Legal Corner Q & A
by Various Authors
Q. In my one-year lease, it states that the rent is due on the first of the month, with a five-day grace period. When the tenancy becomes month to month, is the five-day grace period automatically canceled? If not, how can I cancel it?
A. If the rent is paid monthly and the tenant remains in possession after the first year, then the terms of the rental agreement are renewed on a month-to-month basis, including the provision concerning the grace period. You may delete the grace period from the rental agreement, and/or change any of the other provisions of the lease, by giving the tenant a written 30 Days’ Notice of Changes of Terms of Tenancy. There is one exception—if you intend to raise the rent by more than 10%, you must give 60 days’ advance notice.
You may deliver the notice personally to the tenant, or send it by regular or express mail. If you send it through regular mail, then the 30-day period is extended by 5 days. If you send it using express mail, then the 30-day period is extended by only 2 days. To serve the notice personally, it is best to hand the notice to the tenant or another adult in the tenant’s household. Slipping the notice under the door or dropping it in the tenant’s mailbox are not valid methods to serve such a notice, and may be challenged legally. However, tenants often accept such service without complaint.
There may be no reason to change the grace period. Usually, what people refer to as a grace period is actually the period between the rent due date, often the first of the month, and the date when a late charge would be imposed, often the sixth day of the month. Even though a late charge is not imposed until the end of the grace period, you may still legally demand that the tenant pay the rent on or before the due date, and you could serve a 3-Day Notice to Pay Rent or Quit if you do not receive it on time. It might be appropriate to serve a 3-day notice immediately after the due date if the tenant habitually pays the rent late. Otherwise, I would recommend waiting for at least five days in order to mitigate any claim that you were attempting to evict the tenant in bad faith. On the other hand, some owners and/or managers expect to receive all of the rent payments on or before the due date, and eliminating the so-called grace period would be one way to emphasize this.
Lastly, keep in mind that if the landlord unilaterally changes the terms of the rental agreement by 30-day notice, without the tenant’s consent, then the changed provision may not be enforceable with a 3-day notice if the tenancy is subject to the San Francisco Rent Ordinance. The only material exceptions are rent increases and reductions in services such as parking, storage or access to common areas with corresponding reductions in rent.
—Michael C. Hall
Q. A tenant has not paid for two months. She was sent a three-day notice and an unlawful detainer and responded with a request for a jury trial. What could she argue about nonpayment?
A. There are a few arguments commonly raised by tenants in defense to Three-Day Notices to Pay Rent or Quit. Chief among these is the defense of breach of the implied warranty of habitability. In 1973, the California Supreme Court held that all residential rental agreements include an implied warranty of habitability, and that a landlord cannot demand the full amount of rent if the unit contains any defective conditions that constitute a breach of this implied warranty.
Exactly what constitutes a breach of the implied warranty of habitability is a common subject of debate between landlord and tenant attorneys. The state Supreme Court did not articulate a definitive list, but essentially stated that major items, such as lack of heat and lack of security would qualify, but peeling paint, faulty blinds and water leaks are examples of conditions that do not rise to the level of breach by the landlord. Today, tenants who do not pay their rent often raise this defense regardless of the condition of the unit, and will point to any minor imperfection in the unit as an excuse for their failure to pay rent.
It should also be noted that the law is divided on whether defective conditions created by the tenants themselves, or of which the landlord has not previously been notified, can be raised as a defense to a three-day notice.
Another basis for a tenant challenge is the amount of rent demanded in the three-day notice. The amount must not exceed the rent to which the landlord is entitled for the period in question. So, if the rent was improperly raised sometime in the past, which is fairly common in San Francisco, the current base rent is illegal; if the three-day notice demands rent at the current level, it is invalid. This can be a particularly tricky situation for a landlord who inherits a tenant with an unclear history of rent increases by the prior landlord.
A tenant can also challenge the form of the three-day notice even if the rent demanded is correct. There are number of format requirements for three-day notices, both under state law and under the San Francisco Rent Ordinance. If the notice does not comply with all format requirements, it will likely be held invalid by the court.
Finally, a tenant can argue that he/she either tendered the rent demanded in the notice or that the landlord accepted rent after the expiration of the three-day notice. Both scenarios would provide a defense to an eviction action based on the three-day notice.
—Fredrik Emilson
Q. I tried to evict one of two roommates for being a danger to the property and other residents, and succeeded in getting him into assisted living. Now his roommate, who stayed in the apartment, has sued me for wrongful eviction. Does he have a case?
