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Rental Home and Apartment Building

Questions and Answers

Real Estate and HOA Attorneys

Michael Chulak of Michael T. Chulak & Associates, is the author of a legal column that appears in several newspapers. The column features questions and answers concerning landlord - tenant issues, homeowner associations and various real estate topics. Following are questions and answers. Additional questions and answers are added monthly, so please visit our site often. Please feel free to make copies for non commercial purposes and visit our links.

Roommate Requests Security Deposit

Q.
Fourteen months ago, I rented my property to three roommates for a period of one year. One of the tenants just gave me a 30 day notice to vacate and has requested the return of one – third of the security deposit. What are my rights and obligations?

A.
Since the property was rented to three people, you are obligated to return the security deposit only after the last tenant vacates the premises. Also, all three roommates remain legally liable for the rent until the last tenant vacates in accordance with the terms of the lease. If the three roommates want to adjust the security deposit among themselves, that is their prerogative.

Rental Charge Calculation

Q.
Is it legal to charge rent on the basis of the number of occupants or is this considered discrimination?

A.
If you pay for water or other utilities, I believe you are justified in charging additional rent for each resident over a certain number. However, you should have a standard written policy and be consistent in its application. Another factor that justifies higher rent for more occupants is that more people produce greater wear and tear on the carpeting and other interior components.

Tenant Claims Injury

Q.
One of our tenants claims he slipped and fell on the exterior stairs and wants to know who provides our insurance. He said his back was injured due to his fall. Should we give him this information?

A.
I would not provide the information. Instead, I would ask him to provide proof of any medical bills incurred along with a letter describing what happened. If you receive the items requested, I would consult with a premises liability attorney before submitting the invoices and letter to your insurance company. At times like this, a video surveillance camera is worth its weight in gold.

NOD Recorded On Rental Property

Q.
I own a home in Woodland Hills that I rent out. My tenant received a Notice of Default that was recorded against my property because I am delinquent on the payments to the bank. The tenant stopped paying rent and claims she has no further obligation to me. What are my rights?

A.
The tenant has the obligation to pay rent as long as you own the property which means you have the right to serve a Three Day Notice to Pay Rent or Quit. However, you may want to review the facts of your situation with a real estate attorney because it is not uncommon for tenants to file lawsuits against landlords for misrepresentation or fraud under such circumstances.

Security Signs

Q.
In order to provide better security, we recently installed security cameras in the common area. Are we required to post signs informing tenants and visitors that we have surveillance cameras?

A.
No. If the cameras are limited to common areas where there is no expectation of privacy, posting signs is not required. If the cameras are in the pool area, signs should be posted because of the greater expectation of privacy. Notwithstanding, I believe posting such signs is a good idea because these types of signs act as an added deterrent.

Guards As Employees

Q.
We are spending a great deal of money on several security guards at our apartment building. We are considering hiring our own guard employees who will be required to obtain guard cards. What is your opinion?

A.
Do not hire your own guards. Hire a professional security firm that trains and supervises its guard employees. You will greatly reduce your potential liability. The money you will save is not worth the increased risk. If there is a serious incident at the property resulting in a lawsuit, you want the benefit of the guard company’s insurance and expertise in training and supervising guards.

Security Cameras In The Pool Area

Q.
Our apartment building is experiencing a great deal of unlawful activity around our pool area. Can we safely install security cameras in the pool area in order to discourage this type of activity?

A.
You can and should install security cameras in the pool area if illegal activity is taking place. However, it is important that the cameras be installed in such a way as to avoid invading the reasonable expectation of privacy of people using the pool. I recommend that you consult with an attorney before purchasing and installing any cameras in the pool area.

Judgment Against Former Tenant

Q.
I have a judgment that is six years old against a former tenant for more than seven thousand dollars. I have done nothing to try to collect the money owed. Is it too late?

A.
Absolutely not. A judgment is effective for ten years and can be renewed for an additional ten years. Interest accrues at the rate of 10% per annum compounded annually. You should talk to a collection attorney about representing you for a percentage of the amount recovered.

LAHD Inspection Fees

Q.
I have several tenants in Los Angeles that report all maintenance problems to the Los Angeles Housing Department and refuse to call us (management company) first. Many of the reported maintenance items are perfectly legitimate and would be repaired immediately if we knew about them. The tenants know that the LAHD will inspect and charge us an inspection fee if maintenance is required. The tenants are intentionally driving up the cost of operating the building and are protected by rent control. The LAHD is happy to keep collecting inspection fees. What do you recommend?

A.
You should amend your leases to require that all requests for maintenance be directed to the landlord in writing and that any governmental inspection charges shall be payable by the tenant, if the tenant fails to first notify the landlord in writing.

No Smoking Lease Provision

Q.
We own a few rental units in Los Angeles. Is there any law that would prohibit us from adding a no – smoking provision to our lease to apply to new tenants?

A.
No. Many building owners are finding that such a prohibition reduces maintenance costs as well as tenant complaints about second hand smoke.

Access To Repair

Q.
I need access to a rental in order to repair a small leak. The tenant is not being cooperative and I am concerned about damage. What is my right to access the unit?

A.
You need to provide a written notice to the tenant at least 24 hours in advance that you will be entering the unit for a stated reason, providing the date and time. The stated time must be during normal business hours of 9:00 a.m. to 5:00 p.m. The notice may be taped to the front door. If the tenant is not available to provide access at the stated time, you may enter using your own key, or with the help of a lock smith. Generally, when a tenant receives such a notice, they will cooperate in setting a mutually convenient time.

Three Day Notice Fee

Q.
I have a tenant that will not pay her rent until I serve a Three Day Notice to Pay or Quit. This has gone on month after month. I have collected late fees, but they are not sufficient to compensate for the time and delay in the receipt of funds. What do you suggest?

A.
Amend your lease to permit you to charge a fee for each Three Day Notice delivered. I suggest $50 or 2% of the monthly rent, whichever is greater. This should help.

Partial Rent Payment

Q.
My tenant paid only one – half of the rent and has asked for a rent reduction because her business is not doing well. Can I serve her with a Three Day Notice?

A.
Yes. The Three Day Notice should demand the unpaid rental amount and should not include late fees.

Leases with Option To Purchase

Q.
I have a well qualified rental applicant who wants an option to purchase my property in the near future. I have an interest in selling the property. Do you recommend a lease with an option to purchase?

