For your convenience, the new laws and trends are divided into nine sections: Landlord/Tenant, Fair Housing, Disability Access, Employment, Real Estate License Laws, HOA (Homeowners’ Association), Mobile Home and Estate Planning and Other.
Landlord / Tenant Laws and Trends
AB 73 Death Disclosure: Under previous California law, residential landlords and sellers were not required to disclose a property occupant’s death, if the death occurred more than three years prior to offers to purchase, lease, or rent the property. Deaths occurring less than three years prior to such offers were required to be disclosed as well as the cause of death, if known, unless the death was from HIV or associated illnesses. The new law clarifies that a landlord or seller is not required to disclose that a property occupant was HIV-positive or died from AIDS- related complications.
AB 551 Bed Bugs: This law addresses issues of bed bugs in rental housing.
Civil Code §1942.5 was amended to prohibit a landlord from retaliating against a tenant
who gives notice of a suspected bed bug infestation.
Civil Code §1954.602 prohibits a landlord from showing, renting or leasing a unit that the
landlord knows has bed bugs. It does not require a landlord to inspect for bed bugs, but if a bed bug infestation is apparent, the landlord is considered to have knowledge of bed bugs in the unit.
Civil Code §1954.603 requires that a specific bed bug notice (with specific language and in at least 10 point font) be given to new tenants on and after July 1, 2017 and to existing tenants by January 1, 2018.
Civil Code §1954.604 addresses entry into a unit to inspect for and treat bed bugs. Landlords are required to give notice of intent to enter, and tenants are required to cooperate with inspection and requests for information to facilitate bed bug detection and treatment.
When occupied units are inspected by a licensed pest control operator, Civil Code §1954.605 requires landlords to notify tenants within two business days of receiving the pest control operator’s findings. When infestations are found in common areas, the landlord must provide the notice to all tenants.
AB 2881 Retaliation: This law also amends Civil Code §1942.5 to prohibit a landlord from retaliating against a tenant who gives notice of a suspected bed bug infestation.
AB 1750 Residential Environmental Hazard Handbooks: This new law allows a residential property owner or agent who voluntarily provides a tenant with the Residential Environmental Hazard Handbook a presumption in their favor that the information in the Handbook is accurate. This is the same protection currently afforded to a seller or broker who sells housing.
AB 2819 Unlawful Detainer Masking Law: Under previous law, unlawful detainer (UD) filings were automatically sealed from public view for the first 60 days following the initial court filing. After the 60 day period, the record would be made available to the public and only remain sealed (A) if the defendant prevailed at trial within the 60 day period, (B) the court permanently sealed the record, or (C) the record was sealed by a stipulation between the parties. (UD files were accessible to (1) the parties and their attorneys, (2) people who provided the court clerk with the names of at least one plaintiff and one defendant and the address of the premises, (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 a person with a court order).
AB 2819 amends California Code of Civil Procedure §1161.2 to automatically and permanently seal all UD actions, unless (1) the plaintiff (landlord) prevails within 60 days of filing or (2) after 60 days only if judgment against all defendants has been entered for the plaintiff after a trial and the court issues an order allowing public access to the record. Absent the above, only one of the persons (numbered 1-4 above) may request access to the record.
The new law allows a court to issue an order barring access to the court record if the parties so stipulate. Additionally, a court on its own motion may dismiss an UD action if a proof of service of the summons has not been filed within 60 days of the complaint’s filing.
AB 2820 Price Gouging After States of Emergency: Pursuant to California Penal Code §396(b), landlords are prohibited from raising prices more than 10% on “housing” for 30 days after a declared state of emergency resulting from an earthquake, flood, fire, riot, storm, or natural or manmade disaster issued by the President, Governor, or executive officer of any county, city, or city and county. AB 2820 amends this Penal Code by clarifying that this provision applies to both statewide and locally declared emergencies and expands the types of emergencies to also include drought, and plant or animal infestation or disease. Additionally, while the previous version of the law defined housing as “any rental housing leased on a month- to-month term”, this bill expands the definition of housing to include “any rental housing with an initial lease term of no longer than one year.”
AB 1920 TCAC Low Income Housing Credit; Fines: This bill authorizes the California Tax Credit Allocation Committee to establish and enforce fines for violations of the terms and conditions of the regulatory agreement, other agreements, or program regulations. The fines may not exceed $500 or double the amount of financial gain to the violator, whichever is greater. Except for serious violations, this bill requires a first-time property owner violator to be given the opportunity to correct the violation before the fine is imposed. The bill allows a property owner to appeal a fine to the committee. The committee is authorized to record a property lien for fines that are not paid within 6 months of being assessed.
HUD Final Rule 5720-F-03 Regarding the Implementation of Housing Protections Authorized in the Violence Against Women Reauthorization Act of 2013 (VAWA): Effective December 16, 2016, this final rule updates the Code of Federal Regulations to implement the requirements of the VAWA. Reauthorized in 2013, the VAWA now extends to all covered housing providers, which includes federally subsidized housing.
This final rule will now require applicants and tenants be provided with a “Notice of Occupancy Rights under the Violence Against Women Act” and certification under the following circumstances: (1) upon denial of assistance or admission to the housing program; (2) at the time the individual is provided assistance or admission; (3) with any notification of eviction or
termination of assistance; and (4) once during the 12-month period immediately following December 16, 2016.
