the other side

By J. Wallace Oman

Editor’s Note: This is the second part in a three-part series on the SFAA Form Lease. The first part was printed in the November 2007 issue of this magazine, and the third part will be printed in the April 2008 issue.

In this article, I will continue my description of particular lease provisions (the “top 20”) that I find the most odious, in decreasing order of negativity. This column will discuss provisions 5 through 11.

#5: No Waiver by Custom or Practice
(¶ 39, “No Waiver”)
Besides the usual landlord lease “no waiver” clause, this lease declares that no custom or practice that may have developed between the parties will be construed to waive or lessen a contrary provision in the lease or be allowed to support a tenant defense of estoppel by detrimental reliance. However, it is a long-settled principle of contract law that a written contract can be modified orally by the parties, where the parties’ acceptance of the oral terms is shown by their performance of those terms. If a landlord orally agrees to a change in a written lease term and afterward accepts rent, that is a strong argument that the landlord has accepted the oral modification of the lease.

Landlords and tenants frequently develop patterns and practices through mutual accommodation over the years of a long tenancy; these accommodations are evolutions of the strict lease provisions created at the beginning of a tenancy. This lease provision states that the landlord, or, more likely, a successor landlord, can abruptly ignore those accommodations and demand that the tenant perform according to the long-ago lease provisions. The issue here is whether a landlord can declare at the start of a tenancy that none of the landlord’s future arrangements with the tenant for practices contrary to the lease provisions—arrangements that legally would constitute executed oral lease modifications or waivers of tenant breaches—are enforceable. I think, depending on the facts, that the answer is no, except for one narrow situation regarding subletting. (Civil Code § 1954.53(d)(4), part of the Costa-Hawkins Rental Housing Act, states that “Acceptance of rent by the owner does not operate as a waiver or otherwise prevent enforcement of a covenant prohibiting sublease or assignment or as a waiver of an owner’s rights to establish the initial rental rate, unless the owner has received written notice from the tenant that is party to the agreement and thereafter accepted rent.” However, this Costa-Hawkins nonwaiver provision is inapplicable under Civil Code § 1954.53(d)(f) if the unit has longstanding serious health, safety, fire or building code violations.

#6: Provisions Deeming Tenant No Longer Permanently Resides in Unit
(¶ 14(A)-(B), “No Assignment or Subletting” and “Consent to Assignment or Subletting Required”)
Tenant advocates understand that nothing angers landlords more than learning that a tenant has usurped their role and their profits by subletting the unit for higher rent to a subtenant and living elsewhere. Another battlefield concerns “revolving tenancies,” by which original tenants bring new tenants into the unit, often surreptitiously, to try to prevent landlords from raising rent-controlled units to market-rate rents when the original tenants leave the unit, also often surreptitiously. As a matter of public policy, the San Francisco Rent Board has declared by its Regulation 1.21 that the rent control provisions no longer apply if a tenant no longer lives in the unit as the tenant’s principal place of residence. This is a fact-based determination, and landlords who file “Lack of Principal Residence” 1.21 Petitions or “Lack of Original Occupant” Costa-Hawkins Act Petitions (per Civil Code § 1954.53) at the Rent Board frequently lose them, despite spending hundreds of dollars on private investigators and lawyers.

This lease provision erroneously seeks to deal summarily with that problem by having the tenant agree in the lease that the tenant “no longer permanently resides” in the unit if, among other criteria, the tenant occupies the unit for less than 30 days in any six-month period, owns residential property within California, is employed or has a place of business more than 75 miles from San Francisco, has a spouse or domestic partner who resides or has a principal place of residency elsewhere, or has acquired another residence elsewhere. However, Rent Ordinance § 37.9(e) declares that any waiver by a tenant of rights under the Rent Ordinance shall be void as contrary to public policy; and Rent Board Regulation 1.21 recognizes many bona fide reasons for a tenant to be temporarily away from his/her rental dwelling, so this entire provision is probably void. Other laws also protect the rights of people who must travel for such things as military service, employment, or even the emergency medical care of qualified family members. Landlords would not fare well if they used this adhesionary “deemed-no-longer-a-permanent-resident” provision to try to oust a tenant in contravention of such strong public policies protecting people who must travel.