A.
No. Leases with options to purchase are problematic and often result in litigation. Attempting to evict a tenant with an option to purchase is particularly difficult at times. The option will only benefit the tenant. They should be avoided if possible.

Dummy Cameras

Q.
We are considering the installation of dummy cameras in our parking garage and entry areas to deter crime. I have been told this may not be a good idea. What is your opinion?

A.
Dummy cameras are never a good idea because they create potential liability for the building owners. When renters and visitors see dummy cameras, they often believe the premises are being monitored and therefore, they are reasonably safe. If a serious crime takes place, you can be certain the owner will be named as a defendant. It is far better for the owner to spend his or her money on real cameras to deter crime. Check with an experienced insurance broker to determine if your building can qualify for a discount on its premiums if it installs security cameras.

Tenant Wants Carpeting Cleaned

Q.
I have a tenant in a home that she has been renting for eight years. The lease is now month - to - month. She has requested that I have the carpeting cleaned for her. Am I obligated to do so?

A.
No. Landlords are required to make repairs but you are not obligated to clean the carpeting. However, you may want to consider cleaning the carpeting if your tenant is agreeable to signing a new one year lease.

Witness Not Available

Q.
I am suing a former tenant in small claims court for damaging my rental property. The trial has been scheduled but my key witness is scheduled to be out of the country on that date. Can I provide the court with a written statement from the witness at trial?

A.
The written statement will be hearsay evidence and will probably be excluded. In Superior Court, it would absolutely be excluded. A minority of small claims judges will admit it as evidence but will not give it great weight. To be safe, you should request a continuance of the trial until your witness is available. Since you are the plaintiff, it is likely to be granted.

Negotiation of Management Fees and Costs

Q.
We own a forty unit apartment building in Woodland Hills that is managed by a large property management company. While they do a satisfactory job overall, we are paying out substantial attorneys fees to evict non-paying tenants resulting in negative cash flow. Any comments?

A.
Yes. First, talk to your management company about their paying 50% of any attorneys fees related to unlawful detainer suits where they selected the tenant. I realize that most evictions are the result of factors that have little to do with tenant selection, however, if the management company shares in the cost of evicting tenants, you are likely to experience fewer evictions. Given the current economy, your request (as suggested) is not unreasonable.

The other thing you can do is talk to your management company about the possibility of their deferring their property management fees at least until your cash flow situation improves. Again, given the state of the economy, this is not an unreasonable request.

Visiting Dog

Q.
My apartment lease includes a no-pets provision. One of my tenants is now claiming that the dog in her apartment is only visiting, and consequently, I can’t evict her. Is she correct?

A.
No. The law does not make an exception for visiting pets. You can serve a Three Day Notice to perform or quit and can then evict her and the "visiting dog" if she does not remove the pet.

Jury Trial

Q.
I recently filed an unlawful detainer lawsuit against my tenant for failure to pay his rent when due. In his response, he demanded a jury trial. Is he entitled to a jury?

A.
Yes. Even if you had a provision in your lease waiving a jury trial, a court will not deny a tenant a trial by jury if it is demanded. While it does not happen often, sometimes a property owner can be subjected to jury nullification which is where the jury ignores the law and the facts in order to obtain a desired result. Most juries do not favor property owners.

Grace Period Requirements

Q.
Is a grace period for residential tenants required by law?

A.
No. The landlord may establish a grace period in his or her lease but the law does not require it. It is common for landlords to include a two to three day grace period.

Roommate Dispute

Q.
I rented an apartment unit with a roommate who has turned out to be a problem. We are both on the lease. I recently had a serious dispute with him and now want to evict him. Is it possible to evict him?

A.
No. Only the landlord can evict a tenant. Should you move out, you will continue to be jointly liable for the lease obligations until your co-tenant vacates. Likewise, if he moves out, he will continue to be jointly liable for the lease obligations until you vacate the premises. The best course of action would be for both of you to move out when permitted by the lease terms or for only one of you to sign a new lease with the landlord if agreeable to all parties.

Questions About Race and Ethnicity

Q.
We own rental units in Thousand Oaks. How should we respond to questions by rental prospects about the race or ethnicity of the people living in our apartment building? We want to be honest, not break the law, and avoid turning away good rental applicants.

A.
Federal fair housing law makes it illegal to rent property on the basis of a rental applicant's race, religion, color, national origin, gender, sexual orientation, handicap or family status. It is also illegal to provide such information about existing renters to prospective renters.

If asked, you should state that it is company policy to rent to any person who completes our rental application, meets our standards, and wants to live here. We do not keep such statistics and it is both against company policy and the law to answer questions about the characteristics of the people living here.

Then add, "We would be pleased to show you what we have available."

Always smile and use a friendly tone of voice. Never invite prospective renters to look around and check for themselves. Also, never refer a rental prospect to another person who can provide such information.

Always be aware that the person asking the question may be a tester attempting to set you up for a fair housing lawsuit.

Renters Insurance

Q.
Why should my residential tenants buy renters insurance? Sometimes I have a difficult time convincing them.

A.
A standard renters policy protects the renter's personal property against loss or damage, provides protection for personal liability, and will usually pay for temporary living expenses if the premises become uninhabitable as a result of a covered loss. The personal liability coverage generally covers most unintentional acts (excludes auto) causing harm to a third party or his / her property on or off the premises, by you, your qualified family members and even your pets. Most policies also include $1,000 of medical coverage for third parties injured on or in your property for any reason.

Renters Insurance

Q.
Why should I, as a landlord, require by tenants to buy renters insurance?

A.
To ensure that they have liability coverage. If a tenant causes harm to your premises or building, you will want to be in a position to obtain reimbursement from the tenant without having to make a claim on your policy. If the tenant has a renters policy, it makes it much easier to receive payment.

Roommates

Q.
If I am renting to two roommates, do I need to verify two separate renters insurance policies?

A.
Yes. Renters insurance policies cover only the named insured and relatives that live with the named insured. A roommate would not be covered.

Renters Insurance

Q.
What can my renters do to minimize the cost of renters insurance?

A.
They can increase the standard $250 deductible to $1,000. Also, some insurers provide a discount if they are also providing the renters automobile insurance. Finally, many insurance companies will offer a discount of up to 20% if the renter has a burglar alarm system as well as non - smoker discounts.

