- Get pre-approved, not just pre-qualified. A pre-qualification is just a quick conversation with a lender who may glance at the borrower's credit score. However, a pre-approval is a more thorough review of their credit history. "It makes your offer look stronger," says Adriana Mollica, a sales associate with Teles Properties in Beverly Hills, Calif. "It also minimizes any surprises that may delay or force a cancelation during escrow."
- Urge clients to narrow their options. Buyers who have a long wish list of home features will rarely be satisfied by the houses they see. This is an opportunity to have a heart-to-heart with your client about whether their desires are plausible for the area and price range they are searching in, says Michael Shaffer, broker-associate at LIV Sotheby's International Realty in Greenwood Village, Colo. Have your buyers narrow their wish list down to their top must-have features, and encourage them to look at only those homes that fit the criteria.
- Look at homes that have lingered on the market. Homeowners who haven't been able to sell quickly enough are often the most motivated to negotiate a deal. Help your buyers understand the leverage they have when making an offer on a home that has been on the market for a long time. But remember that "a long time" means something different in various areas. "In some markets, that may be a week or two," Shaffer says. "In others, it could be a year or more."
- Don't make lowball offers. Tell your clients a strong offer doesn't have to meet the full list price — but it may mean vowing to make a larger down payment, offering up more earnest money, or accepting an early closing date. Sellers who have a sense of commitment from your buyer may be more likely to accept their offer, particularly as the end of the year nears.
- Waive contingencies — maybe. Contingency clauses are notorious for sparking delays, but your buyers should weigh whether to give them up. Some contingencies may be worth fighting for. Be certain your clients won't suffer from buyer's remorse or land in financial trouble if they waive contingencies.
- Put paperwork in order. Encourage your buyers to have at least three months of bank statements, pay stubs, and letters of explanation for any unusual expenses or financial gifts being applied toward a down payment. Even with a pre-approval, buyers will still need paperwork to finalize the transaction, and having it ready up front could save time. "In most cases, things get held up because paperwork and information isn't readily available," says Raena Casteel of the Casteel Little Real Estate Group in Tucson, Ariz.
Home buyers in a hurry to move into their new house may be discouraged to know that the average time to close on a property is 50 days, according to Ellie Mae. But you can help your clients shorten the timeframe by encouraging a more focused home search and being proactive about paperwork, among other things. An organized buying process is particularly important for relocation clients and customers who are simultaneously selling, both of whom typically are working against tight moving deadlines. Share these tips with buyers to help them get a transaction completed in a shorter amount of time.
The legislative session for 2016 has come to a close, and many new laws were passed which will directly impact California landlords. Below are the new laws for 2017 along with other significant trends which will affect California landlords.
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:
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.
(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:
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.
1. Question: I understand a security deposit refund must be postmarked within 21 days of my former tenant vacating the premises. Is that correct?
Answer: Yes, the security deposit must be mailed within 21 calendar days after the tenant vacates the unit.
2. Question: I have a maintenance worker who was terminated and was given seven days to vacate his apartment. He has not left, and I would like to know if I need to send him through the eviction process or if there is anything else I can do to get him out.
Answer: You need to send him through the eviction process. If he was purely an employee, you may be able to immediately file the unlawful detainer action.
3. Question: Is it illegal for an owner to charge for his own labor (as long as it is the going rate for that type of work) and deduct that amount from the tenant’s security deposit?
Answer: No, it is not illegal to deduct for your own labor from the tenant’s security deposit. You can charge a reasonable hourly rate and you must state the time and rate in your security deposit disposition statement.
4. Question: I have a tenant that I strongly believe is selling and using drugs. What actions can I take without having any evidence?
Answer: In order to use the illegal drug activity as a basis for eviction, you have to prove that the drug activity is going on; otherwise if you are on a month-to-month tenancy, you can serve a 30 or 60-day notice without cause unless you are in a rent controlled area. You should also call the police.
5. Question: Our tenants have just informed us via telephone that their rent check will bounce, they don’t plan to cover it, and they intend to vacate the premises by the end of this month. They want us to use the majority of their security deposit as last month’s rent. If we don’t give a 3-day notice to pay or quit and proceed with an eviction, are we leaving ourselves more vulnerable?
Answer: If you do not proceed with a 3-day notice followed up by an eviction, you could find that the tenants decide to change their minds and not move out after all, prolonging their time in possession without paying rent. The extra “motivation” is often worthwhile.
6. Question: I served a 60-day notice of termination because I am going to sell my home. Since then, one of the two residents moved out and is asking for his half of the security deposit. Am I responsible to pay the security deposit before the second person moves out?
Answer: The security deposit is normally not returned until the owner recovers possession. The tenant who vacates should work that out with the tenant who remains. It is not the responsibility of the landlord to account for the deposit until he or she recovers possession.
7. Question: We served a 3-day notice to pay rent or quit. What is the latest date we could start an unlawful detainer without our 3-day notice “becoming stale” and having to be re-served?
