibited.

HUD’s Permitted Practices

HUD’s Guidance Memo states landlords may deny housing to an applicant based on two specific convictions; the “manufacture or distribution” of a controlled substance. It is important to be aware of the fact that a conviction for anything other than the “manufacture or distribution” (e.g., the “use” of a controlled substance) does not, by itself, substantiate a denial of housing.

Developing Narrowly Tailored Policies & Criteria

Assuming an applicant’s criminal background check reveals one or more convictions for something other than “the manufacture or distribution of a controlled substance” the landlord will be required to go through an analysis of the conviction to determine whether it justifies a decision to deny the applicant.

In order to deny housing to an applicant based upon convictions revealed by a criminal background check, landlords must first develop “narrowly tailored” policies which demonstrate that the “narrowly tailored” policy “accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety and/or property, and criminal conduct that does not.” In other words, landlords must show that their policies are effective at denying housing only to those applicants with convictions for crimes that create a risk to the other tenants in the building and/or property. For example, a policy which denies housing to an applicant convicted of assault and battery, but allows an applicant with a conviction for “possession of marijuana” would likely be acceptable to HUD, since “assault and battery” can be shown to present a direct threat to the safety of the other tenants, while “possession of marijuana” poses little threat, if any.

A short list of crimes for which a denial of housing would likely be acceptable to HUD might include assault & battery, domestic violence, rape, murder, and mayhem, to name a few. Additionally, since HUD appears to recognize a need to protect the safety of both “resident[s] and/or property” arson, vandalism, and grand theft of property might likely be acceptable categories as well.

Finally, it would serve landlords well to consider their approach to white collar crimes. For example, can a landlord demonstrate that a conviction for, say, identity theft, is a direct and/or “demonstrable risk to resident safety and/or property”? While you and I can see how an individual convicted of such a crime could easily pose a risk to the security of the neighboring tenants, is that enough to use as the basis for denying that individual housing? My position is that under the normal circumstances surrounding identity theft, the answer is “yes”. Here you have an individual who is surrounded by other tenants, who all receive mail in a centralized area, share a central trash bin, and receive packages in close proximity to each other. So, for me, this would be a crime for which a conviction would disqualify an applicant.

Factors to Consider for Each Conviction

In addition to developing policies regarding which specific crimes will support a decision to deny an applicant, HUD requires that the use of criminal convictions to deny housing to an applicant must be determined on a “case by case” basis. In other words, even where an applicant has been convicted of a crime for which it can be shown that a “demonstrable risk to resident safety and/or property” exists, the landlord must go further and look at the specific facts and circumstances surrounding the conviction. In fact, criminal screening standards must take into account: 1) the “nature and severity” of the conviction; 2) The length of time between the conviction and the application; and, 3) The landlord must conduct an “individualized assessment” of each applicant, considering “relevant mitigating information” such as: a) the facts or circumstances surrounding the criminal conduct; b) the age of the individual at the time the conduct occurred; c) evidence that the individual has maintained a good tenant history before and after the conviction or conduct; and d) evidence of rehabilitation efforts.

For example, a conviction for simple battery can be either a misdemeanor or felony. When reviewing an applicant’s conviction for battery, landlords would be wise to look deeper into the situation. For example, was the conviction based on spitting on someone’s food (in California, such action can lead to a conviction for battery)? Or, on the other hand, was the conviction for beating a motorist in a fit of road rage (which would be charged as a felony)? Has the applicant just been released from incarceration? Or did the conviction take place 20 years ago when the applicant was 18 years old?

As you can see, simply having a policy which sets forth the convictions for which you intend to deny an applicant is not enough to meet HUD’s guidelines. Even where those convictions can be shown to present a “demonstrable risk to resident safety and/or property” when looked at in a vacuum, landlords are still required to analyze the various circumstances and situations surrounding the conviction before implementing a blanket policy of denying an applicant convicted of that specific crime.

Strategies to Think About

While it is clear that landlords may no longer apply blanket restrictions to deny housing to applicants with criminal backgrounds, landlord are still permitted to use criminal background checks as a screening tool. Below are some strategies that can be used to limit the risk of liability for claims of discrimination based on a denial of housing to an individual with a criminal history.

First, if you intend to conduct criminal background checks, take the time to develop very specific policies on the convictions and their connected situations and circumstances for which you will deny an applicant housing. While this may initially be time consuming, the ability to provide such policies in the event of a Fair Housing investigation will demonstrate that you have at least attempted to comply with the requirements by developing your narrowly tailored policies.

