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Are You Hiring Trouble? Fair Housing – California
By D. J. Ryan, Fair Housing Specialist
/Director of Client Education Kimball, Tirey & St. John, LLP
The first line of defense against a potential fair housing
complaint is a well-trained and knowledgeable staff. But knowledge and training
is only half the picture. The fact is, not everyone is cut out to work with the
diversity of applicants and residents on your properties. No matter how
intelligent and technically skilled an employee might be, the wrong personality
in the job can spell trouble.
For instance, take body language, which tells others about how we feel through
unspoken communication in face-to-face encounters. Studies show that our body
language says more than the actual words we use. Even without intending to, our
body language can quickly give us away if we don't like someone. The way we
tense up, pull away, fold our arms, change facial expressions, or lose the
enthusiasm in our voices, for example, can speak volumes.
There is no foolproof way to ensure that every person you hire on the property
can or will be able to successfully make all applicants and residents feel
welcome, but there are a few fair housing tips that you can keep in mind if you
have the responsibility of hiring on-site personnel.
First, establish the characteristics that are both the least likely and
the most likely to create fair housing problems. Then, during the interview
process, make it a point to identify those positive or negative traits are
present in each candidate.
Positive Traits: Is the candidate
« emotionally mature? You can't afford to have an onsite employee who is abrupt with applicants or residents, who is prone to outbursts when frustrated or angry, or who is moody (happy today, grouchy the next). Applicants and residents take things personally.
« fair and open minded? If the candidate is "stuck" in their personal beliefs, he will carry those problematic attitudes into the workplace.
« alert to problems? You want employees who are problem-solvers, not problem- makers. Your candidate should be able to spot a potential problem and quickly deal with it appropriately, not ignore it and hope it will go away.
« alert to problems? You want employees who are problem-solvers, not problem- makers. Your candidate should be able to spot a potential problem and quickly deal with it appropriately, not ignore it and hope it will go away.
« a good learner? Many candidates are set in their ways and are not capable or interested in learning about current laws and practices, particularly if they haven't been "caught" in the past. Fair housing is the most complicated area of the landlord-tenant relationship and employees MUST stay abreast of current practices.
« professional at all times? Your candidate should be able to remain business-like and consistent with applicants and residents at all times. Becoming too friendly with them can cause favoritism and lead to fair housing complaints.
« positive about the work and life in general? Remember that applicants and residents who encounter negative, dour employees often come to the conclusion that the bad attitude is directed at them personally.
« like people? The bottom line is that managing rental property is a people business--twenty-four hours a day, seven days a week. If the candidate is NOT a demonstrated people person, he or she will be much happier in some other profession.
Negative Traits: OR does the candidate
« dislike kids? Families with children are a protected class. Kids sense when someone doesn't like them and can exploit the situation very quickly. Further, managers who dislike children are likely to deal more harshly with them because of their age, creating a huge potential for a fair housing complaint.
« have past problems with discrimination? Anyone can be accused of discrimination. Ask questions such as : "What was the alleged violation?" and "What was the result of the investigation or hearing?"
« enjoy telling off-color or ethnic jokes? Some people think they are the life of the party, always having the latest story or joke to relay to others, whether in a group or on the computer. Saying or writing anything that is derogatory towards a protected class is trouble waiting to happen.
« act like a control freak? Reasonable control is necessary in management situations but if control is carried to the extreme, residents will take the extreme control tactics as personal attacks on them. This commonly occurs with regard to rules that are directed at children.
« have a negative attitude? The employee who is always grousing around, never smiles, and flat out thinks life sucks can lead applicants and residents to think the negativity is directed at them. (And don't forget the impact negativity has on the rest of the staff.)
« think and act immaturely? There are going to be many times when important decisions have to be made - sometimes on the spot - which call for a cool head and mature thinking. A bad decision based on emotion, fear, ego or lack of knowledge is fodder for a costly fair housing complaint.
« have a hot-temper? An employee who flies off the handle at residents is a guaranteed liability. Find a replacement, quick!
How do you maximize
your odds for hiring someone who isn't going to get you and your company in fair
housing hot water? You will need to conduct your interview in such a way that
you identify the positive and negative traits in each candidate. Remember that
the law doesn't care whether your employee intentionally or accidentally
discriminated…it is still considered to be discrimination with all the
associated costs and penalties. So - don't hire trouble!
D.
J. Ryan is the Director of Client Education and a fair housing specialist in the
Fair Housing Training and Defense Department of the law firm of Kimball, Tirey
& St. John LLP. She served as executive director of SDCAA from 1977 to 1991,
and has been a fair housing trainer and consultant for the past 15 years. For
fair housing consultation, contact the department at
Legal Alert:
FDCPA
Amended to Clarify Legal Pleadings Are Not An Initial Communication
On October 13, 2006, President Bush signed into law the Financial Services Regulatory Relief Act.
This new law, which becomes effective immediately, is an enormous victory for
third party creditors and proponents of collection law everywhere.
Earlier this year, the United States Court of Appeals for the Second Circuit
ruled that the filing of an unlawful detainer lawsuit (eviction) seeking
recovery of unpaid residential rent is an "initial communication"
within the meaning of the Fair Debt Collection Practices Act or FDCPA. Goldman
v. Cohen, 445 F.3d 152 (2006).
As a result, if the landlord's attorney had no prior communications with the
tenant before filing for eviction, they were required to include a debt
validation notice in the unlawful detainer action or send it to the consumer
within five days after serving the eviction on the tenant.
Fortunately, this new law clarifies the FDCPA and its application to
legal/formal pleadings. With the amendments, legal pleadings will not be treated
as an initial communication under the FDCPA. As such, formal pleadings,
including a summons and complaint for residential unlawful detainers, will not
be required to include a debt validation notice. Notices, such as three-day
notices, are arguably not considered pleadings and therefore the new law does
not apply to notices.
Kimball, Tirey & St. John LLP has a
Collection Group including 26 full time dedicated account executives who work
exclusively on recovering past due debts from former tenants. Our Collection
Group can be reached by calling 800-575-1770.
This legal alert is for general information
purposes only. Before acting be sure to receive legal advice from our office. If
you have questions about this alert, please call Stacy Rubin at (800)575-1770.