Cost of Renters Insurance

Q.
What does it cost to buy renters insurance?

A.
The cost will vary depending upon your location, and other factors, but will usually be less than one dollar a day. The factors include your distance from the fire department, type of building construction, number of units in the building, and whether the building has fire sprinklers.

Security as Last Months Rent

Q.
Can a tenant insist that her security deposit be used as the last months rent? She has been in the building for over nine years and has an excellent payment record.

A.
No. You can insist that the tenant pay the last months rent when due and I strongly recommend that you do so. While the landlord has the right to make an exception, it is a bad idea to do so. First, it increases your risk. Secondly, it creates a precedent. Thirdly, if you refuse to allow it in the future, you are setting yourself up for a discrimination claim.

Reduction of Services

Q.
We own a rent controlled five unit apartment building in the City of Los Angeles. One of the tenants is using a storage shed that we need for storage. Can we request that he turn it over to us?

A.
Yes, but you will have to provide the tenant a 30 day notice and will be required to reduce the rent by the market value of the service. There is no easy way to determine the fair market value of the right to use the storage area so you need to be generous in order to avoid a possible lawsuit. The law has given tenants a significant advantage over landlords in the type of situation you have described.

Determining Security Deposit

Q.
I normally collect a security deposit equal to a months rent plus $200. Can I collect a higher security deposit from an applicant if their credit is marginal?

A.
You can collect a security deposit not to exceed two months rent. However, if your practice is to charge the higher security deposit to a rental applicant, you must have objective criteria for making the determination, and must apply your criteria consistently. Otherwise, you face the possibility of a discrimination lawsuit.

Please be aware that a number of tenants make their living filing lawsuits against landlords and management companies for discrimination, sexual harassment, and a long list of other claims. Always exercise caution.

Thirty Day Notice

Q.
My tenant gave me a 30-day notice to vacate, but moved out after only two days. She was on a month to month rental agreement and did not pay the rent for the notice period. Can I demand and collect rent for the thirty days?

A.
You are entitled to collect rent for the 30 day period unless you were able to rent the premises to another tenant and collect rent from the new tenant during the notice period. The law does not permit a landlord to collect rent twice for any period of time even though a tenant voluntarily vacates the premises. A landlord is required by law to make a good faith effort to rent the premises as soon as possible in order to mitigate his or her damages.

Habitability

Q.
One of my tenants in a ten unit apartment building complained of roaches in his unit. The other nine units don’t have a problem. Am I legally obligated to deal with his problem?

A.
Yes. Unless you can conclusively prove that the tenant transported the roaches to the unit, the Civil Code requires that the landlord keep rental units free of all pests including roaches. As a practical matter, you should waste no time because roaches will rapidly multiply and spread from unit to unit if not professionally exterminated.

Pit Bulls

Q.
My property insurance company has notified me that they will not renew our policy unless I can assure them that my tenant’s Pit Bull is no longer on site. Can they do this?

A.
Yes. More and more insurance companies are reducing their exposure to losses by prohibiting certain breeds of dogs. According to insurance company statistics, Pit Bulls attack more frequently than most other breeds of dogs, and when they do attack, the consequences are far more severe. I recommend that you include a provision in your lease application and lease prohibiting Pit Bulls and Rottweiler’s in order to avoid problems.

Section 8 Renters

Q.
I own a rent controlled eight unit apartment building in the City of Los Angeles. Two of the units are rented under the tax payer subsidized Section 8 Program. I recently learned that the 3% maximum rent increase, allowable under Los Angeles City Rent Control, does not apply to the two families receiving the tax payer subsidy under Section 8. In fact, I can’t raise their rent at all. Now I can only increase the rents on six of the eight units which effectively reduces the increase to only 2.25%. I have been advised that only Section 8 can give me permission to increase the rents and this is unlikely to happen for at least several years. After the allowable increases, the building operates at a monthly loss of between $600 and $900 per month. I have deferred painting for several years and have reduced the cleaning company and gardener to 50% of the needed level of services. My building, as well as the neighboring buildings, are going down hill fast. What do you suggest?

A.
Unfortunately, your options are limited. While you must maintain the buildings in a tenable condition as defined by law, you will simply have to spend what money you have available for maintenance. Nearly all rent controlled apartment buildings in the City of Los Angeles are deteriorating because of the law. You must simply do the best you can with available cash flow. You should join with others that oppose rent control to change the law. Otherwise, the entire city will turn into a slum.

Tenant Re-keys

Q.
I recently discovered that one of our tenants re-keyed his apartment unit without notifying us. It was totally unnecessary because we always re-key units immediately before they are rented. Furthermore, our lease prohibits re-keying by the tenant. When I asked for a duplicate key, the tenant refused. How should we respond?

A.
I would serve the tenant with a Notice To Perform or Quit giving the tenant three days to provide you with a key. If the tenant refuses to perform, you have legal grounds to evict him.

Sexual Harassment Claims Against Landlord

Q.
Can a tenant in an apartment building file a law suit against the manager of an apartment building? We own a building in Tarzana where a tenant has been claiming that both the on-site manager and management company supervisor are sexually harassing her.

A.
Yes. Apartment building owners, management companies, and management company employees can all be held liable for sexual harassment. Potential liability includes emotional distress damages, attorneys fees, treble damages, and punitive damages.

Generally, the property owner is strictly liable for sexual harassment by supervisors and managers even if the owner had no knowledge of the conduct. With non-managerial staff, the owner will be liable for sexual harassment conduct if he or she knew of the conduct or should have known of the conduct and took no corrective action.

Apartment building owners and managers should avoid being alone with residents in their units to lessen the opportunity for a resident to claim sexual harassment. Owners should also inform tenants that they have a strict policy against all forms of sexual harassment and that any such conduct should be reported immediately in writing to the owner. Notices can be included in leases and can be posted next to the fair housing notice.

Owners should adopt a no tolerance policy and quickly investigate any claims. Owners should purchase insurance coverage to protect themselves against such claims and should immediately consult with legal counsel if a claim is made. Owners should do everything possible to protect potential victims from sexual harassment while also protecting the rights of those hired by the owner. This is not easy to do.

Controlling Apartment Keys

Q.
We are partners in an apartment building located in Encino. We have three people on staff who have access to keys. We are always concerned about liability. What do you recommend for controlling keys?

