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Legal Q & A by Richard Beckman, Attorney

Posted on 01. Mar, 2016 by in all

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Question 1:     We are purchasing a property in Modesto occupied by tenants. Should we do new leases/month to month agreements with the tenants living there? Is there any time limit that we should be aware of?
Answer 1: Congratulations on your pending purchase. If the existing tenants are ‘month to month,’ then you can provide them with new leases by serving a notice to change the terms of tenancy (See AOA form 102). If the tenants are on existing leases for a remaining term (e.g. six months left on a one year lease), then you simply step into the shoes of the seller and are bound by the existing lease (assuming this was not a foreclosure purchase, which may affect the tenancy status).
 

You do need to provide the tenants with the news that you are the new owner, and that all future communications, including of course rent payments, should be directed to you. You need to comply with Civil Code Section 1962, which sets out the information you must provide the tenant as the new owner (basically, the name, telephone number and address of the person or entity to whom rent payments are to be made; the forms of payment accepted; and the usual days and hours the person will be available to receive the payments if payments may be made in person). You are also required to identify the name of the owner of the premises or a person who is authorized to act for and on behalf of the owner for the purpose of service of process and for the receipt of all notices and demands.

In the case of change in ownership or management, if the information is not provided within 15 days after a change in ownership or management, you may not serve a Notice to Pay Rent or Quit on the tenant, nor evict for nonpayment of rent that accrued during the period of noncompliance with that notice requirement. The tenant remains responsible for the rent, but the rent cannot be pursued in an unlawful detainer action. The fact that the tenant may know about the change of ownership informally may not protect a landlord from a defense based on noncompliance with Civil Code §1962. Civil Code Section 1962 (along with most of the code sections referred to in this column generally) can be found online at:

 http://www.leginfo.ca.gov/cgi-bin/displaycode?section=civ&group=01001-02000&file=1961-1962.7.  As I typically also recommend, you should review the actual statute for the complete language of the law.

As to the issue of changing the terms of the tenancy (if month to month), there is generally no time limit, though the tenants may be able to raise certain arguments if your change of terms materially changes an existing benefit the tenants received from the prior owner. For example, if the prior owner allowed the tenants to have a pet, and in reliance on that permission they got a pet, changing the terms of tenancy to prohibit a pet would require the tenants to either move, or get rid of their pet – neither of which the tenants are likely to find appealing options. On the facts above, the tenants could argue that you are ‘estopped’ from requiring them to cease having a pet. This would be a very interesting legal argument that could be argued both ways – since estoppel generally requires that the person being ‘estopped’ is the person who made the promise or representation (which in this case would be the former owner). If it came down to a legal decision, I believe the tenants would lose in that situation, but I offer the scenario simply as an example that even if the law is ‘generally’ clear, it is often capable of also presenting situations where the final answer may differ from the general rule.           

Question 2: Three tenants occupy an apartment. One moved out and I allowed the remaining two tenants to find a new roommate. The new tenant and the original two signed a new six- month rental agreement. After two months, the new tenant is not getting along with the original two. Can the original two give the new tenant 30 days notice to move when the lease expires in May? The new tenant pays rent on time but there is a personality conflict with the other two tenants.
Answer 2: The tenants are all ‘co-tenants,’ (rather than two master tenants and one subtenant), since they each signed the rental agreement. However, once the rental agreement ends, and assuming the tenancy is not covered by a local eviction control law (which would change the analysis  significantly) they are all expected to vacate the unit, since anyone left in possession without the landlord’s agreement is a holdover occupant who can be evicted. If the two ‘original’ tenants and you agree to a new rental agreement that begins when the current one ends, and which does not include the third current tenant, then that tenant will be the holdover occupant at the expiration of the current rental agreement, and can be evicted either by the two tenants under the new rental agreement, or by you. But this should all be worked out in advance between the three occupants, since you likely do not want to become embroiled in their deteriorating relationship.
                       