Fair Housing Issues:
Disabiltiy Access Lawsuits are on the Rise
by J. Kathleen Belville, Esq.
Kimball, Tirey & St. John
Now is the time to be proactive about accessibility issues for the disabled on
commercial or residential rental properties! The number of lawsuits being
brought against owners and property managers has risen to a level that is
receiving national attention. In recent years, accessibility lawsuits have
focused primarily on large public venues such as recreation and shopping areas.
Lately, however, the rental housing industry has become a target of these
lawsuits as well.
These cases are expensive and time-consuming to defend, even if the defense is
successful. Therefore, good business planning involves attempts to reduce the
risk that a suit will be filed in the first place. It is seldom worth the
Plaintiff's effort to sue when there is clearly no legal basis for a suit. Even
so-called "nuisance" lawsuits, which are designed primarily to make
the Defendant pay to settle (rather than actually create access) usually have
some type of non-compliance issue to cite. Knowledge is the key to avoiding
non-compliance.
There are several laws that deal with disabled access to real property. This
article is in-tended only as an overview to address, in general terms, the
requirements in commercial and conventional rental housing. It does not address
individual disability accommodations or subsidized housing requirements.
The Americans with Disabilities Act (ADA) is commonly used as the generic name
for disability issues (like the brand name Kleenex® is often used to mean
facial tissue). The ADA only applies to one portion of rental properties-the areas
to which the public is invited. The federal Fair Housing Act (as well as other Federal,
state and local laws) applies to accessibility in the private common areas of the property
and the individual rental units. The following list of "Do's and
Don'ts" may help reduce your risk of monetary liability for access issues:
Don't Assume
ADA: The ADA was enacted in 1990. Many owners and managers of residential and commercial rental property assume that if their buildings pre-date the passage of the law, they are "grandfathered in" and need not comply with the ADA. That is an incorrect assumption and has proved to be costly for uninformed landlords. All areas of a property to which the public is invited need to be accessible to the extent that access is "technically feasible" and "readily achievable." The public areas of properties even include the rental office (or residential manager's unit) in properties with 16 units or more (which must have an agent of the owner on-site). Remember that in a lawsuit, feasibility and achievability will be determined by a judge or jury, so be prepared to defend whatever position you take!
Fair Housing Act: For residential property, the Fair Housing Act (FHA) established construction guidelines to provide access to common areas and dwelling units. Those guidelines became applicable in early 1991. Unlike the ADA, if a rental property was built prior to the application of the accessibility requirements, the property might not have to be brought into compliance. But don't assume that there is nothing to be done just because of the date of construction.
Don'tmProcrastinate
Accessibility lawsuits are sometimes called "drive-by" cases because they can be filed with little investigation and no notice. A potential plaintiff can simply pass by the property or visit it briefly and cite suspected violations, Consequently, every day is a new opportunity for a drive-by to occur. If you wait to take steps to be sure the property is compliant, tomorrow may be too late.
Do Evaluate
Even if a property was designed by a licensed architect, built by a licensed contractor and approved by building inspectors, it may not be compliant with all ADA or FHA accessibility requirements. Several large rental housing companies and many small business owners have recently found that the properties they had operated without incident for years were legal time bombs ready to explode! Although the owner and management company may have a cause of action against those who built the property incorrectly (if they are still in business), it usually involves a separate lawsuit and significant attorney's fees to prosecute. Being proactive can save a lot of expense. It is critically important to have every commercial or residential rental property audited by a contractor knowledgeable in the many applicable laws. The experts we have consulted say they have never found a property to be in perfect compliance with all laws. One reason is because there are conflicts between the requirements in the various codes; however, an evaluation will usually point out the most dangerous discrepancies. Get a written report with detailed recommendations for becoming compliant.
Do Formulate a Plan
Establish a written plan. Create priorities. What changes would be most helpful to disabled persons seeking access, and which changes would be the most cost-effective? Include projected completion dates and explain any delays that might be questioned. All potential problems should be mentioned in the plan. If a lawsuit is settled with regard to one non-accessible issue, the same or a different party could still sue for any remaining unaddressed issues. Be thorough.
Execute the Plan
Start work on your first priority immediately. Sometimes
even if there is a suit filed, the agency or court will take into consideration
that efforts are being made to come into compliance when determining the extent
of the penalties to assess. Remember, this type of lawsuit is difficult to
defend. A slope or a measurement for an opening is either correct or not. There
is no gray area for something which is "substantially" compliant. The
only arguments owners and managers can make relate to whether correction of a
physical deficiency is technically feasible or readily achievable
Don't Count on Insurance Coverage
You may have seen articles about lawsuits against large property owners/management companies that resulted in fines in the million dollar range. If you are the owner of a small number of residential units or an owner or manager of a small commercial business, the fines may be less, but could still be significant to you. Check your insurance coverage and be sure that the assurance of coverage is in writing. Remember that the fines are the tip of the iceberg. Even if you successfully defend a case, the attorney's fees can be significant. Added to that is the cost to retrofit every deficiency, all at once and in a hurry in order to avoid further penalties.
Everyone wants disabled persons to have equal access to
properties and businesses in order to obtain housing, goods and services. The
challenge is to make property owners and managers aware of accessibility
deficiencies and to be able to bring them into compliance as cost-effectively as
possible.
Your industry representatives have had only limited success in their attempts to
get legislation passed that would establish some protections for owners and
managers with regard to accessibility. There have been laws proposed that would
require that an owner or manager receive notice and the opportunity to cure
deficiencies before a lawsuit can be filed. Those bills have consistently
failed. There is a bill in the California legislature this year to require that building
code inspectors be knowledgeable about ADA and FHA accessibility issues so they can catch
problems before the building is completed. If that passes, it would at least be of some help.
Please take every opportunity to contact your legislative representatives on the local, state
and federal level to make them aware of this issue.
Attorney J. Kathleen Belville, is the managing
partner of the Fair Housing Training and Defense Department at the Law Offices
of Kimball, Tirey & St. John, LLP (KTS). KTS is a full service real estate
firm, representing owners and managers of properties throughout
California
. The information provided in this article is
general in nature and not intended to be legal advice. For consultation on
specific legal issues or referrals to contractors with expertise in
accessibility requirements, please contact the author at (800) 338-6039.