A.
We have the following recommendations for controlling apartment building keys:
   
Complete a background check before giving an employee access to keys. Complete another background check after each employee's first and second employment anniversaries. After that, you are probably safe in not repeating the process unless you become suspicious of wrongful activity.
   
If possible, do not give new employees access to keys until after their probation period ends. This may eliminate the need to re-key if a new employee proves to be unsatisfactory.
Do not use master keys. Use a duplicate key system. Master keys can open all doors and thus create the highest level of risk for apartment building owners and managers. While keeping track of many duplicate keys requires more work, it reduces liability. I strongly recommend that building owners and managers who are using master keys convert to a duplicate key system.
   
Never give keys to contractors. Once they receive a key, it may be passed on to another co-worker or get lost. Also, chances are that you have not completed a background check on your contractors and their employees who might get access to your keys. Giving keys to contractors increases your liability and it also exposes them to liability. While it may seem like giving a contractor a key is making their job easier, you are not really doing them a favor by exposing them to what could be an enormous liability.
   
Always re-key before a new renter moves in, you receive a report of an unforced entry into one of the apartments, or a renter reports a lost or missing key. Your lease should allow you to charge the tenant for a lost or missing key.
   
Never permit employees to remove keys from the premises. Once a key is removed from the premises, it is easier for the key to be lost or duplicated.
   

No Late Fees on Three Day Notice

Q.

What is the rationale for not permitting a landlord to include late fees on a three day notice?

A.
It is simply a means for giving non-paying tenants an advantage over property owners. Since it is intuitive to include late charges, the state legislature knew that many inexperienced landlords would lose their eviction cases if the law disallowed including them. There is no other rationale as far as I can determine.

Thirty or Sixty Day Notice

Q.
If I serve my tenant a 30-day notice to quit and it should have been a 60-day notice to quit, can I simply serve him another 30-day notice to quit? The time is the same.

A.

No. The law requires that you start over with a 60-day notice to quit.

Serving a Three Day Notice

Q.
I have been trying to serve a Three Day Notice for more than a week but my tenants refuse to open the door. What do you recommend?

A.
Service of a Three Day Notice does not have to be made by personal service which is handing the notice to the person being served. You have two other alternatives:
   
You can post a copy of the notice on the door and mail a copy to the property address, or
   
You can serve the notice to any person at the property over the age of eighteen who opens the door and mail a copy to the property address.
   

I suggest that if you post a copy on the door, you take a photo of it for later proof. This is not required by law, but is highly recommended.

Renting to Tenant with Poor Credit

Q.
We own a non-rent controlled twenty unit apartment building in Encino. Except for the front and rear units, the eighteen middle units all have the identical rent. When one of the middle units became vacant, I received a rental application from an individual whose credit score was below our minimum. Notwithstanding, I rented the unit to the person, but I increased the security deposit from one to two months rent, and I increased the rent by an additional one hundred fifty dollars to compensate for the higher risk.

The renter became aware that she was paying more rent and paid a higher security deposit than her neighbors. She has now threatened to sue me for discrimination unless I make an adjustment. What should I do?

A.
If you have a written policy that addresses the situation you have described (and have followed it), and you treat all similarly situated rental applicants the same, you should have no legal liability. If you are making decisions as situations develop, you are at risk.

Mailing or Delivery of Rent

Q.
My lease requires my renters to mail their rent to my office. Recently, one of my tenants claimed that he mailed the rent to me, but I did not receive it. He claims he sent a money order and does not have a copy or receipt. He also claims that since he purchased the money order with cash, he no longer has the money to pay me. Can I serve a Three Day Notice and evict him?

A.
Your lease has created a major problem for which there is no simple answer. A lease should never require the renter to mail the monthly rent. Rent should always be delivered, or if mailed, it should be mailed because the tenant decided to mail it at his or her risk of delivery.

While it is probable that a court would side with you if you decide to evict the tenant, it is not certain. A court may reason that you caused to the problem and may give the tenant more time, partial credit, or even full credit.

I would not file an eviction suit at least until you have waited a sufficient time for any mail to be returned to the tenant. After that, if you are not in receipt of the rent you can go forward, but whether you will be successful is difficult to predict. Different judges are likely to have differing views. I would not want to be the judge because there is no way for the judge to assure that justice prevails.

No Written Notice to Vacate

Q.
My tenants paid their rent on the first day of the month and then told us three days later that they would be vacating in thirty days. I asked them for a written notice which they refused. They vacated the apartment at the end of the month and are now demanding the return of their one month security deposit. What should I do?

A.
Tenants are required to give their notice to vacate in writing. Nearly all leases point this out, but it is the law in California. Since you did not receive written notice, you can charge rent for thirty days from the date they actually vacated the unit. You can apply their security deposit to the rent owing, but must provide them with an accounting as required by law.

Lost Unlawful Detainer Case

Q.
I recently lost an eviction case. The rent was $2,000 per month but the renter also owed a $50 late fee. My Three Day Notice specified $2,050 due. The judge said I could only claim $2,000 on the Three Day Notice. I am now losing an additional six weeks of rent. Is the judge correct? This doesn't make sense.

A.
Many California laws don’t make sense to many of us including the one that does not allow a landlord to include late charges on a Three Day Notice. Many laws are designed to favor tenants over property owners and this is one of those laws. Owners filing unlawful detainer lawsuits must strictly follow the laws. One small error will result in the case being thrown out of court. To avoid costly delay, it is best for landlords and property management companies to hire an experienced eviction attorney. Tenants have the ability to get “free” legal advice (at taxpayer expense) in most areas. This puts them into a position to take advantage of any small error made by the landlord.

Discrimination in Advertising

Q.
We own and manage a small apartment building in North Hollywood. The couple that owns the building adjacent to ours was recently sued for discrimination because of a rental ad. We are now more afraid than ever that we will inadvertently violate some law when we advertise our vacant rental units and lose our building. Do you have any suggestions?

A.
The Federal Department of Housing and Urban Development (HUD) has created the following checklist:
   
Are your ads free of words, phrases, symbols or visual aids which indicate or convey any preference, limitation or discrimination based on race, color, religion, sex, disability, familial status or national origin?
   
Are the directions used in the ads free of references to any landmarks or an area that could imply an unlawful discriminatory preference?
   