Additionally, the law requires covered housing providers to develop and adopt an emergency transfer plan, based on HUD’s model emergency transfer plan, no later than May 15, 2017. The emergency transfer plan must outline a procedure which allows for the transfer of a victim of domestic violence, dating violence, sexual assault, or stalking upon request. Housing providers may, but are not required to, request specified documentation from tenants seeking emergency transfers under this rule.
Lastly, the new rule adds a completed HUD certification form or a self-statement to the acceptable forms of documentation to seek protection under the VAWA. This amendment allows a victim of domestic violence to self-certify the occurrence of domestic violence, dating violence, sexual assault, or stalking.
SB 7 Water Meters; Multi Unit Structures: California SB7 requires new multi-family properties, constructed after January 1, 2018, to have water submeters.
SB 745 Water Conserving Plumbing Fixture Replacement (2014): Originally passed in 2014, and codified in Civil Code §1101.5, it requires water conserving plumbing fixtures be installed in property constructed before January 1, 1994. To be compliant, plumbing fixtures may not use more than the following amounts of water:
(1) Toilets - 1.6 gallons per flush
(2) Urinals - 1 gallon per flush
(3) Showerheads - 2.5 gallons per minute (4) Interior faucets -2.2 gallons per minute
By January 1, 2017, single family residential properties must be in full compliance, and provide buyers a written disclosure regarding compliance with this law.
Beginning on January 1, 2014, noncompliant plumbing in multifamily and commercial property must be replaced:
- For any alterations or improvements to a room in a building that require a building permit and that room contains any noncompliant plumbing fixtures, the building permit applicant must replace all noncompliant plumbing fixtures in that room.
- For building additions in which the sum of concurrent building permits by the same permit applicant increases the floor area more than 10 percent. The building permit applicant must replace all noncompliant plumbing fixtures in the building.
- For building alterations or improvements in which the total construction cost estimated in the building permit is more than one hundred fifty thousand dollars ($150,000), the building permit applicant must replace all noncompliant plumbing fixtures that service the specific area of the improvement.
Beginning January 1, 2019, in multifamily and commercial property:
- Noncompliant plumbing fixtures must be replaced.
- Water-conserving plumbing fixtures must operate at the manufacturer's rated water
consumption when the tenant takes possession.
- The tenant is responsible for notifying the landlord if the water-conserving plumbing
fixtures are using more than the manufacturer's rated water consumption. The landlord
is required to make repairs (unless the lease states otherwise).
- If a property is being sold, the seller must disclose to the buyer in writing the retrofit
requirements and whether the residence includes any noncompliant plumbing fixtures.
Kimball, Tirey & St. John LLP is a full service real estate law firm representing residential and commercial property owners and managers.
- For registered historical sites;
- For up to one year if a demolition permit has been issued for the building;
- If a licensed plumber certifies that, due to the age or configuration of the property or its
plumbing, installation of water-conserving plumbing fixtures is not technically feasible.
- Water service for the building has been is permanently disconnected.
SB 843 Continuation of Shriver Act to Provide Tenants with Free Attorneys: SB 843 amends Government Code 68651 to extend the Sargent Shriver Civil Counsel Act indefinitely. The Act had been scheduled to expire on January 1, 2017. Since 2011, the Shriver Act has negatively affected the ability of landlords to provide affordable housing by giving indigent tenants the right to be represented by an attorney when facing an eviction. The number of cases won or lost by landlords has remained the same, but the result of the Shriver Act has been to increase the length of time it takes to evict tenants, increase court costs and attorney's fees, and further clog the courts with frivolous motions, discovery and trials. The program is currently operating in San Diego, Bakersfield, Santa Barbara, Sacramento & Yolo, and Los Angeles counties.
SB 1092 Vacation Rental Hosting Platform Insurance Notification: Effective July 25, 2016, amended Business & Professions Code §22590 requires vacation rental hosting platforms (including but not limited to vacation rental websites such as AirBNB) to provide written notice to users to review their insurance coverage prior to listing their short-term rental on the site to ensure their policy will provide adequate coverage.
AB 802 Energy Disclosures: AB 802 repeals a previous energy disclosure law, AB 1103, effective December 31, 2016, and instead requires the Energy Commission to adopt regulations regarding the delivery to the commission and public disclosure of energy use for commercial and multifamily residential buildings of more than 50,000 square feet. Disclosures will begin by January 1, 2017. Delivery will be by the utility companies, and will be made only upon the request and written authorization of the property owner or the property owner’s agent.
Drones: The increased availability and decreased cost of unmanned aircraft systems (“UAS” otherwise known as “drones”) suggests that, if you already have not, you may soon be encountering them on or around your property. Despite increased attempts to legislate UAS specific laws in California, UAS use remains mostly federally regulated.
In 2015, the FAA enacted a nationwide UAS registration system which requires UAS devices weighing more than 0.55 and less than 55 pounds (for both commercial as well as personal use) be registered prior to outdoor use. Last year in California, AB 856 updated Civil Code §1708.8 to expand existing physical invasion of privacy law to include when a person knowingly enters into the airspace of another person without permission in order to capture a visual image, sound recording, or other impression of someone engaging in private, personal, or familiar activity, in a manner which is offensive to a reasonable person. In California this year, six bills made it to the Governor’s desk or which Governor Brown signed two, SB 807 and AB 1680, which address drone use and liability that may affect emergency responders/services.