Megan’s Law Impacts Housing Providers
The Governor signed AB 488 (Parra), effectively expanding the scope of Megan’s Law by requiring information about sex offenders to be available on the Internet. The new law requires specific information about persons required to register as sex offenders to be posted on the Attorney General’s Internet web site on or before July 1, 2005. The information that must be made available to the public includes the sex offender’s name and known aliases, a photograph, a physical description (including gender and race), date of birth, criminal history related to sex offenses, the community of residence, and ZIP Code in which the sex offender resides. Currently this information is available generally only by personally visiting local law enforcement offices or by calling a 900-telephone number. Moreover, under the bill, the public will be granted access to the registered home address of those sex offenders who fall under a specified category of offenses, generally believed to be the most serious offenses.
On its surface, Megan’s Law appears to be unrelated to housing. However, a close reading of this law demonstrates that California has given rental property owners contradictory legal directives with respect to the housing of convicted sex offenders. On the one hand, California law provides that owners may be held liable for failing to protect a tenant from a known risk. In light of this directive, and because of the high recidivism rate of sex offenders, a multifamily housing owner would rightfully conclude that he/she must refuse to rent to a known sex offender in order to protect the tenants from harm. On the other hand, Megan’s law itself can be construed as prohibiting an owner from using the information obtained on the list to discriminate against a sex offender. The law imposes damages and a civil penalty of up to $25,000 for doing so.
While owners may be inclined to tackle the vagueness in the law by implementing a “don’t’ ask don’t tell” policy, such a policy will be more difficult to sustain in light of the expansive reach of the new law. The fact that the sex offender information will be easily available on the Internet and will include the sex offender’s specific address will greatly increase the likelihood that the public, including tenants and neighboring property owners, will discover the sex offender status of existing and prospective tenants. Thus, owners will have to choose between evicting the sex offender (thereby facing a potential lawsuit by the sex offender), and encouraging an exodus of existing tenants who refuse to live in close proximity to a registered sex offender. Moreover, the rental property may be exposed to vandalism, public protest, and other forms of public scorn that will jeopardize the owner’s ability to operate the property safely and profitably.
I
n light of the problems created by Megan’s law with respect to multifamily housing, CAA is assessing various options to solve the contradictory directives in the law and will provide guidance to its members in the meantime.
Tobacco Smoking at Residential Rental Properties
A service of your local CAA chapter and the California Apartment Association
Challenges for Rental Property Owners
Restrictions On Smoking In The Workplace
Although tenants view the apartment building and their individual units as their home, larger complexes are also the workplace of the building manager and maintenance personnel. California's Labor Code Section 6404.5 bars smoking in any enclosed work area. Although "private residences" are exempt from this law, according to California 's Legislative Counsel, common areas of apartment or condominium buildings or complexes such as lobbies, hallways, laundry rooms, stairways, elevators and recreation rooms remain subject to the Labor Code's smoking prohibition if the areas are enclosed and are places of employment. The smoking prohibition also applies to residences licensed as family daycare homes during the hours of operation as a family daycare home and in those areas where children are present. The Labor Code requires the posting of 'no smoking' signs and requires employers to ask smokers to stop smoking in any enclosed work area. The Labor Code is enforced by local health departments and other local law enforcement agencies. Penalties start at $100 for a first violation and increase thereafter. Workplace exposure to tobacco smoke is also addressed by Proposition 65 (discussed below).
Housing Discrimination
Under the California Fair Employment and Housing Act, Government Code Section 12960 ("FEHA" ), individuals with disabilities are entitled to reasonable accommodations to ensure equal access to and enjoyment of their housing. FEHA prohibits discrimination based on physical disability, mental disability, and medical condition. "Physical disabilities" include physiological and anatomical conditions that limit a person's ability to participate in major life activities. Courts have found that individuals such as asthmatics, who are hypersensitive to tobacco smoke, are disabled because the tobacco exposure interferes with the major life activity of breathing. Under the FEHA, reasonable accommodations must be provided to the qualified disabled person unless that accommodation causes an undue hardship. Depending on the circumstances, such accommodations could range from (1) designating common areas or certain other portions of a building as smoke free, (2) allowing the tenant to relocate to a different unit, or (3) allowing the tenant to terminate the lease without a penalty so that the tenant can move to other housing in order to obtain a smoke free environment.
Liability For Failure To Warn Regarding Exposure To Environmental Tobacco Smoke: Proposition 65
Proposition 65, the "Safe Drinking Water and Toxic Enforcement Act of 1986," (Health & Safety Code Sections 25249.5, et seq.) requires businesses with ten or more employees to provide notification to individuals about exposures to carcinogens and reproductive toxins. Proposition 65 has primarily been used to require manufacturers and retailers of consumer products to place health hazard warnings on the products or on store shelves. Proposition 65, however, also requires warnings for environmental and workplace exposures. Unlike the Labor Code's prohibition against smoking in the workplace, Proposition 65's warning requirement is not limited to enclosed areas.
Private enforcers of
Proposition 65 have recently begun issuing notices of violation to owners and
managers of apartment buildings that allow smoking in common areas but who have
not posted the required "clear and reasonable warning." Notices have been issued
recently against owners and managers with properties throughout
California
for exposing tenants, the public, office and administrative staff, security
personnel, maintenance workers and service personnel to tobacco smoke in
interior and exterior common areas including lobbies, hallways, exercise and
pool areas and "areas adjacent to buildings." These Notices allege exposures to
tobacco smoke, which is listed as both a carcinogen and a reproductive toxin
under Proposition 65, and over forty other toxic chemicals that are components
of secondhand smoke, including arsenic, carbon monoxide, nicotine, lead, benzene
and formaldehyde.
Under Proposition 65, a private enforcer must wait 60 days to file an action
after serving the Notice of Violation, in order to allow the public enforcement
agencies (who have received a copy of the Notice) an opportunity to pursue the
action. Violations of Proposition 65 are punishable by civil penalties of up to
$2,500 per day, per violation. Owners and managers can avoid becoming the
targets of private or government enforcement by posting clearly visible signs
with the "safe harbor" warning language as specified in the Proposition 65
regulations, in all areas where smoking is allowed. The regulations specify
"safe harbor" warning language and methods for both occupational and
environmental exposures.