Answer: It depends on the facts of any given case, but the longer you wait, the more of an argument you are giving the tenant. I would, in general, not wait more than one week.
8. Question: There is a very loud tenant in the apartment building across the alley from our rental. I have asked them to quiet down on numerous occasions and have even called the police. They keep playing their music late at night and into the wee hours of the morning. What else can we do?
Answer: You should continue to contact the police when unreasonable disturbances occur and consider contacting the owner of the property to inform him or her of the situation. The owner may not be aware of the problem and may be in a position to take legal steps to remedy the situation if the loud tenant does not quiet down.
9. Question: After a lease expires and it is month-to-month, how much notice must a tenant give me in order to legally terminate the lease? He says one week. Is this true?
Answer: In California, 30 days or 60 days written notice is required to terminate a month-to- month tenancy and can be served by either party at any time during the tenancy. If all of the tenants have been in possession for one year or longer, you must serve a 60-day notice. Keep in mind the tenant can also serve a 30-day notice notwithstanding how long they have resided in the premises.
10. Question: Someone told me that if a resident is committing a crime on the premises they can be evicted in 3 days. I have never heard of this law and I rent to someone I suspect is dealing in drugs. Can you tell me more about it?
Answer: California law does allow an owner or manager of rental property to serve a 3-day notice to quit the premises based upon the commission of an illegal act on the property. The illegal conduct must, however, relate to the rented property. If your tenant was dealing with or possessed illegal drugs on the premises, you could serve the 3-day notice. If the tenant failed to quit, an unlawful detainer action could be filed in court to recover possession.
11. Question: One of our tenant's guests broke a window of the recreation room by throwing a ball through it. The host tenant claims he should not be responsible because the damage occurred outside the apartment and while they were playing catch in the common area. My tenant also refuses to give me the name or any information about his guest who caused the damage. What can I do?
Answer: In California, tenants are liable for the negligence of their guests while on the premises. The premises not only include the actual rented unit, but the common area as well. Therefore the tenant and the tenant's guest are jointly liable for the damage to the window.
12. Question: I have a tenant who is on a long term lease. Recently, however, the tenant brought in a roommate and has been out of town for over 30 days. I am concerned that the roommate intends on staying and that my original tenant may have moved out for good. What are my legal options?
Answer: If you have a clause in your lease which prohibits the assignment or sublet of your lease agreement, you do not have to consent to the roommate. You could ask the roommate to fill out an application to rent and thereby identify who the roommate is. Once identified, you could choose to either allow the roommate to live there if he meets your qualifications, and sign the lease or start eviction procedures based upon the breach of the assignment and sublet clause of your lease.
13. Question: I want to rent out our condominium (we are buying a new house) and I need to know how much I can charge for a security deposit. Can I also charge a cleaning, pet and key deposit?
Answer: California law limits the amount of a residential security deposit to twice the amount of the monthly rent if unfurnished, or three times the amount of the monthly rent if the property is furnished. The legislature recognizes all deposits as a security notwithstanding how the parties are identifying it. All deposits, taken together, cannot exceed these limits.
14. Question: The lease for one of my tenants expires at the end of this month. He told me to take the month's rent out of his security deposit because he would leave the apartment clean and in good repair. He told me since it is his deposit, he has the right to deduct rent out of the deposit. What should I do?
Answer: California law requires the owner or manager to account for the use of the deposit no later than 21 calendar days after the tenant vacates the unit. The law also provides that the deposit shall not be used without the owner's permission until after the tenant vacates. Since the tenant has failed to pay rent, a 3-day notice to pay rent or quit may be served. If the tenant fails to comply, an eviction may commence to produce a judgment for possession and monetary losses.
fter Christmas, many people put the empty boxes their expensive gifts came in out on the curb. What do you think that says to potential burglars? It screams, “I just got a brand-new TV! Come and rob me!”
That’s just one example of some unwise habits homeowners have. If those owners are sellers opening their doors to the public for showings, habits such as these put them in even greater danger. The above example is a good warning to give to your clients now, since we’re in the holiday season. But use it as a jumping-off point to have a deeper conversation about safety — and to show that your safety knowledge is an asset to sellers.
Consider using this checklist (you can request it as a customer handout on my website) during listing appointments to better prepare prospective sellers and show your value as a real estate professional. We spend a lot of time telling sellers how we’ll market their home, and while that is obviously important, we rarely address their true concern: how to keep their home safe while it’s open to the public. Touch on these 10 anti-burglary tips so your clients will know that you have their best interest at heart.
National Snapshot of Burglaries
A burglary is committed every 20 seconds, with nearly 1.6 million such crimes nationwide annually, according to the FBI’s 2015 Crime in the United Statesreport. That’s down 7.8 percent from 2014. Total property crime, which includes arson, larceny theft, and motor vehicle theft, reached nearly 8 million instances in 2015, down 2.6 percent from 2014.