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Legal Q & A By- Dennis Block

Posted on 01. Aug, 2020 by in all

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Question One: I own a duplex in Eagle Rock which is under Los Angeles Rent Control.  There is a problem tenant who causes verbal altercations with other tenants. He has yelled at me, slammed doors in my face, verbally abused my daughter and son-in-law, and the police have been called multiple times. He calls housing every year once his rent gets raised and makes a miserable experience out of the inspection.  The inspectors already know how petty he is and that he disables the smoke detector on purpose every year. The last straw was today, as my teen son was working on the property. A yelling altercation started between the tenants. This tenant got into my son’s face, provoking him to take a swing.  After three years of putting up with this tenant’s abuse, I want to know if there is anything I can do to legally evict him and NOT pay relocation fees.

Answer One: If you are evicting for nuisance behavior, relocation fees would not have to be paid. The protections afforded tenants in our court system is truly off the charts. There are numerous procedural requirements that, if not followed, will result in a loss. In any event, the conduct that you are describing would justify filing an eviction based on nuisance. At this point, do not accept any rent and seek the services of an attorney to properly prepare and serve the Notice to Quit. 

 

Question Two: I have two buildings in the Lomita/Torrance area. Are landlords allowed to raise the rent? And if so, what is the maximum at the moment?

Answer Two: If your buildings were built prior to 2005, you would be subject to Statewide Rent Control. (AB 1482). Under this code section, landlords are permitted a yearly increase which is equal to 5% plus the Consumer Price Index. The CPI is computed in April of each year. This year the CPI is 1.3% and therefore the total increase would equal 6.3%.

 

Question Three: What can be done for non-payment of rent since August 2019?  My current lawyer says they are untouchable and it might take months to even be able to evict. Is this true?

Answer Three: You can initiate your eviction at this time. Most local jurisdictions prevent landlords from commencing an unlawful detainer action if the tenant has an inability to pay rent due to the pandemic. Clearly, your tenant’s inability to pay rent was not related to the COVID-19 virus for the months of August, 2019 through February 29, 2020. In your case, I would issue a 3-Day Notice to Pay Rent which would just cover those months only. After the notice expires, you are able to file the unlawful detainer, though under current Emergency Rules your case will be delayed.  The advantage of filing affords you priority over lawsuits filed at a later point in time.

 

Question Four: My property is under rent control for the City of Los Angeles. All my tenants are still working, though some are working from home. Two of the rentals were to receive annual rent increases as of August 1, 2020, but due to coronavirus, all rent increases are frozen.  When can I increase the rent?

Answer Four: The Housing Community and Investment Department for Los Angeles (HCIDLA) has clarified their position on rent increases. You cannot serve a rent increase notice until one year after the pandemic is declared over.

 

Question Five: We have one set of tenants who sent in partial rent for April and May.  I have not received any amount of rent for June or July. In April, I received a letter from the tenants. The letter indicated that they were being temporarily furloughed. I sent them a form which required that they submit proof that they are not working. To date, I have not received any documentation and I actually see them leaving every morning, presumably going to work. My property is located in Glendale.  What can I do at this point?

Answer Five: Similar to the City of Los Angeles, Glendale does not require tenants to submit documentation. Of course, this allows tenants to abuse the system. If rent is deferred, it does not have to be repaid for one year from the time the “Emergency State” is lifted.

 

Question Six: I filed an unlawful detainer on March 20th for a rental townhouse in Aliso Viejo, Orange County. My tenant has not paid rent since January and the court will not issue a summons. I told my tenant that I will be putting the house for sale, but I am afraid he will not want to cooperate with the showings. If I serve a proper 24 hour notice, is the tenant obligated to allow for access?

Answer Six: Unfortunately, during this period, if your tenant refuses access, you cannot show the property. While the law is clear that a tenant must allow access to show the unit to prospective buyers, during this pandemic, the tenant would be justified in refusing access.

 

Question Seven: I have an apartment in my building that will soon become vacant. Considering the COVID-19 pandemic, what can I ask prospective tenants regarding their current health status? Can I have the applicant complete a health report? Can I refuse to rent to them if they cannot show that they are free of the virus?

Answer Seven: You certainly can ask if they are exhibiting any signs relating to the coronavirus, but you cannot ask for any documentation relating to their health. Your only other option would be to delay leasing the unit until the pandemic is declared over. 

 

Question Eight: Due to the pandemic, can I legally ask for a copy of a valid driver’s license from a prospective tenant before showing a vacancy?  I think this would be invaluable in tracing the applicant if something were to arise.

Answer Eight: I do not see any reason why you cannot ask for identification. This would be true even if we were not in a pandemic.

 

Question Nine:  What are the benefits of creating an LLC for rental property and why should I consider it?

Answer Nine:  An LLC, or Limited Liability Company, is a type of legal entity that protects an owner’s personal assets and separates them from the business assets of owning and running a rental property investment. If you own your property individually and a tenant decides to file a lawsuit against you, then your personal assets are at stake. This means that personal bank accounts, homes, and other personal property will all be fair game for tenants to collect on in a lawsuit. However, if you create an LLC, then the only assets at stake are those owned by the LLC. In other words, your rental property is the only asset at stake and not your personal finances. 

Separating business from personal records enables landlords to stay organized and treat their rentals as a business.  As a result, income and capital gains from the LLC will pass through directly to you and you’ll only pay taxes as an individual. Since there is no separate LLC tax, you’ll avoid double taxation.  Also, if the property owner gets sued, only one property will be liable and the rest of your properties will not be affected by the lawsuit. 

An LLC for rental property should be considered vital for anyone who wants to invest in rental property in the U.S. The risk of being sued has never been higher and you must make sure that you protect your other rental properties and personal assets. An LLC ensures that nobody can touch what you have worked so hard to achieve.

 

For further information, please contact Attorney Madison Block at 

800 77-EVICT (38428) to discuss what you need to do to protect your money by setting up an LLC for your rental property. Further information can be viewed on our website at: www.evict123.com/llc.  

Dennis Block, of Dennis P. Block & Associates can be reached for information on landlord/tenant law or evictions at any of the following offices:  Los Angeles: 323.938.2868, Encino: 818.986.3147, Inglewood: 310.673.2996, Long Beach:  310.434.5000, Ventura: 805.653.7264, Pasadena: 626.798.1014, Orange: 714.634.8232, San Diego: 619.481.5423 or by visiting www.evict123.com. Now, you can also read Dennis Block on Twitter, www.twitter.com/dennisblock or text him at (818) 570-1557.  “Landlord Tenant Radio Weekly Podcasts can be heard at any time at www.EVICT123.com or download the app “EVICT123”.

 

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