If the ad contains discounts or promotions, have you eliminated unlawful discriminatory preferences?
   
Are the logos used in the ads (e.g. complex, management company) free of unlawful discriminatory preferences? Are Equal Housing logos used properly?
Do the ads use models and model graphics in a non-discriminatory way?
   
Are both sexes adequately represented?
   
Are children adequately represented?
   
Are minority populations represented in reasonable proportions to their population in the metropolitan area?
   
Are models and model graphics clearly definable as representing minority and majority populations and are the minorities being used in equal social settings?
   
Are model or model graphics of children and minorities being used for all and not just some properties advertised?
   
Is an equal housing opportunity logo, statement or slogan, as appropriate, being used in connection with the advertising?
   
Are displays or announcements being used properly at all rental offices?
   
If appropriate to the metropolitan area, are you placing ads in non-English language media?
   
Is the distribution of your advertising campaign (including brochures, flyers, billboards, mailings, radio ads, newspaper ads and publication ads), reaching the protected classes?
   

HUD has also created a list of terms and phrases they consider offensive. Following is a partial listing:
   
Church nearby
   
Walking distance to Synagogue
   
Houses of worship nearby
   
Great View
   
Walk-in closets
   
Walking distance to supermarket
   
Senior discounts
   
Military discounts
   

Unfortunately, owning a rental property today, has its risks.

Increasing the Security Deposit

Q.
I own a small apartment building in Reseda subject to the Los Angeles City Control Ordinance. I recently raised the rent in accordance with the law and requested that my tenant increase her security deposit by the same percentage. She refused to pay it. Am I entitled to the higher deposit?

A.
Yes.

Rental Applicant - Prior Criminal Record

Q.
Is consideration of a rental applicant's criminal record forbidden under California fair housing laws?

A.
We believe that consideration of a rental applicant's criminal record is not a violation of the fair housing laws when the prior act for which the person was convicted is of the type that would constitute a direct threat to other residents and/or their guests and visitors. The law is unclear on this subject, but we believe protecting tenants takes priority. If you are in doubt, check with a landlord - tenant attorney.

Misrepresentation on Rental Application

Q.
Is a misrepresentation on a rental application grounds for disapproval of the application?

A.
Yes, if the misrepresentation is material. If the truth would have disqualified the rental applicant, the misrepresentation would clearly disqualify the applicant. If the truth would not have disqualified the applicant, the answer is uncertain because the law is not clear. One court may rule one way while another court the opposite. A court will evaluate whether the misrepresentation was intentional as opposed to being negligent and the level of materiality of the misrepresentation. If in doubt, consult an experienced landlord - tenant attorney.

Rent Control Laws

Q.
Which cities in Southern California have rent control laws?

A.
As of 12-31-11 the following Southern California cities have rent control ordinances:

Beverly Hills Thousand Oaks
       
Los Angeles West Hollywood
       
Palm Springs Westlake Village
       
Santa Monica    
       
  

Three Day Notices

Q.
When is a landlord justified in serving a three day notice on a tenant?

A.
If the tenant has:

   
Failed to pay the rent;
   
Violated any provision of the lease or rental agreement;
   
Materially damaged the rental property ("committed waste");
Substantially interfered with other tenants ("committed a nuisance");
   
Committed domestic violence or sexual assault against, or stalked another tenant or subtenant on the premises;
   
Used the rental property for an unlawful purpose;
   
Engaging in drug dealing or unlawfully used, cultivated, imported, or manufactured illegal drugs; or
   
Engaged in unlawful conduct involving weapons or ammunition.
   

Landlord Retaliation

Q.
What is landlord retaliation?

A.
It is any form of punishment by a landlord resulting from a tenant exercising a legal right. The punishment may be eviction or increasing the tenant's monthly rent.

The law in California presumes that the landlord has a retaliatory motive if the landlord commences an eviction or increases the rent within six months after the tenant has exercised any of the following tenant rights:
   
Using the repair and deduct remedy, or telling the landlord that the tenant will use the repair and deduct remedy;
   
Complaining about the condition of the rental unit to the landlord, or to an appropriate public agency after giving the landlord notice;
   
Filing a lawsuit or beginning arbitration based on the condition of the rental unit; or
   
Causing an appropriate public agency to inspect the rental unit or to issue a citation to the landlord.
   

In order for the tenant to defend against eviction on the basis of retaliation, the tenant must prove that he or she exercised one or more of these rights within the six-month period, that the tenant's rent is current, and that the tenant has not used the defense of retaliation more than once in the past twelve months. If the tenant produces all of this evidence, then the landlord must produce evidence that he or she did not have a retaliatory motive. Even if the landlord proves that he or she has a valid reason for the eviction, the tenant can prove retaliation by showing that the landlord's effort to evict the tenant is not in good faith. If both sides produce the necessary evidence, the judge or jury then must decide whether the landlord's action was retaliatory or was based on a valid reason.

A tenant can also assert retaliation as a defense to eviction if the tenant has lawfully organized or participated in a tenant's organization or protest, or has lawfully exercised any other legal right. In these circumstances, the tenant must prove that he or she engaged in the protected activity, and that the landlord's conduct was retaliatory.

Retaliatory Discrimination

Q.
What is retaliatory discrimination in California?

A.
A landlord, managing agent, real estate broker, or salesperson violates California's Fair Employment and Housing Act by harassing, evicting, or otherwise discriminating against a person in the sale or renting of housing when the "dominant purpose" is to retaliate against a person who has done any of the following:
   
Opposed practices that are unlawful under the Act;
   
Informed law enforcement officials of practices that the person believes are unlawful under the Act; or
   
Aided or encouraged a person to exercise rights protected by the Act.
   

A tenant who can prove that the landlord's eviction action is based on a discriminatory motive has a defense to the unlawful detainer action for retaliatory eviction.

Exception to Rent Control

Q.
I have an opportunity to purchase one rental home in Woodland Hills and another in West Hills at attractive prices. Would they be burdened by rent control?

A.
Currently, Los Angeles City rent control does not apply to single family homes.

Effect of Rent Control Laws

Q.
I recently purchased two eight unit apartment buildings in Los Angeles. One is subject to rent control and the other is not. I have interviewed several management companies. Every management company has quoted a higher management fee for the rent controlled building. Is this normal?