Restrictions on Smoking in Public Places - Common Areas of Apartment Buildings
Local ordinances that restrict smoking in public places are also on the rise in
California. Some of these ordinances can be interpreted to prohibit smoking in
certain interior common areas, entryways, or playgrounds of apartment complexes.
The cities of Arcata, Oakland, Davis, Sacramento, Palo Alto, and Monterey, as
well as San Mateo and Marin Counties have, to varying degrees, restricted indoor
and outdoor smoking in public areas. Certain local ordinances apply to the
interiors of buildings that are open to the public, including areas that may not
be workplaces covered by the Labor Code. Other ordinances extend to outdoor
public areas such as sidewalks, plazas, doorways and entryways. The Cities of
Davis and Arcata have the most restrictive ordinances. Arcata bans smoking in
its entire downtown "Plaza" area. Davis bans smoking in most outdoor locations
where people are likely to congregate including ATM lines, bus stops, and
outdoor bar and restaurant seating areas, and it also forbids smoking within 20
feet of any building in which smoking is prohibited, except when passing through
to another destination. Some local ordinances that ban smoking in entryways
apply to all businesses that are open to the public, while others, like the one
under consideration in the City of Sacramento, apply only to governmental
buildings.
Modesto, San Ramon, Berkeley, San Diego, and the County of Stanislaus have all
passed, or are about to pass, ordinances making outdoor children's recreational
facilities, such as playground, zoos, wading pools, and skate parks, smoke free.
These ordinances could cover playgrounds that are part of an apartment complex
if the playgrounds are accessible to the public.
Express restrictions on smoking in common areas of apartment buildings that are
not already covered by the Labor Code are likely to be forthcoming. The State of
Minnesota has banned smoking in common areas of rental properties. In
California, the City of Long Beach has also passed an ordinance that prohibits
smoking in the public areas of apartment and condominium complexes.
Smoking In Individual Units
According to the American Lung Association, secondhand smoke that seeps in from
neighboring units can pose both a health threat to sensitive individuals and a
significant nuisance. Since the interiors of private dwellings are not covered
by the laws and ordinances that address public areas, there are no clear
guidelines for resolving these conflicts. Non-smokers have filed lawsuits
against property owners and against their fellow tenants for causing or failing
to stop exposures to environmental tobacco smoke. They use legal theories such
as nuisance, battery, breach of the covenant of quiet enjoyment and the warranty
of habitability, negligence, harassment and intentional infliction of emotional
distress.
A tenant
could argue that the owner has violated the implied covenant of quiet enjoyment
by failing to stop other tenants from smoking and thereby substantially
affecting the tenant's enjoyment of a material part of the premises. Although no
California court has ruled on this issue, courts in several other states have
allowed lawsuits to continue where a neighbor's smoking is extreme enough, and
the courts have required owners to give the tenant a reduction in rent or other
relief.
In the absence of a specific law or ordinance, it may be difficult for a tenant
to establish that a neighbor's smoking is a nuisance, because the behavior must
be both substantial and unreasonable. However, in San Diego, a condominium owner
was successful in obtaining a restraining order to prevent his neighbor from
smoking in his garage, which was located underneath the plaintiff's home.
States are now beginning to pass laws that address this very problem. A recently
passed Utah
state law provides that drifting tobacco smoke may constitute a nuisance and
that a tenant may bring suit to stop the nuisance and recover damages unless the
lease gives notice that smoking is allowed in other units.
Options For Owners
Improved ventilation may reduce, but may not completely eliminate exposure to
secondhand smoke. Ventilation systems are generally designed to meet the
standards established by American Society of Heating Refrigerating and Air
Conditioning Engineers ("ASHRAE"), which treat secondhand smoke as an irritant,
rather than a heath risk. ASHRAE has acknowledged that their standards do not
and cannot ensure the avoidance of adverse health effects from tobacco smoke,
because they are designed to remove odor, rather than carcinogens or other
toxins. Multi-unit ventilation systems, however, can be improved by increasing
fresh air intake, installing, and frequently cleaning better filters and
restricting the amount of air exhausted from one unit to another. If each unit
has its own ventilation, upgrading the system of the non-smoker units may also
improve air quality. Owners should ensure that both individual and multi unit
systems are operating at maximum efficiency.
Owners may also choose to adopt a policy that designates all or part of a
building as smoke-free, or that regulates or bans smoking in outdoor locations
on the property. This type of policy is most effectively implemented over a
period of time, as units turn over. Avoiding litigation and tenant conflicts are
not the only reasons for owners to limit smoking on their properties.
Refurbishing the apartment of a heavy smoker, for the next tenant requires
significantly more time and effort in repainting and there can be significant
costs in cleaning or replacing carpeting, draperies and upholstered furniture.
California's Legislative Counsel has also found that no-smoking policies serve a
legitimate business interest by reducing the risk of fire damage, which in turn
can reduce insurance and maintenance costs.
Entering the Rental Unit
Owners’ Rights and Limitations - Updated: July 2004
Once an Owner has entered into a rental agreement with a Resident and has handed over the keys, the Resident has the right to privacy, and the law places specific limitations upon Owners and Property Manager’s right to enter into an occupied rental unit.
What You Can and Cannot Do:
An Owner and any contractors or employees of the Owner may enter a dwelling unit only in the following cases:
• In the case of an emergency.
• To make necessary or agreed repairs, decorations, alterations, or improvements.
• To supply necessary or agreed services.
• To show the dwelling unit to prospective or actual purchasers, mortgagees, residents, workers, or contractors.
• To make an inspection pursuant to subdivision (f) of Section 1950.5 of the California Civil Code, if requested by the tenant.
• To repair, test, and/or maintain smoke detectors as allowed by Health and Safety Code Section 13113.7.
• To inspect a waterbed for compliance with the installation requirements of Civil Code 1940.5.
• When the resident has abandoned or surrendered the premises. (See CAA’s Issues Insight on Abandonment.)
• Pursuant to a court order.
Except in the case of an emergency or when the Resident has abandoned or surrendered the premises, the Owner may enter the unit only during normal business hours – unless the Resident consents to entry during other than normal business hours at the time of entry.