Second, implement a policy under which your non-criminal-related screening criteria are considered first, before resorting to criminal background checks in your screening process. In other words, run your standard criteria first. If the applicant doesn’t qualify under the regular screening requirements, (e.g., 2.5 times the rent in gross monthly income, a minimum FICO score, acceptable and verifiable credit and tenant histories, etc.) then there is no need to rely on the information found in a criminal background check to deny the applicant. Rather, base your denial on the inability of the applicant to comply with the standard screening criteria instead. By doing so, you would be able to prove that criminal history never even came into the picture and, therefore, no disparate impact discrimination could have occurred.

Mistakes to Avoid

When contemplating the use of criminal background checks as part of your screening process, avoid making the following mistakes:  1) denying applicants based solely on arrest records; 2) using blanket prohibitions such as denial of housing to persons with any type conviction; 3) denying housing for less serious convictions such as infractions and misdemeanors; 4) failing to review the conviction on a case by case scenario in which you consider the mitigating circumstances and factors; and, 5) keep the decision making in connection with your policies and case by case analysis to owner or upper level management rather than onsite managers. Leaving such decisions to the discretion of an onsite manager may result in disastrous results. Instead, require the onsite managers to submit the applications to the owner or supervisor to assure the acceptable policies and procedures are being implemented.

Conclusion

In conclusion, landlords are, in fact, still permitted to use criminal background checks as part of their screening process, and they are still permitted to use information discovered in those background checks to deny housing to applicants with a criminal history. However, HUD’s Guidance Memo, while not “law”, sets forth prohibitions and acceptable policies in connection with the use of criminal background checks. While landlords may not deny housing for mere arrests in an applicant’s background, they are specifically permitted to deny housing to those convicted of the “manufacture and/or distribution of a controlled substance”. Additionally, landlords may deny housing to applicants convicted of various other crimes, provided three criteria are met, namely: 1) the policies as to which crimes will be used to deny housing are “narrowly tailored” to “accurately distinguish between criminal conduct that indicates a demonstrable risk to resident safety and/or property, and criminal conduct that does not”; 2) the landlord conducts a “case by case” analysis taking into consideration  the “nature and severity” of the conviction; b) the length of time between the conviction and the application; and, 3) the landlord conducts an “individualized assessment” of each applicant, considering “relevant mitigating information”, such as the facts or circumstances surrounding the criminal conduct, the age of the individual at the time the conduct occurred, evidence that the individual has maintained a good tenant history before and after the conviction or conduct, and evidence of any rehabilitation efforts on the part of the applicant.

The foregoing information is presented and intended to address the topic(s) covered above in a general nature, and not as specific legal advice.  Specific situations and their facts should be presented to your attorney for review.  The Brennan Law Firm is one of the premier landlord-tenant law firms in Southern California, representing landlords exclusively in evictions, judgment enforcement, and other landlord-tenant matters. Mr. Brennan is a frequent speaker and contributing author for AOA, and may be reached at (626)294-0500, or toll free at (855)285-2230. Please visit our website at www.MBrennanLaw.com for more information.

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 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.

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 1st to collect this fee along with the rent due on August 1st.

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/

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.

 

  1. 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.  

 

  1. 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. 

 

  1. 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.  

 

  1. 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.

 

  1. 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 !!

 

  1. 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

City is Sued for Attempting Unjustified Snooping on Rental Property – by Meriem Hubbard and Wencong Fa, Attorneys-at-Law

In a legal case that should interest rental property owners statewide, the City of Highland in San Bernardino County is being sued for trying to arm-twist landlords and tenants into allowing warrantless inspections of their homes.

In other words, the city is trying to coerce property owners and tenants into surrendering a fundamental constitutional protection: the Fourth Amendment’s guarantee that government officials cannot search private property unless they first obtain a warrant.

To be sure, the plaintiffs in this case –  property owner Karl Trautwein and the tenants in one of the homes he owns – have nothing at all to hide.  An investor with a number of homes around Southern California, Karl takes pride in maintaining all his properties to a high standard and keeping tenants satisfied.

What Karl and the tenants who are joining in the lawsuit resent is Highland’s attack on their fundamental privacy and property rights.

Indeed, in a sign of the importance of the case, they are represented by Sacramento-based Pacific Legal Foundation, the nation’s leading legal watchdog for property rights and individual liberty. Donor-supported PLF represents these plaintiffs free of charge, as with all its clients.

Karl and his tenants are victims of local government’s plan for a sweeping regime of unjustified rental-property inspections throughout the city – and its heavy-handed strategy for imposing this agenda on owners and renters.

Instead of simply responding where there have been complaints about code violations, the city adopted the goal of aggressively inspecting all 4,800 rentals within city limits, whether or not there have been complaints.