A. Given the facts as stated, your tenant probably has no case. A “wrongful eviction” is defined in Section 1.20 of the Rules and Regulations of the San Francisco Rent Board as “the serving of a notice to quit a rental unit, the making of a demand for possession of a rental unit or the prosecution of an unlawful detainer action in violation of the ordinance.” Evictions of residential tenants in San Francisco are governed by Section 37.9 of the San Francisco Rent Ordinance. Section 37.9(a) lists only 14 just-cause reasons under which a landlord may recover possession of a residential unit. If a landlord intends to recover possession for a reason that is not listed in this section, it may be deemed unlawful and violate the ordinance.
One of the 14 just-cause reasons for evicting a tenant is when the “tenant is committing or permitting to exist a nuisance in, or is causing substantial damage to, the rental unit, or is creating a substantial interference with the comfort, safety or enjoyment of the landlord or tenants in the building” (Section 37.9(a)(3)). The nature of the nuisance, damage or interference must have been specifically stated in the written termination notice.
Here, it appears there was just cause for evicting the problem tenant. The remaining roommate was not evicted, nor was there an attempt to evict that tenant. Furthermore, the remaining tenant has not suffered any damages. He likely does not have a strong case for a wrongful eviction.
One caveat: Sections 37.9(a)(2)(A) and 37.9(a)(2)(B) restrict when a landlord can evict a tenant for improper subletting—allowing an unauthorized (new) roommate to move into a unit. In your case, if the remaining tenant made a written request to the landlord that the evicted roommate be replaced with a new roommate, provided certain criteria are met, the landlord may not unreasonably prohibit the new roommate from moving in. If this is the basis for the remaining tenant’s wrongful eviction claim, further factual and legal analysis is required.
—Stephen K. Lightfoot II
Q. How can I issue a new lease to current tenants? I would like all my tenants to have an updated lease contract.
A. You may have a problem. Of course, the best time to have a tenant sign a lease (preferably the updated PPMA Residential Tenancy Agreement that complies with all laws and provides the maximum protection for the owner) is at the beginning of the tenancy. If the term of the original written lease has already expired, most tenant attorneys and organizations will tell existing tenants not to sign any new leases. Often, the original lease is old, short and does not contain many important owner protections. You are free to ask. If the existing tenant is willing to sign a new lease, great. It’s worth a try.
It may be possible to incentivize signing a new lease (not otherwise in violation of the law). For example, a parking spot opens up and the tenant wants it. The tenant can have the parking spot at market rent, conditioned upon signing the new rental agreement.
If the tenant’s original lease term has expired, the owner can unilaterally add as a new term of the month-to-month tenancy a requirement that the tenant must sign a new lease upon the landlord’s request. Under California law, an owner can change the terms of a month-to-month tenancy by service of a proper 30-day notice (except where it is a rent increase of more than 10%, in which case it is a 60-day notice). However, in San Francisco, Rent Ordinance Regulation 12.20 provides that an owner may not be able to evict a tenant for breach of the rental agreement where the owner has “unilaterally imposed” terms of tenancy. The exceptions (situations where you can enforce it by eviction if the tenant breaches) are if the new term is required by law or to protect the health, safety and quiet enjoyment of other occupants or neighbors, and also where the unilateral change in terms is not “material.” An example of a permissible unilaterally imposed term of the tenancy would be to ban smoking in the unit and common areas, since that relates to the health and safety of other occupants.
There are some attorneys who take the position that 12.20 is not enforceable, since it was not authorized in the Rent Ordinance or is pre-empted by state law, but it has not been invalidated by any appellate court. It should be possible, under state law, to enforce the new unilaterally imposed term through other remedies, such as damages. Also, it may be valuable to have the new lease term in place, even if you may not be able to enforce it through an eviction.
—Lawrence M. Scancarelli & Jerod Hendrickson
The opinions expressed in this article are those of the authors and do not necessarily reflect the viewpoint of SFAA or SF Apartment Magazine. The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Michael C. Hall can be reached at 415-512-9865. Fredrik Emilson is a principal with Cornerstone Law Group and can be reached at 415-357-2099. Stephen K. Lightfoot II can be reached at 415-593-5808. Lawrence M. Scancarelli and Jerod Hendrickson can be reached at 415-398-1644. Copyright © 2006 by SF Apartment Magazine. All rights reserved.