Drone use can impact landlords in two ways: landlords may be considering drone use for commercial purposes (such as aerial photo or videos of their properties) or landlords may have to address drone usage by tenants which may disrupt the quiet enjoyment of the premises for others. Landlords may want to consider updating their leases and/or addenda to prohibit and/or limit use off these devices on property.
In response to the passage of Proposition 64, several cities are adopting and/or considering local certain bans on recreational marijuana. Proposition 64 allows cities to pass ordinances banning marijuana businesses from operating in the city and banning outdoor cultivation of marijuana (even for personal use). Marijuana possession, distribution, and use, regardless of purpose, remains illegal under Federal law (Controlled Substances Act (U.S.C. title 21).
While the impact this new law will have on landlords and residential properties remains to be seen, we can anticipate a likely rise of marijuana use at residential properties statewide; creating procedures and policies to address minimizing nuisance allegations and responding to resident complaints will be important to consider. Properties with no-smoking provisions may want to have their lease reviewed to ensure their provisions will allow landlords to control marijuana, as well as tobacco and e-cigarettes.
Smoking: Smoking (whether marijuana, tobacco, or e-cigarettes) will result in more conflict between neighbors and greater property damage. Cities, counties and housing authorities have continued to implement ordinances and policies to restrict or discourage smoking in multifamily housing.
New smoke-free laws are being added rapidly. On November 9, 2016, the San Bruno City Council adopted regulations which will ban smoking in attached living units, including patios and balconies. San Francisco is in the process of adopting similar regulations. A current list of cities, and more information about local smoke free laws, is available at www.center4tobaccopolicy.org/localpolicies-smokefreehousing.
On November 30, 2016, HUD issued Final Rule 5597-F-03, which will ban smoking in all Public Housing Developments throughout the country. Under this new rule, Public Housing Agencies will have 18 months to implement no-smoking policies at their properties, which include prohibiting smoking of tobacco products in all units, indoor common areas, and outdoor common areas within 25 feet of housing and/or administrative offices.
Properties that do not currently have no-smoking provisions in place may want to consider implementing them to their properties.
Rising Rents & Rent Control Initiatives: As renters continue to flood the California housing markets, many local governments continue to battle over the implementation of rent control ordinances in their cities.
This issue is garnering particular interest in Northern California, where multiple municipalities, including San Jose, Santa Rosa, San Mateo, Lafayette, and Pacifica have considered implementing or expanding rent control within the past year. Most recently, on November 8, 2016, voters in the City of Richmond and the City of Mountain View approved rent control and just cause eviction ordinances (see local ordinances below). In Berkeley, Oakland, and East Palo Alto, voters approved measures strengthening existing rent control laws. Voters rejected strict rent control laws in Burlingame, San Mateo and Alameda. KTS anticipates that rent control will remain a major issue for landlords over the coming years.
SB 775 Rent Control Certification: Existing law requires cities that have a local rent control/rent stabilization ordinance or charter which requires registration of rents (such as the cities of Berkeley, East Palo Alto, Los Angeles, Santa Monica, and West Hollywood) to certify the maximum allowable rent for every rent controlled unit under its jurisdiction. Retroactively applicable as of January 1, 2016, this bill removes the rent registration requirement for any tenancy entered into after January 1, 1999.
Mountain View Community Stabilization and Fair Rent Act: Approved by voters in the city of on November 8, 2016, the Act introduces rent control in the city of Mountain View. The Act applies to all rental units except for those exempted by California Law (Costa Hawkins) or by the Act itself (such as single family homes, condominiums, companion units, and duplexes). Under the Act, rents in rent controlled units must be restored to the rent effective as of October 19, 2015 (for tenancies beginning after that date, the initial rental rate will apply) and will be considered the base rent. Rent increases will be set annually by the Rental Housing Committee and will range between 2-5% depending on the Consumer Price Index. The Act also includes Just-Cause for Eviction provisions, which prohibit evictions except for the specified reasons stated in the ordinance, and apply to all rental units (even those not subject to rent control) except for properties exempted by the ordinance.
Richmond Fair Rent, Just Cause for Eviction, and Homeowner Protection Ordinance: Approved by voters in the City of Richmond on November 8, 2016, the ordinance: (1) restores rents of rent controlled units to the rent effective as of July 21, 2015 (for tenancies beginning after that date, the initial rent will apply); (2) establishes a Rent Board that will set a maximum allowable rent increase (based on the Consumer Price Index) for rent control units throughout the city; (3) prohibits landlords of any rental unit (even those not subject to rent control) from terminating tenancies except for the reasons specifically listed in the ordinance. Rent controlled units under the ordinance include all rental units except for those exempted by CA law or the ordinance (units with a certificate of occupancy issued after February 1, 1995, single family homes, small second unit condominiums, temporary rentals, and rooms for rent in which the tenant shares a bathroom or kitchen with the homeowner.)
Bay Area Air District Wood Smoke Rule; Required Lease Language: Bay Area Air District Rules and Regulations apply to all properties located in the Bay Area Air Quality Management District (BAAQMD), which includes the following counties: Alameda, Contra Costa, Marin, Napa, Santa Clara, San Francisco and San Mateo. Pursuant to the Wood Smoke Rule, Regulation 6, Rule 3, effective June 1, 2016, persons selling renting, or leasing real property that contains a wood-burning device, such as a wood-burning fireplace, must include in the lease a specific disclosure in accordance with guidance made available by the District. The disclosure serves to describe the health hazards of particulate emissions from residential wood burning and to notify tenants of the law prohibiting the burning of wood or other solid fuels in fireplaces, wood stoves, or fire pits, when a Winter Spare the Air Alert has been issued by the BAAQMD.