California law does not authorize landlords to enter rental premises purely for the purpose of inspecting them, even though it may be required periodically under the landlord’s liability insurance policy, for example. Civil Code Section 1954 does not list “inspection” as one of the reasons for entry. A landlord must claim that the purpose of an inspection is connected to providing an agreed to service, improvement, repair, decoration, or some other authorized basis for entry. (California Landlord Tenant Practice, 2nd Edition (January 2004) Continuing Education of the Bar, Oakland, California, Section 3.2).
Case Law & The Constitution
In the case of Jordan vs. Talbot, 55 Cal.2nd 597 (1961), the court opined that “absent a voluntary surrender of the premises by the tenant, the landlord could enforce his right of reentry only by judicial process, not by self-help. Under Section 1161 of the Code of Civil Procedure, a lessor may summarily obtain possession of his real property within three days. This remedy is a complete answer to any claim that self-help is necessary. . . In any event, a provision in the lease expressly permitting a forcible entry would be void as contrary to the public policy. . . Regardless of who has the right to possession, orderly procedure and preservation of the peace requires that the actual possession shall not be disturbed except by legal process.”
Under the Fourth Amendment of the United States Constitution, people are protected from unreasonable government intrusions into their legitimate expectations of privacy; United States vs. Chadwick (1977) 433, U.S. 1, 7. The Fourth Amendment pointedly guards against intrusions into the home; People vs. Ybarra (1991) 233 Cal.App.3 1353, 1360. The constitutional protection for homes extends to all residential premises, including rooms in boarding houses; McDonald vs. United States (1948) 335 U.S. 451, 452-456.
If a landlord wants to end a tenancy involuntarily after the tenant has taken possession of the rental premises, the landlord must take certain legal steps to do so; Civil Code Section 1940; Code of Civil Procedure 715.010 and 1159. Until these steps are taken, the tenant is entitled to peaceful possession of the rented premises and has the right to exclude anyone, including the landlord. People vs. Thompson (1996) 43 Cal.App.4th 1265, 51, Cal.Rptr.2d 334.
Reasonable Notice Prior to Entry
If the owner wishes to enter, he/she must give the Resident reasonable notice in writing of his or her intent to enter. The notice must include the date, approximate time, and purpose of the entry. With limited exceptions, as outlined below, a 24-hour written notice from the Owner to the Resident(s) is presumed reasonable in absence of evidence to the contrary. The Owner can provide the written notice in one of the following ways:
• Personally delivered to the tenant;
• Left with someone of suitable age at the premises;
• Left on, near, or under the usual entry door of the premises; or
• Mailed to the resident. In this case, the notice must be mailed 6 days prior to the intended entry.
If the Owner will make an initial inspection (prior to the time the tenant moves from the unit) pursuant to subdivision (f) of Section 1950.5 of the California Civil Code, the owner must provide a 48-hour written notice to the tenant. The Owner and the Resident may, however, waive this notice. The waiver must be in writing. (See CAA’s Issue Insight on the Mandated Walk-Through Process and CAA’s Move-In, Move-Out List - Form 16.0.)
An Owner or an agent may provide a Resident with a verbal notice of entry to exhibit the unit to prospective or actual purchasers. This verbal notice is allowed only if the Resident has received a written notice from the Owner or agent within 120 days prior to the verbal notice. A 24-hour notice is presumed reasonable notice in the absence of evidence to the contrary. The Owner or the agent must inform the Resident in the written notice that the property is for sale and that the Resident may be contacted by the Owner or the agent for the purpose of showing the unit. At the time of entry, the Owner or the agent must leave written evidence of the entry inside the unit.
The Owner is not required to provide a written notice in the following cases:
• To respond to an emergency.
• If the Resident is present and consents to the entry at the time of entry.
• After the Resident has abandoned or surrendered the unit.
• The Resident and the Owner have agreed orally that the Owner or maintenance personnel may enter to make repairs or supply services (see further information below).
If the Resident refuses entry to the owner, the Owner should not enter, even if the owner provides proper notice to the Resident. A 3-day Notice to Perform Conditions or Quit may be the Owner’s next appropriate recourse in this situation.
Verbal Agreements to Enter
The Owner and the Resident may agree orally to an entry to make repairs or to supply services. The agreement must include the date and approximate time of entry, which shall be within one week of the verbal agreement. If the entry will take place at a time that is not within one week, the owner should provide the Resident with a written notice to enter or contact the Resident again prior to entry to secure another verbal agreement to enter. When a resident verbally requests that an owner or manager enter the unit to make repairs, the following steps are recommended:
• Ask Residents to put their maintenance requests in writing. While this is not required by law, it is highly recommended for the protection of the Owner or Management Company. The Owner can provide service request forms to Residents at the beginning of their tenancy and/or have them available in the rental office. CAA offers two versions of a maintenance request form: Resident Service Request (Long Form) – Form 24.0, and Resident Service Request (Short Form) – Form 24.1.
• If the Owner receives a verbal request (either in person or by telephone) from the Resident, he/she should document verbal requests on a maintenance request form. This documentation should include the date and time of the request, the Resident’s name and address, and the nature of the problem. The name of the employee who took the verbal request should also be noted. The Owner or employee should provide a copy of this request to the Resident, if possible.
• Owners should clarify with the resident whether the owner and/or a maintenance staff person is authorized to enter the unit if no one is at home. Note this on the forms as well.
• Maintenance workers should always knock before entering to determine if the Resident is at home.
• If the Resident refuses to allow entry when maintenance personnel go to the unit, do not enter. A new date and time should be arranged and proper notice to enter given by the Owner to the Resident.
• When inside the unit, especially if the Resident is not at home, maintenance personnel should use a “door knob hanger” or other notice that indicates maintenance personnel are inside the unit. This same form can also be used when the service call is complete — leave it inside the unit, letting the Resident know a maintenance call took place. (CAA offers the Maintenance Door Tag, Form 44.0, created specifically for this purpose.)
• Once the repair has been made, the Owner or Manager should confirm with the Resident that the repair was made. If the repair was not completed, indicate the reason to the Resident, and reschedule with the Resident to complete the repair. Provide a notice to enter for follow up maintenance calls.
