Free Rent For Tenants?!

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Ben Franklin was partially right when he said "but in the world nothing can be said to be certain except death and taxes."

If we could, we would have suggested an amendment to his quote. One more important part of life that is "certain" is that whatever the California Legislature will propose will definitely affect our livelihood and our well being.

To get your blood pressure flowing a bit, here are just a few of the bills that AACSC will face this year:

Free Rent for Tenants?

Senator Joe Simitian introduced SB 1191, a bill that will require every landlord who is in default under a mortgage or a deed of trust, and who has received a notice of sale, to disclose the notice of sale to any prospective tenant prior to executing a lease agreement. What are the consequences? If a landlord fails to disclose the notice of sale and executes a lease agreement (and arguably a rental contract), the "tenant" shall recover ALL rent paid under the lease.

There are many issues that are not addressed. For example, should the bill apply to rental AND lease agreements? Should the bill apply to all notices of sale, whenever they were executed? Does the bill apply to new and existing owners? What are the consequences of a notice of sale that is improperly followed?

Time to Improve Protections for Tenants?

Senator Hancock is expressing an interest in the foreclosure process as well. The Senator introduced SB 1473. This measure is considered a "spot bill" or a placeholder, if you will. For now, she has stated that she wants to substantially beef up or "improve protections for tenants" that reside in residential rental units that are subject to foreclosure.

Assembly Member Skinner is weighing in on the foreclosure process as well. Until January 1, 2013, the law requires an owner of property to maintain vacant residential properties purchased at a foreclosure sale. Failure to maintain the property authorizes any local government to impose civil fines and penalties and give a notice of the violation to the owner. The property owner is given 14 days to correct the violation prior to imposing the fines and penalties. This bill would extend the "sunset date" that will expire at the end of this year until January 1, 2018.

Assembly Member Torres is authoring AB 1745, a bill that proposes to amend the same area of law.

Victims of Domestic Violence

Assembly Member V. Manuel Perez has introduced AB 1740, a bill that would include the status as a victim of domestic violence, sexual assault or stalking as an additional protected class. This would expand the basIs upon which discrimination is prohibited.

Senator Yee is authoring SB 249. It proposes to allow landlords and managers to terminate the tenancy of aggressors following notice by a victim that he or she has a protective order or a police report that identifies the aggressor who is living in the same rental development or unit. This will be a welcome change in law and would help everyone but the aggressor.

Mandatory Relocation Payments

Assembly Member Ma introduced AB 1925, a bill that will be amended soon to set mandatory relocation payments for tenants in rent control jurisdictions. When the owner asks a tenant to move out (for less than 30 days) in order to perform building repairs and improvements, he/she will be faced with paying living costs for the tenants.

First, let's discuss the proposed amendments. Anytime an owner of residential rental property elects to recover possession for less than 30 days in a rent control community, such as Los Angeles, to perform building repairs (not defined), improvements (not defined), seismic upgrades (not defined), lead abatement (not defined), fumigation (not defined) or other capital improvements (not defined), the local government "may require the property owner to pay to the tenant (we would presume the payment would be made to EACH tenant) all of the following costs:

  • Tenant's Actual Moving Costs. If it is necessary to move the tenant's possessions in order to make the repairs or improvements, costs would be limited to actual, reasonable and necessary costs of moving the tenant's household personal property. This would include costs of transportation of the property, packing and unpacking, insurance, storage, disconnection and reconnect of all utility services, and ANY other additional, actual, reasonable and necessary costs attributable to a tenant's special needs. The special needs would include a tenant's disability or age (not defined).
  • Living Costs. The actual costs of temporary lodging costs, all meals, and the actual costs of accommodations for pets, laundry expenses. These costs are limited to just $225 per day, per tenant.
  • One-For-One Replacement. The residential property owner may, in lieu of paying the actual cost of moving a tenant's personal property, pay to provide each affected tenant with comparable housing for the time the tenant(s) are displaced. That housing shall be similar to the tenant household's existing housing in location, size, number of bedrooms, accessibility, type and quality of construction, proximity to services and institutions upon which the tenant depends.
  • But Tenants Must Still Pay The Rent! The tenant will remain responsible to pay rent to the landlord for the time he or she is displaced. This provision is silent about such minor issues as a landlord's ability to legally pursue an unlawful detainer for the non-payment of rent during this period.
  • Right To Re-Occupy. Displaced tenants will have the right to return to the unit upon completion of the improvements, but the bill is silent on other important issues. For example, there is no explanation or remedy for the tenant's failure to return to the unit upon completion of repairs or improvements within specified periods of time.
  • Tenant-Caused Damage. Owners will not be required to provide temporary relocations benefits to the tenants if the tenant was "entirely or primarily responsible" for causing the condition that required the property to be repaired. Once again this is not defined.

Stay tuned for more legislative news as we will be involved in literally dozens of bills this year. We can assure you that you will continue to shake your head in disbelief about the Legislature.

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Contact AACSC

Apartment Association,

California Southern Cities
333 W. Broadway St., Suite 101
Long Beach, CA 90802
(562) 426-8341

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