#7: Owner Disclaimer of Responsibility to Control Nuisances by Other Tenants
(¶ 42, “House Rules, Noise and Behavior”)
House Rule 3 declares that the landlord is not in a position to be an arbiter of disputes between a tenant and other residents or neighbors, so that “under no circumstance will Owner be required to take any sort of action whatsoever as between Tenant and other resident to resolve disputes, nor shall Owner be required to evict or threaten to evict, any resident because of a dispute upon demand by Tenant, and Owner’s failure to do so shall not give rise to a claim against Owner for breach of Tenant’s quiet enjoyment or any other cause.” But Civil Code § 1953(a)(2) makes void as against public policy any lease provision that abridges a tenant’s “right to assert a cause of action against the lessor [landlord] which may arise in the future.” And landlords have affirmative nondelegable duties to act toward their tenants as reasonable persons under all of the circumstances. In addition, in every lease there is an implied covenant of quiet enjoyment, so that, if a landlord has a tenant causing a nuisance, the landlord has a duty to the other tenants in the building (and also, by the way, to neighboring property owners) to abate that nuisance. As shown by the recent dangerous dog cases, a landlord cannot shield himself/herself from liability with this adhesionary lease provision.

#8: Unilateral Changes of Lease by Owner
(¶ 48, “Entire Agreement”)
Part of this paragraph states that, “Owner may change the terms of the tenancy and this Agreement pursuant to Civil Code Section 827.” That is correct as far as it goes; but it should have gone a lot farther to avoid being deceptive. The same problem applies to the House Rules preamble, which states, “Owner reserves the right to make changes or adopt additional rules.” For starters, any change to the lease, including its House Rules, must not violate the Rent Ordinance, which regulates rents for most units in San Francisco and prohibits the removal of specified housing services without both just cause and decreased rent. Also, many unilateral changes to the lease are effectively prohibited by Rent Board Reg. 12.20, which authorizes tenants to ignore, without fear of eviction, many if not most lease changes unilaterally imposed by the landlord.

#9: Security Deposit Deductions and Replenishment
(¶ 5, “Security Deposit”)
Among other provisions of this large paragraph, there is a provision purporting to give the landlord the power to deduct from the security deposit before the end of the tenancy and then to force the tenant to replenish the deposit within five days after demand to replenish. Another provision allows the landlord to “increase the security deposit up to the maximum allowed by law [typically, twice the starting monthly rent] at any time with notice.” Again the lease ignores the prohibitions of Civil Code § 1953(a)(1), which prohibits any tenant waiver or modification of rights under Civil Code § 1950.5 (the statute regarding residential tenancy security deposits) and makes them void as contrary to public policy. Although the recent rise in interest rates has made many landlords unhappy about the increased interest they must pay to their tenants, and perhaps decreased the landlords’ desire to try to use or enforce this replenishment and increase provision, this provision still should not even be in the lease. I know of no express law that permits a landlord to make a deduction from the security deposit prior to the end of the tenancy or to require subsequent replenishment after that premature deduction. One even-minded landlord attorney I know believes that Civil Code § 1950.5(b) permits a landlord to make deductions from a security deposit, with notice to the tenant, prior to the end of the tenancy, but he believes that the landlord cannot compel the tenant to replenish the security deposit.

#10: Hold Harmless for Failure to Deliver Possession
(¶ 3, “Physical Possession”)
By this provision, if the landlord is not able to deliver possession, the lease is not void or voidable and the landlord isn’t liable for the tenant’s damages (but the tenant doesn’t owe any rent until possession is delivered). This unconscionable provision would keep the tenant hostage to the lease and hanging in suspense, unable to rent another dwelling. Under Civil Code § 1953(a)(2), the provision is void as contrary to public policy because it seeks to waive the tenant’s right to assert a cause of action against the landlord that may arise in the future, in this case to seek specific performance or rescission. Most other leases in the industry give either party the right to rescind after 30 days in this situation. This lease provision is a trap for landlords; it is likely to embroil them in otherwise avoidable litigation.