Kimball, Tirey & St. John LLP is a full service real estate law firm representing residential and commercial property owners and managers.
Additionally, effective November 1, 2016, Rule 3 now prohibits the installation of a wood- burning device in new building construction and further requires any fireplace or chimney remodels, where the total cost exceeds $15,000 and requires a permit, be replaced only with a gas fueled, electric, or EPA certified device.
Vacation Rentals: The ongoing popularity of vacation rental websites such as AirBNB and VRBO has led to increased legislative attention. In addition to the California laws enacted last year (SB 761) and this year (SB 1092), requiring that vacation rental hosting platforms provide specified notifications prior to allowing a user to list a property for rent, many municipalities have enacted or are considering local ordinances that prohibit, limit, or otherwise regulate short-term rentals. Cities with local ordinances include San Francisco, San Luis Obispo, San Jose, Santa Monica, Ojai and Palm Springs. Cities considering legislation include Los Angeles, Trinidad, and Santa Cruz. Additionally, hosting platforms nationally are facing increased scrutiny due to allegations of discrimination in their renting practices.
While many residential lease agreements prohibit subleasing, tenants often try to avoid enforcement. Subletting situations can raise multiple issues for landlords, including landlords seeking to avoid the issues with vacation rental subleasing should prohibit assignment and subleasing in their lease agreements, and also prohibit advertisement of the lease premises for assignment of sublease. When dealing with a suspected subleasing situation, it is important to obtain legal advice early.
Some landlords owning rental property in vacation areas have increased revenue by changing long-term rentals to short term vacation rentals. Vacation renters are often willing to pay more per night than long term tenants. With internet platforms such as HomeAway.com, VRBO, AirBnB.com, and FlipKey.com, reaching potential vacation renters is easier. However, before becoming a short-term vacation rental landlord, property owners should be aware of requirements, restrictions and risks unique to vacation rentals.
Credit Card Surcharges: Major credit card companies charge a “swipe fee” each time a merchant charges a consumer’s credit card. California Civil Code §1748.1 prohibits merchants from passing credit card swipe fees to consumers as a “surcharge”. In March 2015, in Italian Colors Restaurant v. Harris, 2015 U.S. Dist. LEXIS 39030 (E.D. Cal.), the United States District Court, Eastern District found the “surcharge” and “discount” distinction arbitrary. The court ruled the law to be an unconstitutional restriction on free speech and unconstitutionally vague. The case has been appealed to the United States Court of Appeals for the Ninth Circuit, and is not yet final, but an injunction currently prohibits the California Attorney General from prosecuting merchants who impose credit card “surcharges” on consumers. Kimball, Tirey & St. John is monitoring this case, as it may impact acceptance of credit cards by property owners and managers.
Fair Housing Laws and Trends
AB 1709 Hard of Hearing: This bill replaces the phrase “hearing impaired” with “hard of hearing” and applies to multiple statutes, including California Civil Code §54, which requires full and equal access to all housing accommodations offered for rent, lease, or other compensation.
AB 1732 Gender Neutral Signs for Single User Restrooms: Beginning March 1, 2017, AB 1732 requires updated signage on all single-user restrooms made available to the public (such as a restroom located in a leasing office). A single-user restroom under the law is a restroom with no more than one toilet and one urinal with a user-controlled locking mechanism. These restrooms can no longer be designated as “male” or “female”; rather, these restrooms must be identified as all-gender toilet facilities via appropriate signage. The signage must comply with California Building Code Title 24. The law authorizes inspectors, building officials, and/or other local code enforcement officials to inspect for compliance with this law.
SB 1442 Discrimination Regulations and Enforcement: This bill reorganizes and consolidates various statutes regarding discrimination. Additionally, this bill removes the authority of various state agencies to promulgate regulations to prohibit discrimination and instead places that responsibility, as well as investigation and enforcement duties, with DFEH.
HUD Final Rule 5863-F-02 to Ensure Equal Access to Housing & Services Regardless of Gender Identity: This rule applies to programs and shelters funded under programs administered by HUD’s Office of Community Planning and Development (CPD), which includes HOME Investment Partnership Programs (24 CFR part 92), Housing Trust Fund Programs (24 CFR part 93) Community Development Block Grant Program (24 CFR part 570), and others. Under this new rule, CPD providers must grant equal access to such facilities and services to individuals in accordance with an individual's gender identity.
The rule redefines the term gender identity to include both actual and perceived gender identity. Additionally, the rule removes the previous prohibition against a CPD provider inquiry as to gender identity and/or sexual orientation in order to allow a provider to ensure compliance with this new rule.
SB 866 Veterans Housing: This bill allows a housing developer or service provider that provides Veteran’s Housing pursuant to §987.005 of the Military and Veteran’s Code to provide housing or services to female veterans and their children in women-only facilities in limited instances in which a female veteran (A) has suffered any form of sexual abuse, trauma, or intimidation or harassment while serving in the military and is seeking treatment for that sexual abuse, trauma, or intimidation or harassment, or (B) is seeking the housing or services as a result of being a victim of sexual abuse or domestic violence.