Legal Alert
New Laws Regarding Identity Theft and Property Management Responsibilities
The Fair and Accurate Credit Transactions Act (“FACTA”) of 2003 creates amendments to the Fair Credit Reporting Act (“FCRA”) that impact property management companies, rental agencies, collection agencies as well as lenders, insurers and employers. This article specifically addresses the impact of the FACTA on the rental housing industry.
The primary thrust of the FACTA is to curb the incidence of identity theft. In particular, the FACTA governs the use of consumer credit reports and related data. Although the legislation of the FACTA is well-intentioned, the language of the Act is subject to interpretation and is ambiguous in many respects. In fact, the Federal Trade Commission (“FTC”) has encouraged comment concerning the legislation in an effort to provide later clarification of the guidelines that must be followed by furnishers including members of the rental industry. Until the FTC has issued these new guidelines, members of the rental industry should conform to the plain language of the Act and await further agency clarification.
The daily operation of property management companies and housing providers will be most significantly affected in the following areas: 1) the need to comply with more stringent regulation concerning the prevention of identity theft; and 2) enhanced requirements for data accuracy.
Can a property manager offer or decline a lease after receiving notice of a “fraud alert”?
The FACTA creates a procedure for victims of identity theft to include a “fraud alert” on their consumer credit report. During the course of tenant screening procedures, a property manager might see a “fraud alert” on the applicant’s credit report. Once a consumer notifies the credit bureaus (for instance Experian, Transition, or Equifax) that he or she has been the victim of identity theft, the bureau is obligated to “block” the reporting of any data on the consumer’s credit report that the consumer has identified as a result of identity theft.
The threshold question presented by the appearance of a “fraud alert” on an applicant’s credit report is whether the applicant may still be offered a lease by the landlord. Generally, a “fraud alert” that appears on a consumer’s credit report presents potential obstacles to an extension of credit to an applicant. However, it can be argued that the provisions creating these obstacles do not limit the ability of a rental housing provider to offer a lease to an individual. The Federal Trade Commission has opined that a tenant-landlord relationship is not a “credit relationship” pursuant to the FCRA. Thus, a landlord could offer a lease to an applicant notwithstanding the “fraud alert.”
Nevertheless, it is imperative that property managers and housing providers “step up” their screening of a potential applicant under these circumstances by diligently reinvestigating the information obtained during the application procedure in the event that a “fraud alert” should be discovered. In order to “step up” screening procedures, the property manager should carefully review the content of the credit application and, when the lease is signed, ensure that the picture form of identification matches the applicant. Additionally, signatures should be scrutinized as a means of discovering potential forgery. A second form of picture identification and a thorough verification of references may also be required.
A landlord may not decline an applicant based solely on a “fraud alert” that has been placed upon the applicant’s credit report. If the property manager wishes to decline the applicant, an independent basis is necessary.
Can a property manager report delinquent rent as a bad debt subsequent to a “fraud alert”?
The reporting of delinquent rent of former tenants has long been an effective means of debt recovery for property managers. The FACTA curbs a manager’s right to report delinquent rent to the credit bureaus (for instance, Experian, Transition, and Equifax) subsequent to the receipt of an identity theft report or appropriate affidavit from a former tenant.
The FACTA mandates that property managers cease furnishing data to the bureaus when becoming aware of the existence of a potential identity theft case. The manager may become aware of the existence of an identity theft occurrence from the bureau or from an identity theft affidavit directly from the former tenant. The property manager may continue reporting procedures once it has been determined that the information transmitted to the bureaus is actually not the result of identity theft. In this regard, a property manager’s decision to resume reporting could be tenuous and suspect to a high level of scrutiny by a court in the event that a suit is brought by a victim of identity theft. The FACTA provides no guidance to determine the criteria for a manager to make an effective decision in this regard. However, the FACTA does make certain that property managers must have a system in place to prevent data from being reported to the bureaus once there is notice of an identity theft claim.
May collection be pursued during the pendency of an identity theft case?
The FACTA prohibits the sale, transfer, or placing for collection of a debt when a property manager has been notified that the debt has resulted from identity theft. This prohibition precludes a property manager from collecting in its own name or retaining an attorney or outside agency to collect the debt.
If a third party is collecting on a manager’s behalf and receives notification of identity theft, that party must cease collection activity and notify the client that the debt is alleged to be the result of identity theft. The claim of identity theft must be investigated vigorously. Moreover, information is to be exchanged with the alleged victim. The parties should cooperate to resolve the claim and amend all credit data according to the outcome of the investigation.
Must business records be released to alleged victims of identity theft?
The FACTA obligates property managers to release business records to an alleged victim of identity theft, or to a law enforcement agency that is specified by the victim, when a person has made unauthorized use of the victim’s personal information.
The property manager may require that the alleged victim provide appropriate identification and, in good faith, decline to provide the requested information.
The FACTA does not, however, indicate what constitutes a good faith declination. At all times, property managers have an ongoing duty to protect the personal identification information of its applicants and tenants. Thus, it is difficult to reconcile the manager’s obligation to release information under the FACTA with the manager’s duty to maintain privacy rights. Until clarification is provided by the FTC, a proper course of action for property managers in this regard is difficult to determine.
What are the responsibilities concerning data accuracy and reinvestigation?
Under the FACTA, property managers have new responsibilities to ensure accuracy of data that is transmitted to the credit bureaus. The FACTA also establishes restrictions for furnishing data in some circumstances.
The FACTA rules are particularly broad in this regard. Property managers, pursuant to the FACTA, have an obligation to maintain the integrity and accuracy of data that is reported to the bureaus. Managers will be required to establish policies and procedures for maintaining accurate data. Nevertheless, the extent of these policies and procedures has not been identified with any specificity. The FTC has encouraged comment concerning the practical application of such policies.
A property manager may not furnish data to credit bureaus when it has “reasonable cause to believe” that the information is inaccurate. The “reasonable cause” is defined in the Act as “specific knowledge, other than solely allegations by the consumer, that would cause a reasonable person to have substantial doubts about the accuracy of the information.” As with any statute, this language will be clarified by subsequent case law and perhaps written agency guidelines.
Conclusion
Until the FTC clarifies the relevant portions of the FACTA and the correlation between the FACTA and the rental housing industry, the mandated responsibilities and procedures remain ambiguous. A conservative approach to compliance is therefore recommended.
