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No Clear Guidance with Supreme Court’s Disparate Impact Decision

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After much anticipation, speculation and contemplation of the potential ruination of the apartment nation … the Supreme Court of the United States (SCOTUS) finally released its decision on Texas Department of Housing and Community Development v. The Inclusive Communities Project, Inc. For those unfamiliar with the name, this is the case that answers the question of whether the Federal Fair Housing Act supports the concept of disparate impact in housing discrimination cases. In other words, can someone be liable without intent to discriminate. The answer, by a vote of 5 to 4, is yes … with some caveats and provisos.

 

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Get Involved!

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Happy New Year everyone! I can’t tell you how much I’m looking forward to serving as your President this year. I expect a number of great things to happen in 2017.

For starters, I think that by the time you read this, USC will have whipped Penn State in the Rose Bowl. (Sorry UCLA fans.) I think we’ll have a good year in the rental real estate business, and be able to manage around any legislation that’s passed this year affecting our industry.

I don’t know about you, but I have a big wish list for my real estate business this year, and maybe the best way to ensure that those wishes all come true is to put together some good New Year’s resolutions and start working on them. Do you have a plan yet for 2017? Are your goals in place yet? If not, here are some suggestions to help you get started.

Help your business and your industry by getting involved with one of the AACSC committees.

AACSC has local and state legislative committees, a trade show committee, member ship committee, golf tournament fundraising committee and Political Action committee. Get involved. Your help is needed. You’ll meet great people, learn a lot, and make a difference.

Lest we forget our regular order of business as we wait to see what will be on our legislative calendar this year, nevertheless we will hold out an optimistic view that we will continue to be successful as AACSC works with our lobbyist to fend off negative laws that will impact our industry.

We will also be offering a full schedule of great educational classes this year. Get the schedule now and sign up for the classes that will help you up your game. AACSC is working on a certification program for landlords that will educate, test and verify to all interested parties (like the city or pros pective tenants) that you have the knowledge and tools to run a great rental business. Watch for announcements on this program on AACSC’s website.

I also want to thank all of our vendors who continue to sponsor our events and would like to acknowledge the NEW Ambassadors Committee.

This new group is excited to get involved and it is a great way to see what AACSC is all about. Our Ambassadors are informed of all the activity around the Association so be sure to look for them at all of our events. Just a hint—they will be the ones with the badge that says AACSC Ambassador on it. Let them know you are interested in joining the team and we will get you connected, too.

Finally, 2017 is shaping up to be a great year and I would like to personally invite you to the AACSC 2017 Board Installation Dinner on January 19th at the Virginia Country Club. We have some great new board members that I would like you to meet. They are bringing us new ideas, new energy and a new perspective that will be very useful as we begin to work on this year’s issues and challenges.

Cheers!

January 2017

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As we say goodbye to 2016, I absolutely must begin this New Year by thanking you, our members, for a great year. As always, there were successes and challenges, and 2017 is sure to be no different; but when we asked you for your help—you were there. When we asked for your feedback and participation, you were there; and when we wanted to celebrate and give back to our community, you stepped up and gave from your heart.

Interval House is so grateful for your generosity, and as always, AACSC provided the bulk of the toys that were given out to those who are beginning a new life, free from violence. We also participated throughout the year in planting trees around the City of Long Beach and provided donuts to all the volunteers. It was amazing to see just how fast four dozen donuts can disappear—it was like a magic trick—POOF—Gone!

We enjoyed our 10th Annual AACSC Golf Tournament; our first steel drum band at the Summer Social, where we were honored to be host to our own Mayor Garcia; held our first Certified Apartment Portfolio Supervisor (CAPS) class—to rave reviews I might add; and we graduated more than 30 Certified Apartment Manager (CAM) students. As I attended our National Conferences, we heard loud and clear that NAA is committed to educating our industry on the value, time, and dedication it takes to achieve these credentials.

Now that 2017 is here, we want to make sure that you know AACSC is always in your corner and keeping our ear to the ground to listen and act on your behalf. We know that our industry is under attack, and it is important to us that whenever you hear something that you think might affect us, please call our office any time to alert me to any rumors you hear. We are in constant contact with our City Council members in Long Beach, and last year we began reaching out to our other sister cities so that we can remain aware of potential threats. When it affects one, it affects us all.

So welcome to 2017 at AACSC, and continue to look for all the new changes that will bring us into a new way of doing business. More connected, more active committees, increase in education, and don’t forget to tell your fellow owners why they should be a member, too.

We look forward to seeing you at the 2017 Board of Directors Installation Dinner on January 19 at the Virginia Country Club, and at the first Membership Meeting on January 26 at the Petroleum Club in Long Beach.

Make this the best year ever and get involved — there is still a lot to do!