HUD Final Rule 63054 Quid Pro Quo and Hostile Environment Harassment and Liability for Discriminatory Housing Practices Under the Fair Housing Act: Effective October 14, 2016, this final rule amended HUD's fair housing regulations to formalize standards for use in investigations and adjudications involving allegations of harassment by providing for uniform treatment of Fair Housing Act claims raising allegations of quid pro quo and hostile environment harassment in judicial and administrative forums. HUD’s final rule provides definitions of two specific types of harassment, quid pro quo and hostile environment, and specifies how HUD will evaluate complaints of these harassment types under the Fair Housing Act. While previously applied most commonly to sexual harassment claims, HUD’s new rule additionally applies to harassment claims on the basis of race, color, religion, national origin, sex, familial status, or disability. In addition, this rule clarifies how the traditional principles of direct and vicarious liability operate in the Fair Housing context.
Disparate Impact: Disparate impact, or discriminatory effect, discrimination can occur when a policy, rule or practice that is neutral on its face has the effect of discriminating against one or more of the protected classes when the policy, rule or practice is applied. While disparate impact has been a part of California’s fair housing laws for many years, it was not written into the federal Fair Housing Act. Over the years, the federal courts and fair housing enforcement agencies have upheld disparate impact as an important part of fair housing enforcement.
In 2015, in Texas Dept. of Housing and Community Affairs v The Inclusive Communities Project, Inc. the Supreme Court of the United States (SCOTUS) ruled that disparate impact applies to federal fair housing enforcement. Since this 2015 ruling, disparate impact has received increased national attention. In particular, HUD has published guidance related to this concept, focusing on issues concerning criminal background checks, domestic violence, and limited English proficiency.
Criminal Background Checks: Criminal background checks involve difficult issues with potential civil rights, privacy and fair housing implications. On April 4, 2016, HUD issued new HUD Guidance re: Criminal Background Checks. The guidance outlines how using criminal background screening to deny housing can create a disparate impact (discriminatory effect) based on race due to the higher incarceration rates among Hispanics and African Americans relative to their percentage of the total population and when compared against the incarceration rates of non-Hispanic Caucasians. The guidance also outlines HUD’s position regarding what is necessary for a housing provider to successfully defend such a complaint. This guidance applies to conventional as well as subsidized housing providers. Although this is HUD guidance, rather than law, it clearly outlines how HUD would analyze a fair housing complaint based on the use of criminal background checks to deny housing. A KTS article discussing compliance with this new guidance may be found at: http://www.kts-law.com/content/uploads/2016/08/Complying-with-HUD-Guidance.pdf
Domestic Violence: On September 13, 2016, HUD issued Guidance re: Enforcement of Crime- Free Ordinances against Victims of Domestic Violence. Addressing local governments (rather than individual landlords), the Guidance discusses how local nuisance and/or crime free ordinances may disparately impact victims of domestic violence or other crimes. HUD directs local governments to review their own ordinances and repeal those that may disparately impact women, and/or racial or ethnic minorities, who are often disproportionately victimized by crime. While the guidance is not directed at Landlords, it notes that many of these government ordinances place the burden on housing providers to abate the nuisance/criminal activity on the property (often through the eviction process) or risk penalties, such as fines.
National Origin and Limited English Proficiency: HUD’s Guidance on Fair Housing Protections for people with Limited English Proficiency (LEP) was released on September 15, 2016. In this guidance, HUD discusses the correlation between language barriers and national origin discrimination when it comes to housing. In doing so, HUD concludes that, “where a policy or practice that restricts access to housing on the basis of LEP has a discriminatory effect based on national origin, race, or other protected characteristic, such policy or practice violates the act if it is not necessary to serve a substantial, legitimate, nondiscriminatory interest of the housing provider, or if such interest could be served by another practice that has a less discriminatory effect.” This could create challenges for California landlords, as under California Civil Code §1632, if a California residential lease primarily negotiated in Spanish, Chinese, Tagalog, Vietnamese or Korean, the lease must be provided to the tenant in that language.
Source of Income and Section 8 Vouchers: California Fair Housing Law prohibits a landlord from discrimination based on an applicant’s or resident’s source of income. Section 8 vouchers are not currently considered a source of income under state law.
While Section 8 is a protected classification in a dozen other states, it is not currently protected in California. However, there is ongoing pressure from advocacy groups and through court cases to require landlords to accept Section 8 vouchers as a source of income. On November 8, 2016, the Marin County Board of Supervisors unanimously passed Ordinance No. 3656, which redefined its source of income law to specifically include rental assistance, homeless assistance, and other housing subsidy programs. Last year, Santa Monica passed a similar ordinance (Ord. No. 2485 (CCS)) that redefined its source of income law to specifically include income from other rental assistance programs such as Section 8. Other cities with similar laws include Corte Madera, East Palo Alto, and San Francisco.
This past year, California legislators proposed SB 1053, a bill which would have made it unlawful for landlords to deny housing based on an applicant receiving Section 8 assistance throughout the state. However, in May the bill was held in the Senate appropriations committee, effectively halting its chances of becoming law. The blocking of this bill at state level may result in additional local municipalities considering similar local protections in the coming years.
Marin County Ordinance No. 3656: Passed on November 8, 2016, this ordinance augments the Marin County Municipal Code §5.53.010 to prohibit housing discrimination based on “all lawful sources of income” including a “rental assistance program, homeless assistance program, security deposit assistance program, or housing subsidy program.” Landlords in violation of this law may be subject to civil as well as criminal penalties. This law takes effect thirty (30) days from the date the ordinance was passed.