To cut corners in this overwhelming task, officials are attempting to evade the constitutional requirement to seek administrative warrants for inspections. Instead of going to a court and showing cause to receive permission to inspect inside a home, the city is attempting to bully property owners and tenants into allowing inspectors in without a warrant.

Karl and his tenants have been subjected to bullying because they would not agree to let inspectors into their home.  There have been no complaints about the property and the city has offered no evidence that it has any problems.  So Karl and his tenants object to a baseless, uncalled-for, open-ended intrusion by government bureaucrats.

City officials didn’t respond to this refusal by seeking a warrant – because there were no grounds for one.  Instead, the city resorted to threats and coercion.  Karl was charged a “re-inspection fee” and was told that his rental license would not be renewed if he continued to refuse to allow a warrantless entry.

This pressure tactic is what the law calls an “unconstitutional condition” — i.e., Karl’s rental license is being held hostage unless he agrees to the condition that he and his tenants waive their Fourth Amendment rights.  As the lawsuit points out, government cannot confront anyone with a false choice of this kind, which coerces them out of constitutional freedoms.

With its crusade to inspect all rental properties, even those like mine without any tenant complaints, the city is wasting its resources and harassing law-abiding people,” said Karl.“Ironically, this is the kind of regulatory overkill that can reduce the supply of rental housing by causing conscientious and hard-working property owners to decide it’s not worth it.”

“There is no freedom without property rights and the privacy they protect,” he noted.  “Privacy means no one can come inside your residence unless you invite them in.  Cities have no business forcing their way into people’s homes.  The Constitution provides a way for government to enter a home — by convincing a judge to issue a warrant based on probable cause.  Highland wants to avoid the inconvenience of that constitutional requirement.”

“Violating the privacy rights of my residents without probable cause is as unnecessary as it is wrong,” he continued.  “The city should not be violating their privacy for no good reason, and it can’t be permitted to go snooping without a warrant.”

Filed in U.S. District Court for the Central District of California, the case is Trautwein v. City of Highland, et al.  More information, including the complaint, an explanatory blog post, a podcast, and a video statement, is available Pacific Legal Foundation’s website:  www.pacificlegal.org

Meriem Hubbard is a Principal Attorney with Pacific Legal Foundation and Wencong Fa is a Staff Attorney with the foundation.  They represent Karl Trautwein and his tenants in challenging Highland’s attempt to coerce them out of their Fourth Amendment rights. Donor-supported Pacific Legal Foundation www.pacificlegal.org is the leading watchdog organization that litigates for limited government, property rights, individual rights, and free enterprise, in courts nationwide. PLF represents all clients free of charge.  For more information, visit http://www.pacificlegal.org.

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

Legal Analysis of Quiet Title Claims for Apartment Owners and Deed of Trust Holders – By Nate Bernstein, Esq.

Often times we get calls from clients or colleagues who ask us to explain what a “quiet title” action is.  There is no need to be quiet and hush hush about quiet title actions – pun intended!   In fact a quiet title claim is very common claim and cause of action asserted under California real estate law.      This article is an overview of the quiet title claim process for property owners and real estate deed of trust lenders who may have a perceived or real problem with their right, title, and interest to real property in California. 

Everyone should get a “title check up.”  It is in the best interest of all investment property owners and deed of trust lenders to periodically obtain a copy of a preliminary title report from a reputable title company-  you may find items in the title profile for the subject property that are objectionable, fraudulent, or mistakes- these matters should be cleared up.  It is healthy to get a title check up- it leads to good title karma!!

If you are in the real estate investment ownership or real estate lending business, you know that having clear, marketable title to real property is an important component to valuable real estate ownership.   If your title is not clear, or has chain gaps- you cannot sell, refinance, or otherwise leverage your asset.

Clouds on title may impact an owner’s ability to sell or refinance property, and can impact a lender’s rights for title priority and to foreclose on real property.    Clouds on title or mistakes on title can also impact an owner’s ability to evict a tenant – the tenant may claim invalid title as an affirmative defense to an unlawful detainer lawsuit – that is the last thing you want when you are trying to evict a tenant!!

The law provides a remedy for fixing title problems.  Quiet title lawsuits are an important vehicle for deciding real estate title disputes and deed of trust priority disputes under California law.