A.
Yes. Rent control substantially increases the time required to manage these buildings which necessarily increases the cost of management. Rent control has also resulted in reducing the value of these buildings. When rent control was enacted, hundreds of millions of dollars of value was destroyed overnight with millions lost in tax revenues.

Political Signs in Windows

Q.
My standard lease form prohibits renters from placing signs in any windows. My reason is that signs detract from the appearance of the building making it less attractive. One of my tenants in Thousand Oaks placed a political candidate's sign in a window and was asked to remove it. She refused. What are my legal rights?

A.
California law allows tenants to place signs for candidates, legislative votes, initiatives, recalls, and referendums in the windows of their rental homes. The appearance of your building will have to suffer.

Using Tenant Security Deposits

Q.
For what purposes may a landlord use a tenant security deposit?

A.
California law specifically allows the landlord to use a tenant's security deposit for only four purposes:
   
For unpaid rent;
   
For cleaning the rental unit when the tenant moves out, but only to make the unit as clean as it was when the tenant first moved in;
   
For repair of damages, other than normal wear and tear, caused by the tenant or the tenant's guests; and
   
If the lease or rental agreement allows it, for the cost of restoring or replacing furniture, furnishings, or other items of personal property (including keys), other than because of normal wear and tear.
   

A landlord may withhold from the security deposit only those amounts that are reasonably necessary for these purposes. The security deposit cannot be used for repairing defects that existed in the unit before the tenant moved in, for conditions caused by normal wear and tear during the tenancy or previous tenancies, or for cleaning a rental unit that is as clean as it was when the tenant moved in. A rental agreement or lease can never state that a security deposit is "nonrefundable."

Returning Tenant Security Deposits

Q.
What are the legal requirements for returning a security deposit after a tenant vacates the premises?

A.
Under California law, twenty-one calendar days or less after a tenant moves, the landlord must either:
   
Send the tenant a full refund of the security deposit, or
   
Mail or personally deliver to the tenant an itemized statement that lists the amounts of any deductions from the security deposit and the reasons for the deduction, together with a refund of any amounts not deducted.
   

The landlord also must send the tenant copies of receipts for the charges that the landlord incurred to repair or clean the rental unit and that the landlord deducted from the security deposit. The landlord must include the receipts with the itemized statement. The landlord must follow these rules:
   
If the landlord or the landlord's employees' did the work - The itemized statement must describe the work performed, including the time spent and the hourly rate charged. The hourly rate must be reasonable.
   
If another person or business did the work - The landlord must provide the tenant with copies of the person's or business' invoice or receipt. The landlord must provide the person's or business' name, address, and telephone number on the invoice or receipt, or in the itemized statement.
   
If the landlord deducted for materials or supplies - The landlord must provide the tenant with a copy of the invoice or receipt. If the item used to repair or clean the unit is something that the landlord purchases regularly or in bulk, the landlord must reasonably document the item's cost (for example, by an invoice, a receipt or a vendor's price list).
   
If the landlord made a good faith estimate of charges - The landlord is allowed to make a good faith estimate of charges and include the estimate in the itemized statement in two situations: (1) the repair is being done by the landlord or an employee and cannot reasonably be completed within the 21 days, or (2) services or materials are being supplied by another person or business and the landlord does not have the invoice or receipt within the 21 days. In either situation, the landlord may deduct the estimated amount from the security deposit. In situation (2), the landlord must include the name, address and telephone number of the person or business that is supplying the services or materials. Within 14 calendar days after completing the repairs or receiving the invoice or receipt, the landlord must mail or deliver to the tenant a correct itemized statement, the invoices and receipts described above, and any refund to which the tenant is entitled.
   

The landlord must send the itemized statement, copies of invoices or receipts, and any good faith estimate to the tenant at the address that the tenant provides. If the tenant does not provide an address, the landlord must send these documents to the address of the rental unit that the tenant moved from.

Utilities Not Paid by Tenant

Q.
My tenants in Woodland Hills are responsible for reimbursing me for the cost of utilities and have failed to do so. May I shut them off?

A.
No. You may never shut off utilities while your tenants are in possession. You must pay for your tenant's use of the utilities until you have
evicted them for non-payment. This is the law in California as determined by the majority in the State Legislature.

Last Month's Rent or Security Deposit

Q.
I recently purchased my first apartment building which is in Los Angeles. My real estate broker advised me not to collect the last month's rent in advance. Is this correct?

A.
Yes. If you use the term "last month's rent" you must use the funds collected only for that purpose. The maximum deposit you can collect for an unfurnished unit is two month's rent. The maximum deposit for a furnished unit is three month's rent. The limits exist by state law whether you designate the deposit as last month's rent or security deposit. If you designate the deposit as a security deposit you can still demand the payment of rent for the 30 day rental period after a tenant gives his or her notice to vacate. This provides more protection for the landlord.

Property Management Companies

Q.
I recently purchased a 24 unit apartment building in West Los Angeles that requires extensive repairs. The prior owner neglected the building for several years. The tenants are calling me day and night for repairs. Some repair requests are for small things, but some are not. Do you have any suggestions on how to control the phone calls?

A.
The vast majority of apartment building owners of 24 units or more hire full service professional property management companies to manage their buildings. If you hire the right management company, they will save you enough on repairs and maintenance to pay for all or most of their tax deductible monthly fees.

Change of Lease Terms - Rent Control

Q.
Much to my regret, I recently purchased a small apartment building in West Hollywood subject to rent control. After closing escrow, I locked the access door to the roof because during my pre-purchase inspection, I had noticed a great deal of trash on the roof, evidence of vandalism to the roof and air-conditioning equipment, and even evidence of sexual activity. There is no roof deck designed for traffic - only a flat composition roof. In addition, there is only one way to exit the roof in the event of a fire.

Almost immediately after I locked the door to the roof, seven of the twelve tenants filed applications with the City of West Hollywood for rent reductions on the grounds that I have reduced services to them. Is it possible that the City of West Hollywood would actually reduce the rents under the circumstances?

A.
Yes. Not only is it possible, it is highly likely that your tenants will be given a rent reduction. In fact, the City of West Hollywood will probably give all twelve of your tenants a rent reduction. The city is well known for reducing rents when given any opportunity to do so.