Assistance Animal Verifications: Fair Housing laws require management provide reasonable accommodations for persons with disabilities. Assistance animals continue to be a commonly requested disability-related accommodation. If the disability and need for the animal are not obvious, a landlord may request written verification regarding the need for the animal from a healthcare provider or other qualified verifier.
Recently, KTS has seen a rise in online services providing verification documentation for persons with emotional support animals. By filling out a form and paying a nominal fee, these companies will verify a tenant’s need for an accommodation animal. While some companies conduct a telephonic interview, these verifications are almost exclusively provided without ever seeing the requestor in person. The accessibility and convenience of these types of websites may result in an increase in illegitimate accommodation requests.
The Department of Fair Employment and Housing (DFEH) has proposed regulations which may help to curb this potential for abuse. The proposed regulations, if passed, will clarify that a qualified health care provider, “must have specific knowledge of the patient’s medical condition based on an individualized examination and not operate primarily to provide certifications for assistive animals.” In addition to the above, the proposed regulations hope to clarify and formalize other standards of Fair Housing law, pursuant to existing state statutes and relevant case law.
Disability Access for Commercial and Residential Properties
Disability: California has about twelve percent of the nation’s disabled population, but about forty percent of the nation’s disability access lawsuits (also known as “ADA” or “handicapped accessibility” claims). Recent California legislation (discussed below) will provide some protection against disability access lawsuits, but disability access lawsuits will continue.
There are two new trends in disability access cases.
- Plaintiffs suing small restaurants (and their landlords) alleging only a lack of accessible disabled (ADA) seating.
- Cases against residential properties which allege “testing” of fair housing issues in addition to lack of disabled access. In these claims the plaintiffs are typically individuals or a non-profit corporation alleging a failure to provide auxiliary aids and services available to prospective lessees and residents, discrimination in housing design, discriminatory policies, disparate treatment in advertising which does not promote the availability of accommodations for disabled access at a property, and allegations related to perceived general access barriers at a property.
AB 54 ADA Safe Harbor for Small Businesses: Provides small businesses (25 or fewer employees) an opportunity to cure accessibility violations (ADA) within 60 days, if construction- related accessibility standards related to the specified violation have changed within the last three years.
AB 1521 Disability Access & Construction-Related Accessibility Claims: Existing law requires ADA/disabled accessibility plaintiff’s attorneys to provide a written advisory with each demand letter or complaint to be served on each defendant or potential defendant for any construction-related accessibility claim. The new law requires additional information in the advisory letter, including the rights and obligations of business owners and commercial tenants, and requires that a blank Judicial Council verified answer form (to be updated by July 1, 2016) be provided with the letter. It also extends the requirement that the demand letter be sent to the State Bar of California until January 1, 2019 (this requirement was scheduled to expire on January 1, 2016).
This new legislation also requires the plaintiff’s attorney to notify the California Commission on Disability Access within five business days of a judgment, settlement or dismissal. The new law allows the defendant to request a court stay and an early evaluation conference, and to toll the time to file a response, if the plaintiff is a “high-frequency litigant” or if a business requests an early evaluation conference. “High-frequency litigants” must also identify themselves as such in the complaint, and specifies payment of an additional “high-frequency litigation” fee of $1,000.
- For certain technical violations, and
- for a period of 120 days after a CASp inspection is completed, if certain conditions are met.
Previous law allowed people with disabilities to sue property and business owners if the
property violated disabled accessibility codes, the person bringing the lawsuit personally encountered accessibility barriers and person experienced difficulty, discomfort, or embarrassment because of the violation. Under existing law, a defendant is liable for actual damages, plus minimum statutory damages for each instance of discrimination relating to a construction-related accessibility standard. SB 269 exempts a defendant from liability for minimum statutory damages for structures or areas inspected by a certified access specialist for 120 days, if specified conditions are met. SB 269 requires a defendant who claims the benefit of this exemption to disclose the date and findings of any certified access specialist (CASp) inspection to the plaintiff.
SB 269 also helps protect against an award of minimum statutory damages for certain minor technical violations. It establishes a rebuttable presumption, for the purpose of an award of minimum statutory damages, that the minor technical violations (listed below) do not cause a plaintiff to experience difficulty, discomfort, or embarrassment, if specified conditions are met. A plaintiff may not claim statutory damages for the following minor technical violations, if the defendant is a small business and the defendant has corrected the violations within 15 days of the service of a summons and complaint:
(A) Interior signs, other than directional signs or signs that identify the location of accessible elements, facilities, or features, when not all such elements, facilities, or features are accessible.
(B) The lack of exterior signs, other than parking signs and directional signs, including signs that indicate the location of accessible pathways or entrance and exit doors when not all pathways, entrance and exit doors are accessible. If a CASp inspection has been completed for the premises: And if the premises have not had modifications since the CASp inspection that impact the premises’ accessibility compliance, then before the lease is signed the landlord must provide the tenant with the disability access inspection certificate and CASp inspection report, but only if the tenant agrees that information in the CASp inspection report will remain confidential (except as necessary for the tenant to complete repairs to correct accessibility violations). If the CASp inspection report found accessibility violations: If the report is not provided to the prospective tenant at least 48 hours before the lease is signed, the tenant will have the right to rescind the lease, based on information contained in the report, for 72 hours after the lease is signed; and The landlord is responsible for making repairs to correct the accessibility violations unless the tenant agrees to make the repairs. If the CASp inspection report found the premises meets accessibility requirements, the landlord must provide a copy of the inspection certificate and any inspection report to the tenant within 7 days after the lease is signed.
