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Legal Q & A – by Richard Beckman – Northern California

Posted on 28. Jan, 2012 by in all, Magazine Articles

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Question 1: What is considered an illegal rental unit, and what is the problem with renting one?
Answer 1: Typically, a legal rental unit is one recognized by the local planning of the building department as having been constructed with a building permit and has been issued a certificate of occupancy. Often, a building owner will convert a storage or parking space into a living area, and install a bathroom and a kitchen so the unit can be separately rented or occupied. The main reasons units are not built legally in such situations is either the building is not zoned for an additional unit, or off-street parking is required in order to add a unit. When these requirements exist, the unit is unlikely to ever be legally permitted. However, many building owners are not aware of these restrictions, or choose to ignore them, and simply build out the available space as separate habitable space, and then rent the space out. As long as the tenant pays the rent, the landlord may ‘get away with it.’ However, if the tenant refuses to pay the rent, the courts will not order the tenant to pay the back rent due to the illegality of the unit. Also, some tenants will bring a lawsuit against an owner for renting an illegal unit, claiming they were defrauded into renting a unit that is not legally able to be rented. However, a tenant who refuses to pay rent will not be allowed to remain in possession and will be evicted if the owner otherwise complies with the unlawful detainer (eviction) process.

Question 2: If I give my tenants a 24 hour written notice to enter, can they deny me access, and if they do, what should I do?
Answer 2: Oddly, there is no ‘statutory’ remedy in the landlord-tenant code for this situation. The code section that outlines the right of the landlord to enter a rented dwelling after proper notice is silent on the consequences of the tenant failing to allow such entry, whether by changing the lock, or barring the door and simply refusing to allow the landlord to enter.
However, if the landlord provides proper notice of intent to enter for a permitted reason, and the tenant refuses, the landlord has some options. First, in my opinion, and under any scenario, would be to speak or otherwise communicate with the tenant to try to discover why the tenant is unwilling to allow the landlord access, and try to resolve the tenant’s concern such that access will be granted without further conflict. If that approach is unworkable, the landlord should refer to the lease, to see if there is a provision requiring the tenant to provide access upon proper notice. If there is such a provision, the landlord can serve a ‘three day notice to cure breach of lease or quit,’ compelling the tenant to either allow access, or risk being evicted. If there’s no such provision, and the lease is month to month, the landlord should be able to serve a ‘30 day notice of change of terms of tenancy’ to impose such a provision. If the landlord feels that is too long to wait to gain access, and access is denied because the tenant has changed the locks, the landlord can  – at some legal risk –  follow up the notice to enter with a locksmith who will be able to ‘pick’ the locks to allow access. However, I discourage that approach, because of the risk that this entry would be deemed in violation of the tenant’s rights of occupancy or privacy or both. But other attorneys I have spoken to about this subject believe such entry would be legally permitted, unless of course the tenant is physically preventing the landlord’s entry. In that case, under no circumstances – other than extreme emergency – should a landlord force her way into the unit. She should instead consult with counsel for specific advice under the circumstances. It is worth noting that local eviction control laws such as the one in San Francisco specifically make refusing entry to the landlord a ‘just cause’ ground for eviction.

Question 3: I recently purchased property that came with a long time tenant (10yrs) who never had a written contract. Can I insist the tenant sign a lease, either for one year or month to month?
Answer 3: For a month to month tenant, not in a ‘rent controlled’ city or town, the landlord can serve the tenant with a 30 day notice of change of terms of tenancy, which can be an entire lease for one year or otherwise. If the tenant remains in possession and pays the rent after the 30 day period, he will be deemed to have accepted the new lease terms. In a rent controlled city or town, such as Oakland, imposing new terms on an existing tenancy is much more complicated, and in some cases is not permitted if the new terms ‘materially’ lessen the rights the tenant previously enjoyed under her month to month rental agreement. The tenant may file a petition to have the new terms considered to be a ‘rent increase’ in excess of the annual allowed amount, by claiming that the new terms constitute a reduction in the tenant’s housing services which were provided previously, such as parking, laundry, etc.

Question 4: My tenant often turns in her rent check late, or the check bounces. What can I do about this constant hassle of going back and forth to the bank and dealing with essentially a “non-payment”? Also, can I charge fees for bounced checks?
Answer 4: If the tenant is a month to month tenant, you would be well within your rights to simply serve a notice of termination (30 or 60 days depending how long the tenant has lived there), and ending the relationship and your headache. If the tenant is on a one year lease, it is likely the lease has a provision that repeated instances of ‘bounced’ checks is a material breach of the lease, and cause for termination of the tenancy. A written lease is also the only way you will be able to seek fees for the costs of the bounced checks. And because the law of what is called ‘liquidated damages’ is a bit tricky, seeking to enforce late fees of bounced check fees through litigation is generally not recommended. If the tenant pays the demanded fees, as required under the lease, great. If the tenant refuses, for whatever reason, the landlord needs to have the late fee provision reviewed by someone familiar with the case Orozco v Casimiro (2004) 121 Cal.App.4th Supp. 7, which is the best explanation of issues raised by the late fee claim in the residential rental context.

Question 5: I want to make my building a non-smoking building. I already have some recent tenants on leases that prohibit smoking in the unit or the common areas. Is there any problem changing the existing tenants’ rental agreements to make smoking prohibited?
Answer 5: Probably not. A new law takes effect January 1, 2012 that both makes clear the owner’s right to limit smoking in units, but also makes clear that an existing right to smoke is a material provision of the rental agreement, whether the rental agreement specifies it or not.
Civil Code Section 1947.5 will provide that ‘A landlord of a residential dwelling unit may prohibit the smoking of a cigarette or other tobacco product on the property or in any building or portion of the building, including any dwelling unit, other interior or exterior area, or the premises on which it is located.’ So, it’s clear you can prohibit smoking in the unit or common areas. However, for new tenants, the lease must include a provision that specifies the areas on the property where smoking is prohibited. For existing tenants, a ban on smoking cigarettes or other tobacco products in any portion of the property in which smoking was previously permitted “shall constitute a change of the terms of tenancy, requiring adequate notice in writing, to be provided in the manner prescribed in Section 827.”
Basically, this simply means if you have an existing rental agreement for a term (say, nine months left on a one year lease), you can not change it to eliminate the tenant’s right to smoke in areas where smoking was previously allowed, as that would be considered a change in the terms of the lease, like the rent, or right to sublet, that is provided to the tenant by the lease itself. Tenants on month to month rental agreements can be given 30 days’ notice of the smoking ban, like a rent increase or other change in terms of the tenancy, and if they remain in possession and pay the rent after the 30 days notice period, they will be deemed to have accepted the new terms as part of the rental agreement.
I wish a very happy, healthy and prosperous 2012 to all the readers of the magazine and this column. As always, if you have any questions, you are encouraged to send them to Alison Karnes at akarnes@aoausa.com for future treatment in this column, or directly to me at rich@beckmanblairllp.com.

Richard Beckman, of Beckman Blair, LLP has been practicing landlord-tenant law for over 19 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 415-495-8500; email rich@beckmanblairllp.com or by visiting the website www.beckmanblairllp.com.