Question 3: The tenants did not paid rent for January, and we sent them a three day notice. When the three day notice expired, they called us and left a voice message that that will vacate the property by the 26th of January and we can change the lock. They said that they would also leave the key in the apartment. On the 27th, we went to inspect it and they still have a lot of stuff left behind such as furniture and beds, and I couldn’t find the key anywhere. My question is can I still change the lock? And should I give them a timeframe to pick up their remaining stuff?
Answer 3:  Even if you believe the tenants have moved out, it is always recommended that you get confirmation that they have moved out, so you can legally retake possession without risk of violating the tenants’ right to possession. Ideally, the confirmation will come from the tenants themselves by confirming they have vacated (ideally, confirmation in writing, but a phone call will do, though it is of course harder to prove the contents of the call if it is disputed). Have you tried to contact them since your inspection? If you have their contact info, you might send them an email or other contact that states it is your understanding that in accordance with their stated intention to vacate as of January 26, they have done so, and on that understanding you will retake possession, though there are still personal property items left behind.

It is generally not a good idea to retake possession without a court order or a clear statement from the tenant that they are gone. The one exception is the Notice of Belief of Abandonment that you can serve if the rent is 14 days overdue and you honestly believe the tenants have abandoned the unit. See Civil Code Section 1951.3.  Using that Notice even after taking possession would provide you a measure of protection from a tenant’s claim that they had not vacated, had changed their mind, and so your entry, change of locks and removal of property was a wrongful eviction  and conversion (civil theft, basically) of their property. Of course, the safer course is to serve the Notice, wait the 14 days, and if the tenants fail to respond, then recover possession and change the locks.

And however you proceed, if the tenants left personal property behind, you will have to comply with the procedure required by Civil Code Section 1983 and 1984 (which, again, should be reviewed directly for the details and an authorized form of Notice of Right to Reclaim Abandoned Property).  [See AOA form # 145- Notice of Belief of Abandonment.] 

Question 4: Our beautifully renovated unit is being advertised for rent. The first applicant is highly qualified, but has small children. We love kids, and have rented to families in the past, but have a question about the possibility of an increased security deposit for such a situation. What is the maximum I can ask for as security deposit, and are any mitigating circumstances allowed?
Answer 4:  Because of the rules against discrimination based on family, you would likely have liability if you required additional security from a family. Basically, you are not allowed to impose any conditions or restrictions on applicants with children that are not imposed on every other applicant. But if you want to require the maximum amount of security for all applicants, you can require up to two months’ rent for an unfurnished apartment, and three months’ for a furnished apartment. You can also go to
http://www.dca.ca.gov/publications/landlordbook/discrimination.shtml to view a

California Consumer Affairs pamphlet on the general topic of discrimination which provides a good overview of the topic generally. 

Question 5: Hello – we have a tenant saying it is a requirement to have a fire extinguisher in a unit equipped with a wood burning stove.  If so, do we have to supply it or can we ask the tenant to purchase their own?

Answer 5: I could not find any such regulation, and am not aware of any. However, having a fire extinguisher in the unit is a good idea even if not required, and they are not expensive. They may even entitle the homeowner/landlord to an insurance premium reduction, so even if not required by law, it’s worth considering doing anyway. And if one was required, it would clearly be the owner’s duty to provide one, rather than require the tenant to do so. 