(D) The color of parking signs, provided that the color of the background contrasts with the color of the information on the sign.
(E) The color of parking lot striping, provided that it exists and provides sufficient contrast with the surface upon which it is applied to be reasonably visible.
(F) Faded, chipped, damaged, or deteriorated paint in otherwise fully compliant parking spaces and passenger access aisles in parking lots, provided that it indicates the required dimensions of a parking space or access aisle in a manner that is reasonably visible.
As with past years, the State of California continues to revise and expand various aspects of the Labor Code. The following is a sampling of relevant, new laws to be enacted in the following year.
AB 908 Increased Paid Family Leave and State Disability Benefits: Commencing January 1, 2018 California Paid Family Leave (“PFL”) and State Disability Insurance (“SDI”) wage- replacement benefits shall increase from the current level of 55% to 60% or 70% of a participant’s wages (based upon income level and subject to a statutory cap). Furthermore, on January 1, 2018, the current seven (7) day waiting period for PFL benefits will be eliminated. By way of background, PFL benefits are entirely funded by employee contributions and provide up to six (6) weeks of wage-replacement benefits for bonding with a new child or to care for an ill family member.
AB 1843 Juvenile Criminal History: This measure expands California Labor Code Section 432.7’s restrictions on inquiries on criminal history and will prohibit an employer asking an applicant to disclose any juvenile convictions. Furthermore, an employer may not:
- (1) Ask an applicant to disclose information related to an arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while the person was subject to the process and jurisdiction of juvenile court law; or
- (2) Seek from any source or utilize as a factor in determining any condition of employment any record concerning or related to an arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while a person was subject to the process and jurisdiction of a juvenile court of law.
AB 2063 Work Experience Education Programs: This bill will expand the opportunity to participate in a work experience education program for credit to students at least fourteen (14) years old. Prior to this measure such programs only applied to students at least sixteen (16) years old. Moreover, students would be allowed to participate in a job shadowing experience for up to forty (40) hours (presently, set at twenty-five (25) hours) if the school principal certifies that it is necessary for the student’s participation in a career technical education program.
AB 2535 Wage Statements for Exempt Employees: The purpose of the bill is to clarify that an itemized wage statement of certain exempt employees does not need to show the employee’s “total hours worked.” The new provision shall apply to employees who fall under the executive, managerial, profession, outside sale, or computer software profession (so long as they are paid on a salary basis) exemptions pursuant to any IWC Wage Order. Furthermore, the measure also applies to, as provided in any applicable Wage Order, the following: parents, spouses, children, or legally-adopted children of the employer; participants, directors, and staff of a live-in alternative to an incarceration rehabilitation program for substance abuse; exempt crew members of licensed commercial passenger fishing boats; and participants in national service programs.
AB 2899 Minimum Wage Violations: This measure will require an employer seeking a writ of mandate contesting a Labor Commissioner’s citation regarding failure to pay minimum wages will be required to post a bond with the Labor Commissioner. The bond must be issued in favor the unpaid employee and in an amount equal to the unpaid wages, liquidated damages, and overtime compensation assessed, excluding penalties. If the employer fails to pay the amounts owed within ten (10) days from the conclusion of the proceedings, the proceeds would be forfeited to the employee.
SB 1241 Choice Of Law And Forum In Employment Contracts: New California Labor Code Section 925 will prohibit employers from requiring an employee, who lives and works in California, agree, as a condition of employment, to agree to a provision that would: (1) require the employee to litigate or arbitrate in a forum outside of California claims that arose in California; (2) deprive the employee of the protection of California law with respect to a controversy arising in California. A contract that violates these restrictions is voidable at the employee’s request, and the matter would be adjudicated in California and pursuant to California law. The law applies to contracts entered into, modified, and/or extended on or after January 1, 2017. However, it does not apply where the employee is individually represented by legal counsel in negotiating the terms of an agreement with respect to choice of law or forum.
Real Estate License Laws
AB 685 Real Estate Salesperson Terminology and Unpaid Fines: This law updates multiple sections of the Business and Professions Code as well as Section 31210 of the Corporations Code, by replacing the term “real estate salesman” with “real estate salesperson”. Additionally, the law updates §10080.9 of the Business and Professions Code to allow the Real Estate Commissioner to prohibit a license from being issued to a person if the person has an outstanding citation with an unpaid fine and/or uncompleted terms.
AB 1650 Real Estate Licensee Advertisements: Under existing law, “first point of contact” solicitation materials from real estate licensee must include the name and license number of the licensee and identify the responsible broker. Before January 1, 2018, there was an exception for advertisements in print or electronic media, or for newspapers and magazines. This exception has been eliminated. An exception remains for open house, “for sale”, “for rent or for lease” and directional signs, as long as no identifying licensee information is included (or only the broker’s name appears). Real estate licensees should include their name and license number, and the responsible broker, on all solicitation materials, including business cards, stationary, advertising flyers, advertisements on television, in print, or electronic media, signage, and other materials designed to “solicit the creation of a professional relationship between the licensee and a consumer.”