#11: Exceptions to Landlord’s Duty to Maintain Habitable and Tenantable Rental Unit
(¶ 22, “Maintenance and Repairs”)
There are several problem provisions in this long paragraph. First, the lease states that the tenant is responsible for the cost of repair of all damages to the premises caused by the tenant or the tenant’s guests. But the lease fails to make explicit (although it alludes in the previous sentence) that some “damages” can be caused by normal wear and tear. For example, it is fair to charge a tenant for damage to an appliance caused by improper use, but it is not fair to charge the tenant for an appliance that wears out and breaks from old age. Therefore, this portion is void under Civil Code §§ 1950.5 and 1953(a)(1). This lease language will inevitably cause landlords to try to blame tenants and collect reimbursement from tenants for certain kinds of nonchargeable damage, and will cause, rather than prevent, otherwise avoidable litigation.

Second, the lease tries to require the tenant to make maintenance and repair requests in writing unless it is an emergency. Normally, that is a good practice and I would advise all my clients to do that, but the lease cannot use that requirement to help landlords escape their duty to make repairs if they have actual or constructive notice of the need for repairs (such as a landlord’s constructive notice of defects in common areas). Under Civil Code § 1942.1, “Any agreement by a lessee [tenant] of a dwelling waiving or modifying his rights under Section 1941 [imposing duties on a landlord to maintain tenantability] or 1942 [permitting a tenant to “repair and deduct” the cost of repairs from the rent, within specified limits, after giving the landlord written or oral notice of defective conditions rendering the rental unit untenantable] shall be void as contrary to public policy....” (Emphasis added.) And the California Supreme Court in Green v. Superior Court held that generally the implied warranty of habitability cannot be waived.

Third, the lease asserts that the tenant’s written repair request “shall also be deemed permission to enter the Premises to perform such maintenance or repairs in accordance with Civil Code Section 1954.” I often see landlords claiming that a repair request by a tenant gives them the right to enter at any time they choose, but Civil Code § 1954 imposes specific requirements pertaining to notice, time, place, and manner on a landlord who wishes to enter a tenant’s unit. This lease language invites inadvertent or deliberate misinterpretation by landlords and engenders inevitable and predictable conflict between tenants and landlords. Under Civil Code §§ 1954 and 1953(a)(1), the provision is void to the extent it abridges the tenant’s legal rights.

Finally, the lease states that, “As an ‘agreed service’ Owner may periodically inspect the Premises for defects and habitability issues.” Similar language is included in Lease § 26 (“Entry and Inspection”). For normal landlord-tenant relationships, this is good practice and undoubtedly will not receive any tenant objections, so long as the notice, time, place, and manner requirements of Civil Code § 1954 are met. But for those numerous cases where landlords are looking for a way to evict a tenant, they will use this provision to try to inspect the unit to find a just cause ground for eviction. The drafters of the lease should seriously consider whether this provision is illegal and void under Civil Code § 1953(a)(1) and that abuse of entry rights by landlords will subject them to litigation. A general inspection is not currently one of the legal reasons for entry. It is understandable that landlord attorneys want to practice defensive law when they draft this lease, but they should not include provisions that expose landlords to greater risk of becoming targets of tenant litigation.

Editor’s Note: Part 3 will discuss the remainder of the 20 SFAA Lease provisions selected for this series.

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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. J. Wallace Oman is a San Francisco attorney specializing in tenant representation. Before that, for almost 20 years he was a staff attorney with the local, federally funded legal services program. He is a co‑author of California Eviction Defense Manual, Second Edition (CEB California Continuing Education of the Bar 2007). He can be reached at walloman@aol.com. Copyright © 2008 by J. Wallace Oman and SF Apartment Magazine. All rights reserved.