Legal Procedures for Quiet Title Claims

When you have a dispute as to the state of the title for a residential real property or commercial real property, or an unfriendly person or entity is making a legal or equitable claim against the title, you can file a “quiet title” lawsuit in the Superior Court where the property is located to resolve the claim.   This may be done directly by the party or by the party’s title insurance carrier after a claim is made with the title insurance carrier.   Title insurance companies often times get involved in prosecuting, defending, and settling quiet title actions on behalf of property owners and lenders.   Title insurance companies sell title insurance products to purchasers and lenders.      When a title insured client makes a claim, filing a quiet title action is often times the method to fix a title problem on real property short of paying off the client’s claim or investment.  The goal is to obtain title “as insured” under the title insurance policy.

The quiet title claim can also be brought in conjunction with other claims, such as fraud, a claim for cancellation of an instrument, declaratory relief, injunctive relief, or even equitable subrogation.    Each case is fact sensitive.   In a declaratory relief action, for example, the court has the power to determine the ownership rights of the parties as to an interest in real property as of a certain date.  An opponent can also file a countersuit, also called a “cross-complaint.”   Today you are the plaintiff, but tomorrow you may be the defendant!

As another example, in a quiet title lawsuit, you can also litigate a claim relating to a fraudulently executed or fraudulently recorded deed of trust mortgage document.  That is why it is a good idea to get a title check up to see what is in your title profile.

An action to quiet title is a lawsuit filed to establish ownership of real property (land and buildings affixed to land). The plaintiff in a quiet title action seeks a court order or judgment that prevents the defendant from making any subsequent or conflicting claim to the property.    Quiet title actions are necessary because real estate may change hands often, or there may be a conveyance of a partial interest, and it is not always easy to determine who has title to the property.

In the arena of quiet title litigation, the Court will determine the state of the title as of a particular date, and has the power to “clear title,” remove “the cloud on title,” or make an equitable decision, and, hopefully, resolve the dispute.   Title disputes can be adjudicated in an orderly manner without infighting between neighbors or shouting matches.   By law, in California, juries do not decide quiet title actions- these actions are decided by judges in bench trials.   Thus, there is no right to a jury trial for a quiet title action under California law.  Do you really want 12 jurors with no legal training deciding who owns your apartment building?

Applicable Laws

Under the laws of the most states in the United States, the law of quiet title is governed by state statutes and the case law authorities that interpret the state statutes.    Generally speaking, the law of quiet title in California is governed by California Code of Civil Procedure 760.010-760.060, and the case law interpreting these sections.      Also, underlying substantive laws, may apply as well- such as fraud, or breach of contract, the laws of recording and conveyances,  or the laws of probate.

When quiet title lawsuit is filed, the plaintiff is required to record a lis pendens at the County recorder’s office.    The term “lis pendens” is a Latin term for “action pending.”  The lis pendens provides notice in the title profile of a particular property that a lawsuit is pending, and that any subsequent grantee, subsequent purchaser, assignee, or lender, takes title subject to the claim.   Generally, a lender will not make a loan secured by a title that is subject to a “lis pendens” recording.  For the basic statutory procedural requirements for handling a lis pendens, please review California Code of Civil Procedure 405-405.24.

The quiet title action is important, if an owner or secured lender wants to determine that he or she has superior rights to the title of a particular parcel of real property in comparison to other claimants or potential claimants.  Secured real estate lenders often seek to establish title profile priority for its deed of trust by filing a quiet title action and adding a claim for declaratory relief.    Establishing a clear and marketable title is also crucial for receiving future financing, or for making a marketable future transfer by deed, trust, or will.     It is also an important foundation to have clear title if you start an eviction lawsuit- also known as an unlawful detainer action.   If title is not clear, how can the person complete an eviction with confidence?     Possession follows rights to clear title!

Quiet Title Actions are “Fact Specific” –  

Most Actions Settle But Some Proceed to Trial 

In reality, most quiet title lawsuits and related claims are settled after the case is filed and prior to trial.   Cases sometimes settle in mediation, at a settlement conference, or through professional communication and compromise between the parties and their attorneys.   If quiet title cases don’t settle “out of court,” these claims are decided by judges in bench trials every day.  So you need to be prepared to try your case if the case does not settle.

Other times, when the defendant fails to defend the action, a default is filed and the plaintiff has to prove up the default with live testimony in Court.   Because of the intricacies of the court process, parties should retain experienced counsel to represent their interests in a quiet title action.

This article is a capsule overview, and each quiet title claim should be treated specifically to address the specific facts and circumstances of the situation.   Questions should be directed to Los Angeles Real Estate Law Group at (818) 383-5759.  

Nate Bernstein

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.  He 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 and created www.laquiettitleattorney.com a leading educational resource on quiet title real estate litigation.   For more information, call (818) 383-5759, or email natebernstein44@gmail.com

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