Question 6:  I have a studio unit behind a house, and the studio has no separate utility-connected power meter (power for both units routes through one PGE meter). However, we have a second, private electric meter at the property we use to monitor studio power usage.  We have a lease agreement that stipulates the studio tenants pay me $0.13 kWh, as read at the second, private meter. This is done to keep the studio tenant thoughtful with the electricity usage. The studio tenant moved after 10 months without ever paying electricity. I deducted the $166 for 1,280 kWh as the meter indicated from her deposit. That tenant is now saying I must show her an official bill that shows she used that amount of electricity and is threatening a lawsuit. What is my standing?
Answer 6: Because I would not want to risk some disgruntled tenant’s even unsupported small claims security deposit lawsuit over $166, I would probably just concede and return it. And it’s possible she would have a valid claim based on Civil Code Section 1940.9, which requires separate meters or a written agreement in advance as to distribution of utility charges (this applies to the main unit tenants as well, you should note). However, because you provided a separate meter for her electricity use, and because it was not her unit that was paying the whole bill (that would be the tenants in the ‘main’ unit), she probably does not fall under that statute. Thus, if your agreement with her from the beginning spelled out her obligation to pay her utility use, you are probably on sound footing if you want to stand fast and insist she pay the bill. However, another issue is raised by deducting it from her deposit, as the law that governs security deposit deductions is limited to unpaid rent (which utilities are not, unless so specified in the rental agreement), damages and cleaning.
 

Question 7: I recently became the owner of an Oakland duplex, and I want to raise rents and take possession of the detached garages from the tenants. How do I go about doing that?
Answer 7: If you are not familiar with the Oakland rent and eviction control laws, you should spend some time getting familiar with both laws, as they will impact what you can do regarding your Oakland tenants (if they are covered by the laws, which is the first fact you need to learn – basically any rental unit built before 1983 is a ‘covered unit’ (with exceptions such as owner-occupied buildings of three units or less).

But in short, rent increases are limited to once a year, and cannot exceed the annual amount posted by the rent board (which is based on the CPI).  As to removal of ‘housing services’ such as parking, removal of such services is considered a rent increase, and the tenant can petition the rent board for a rent reduction based on the value of the service.              

Question 8:  Two of three tenants living in the same unit got into an argument, and the two who were arguing (boyfriend and girlfriend, who were the tenants on the lease) moved out. The remaining tenant wanted to take over the lease, or maybe start a new one, to which I agreed. But before we could complete that arrangement, the remaining tenant said that the woman living there moved back, and won’t leave even after being told to. No one paid the rent, and so I served a three day notice to pay rent or quit.  Since I know that one tenant (the boyfriend) moved out, if I file unlawful detainer papers do I have to include both remaining tenants? Or both tenants who were on the lease?
Answer 8: if you are certain the ‘boyfriend’ tenant has moved out, then there is generally no need to name that person in the eviction, as it can ruin their credit, and prevent them from re-renting somewhere else. In such case, you would want to be sure to also serve the Prejudgment Claim to Right to Possession, and use a licensed process server to do so, to prevent that departed tenant, or any unknown occupants, from claiming they are tenants who should have been named in the eviction case. If you do not serve the PCRTP, the sheriff’s eviction can be stopped by someone at the premises who is not named in the judgment, and claims to be a legal occupant.
 

NOTE: In the January edition of the Q&A column, I mentioned that the town of Alameda does not have an eviction control law, and a landlord there was generally permitted to terminate the tenancy on proper notice, as long as you are not doing so to retaliate against the tenant for exercising her legal rights. However, in November, and in subsequent events in December and January, the town of Alameda initiated a temporary rent control and eviction control law, termed a moratorium, for the purpose of putting the brakes on rent increases and evictions until the city council can agree on a more long term plan to address the rising rents and evictions in Alameda. A fact sheet on the current moratorium can be found at:

http://www.alamedahsg.org/hcd/rrac/ordinance_3140_moratorium_FAQ.pdf.

It is strongly recommended that any Alameda landlord become familiar with the current status of the moratorium before taking any actions to increase rent or change or terminate tenancies. 

Richard Beckman, of Beckman Blair, LLP has been practicing landlord-tenant law for over 24 years, primarily in rent-controlled jurisdictions such as San Francisco, Oakland and Berkeley. He represents clients in a broad range of real estate-related disputes, including partition of co-ownership interests, purchase contract disputes, insurance coverage analysis and land use. Mr. Beckman also specializes in all aspects of landlord-tenant issues, representing landlords and tenants in residential and commercial matters. He can be reached at 415-871-0070; email rich@beckmanblairllp.com or by visiting the website www.beckmanblairllp.com