This legal alert is for general
information purposes only. Before acting be sure to receive legal advice
from our office.
If
you have questions about this alert, please call 1-800-575-1770.
Legal Alert Re: Service members’ Civil Relief Act
Last month, Congress passed comprehensive legislation titled the Service members’ Civil Relief Act and President Bush recently signed it into law. This federal law dramatically changes the rights and obligations of military service personnel and their dependants in regard to residential rental housing. There are two separate areas of changes that all residential property owners and managers should be aware of, the first in regard to evictions, and the second, regarding lease terminations.
Evictions:
The new law applies to any residential rental unlawful detained action where the rent does not exceed $2400 per month. The service member and their dependents could request a stay (stoppage) of proceedings of 90 days or more if they can show their ability to pay the rent is “materially” affected by their military service. However, if a stay is granted, the court could grant the landlord “such relief as equity may require”. This would allow the court to “balance the equities” of the landlord and the residents and order appropriate relief. For instance, if the rent has not been paid but there are also behavior issues or illegal activity, the court could presumably allow the eviction to continue.
The eviction process must also allow for a court appointed attorney who could also seek a stay if they are unable to contact the service member or if the attorney has contacted the defendant but the defense would require the service member’s appearance in court. It is important to note that the violation of these provisions is a misdemeanor punishable by up to one year in jail. In the event the landlord prevails, the new law also specifies that there can be a rent allotment made from the pay of the service member directly to the landlord.
Lease Termination:
Under the new law, the service member would be able to terminate a fixed term lease by serving a notice on the landlord if he or she becomes a member of the armed services after he or she enters into the lease. If they are already in the military when they enter into the lease and then receive orders for a permanent change of station or, if they receive orders to deploy for a period of not less than 90 days they can also terminate the lease before its expiration date. The notice of termination can be personally delivered or mailed, but the termination date would not become effective until 30 days after the first date on which the next rental payment is due and payable. For instance, if the notice is served 1/15/04, the lease would terminate 3/1/04 and the service member would owe rent up to that date. A landlord may apply for relief with the court from these provisions “as justice and equity require”. Any landlord who interferes with the termination of the lease or withholds or uses their security deposit for rent owed after the lease termination date is committing a misdemeanor.
A written waiver of these rights is possible from a tenant who is already in the military service if it is in a separate waiver agreement apart from the lease. These rules also apply to whom are ordered to report for military service and to any persons ordered to report for induction into the service.
If a service member takes advantage of any of these rights, this fact cannot be used against them to deny an application to rent based upon credit worthiness and cannot even be mentioned in any credit report or applicant screening report.
Ted Kimball is a partner with Kimball, Tirey & St. John. This article is for general information purposes only. Before acting, make sure to receive legal advice from an attorney with expertise in this area of law.
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Just Cause Eviction Ordinance Passes in San Diego:
What You Need to Know
On March 16, 2004, the San Diego City Council, by a margin of 5 to 3, voted in favor of adopting a “Just Cause Eviction Ordinance” to dramatically shift the private property rights of owners to their tenants. Ironically, this Ordinance will only operate to hurt responsible residents and landlords by allowing tenants who engage in criminal activity or commit major and continuous disturbances, to remain in possession of rental property.
This article is intended to inform residential rental property owners and managers of their rights and obligations under the new Ordinance. Keep in mind that this new law is not effective until thirty days after its passage. It is not formally passed until the San Diego City Council adopts it on the “second reading”. This means that the Ordinance should become law sometime in late April 2004. Also, the Ordinance is only operative in the City of San Diego. Rental property not located in the City of San Diego is not affected by this new law.
It is also important to keep in mind that this is brand new law and is subject to different interpretations by rental owners, tenants, attorneys and ultimately, judges. This article is our best effort to describe the rights and obligations of rental owners and managers under the Ordinance. These rights and obligations may be subject to changes and modifications as future cases based upon the new rules are litigated in court.
The Rights of Rental Owners to Terminate Tenancies before the Ordinance Passed
It is helpful to first describe what rights residential rental owners and managers had to terminate leases before this new law was passed. Rental owners and managers were able to give a Thirty Day Notice (or a Sixty Day Notice if the tenant has been in possession of the rental unit for one year or longer) to terminate the tenancy so long as the notice was not served in retaliation for the exercise by the tenant of any of the tenant’s legal rights. If the tenant could prove that the rental owner or manager had a retaliatory motive, the notice would not be valid and the tenant could remain in possession for an additional six months before another Thirty or Sixty Day Notice could be served.
For instance, if a rental owner or manager suspected the tenant was engaged in criminal activity, they could serve a Thirty Day Notice without the necessity of proving that the tenant was indeed, conducting criminal activity. Testimony by neighboring witnesses was not required; police reports were not necessary and the rental owner or manager did not have to conduct any investigation into the matter in order to serve a valid Thirty or Sixty Day Notice to terminate the tenancy.
For fixed term leases, rental owners had no obligation to renew the lease after it expired and if the tenant remained in possession after the expiration date without the permission or consent of the rental owner or manager, an unlawful detainer (eviction) action could be filed immediately without the necessity of serving any notice on the tenant. However, some leases require the parties to the lease to serve the other with a notice of intent not to renew the lease if they do not intend to renew the lease. If this is not done by one of the parties to the lease, the lease could automatically renew on a month-to-month basis.
The Rights and Obligations of Rental Owners After Passage of the Ordinance
The rules of the game have now been changed. This Ordinance basically requires rental owners and managers to state and prove the grounds for serving a Thirty or Sixty Day Notice to terminate a month-to-month tenancy. The burden of proof has shifted from the tenant to prove that the notice was retaliatory, to the rental owner or manager to prove the stated basis for serving the notice. Under the Ordinance, the grounds for serving the notice must be clearly stated in the body of the notice.
For fixed term leases that have expired, the tenant must be unwilling to sign a new lease of “like duration with similar provisions” after written request by the landlord to do so. If the tenant fails to renew, the rental owner or manager can then serve the appropriate Thirty or Sixty Day Notice.