Eviction Records & Source of Income

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Do you check credit of an applicant? Do you care about an applicant’s source of income? These are just two issues the legislature will consider at the urging of tenant groups.

Most property owners and managers are keenly aware credit bureaus and other reporting agencies maintain and report judgments in eviction lawsuits. Most of these entities report the filing of an unlawful detainer (UD) action without it going to judgment. When property owners and managers review tenants’ rental applications and check tenant credit histories, they may deny to rent to the applicant based on a UD judgment or filing.

Tenants with a UD on their record claim they are often “blacklisted” from renting dwellings. Thus, a number of years ago California law was amended to block access to UD filings (or court records) to “mask” the UD to the public for the first 60 days after the filing. Theoretically, tenants are protected for a period of time.

This holds true for most tenants in the State. Tenants argue that in eviction control jurisdictions such as San Francisco, Oakland, Berkeley, Santa Monica, Los Angeles and West Hollywood, property owners and managers have a financial incentive to evict tenants whose rents are significantly below market rents. Further, tenants have an incentive to defeat those evictions. When tenants do elect to challenge an eviction in these and other similar jurisdictions, they are skeptical about the “just cause” for eviction in the notice to terminate a tenancy.

Tenants in these cases are determined to test the property owner’s and manager’s reasons for eviction by making the plaintiff declare their reasons under penalty of perjury during litigation. When this arises, evictions are not easily or quickly resolved. Even when they are settled, they are often not resolved for a long time (as opposed to the usual UD timeframe standards).

Code of Civil Procedure (CCP) Section 1161.2(a) sets forth the law requiring the courts to block access to court records of UDs for the first 60 days after the UDs are filed and it implies that the UD records can become unmasked to the public after 60 days. Here is what the CCP states:

1161.2. (a) The clerk may allow access to limited civil case records filed under this chapter, including the court file, index, and register of actions, only as follows: (1) To a party to the action, including a party’s attorney. (2) To any person who provides the clerk with the names of at least one plaintiff and one defendant and the address of the premises, including the apartment or unit number, if any. (3) To a resident of the premises who provides the clerk with the name of one of the parties or the case number and shows proof of residency. (4) To any person by order of the court, which may be granted ex parte, on a showing of good cause. (5) To any other person [e.g. a tenant reporting agency] 60 days after the complaint has been filed, unless a defendant prevails in the action within 60 days of the filing of the complaint, in which case the clerk may not allow access to any court records in the action, except as provided in paragraphs (1) to (4), inclusive.

Now, the tenants group that sponsored the 60-day masking process claims that tenants are not able to secure a new rental as long as the credit bureau or tenant reporting agency notes a UD filing that has NOT gone to judgment (most UDs do not go to judgment because the defaulting tenant does not challenge the civil filing, moves and the owner and manager thereby regain possession).

The tenant sponsored bill that will be authored by Assembly Member David Chiu (D.-San Francisco) will answer the tenants’ position on this matter. According to the bill, AB 2519, UDs may only be reported if the entire judgment has been found against all tenants, there is a summary judgment, a trial or stipulation by all parties. If the default or default judgment is set aside for more than 60 days after the complaint was filed with the court, then the law will apply as if the UD complaint had been filed on the date of the default. Additionally, the bill will provide that if 60 days have elapsed since the complaint was filed with the court and no proof of the service of the summons has been filed, the action shall be dismissed without prejudice (no credit bureau or tenant reporting agency may report the filing).

The whole intent and direction behind Assembly Member Chiu’s bill will be to permanently mask UDs that do not go to trial.

Unquestionably, the bill will be opposed by our Association.

Another bill of great importance will mandate a massive change in California law pertaining to determining a tenant’s source of income.

The California source of income discrimination law does not protect Section 8 tenants (see Sabi vs. Sterling, 183 Cal.App.4th 916 (2010)). That law has been changed by local government ordinance in California cities including San Francisco, East Palo Alto, Corte Madera, and Woodland, which require landlords to include money paid by government through Section 8 vouchers.

Senator Mark Leno (D.-San Francisco) will author a bill that will mandate landlords to accept Section 8 tenants. It will modify the following long-standing California law which reads as follows:

Government Code Section 12955(p)(1): “’Source of income’ is defined as lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant. For purposes of this section, a landlord is not considered a representative of a tenant.” This section of law was added in January 2000 and amended in 2005.

The measure will be one of the hardest fought bills of the year. Ask any property owner or manager that has experience with the Section 8 program. Costly delays, frequent and often times biased inspections, and conditional or multi-month payment postponement are samples of why owners and managers do not want to be forced to participate in a Section 8 program.

We have described two bills we will face this year in the legislature. There are dozens of objectionable bills we will discuss in our next articles.

Ron may be reached at: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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(562) 426-8341

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