Written Notice to Vacate

Q.
How much written notice to vacate must I give to a tenant?

A.
The notice period is 30 days for a month-to-month tenancy that has lasted less than one year, 60 days if the tenant has rented for a year or more, and 90 days if the tenant is receiving a subsidy under a contract between the landlord and a housing agency. Of course, you must always honor the terms of a lease. Therefore, you cannot provide a notice to vacate that will require the tenant to move before the end of the lease term. Please note that leases for a fixed period of time become month-to-month tenancies after the end of the lease period.

Social Security Cards

Q.
May I refuse to rent to someone who does not have a social security number?

A.
No. Only citizens or immigrants authorized to work in the U.S. can obtain a social security number (SSN). A person can be in the U.S. legally with a Student Visa but would not have a SSN. You should rent to such a person if they otherwise meet your requirements.

People who are working in the United States, whether legally or illegally, can obtain an alternate identification card called an Individual Taxpayer Identification Number (ITIN) which is issued by the IRS to people who expect to pay taxes. Anyone applying for a rental unit who claims to have income should be able to produce an ITIN. If they can't, you are justified in not accepting their rental application.

Jury Trials - Evictions

Q.
Does a tenant have the right to demand a jury trial in an unlawful detainer lawsuit?

A.
Yes. All parties to a lawsuit have the right to a jury trial, however, the party making the demand will be required to pay jury fees and provide the court with prior notice according to the local rules. More and more tenants are demanding jury trials because it tends to delay the trial and force most landlords to hire an experienced trial attorney.

Form of Rent Payments

Q.
Is it legal to require tenants to pay their rent with money orders or cashier's checks?

A.
Yes, as long as it is specified in the lease. Also, you may demand that rent be paid in cash for a period of three months if the tenant gives you a check that is dishonored.

Employee or Independent Contractor

Q.
Can we hire an on-site apartment manger as an independent contractor rather than an employee?

A.
No. On-site managers will always be employees and should be classified as such.

Convicted Criminals

Q.
Can I reject a rental application because the applicant was convicted of a crime?

A.
You are probably safe in doing so as long as you are consistent in applying your approval criteria. There is one exception. If the applicant was convicted of using illegal drugs, you cannot reject him or her because the California Legislature has determined that past drug addiction is a disability. Thus, you could be held liable for discrimination if you reject an applicant convicted of past drug use. If the convicted criminal moves in and continues to use illegal drugs, you can evict the drug user.

Rent Control - Loss of Value

Q.
How significantly has rent control in Los Angeles affected property values?

A.
Rent control in Los Angeles applies to all apartment buildings receiving a Certificate of Occupancy on or prior to October 1, 1978. If two buildings are identical except that one received its Certificate of Occupancy on October 1, 1978 and the other received its Certificate of Occupancy one day later, the building completed one day later will, on the average, be worth approximately 30% more because it is exempted from rent control. The Los Angeles rent control law resulted in one of the largest transfers of wealth from property owners to renters in the history of the U.S.

Tenant Fails to Pay Utility Bill

Q.
I have a rental home in Oak Park. The lease calls for the renter to pay the water bill plus $2,900 per month. The renter has been slow in paying several times and I am anticipating a problem. If the tenant fails to pay both the water bill and the rent, can I add the amount of the unpaid water bill to the rent and serve a 3 Day Notice to Pay Rent or Quit?

A.
No. You must serve a separate 3 Day Notice to Perform Covenants or Quit for the unpaid water bill. It is a common mistake to add them together. A California court would dismiss your eviction case in favor of the tenant if you combined the amounts and make you start the process over costing you thousands of dollars.

Late Rental Payments

Q.
The tenant in my rental home regularly pays her rent several days late each month. It is becoming a problem because my mortgage payment is due on the first day of each month. How do you suggest I get her to pay on time?

A.
You must insist on it and you should use a lease form that includes a late fee large enough to discourage late payments. You should immediately send a letter to your renter informing her that the rent is due on the 1st and that late payments are not acceptable. Otherwise, a court could infer that you agreed to a modification of the lease terms with a later due date.

Three Day Notices

Q.
How are the time periods calculated when serving a 3 Day Notice to a tenant?

A.
Do not count the day the notice was served. You start counting the following day. The notice expires at midnight of the third day. For example: If a 3 Day Notice is served on the 2nd day of the month, the 3 days of notice includes the 3rd, 4th, and 5th. You can file an unlawful detainer case on the 6th. However, if the notice expires on a weekend, you must wait until the following Monday to file your case.

Lease of Storage Space to Apartment Renter

Q.
I own a small rent controlled apartment building in Canoga Park. There is a storage space in the building that is not rented to any tenant. One of my tenants would like to rent it and I would like to rent it to him for additional income. How should I handle it?

A.
You can rent it for any amount as long as you use a separate lease agreement. The new lease must make it absolutely clear that it is not a part of the apartment lease. The new lease is a commercial lease not subject to the Los Angeles Rent Control Ordinance.

Paying Rent by Credit Card

Q.
I own a small apartment building in Chatsworth which is part of Los Angeles. Under Rent Control, can I accept rental payments by credit card and charge a service fee on top of the rent? Does this violate the rent limitation restriction?

A.
While I am not aware of a case where the City of Los Angeles challenged the practice you have suggested, it would be much safer if you had your property management company process the payment and collect the service charge as part of their compensation. Today, most full service property management companies will accept rent by credit card for the convenience of tenants.

Month to Month or Year Lease

Q.
Do you recommend month to month rental agreements or longer term leases?

A.
I recommend an initial lease period of one year and one year renewals thereafter unless the tenant indicates that a shorter renewal term would be more appropriate from their standpoint. Turnover of tenants costs money and move ins and outs, at the minimum, cause wear and tear on the premises. In my years of experience owning and managing rentals, I have found that higher quality tenants want the assurance that comes with a one year lease. They generally want stability and the guarantee that the rental terms will not be changed for at least one year.

Purchase of Rent Controlled Apartments

Q.
Do you recommend the purchase of rent controlled apartment buildings?

A.
I would never purchase a rent controlled apartment building. When you own a rent controlled building, it's like having unwanted partners. The government has incredible power over you and you are forced to share your income with the tenants by artificially reducing their rents. Some investors believe a low price justifies buying rent controlled building. I don't think it's worth the risk when you consider the power of the government.