Exemptions from the Ordinance
The requirements of this Ordinance do not apply to residential tenants who have not been in possession of the rental property for over two years. In other words, if the tenant has been in possession for less than two years, a rental owner or manager does not have to state the reason for serving a Thirty or Sixty Day Notice or prove in court that the basis for the reason was true. The tenant is able to defend the action only if the tenant could prove that the rental owner or manager served the notice to retaliate against the tenant for exercising one of their rights. Likewise, a rental owner or manager can immediately file an unlawful detainer action against a tenant of a fixed term lease that has expired if the tenant had not been in possession of the unit for two years.
Note that the requirements of this Ordinance do not apply to agency owned or government subsidized units such as “Section 8” tenancies.
Eight “Just Cause” Reasons for Eviction
Under the new Ordinance, a rental owner or manager must be able to prove that one of the following eight “just cause” reasons exists before a tenant will be required to vacate the premises:
- Nonpayment of Rent. Rental owners and managers
are still able to serve a Three Day Notice to Pay Rent or Quit in the event of
the tenant’s non-payment of rent. The rental owner or manager may also wish to
also serve the appropriate Thirty or Sixty Day Notice to Quit at the same time
if they want possession of the unit. This is so, even if the tenant pays the
rent pursuant to the demands of the Three Day Notice to Pay Rent or Quit.
- Violation of Obligation of Tenancy. The rental
owner or manager would have to prove that the tenant has violated a lawful and
material obligation or covenant of the rental agreement. Rental owners and
managers are still allowed to serve a Three Day Notice to Perform Covenant or
Quit in the event the tenant is committing a material breach of the rental
agreement. The rental owner or manager may also wish to serve the appropriate
Thirty or Sixty Day Notice at the same time if they want possession back of
the rental unit, even if the tenant complies with the Three Day Notice to
Perform Covenant or Quit.
- Nuisance. If a tenant is committing a nuisance
or permitting a nuisance on the rental premises, or is causing damage to the
rental unit, the appurtenances thereof, or to the common areas of the housing
complex, or is creating an unreasonable interference with the comfort, safety,
or enjoyment of any of the other residents of the housing complex, the
appropriate Thirty or Sixty Day Notice may be served. If the nuisance activity
is based upon criminal activity on the property or major and continuous
disturbances of the quiet enjoyment of the neighboring tenants, a Three Day
Notice to Quit may be served instead of a Thirty or Sixty Day Notice. This may
be much more desirable than serving a Thirty or Sixty Day Notice, especially
if the activity is ongoing and serious or creates a health hazard.
- Illegal Use. If the tenant is using or
permitting the rental unit to be used for an illegal purpose, the appropriate
Thirty or a Sixty Day Notice may be served by the rental owner or manager.
- Refusal to Renew Lease. If the tenant refuses to
execute a written extension of a lease after written request by the rental
owner, then the appropriate Thirty Day or Sixty Day Notice may be served upon
the tenant. The written request by the owner or manager must be made within
the time frames required under the lease or state law, and must offer the
tenant a new lease which is similar to the old lease in its duration and its
provisions.
- Refusal to Provide Access. If the tenant has
refused to give the rental owner reasonable access to the rental unit for the
purpose of making repairs or improvements, or for the purpose of inspection as
permitted or required by the lease or by law, or for the purpose of showing
the rental unit to any prospective purchaser or mortgagee, the appropriate
Thirty or Sixty Day Notice can be served. A Three Day Notice to Perform
Covenants or Quit may be served to require the tenant to supply the landlord
with reasonable dates and times for entry. At the same time, the appropriate
Thirty or a Sixty Day Notice to Quit may be served if the rental owner desires
possession of the rental unit even if the tenant complies with the Three Day
Notice to Perform Covenant or Quit.
- Correction of Violations. If the rental owner or
manager, after having obtained all necessary permits from the City of San
Diego, seeks to recover possession of the rental unit for necessary repair or
construction, the appropriate Thirty or a Sixty Day Notice to Quit can be
served. The rental property owner or manager must be prepared to prove that
the removal of the tenant from the rental unit is reasonably necessary to
accomplish the repair or construction work.
- Withdrawal of Residential Rental Structure from the Rental Market. If the rental owner or manager intends to withdraw all rental units, in all buildings or structures on a parcel of land, from the rental market, then the appropriate Thirty or a Sixty Day Notice to Quit may be served. Note: This does not, however, allow a rental owner or manager to serve the appropriate Thirty or a Sixty Day Notice to Vacate if rental owner or manager intends to provide the rental unit to a relative or on-site manager.
The notice served, whether it is a Three Day Notice or a Thirty or a Sixty Day Notice, must state the grounds under which the rental owner is proceeding. In an unlawful detainer action, the tenant may raise as an affirmative defense any violation or noncompliance with the provisions of the Ordinance. This means that the tenant can successfully defend an unlawful detainer action if he or she can prove that 1) the notice failed to state proper grounds; 2) the notice failed to clearly state proper grounds, or 3) that the grounds stated did not occur.
Conclusion
It is our legal opinion that the provisions of this Ordinance have already been addressed by the State of California, which occupies the field of law surrounding the rights of rental owners to terminate residential tenancies. It is further our belief that under the legal doctrine of pre-emption, this Ordinance may be struck down as unconstitutional by a court of law. Private property rights have lost the battle, but have not yet lost the war. Until the time the Ordinance is declared unenforceable by a court of law, rental owners and managers in the City of San Diego will need to be in compliance.
Please note that the final draft of the approved "Just Cause" Ordinance approved by the San Diego City Council includes two additional just cause reasons that you should be aware of:
-
Owner or Relative Occupancy:
If the rental owner his or her spouse, parent, grandparent, brother, sister, child, grandchild (by blood or adoption) or a resident manager plans to occupy the unit as their principal residence, the rental owner or manager may serve the appropriate Sixty Day Notice to Vacate.Unauthorized Subtenant:
- A notice to terminate the tenancy can be served if the person in possession of the rental unit is a subtenant not approved by the landlord.
Ted Kimball is a partner
with Kimball, Tirey & St. John. This article is for general information
purposes only.
Before acting, make sure to receive legal advice from an
attorney with expertise in this area of law. If you have any questions
regarding this article, please call
1-800-338-6039. For articles on other related topics, please consult the
resource library of our website at
www.kts-law.com.
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