AB 1807 Real Estate License Publication of Disciplinary Action: Existing law allows the Bureau of Real Estate to include records of suspension and revocation of licensees on its license verification internet web page. This new law establishes a procedure that may be utilized as of January 1, 2018, in which, after 10 years from posting, a licensee may petition the Commissioner to remove a notice of disciplinary action from the website when the petitioner can display that he or she has been rehabilitated and that the notice of discipline is no longer required in order to prevent a credible risk to members of the public. Petitions may be granted on a case-by-case basis.
AB 2330 Associate Real Estate Licensees: Beginning January 1, 2018, the Bureau of Real Estate (BRE) website will identify whether a licensee is an associate licensee and, if the associate licensee is a broker, will identify each responsible broker with whom the licensee is contractually associated. A real estate broker must immediately notify the commissioner in writing whenever a real estate broker acting as a salesperson enters the employ of or is terminated by the responsible real estate broker. This bill incorporates additional changes in Business and Professions Code §10083.2, proposed by AB 1807 (see AB 1807 above).
AB 2859 Retired Real Estate Licensees: This law authorizes the Bureau of Real Estate and other boards under the Department of Consumer Affairs to issue “retired licenses”.
SB 710 Advertising Real Estate Team Names: This act corrects an inadvertent drafting error in SB 146 of the 2015–2016 Legislative Session. That law required advertising and solicitation materials using a fictitious business name or containing a team name to display the responsible broker’s identity. “Responsible broker’s identity” was previously defined to mean a name and the associated license identification number under which the responsible broker is currently licensed and conducts business in general or is a substantial division of the real estate firm, as specified. SB 710 revises the definition of “responsible broker’s identity” to mean the name, or both the name and associated license identification number.
AB 2362 Pesticide Application in Common Interest Developments: Requires common interest development associations (HOAs) to provide notice to property owners and tenants if pesticides are applied without a licensed pest control operator. This is similar to SB 328, passed last year, which requires landlords to provide notice to tenants if applying pesticides without a licensed pest control operator.
SB 918 Common Interest Developments; Annual Information: Requires the owners of the separate interests in a common interest development to annually provide their contact information in writing to their common interest development association (HOA) for purposes of receiving notices. If an address is not provided, the property address will be deemed the address in which notices are to be delivered.
SB 944 Amendment to Common Interest Development Declarations: This bill clarifies alternative procedures for approving, certifying, or recording an amendment to the declaration of a common interest development. Existing law also requires the association of a common interest development to distribute to its members an Assessment and Reserve Funding Disclosure Summary form containing specified information, including whether currently projected reserve account balances will be sufficient at the end of each year to meet the association’s obligation for repair or replacement of major components during the next 30 years and that all major components are included in the reserve study and its calculations.
Mobile Home Laws
AB 587 Mobilehomes; Updated Lease Language: Existing Mobilehome Residency Law requires specific notice language to be included in all mobilehome lease agreements and provided to all residents on an annual basis prior to February 1 of each year. This law updates the notice language required to include information regarding mobilehome registration, titling, and taxes.
SB 944 Notice of Mobilehome Disposal, Warehouse Liens and Abandoned Mobilehomes: Last year, AB 999 provided a procedure for a mobilehome park to dispose of an abandoned mobilehome without having to pay past or current vehicle license fees or obtain a tax clearance certificate. In addition to other requirements, management must file a notice of intent to apply to have the mobilehome designated for disposal with the county tax collector and a notice of disposal with the Department of Housing and Community Development (HCD) within 10 days of the date of lien sale. This law extends the notice filing periods from 10 days to 30 days. Management must also post and mail the notice of intent to dispose of the abandoned mobilehome within 10 days after a judgment of abandonment and requires management to file a notice of disposal with the HCD within 30 days following a judgment of abandonment. The law also allows HCD to adopt guidelines and new procedures/forms to implement the above disposal procedures after a warehouse lien sale and for abandoned mobilehomes until final regulations are adopted.
SB 944 Mobile Home Parks; Housing for Older Persons: Under the California Fair Employment and Housing Act, owners and property management are prohibited from discriminating against or harassing any person on the basis of certain personal characteristics, including familial status. The act provides that its provisions relating to discrimination based on familial status do not apply to mobilehome parks that meet the standards for “housing for older persons” contained in the federal Fair Housing Amendments Act of 1988. This law now has been updated to reflect the Fair Housing Amendments of 1996, and will now require these mobilehome parks to meet the standards for “housing for older persons” contained in the federal Fair Housing Act.
AB 691 Fiduciary Access to Digital Assets Act: This new set of laws deal with electronic records after death. It grants a decedent’s personal representative or trustee the right to access and manage the decedent’s electronic information.
SB 1150 Mortgages and Successors in Interest: This bill amends Civil Code Section 2920.7 to allow successors or heirs to have access to mortgage and loan information. It also requires foreclosure and other notices to the successor if a lender has been notified of a death.
SB 833 Medical-Cal: Significantly changes the Medi-Cal recovery rules in California when someone dies after January 1, 2017. It will reduce the number and amount of Medi-Cal liens.
Exemptions for Estate, Gift and Generation Skipping Transfer Taxes: In 2016, the exemptions for estate tax, gift tax, and generation-skipping transfer taxes are $5.45 million. In 2017, they will be $5.49 million.
AB 2217 Maximum Notary Fees: As of January 1, 2017, maximum California notary fees will increase from $10 to $15 per signature.