Tenant Rights Organizations

Q.
Do tenant rights organizations steer tenants away from certain property management companies?

A.
Sometimes. While most tenant rights organizations prohibit their employees from steering tenants away from property management companies or apartment building owners, it is reported to take place regularly. Management companies and landlords that strictly comply with the law and treat tenants in a professional, respectful manner should have no concerns about tenant rights organizations.

Tenant Rights Organizations

Q.
Are tenant rights organizations generally working against the interest of landlords?

A.
No. These organizations generally provide advice to tenants regarding both their rights and obligations. Often their advice works to the benefit of the landlord.

Including Appliances in Leases

Q.
I own a rental home in Thousand Oaks. My tenant recently vacated the property and abandoned a washing machine that was in working order. Subsequently, based upon the advice of my property management company, I rented the home for one year and included the washing machine. A month later the machine stopped working. It will cost over one hundred dollars to fix the machine which was worth about $120 when I acquired it. Am I required to repair it?

A.
Since you have a lease that includes the machine, you must repair or replace it. Your property management company did not provide you with good advice. You would have been better off selling the machine to your tenant for $120, payable $10 per month for 12 months, or even giving the machine to them. If the tenant owned the machine, he or she would be responsible for maintenance. Another alternative (not my preference) would be to include the machine in the lease and include a provision such as "The washing machine is provided by landlord only as a courtesy, which tenant may or may not use, but in no event shall landlord have any responsibility to repair or maintain the washing machine. Tenant may, but is not required to make repairs or maintain the washing machine."

Living Trust as Plaintiff

Q.
We recently hired a non-attorney eviction service to assist us in evicting a tenant from our apartment building in Oxnard. Our case was dismissed because the named plaintiff was our living trust forcing us to start over and costing us thousands of dollars. Should this have happened?

A.
Yes. The named plaintiff should have been the trustee of the trust. For example: Michael Chulak, as trustee of the Chulak Family Trust. The trust is not a legal entity or person and therefore cannot file suit. It does not hold title to the property. Sometimes, landlords attempt to save money by using non-attorneys. This is a perfect example of why it pays to use the services of a licensed landlord - tenant attorney.

Pet Deposits

Q.
We have decided to allow tenants to have certain pets in our Los Angeles apartment building. Do you suggest that we charge a pet deposit or just a standard security deposit?

A.
Separate pet deposits are not a good idea because they limit how you can use the deposit. If you collect a standard security deposit, you can use the deposit funds to pay for any type of damage caused by the tenants and / or their pets. It is also illegal to charge a pet deposit for tenants with service animals, trained guide dogs, or signal dogs. Assuming you are not limited by rent control, you may also protect your property from pet damage by charging higher rent.

Recycling Containers Required

Q.
I own a twelve unit apartment building in Woodland Hills. One of my tenants told me that I am required to provide recycling containers for the building. Is this correct?

A.
Yes. Effective January 1, 2012, "The Renters Right to Recycling Act" became effective. The new law requires that landlords provide recycling receptacles for glass, paper, plastic, and cans for apartment buildings of five or more rental units.

Purchase of Rent Controlled Apartment Building

Q.
I am considering the purchase of a small apartment building in Los Angeles. The problem is that the seller has no written leases with the tenants. Any thoughts?

A.
Under Los Angeles City Rent Control, you cannot force the tenants to sign a lease and cannot even force them to provide you with the names of the occupants. The rent control law gives every advantage to the tenants and none to the landlord. One possibility is for you or the current owner to offer the tenants a monetary incentive to sign a written lease that reflects the terms previously agreed to less the incentive. There should also be a separate written agreement, memorializing what took place. To steer clear of trouble with the government, I suggest you have a real estate attorney draft the agreement.

Notice of Default Posted on Property

Q.
I own a twenty two unit apartment building in Los Angeles, which is in an LLC. A Notice of Default was recently posted on the property because I fell behind on my payments due to rent control limitations on rents.

When the NOD was posted, many of the tenants got together and decided to stop paying rent. Any chance of reinstating my mortgage loan now appears to be very small. Do the tenants have a right to withhold the rent and what course of action should I take?

A.
The tenants do not have the right to withhold rent because of the NOD. As long as you hold title to the apartment building, you are entitled to the rent. You should immediately serve 3 Day Notices on each tenant that has not paid rent and you must be prepared to file unlawful detainer suits against each one. Given that you were behind on your loan payments before the rent was withheld, and collection of the rent will take time and cost money, you should consult with a bankruptcy attorney to discuss your options. Often a loan modification can be negotiated during a bankruptcy proceeding.

Property Management Fees

Q.
We recently purchased a small apartment building in West Hollywood. We also own small apartment buildings in Santa Clarita and Simi Valley. We have interviewed several property management companies and have found that every one of them charges more for buildings in West Hollywood. Is there a reason?

A.
Absolutely. The rent control laws in West Hollywood, Santa Monica, and to a lesser extent Los Angeles, cause apartment building management companies to spend more time managing buildings in these areas. Many tenants in West Hollywood know that the city will force the manager and / or building owner to appear for an inspection or formal hearing if a written complaint for the smallest matter is filed with the city. Some tenants, who are retired or not working, use this knowledge to extort concessions from the building owner, knowing that the city will nearly always support them. The result is predictable - a higher cost for full service professional management.

Cities with Apartment Rent Control

Q.
What cities in Southern California have a rent control ordinance for apartments?

A.
The following Southern California cities have rent control at this time:

Beverly Hills
Los Angeles
Palm Springs
Santa Monica
Thousand Oaks
West Hollywood

Discrimination Against Convicted Drug Addicts

Q.
We were recently named as defendants in a lawsuit for discrimination in the Los Angeles Superior Court because our property management company rejected a rental application. The applicant had been convicted twice for using illegal drugs and this was the reason for the rejection. How can we protect ourselves against insane lawsuits?

A.
The State Legislature in California has determined that drug addiction is a disability that should be protected by law. You will probably be forced to pay the plaintiff some amount of money in order to settle the case. The fact that the illegal drugs were taken voluntarily is irrelevant insofar as the legislature is concerned. There are cases of convicted drug addicts going from apartment building to apartment building, submitting applications, getting rejected, filing a lawsuit and then collecting a settlement. Our legislature has encouraged this type of conduct in the name of preventing illegal discrimination.

 

 

 

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