LEGAL Q&A
A Fencing Lesson
by Various Authors
Q. I have a tenant who wishes to sublet while he travels. Could the subtenant refuse to give up occupancy upon his return?
A. The short response to this question is yes. However, whether or not the subtenant is justified in refusing to give up occupancy is a different question. To resolve this issue, we must first turn to the lease. In California, a lease may absolutely prohibit subletting, or it may condition the right to sublet by a tenant only upon receipt of the landlord’s prior written approval. If the landlord’s consent must be obtained, then such consent may not be withheld unreasonably. If the lease is silent on the issue of subletting, then the tenant has an implied right to sublease the unit. As a precaution in a rent control jurisdiction, landlord attorneys will advise their clients to prohibit subletting in their leases to avoid issues such as the subtenant refusing to give up possession at the end of the sublease term. This is a viable choice. However, the landlord should keep in mind that a tenant may conclude that he cannot afford to pay for rent if the sublease request is denied. As a result, the tenant may choose to either terminate the lease or stop paying rent, which will require the landlord to incur costs in replacing or evicting the tenant. In the current economic climate, landlords may choose to grant the sublease as a way to avoid disruption of their revenue stream.
If the landlord decides to allow the tenant to sublease, then there are steps that can be taken to minimize the risk of the subtenant refusing to give up possession at the end of the sublease. First, regardless of whether or not the unit is covered by rent control, the landlord should demand that the prospective subtenant fill out an application, and provide a credit report and references. These steps enable the landlord to make an evaluation of the prospective subtenant. Also, by asking for this information, if the landlord denies the request to sublease to the prospective subtenant, then the landlord has substantive criteria that can be used as the basis for the denial, such as poor credit history. This one step will serve to enable a jury or judge to conclude that the denial of the requested sublease was reasonable, if challenged. Once the decision to accept the applicant as a subtenant is made, then the landlord should require, as a condition of approving the request, that the tenant and the subtenant enter into a written sublease that obligates the subtenant to perform all of the duties of the tenant during the term of the sublease and quit the premises at the end of that term.
If the unit is not covered by rent control, then as a condition of the sublease, the landlord can demand the following: that the term of the sublease is specified in the written sublease; that as a condition of the sublease the tenant has the right to resume possession of the unit at the end of the sublease term; that if the subtenant fails to surrender possession of the unit at the end of the sublease, then as a result, the subtenant agrees to an increase in the rent to market rate; and that the subtenant agrees to bear costs and attorney’s fees incurred if measures have to be undertaken to recover possession of the unit.
If the unit falls under the purview of the San Francisco Rent Control Ordinance, then some modifications to the plan advanced above are needed. If the subtenant refuses to surrender possession at the end of the sublease term, then the sublease may not contain an increase in the rent to market rate. Otherwise the landlord and/or the tenant, who becomes the sublessor, become liable for violating the prohibition against raising rent beyond the rent control guidelines. However, there is an exception. Under the Costa Hawkins Rental Housing Act, in a rent controlled jurisdiction, if the tenant does not intend to resume possession of the unit at the end of the sublease term, then a rent increase to market rate may be imposed on the subtenant at the end of the sublease term if the subtenant elects to remain in possession of the unit.
By following these steps and precautions, landlords can maintain the integrity of the revenue stream their rental properties provide and lessen the risk of litigation costs associated with an unlawful detainer against a subtenant.
—Ronnie Gipson
Q. Who is responsible for fixing a broken-down fence between two properties when neither property owner knows who built the fence?
A. There is nothing truer than the adage “Good fences make good neighbors”—until it comes time to replace the fence. Many a dispute begins when a fence starts to fail, and one neighbor questions or ignores her responsibility for the fence’s repair.
First, the owners should establish on whose property the fence is located. The San Francisco Planning Department can provide descriptions of property dimensions, which can help establish property boundaries.
Another option is to hire a professional surveyor to survey the property and establish each owner’s property boundary; however, the cost of a professional survey may often exceed the cost to repair or replace a simple fence.
Generally speaking, if it is established (through a survey or other means) that the fence is clearly on one property, then that particular property owner owns the fence and is responsible for its upkeep and maintenance. That said, there is no legal requirement to have a fence and so if that owner chooses to take down his fence instead of repairing it, he is not obligated to replace it. Alternatively, the adjoining neighbor is free to build a fence within her own property lines should she desire.
However, a more common scenario is that a fence will be a “boundary fence,” a fence built on the boundary line adjoining the two properties. In this situation, both property owners actually share ownership of the fence and thus are each responsible for its upkeep and maintenance. This principle is codified in California Civil Code Section 841, which states that “coterminous owners are mutually bound equally to maintain… the fences between them.”
As such, if it is determined that the fence in this situation is in fact a boundary fence, then both owners are required to pay for its repair or replacement. Sometimes both property owners are amenable and cooperative about the need to repair a boundary fence, including the style of replacement, the cost, which contractor to use, etc. Other times, one property owner may have the idea of a cedar wood fence with lattice trim while the other neighbor perhaps just wants a simple chain link fence. Who gets to decide the outcome?
These types of minor fence disputes should not elevate to litigation. There are many free and low-cost mediation services that can help resolve these types of disputes, such as Community Boards or mediation through the San Francisco Bar Association. Using an impartial third party to evaluate the situation is less costly than going to court, and usually will result in a compromise that is agreeable to both sides.
—Marina Franco
Q. I have a three-unit building, but one tenant is using about two-thirds of the storage space. The lease was signed two owners ago and does not say anything about his use of the space. What should I do?
A. A new owner is bound by the terms of tenancy existing at the time of purchase. If a tenant was permitted to use storage space, whether by a written, oral or implied agreement, then the new owner inherits this agreement.
Where the terms of such a storage agreement are unclear, then the new owner should first check to see if the tenant completed a disclosure or estoppel form identifying the terms of the storage agreement. Tenants are often times requested to complete disclosure or estoppel forms when a property is listed for sale.
Further information may also be obtained by: researching Rent Board records to see if a petition was ever filed concerning this issue; contacting the prior owner(s), if possible, to get their understanding of any storage agreement; and/or contacting the other tenants in the building to see if they have any information.
If the new owner discovers that some or all of the use of the storage space was not part of the rental agreement and/or that no additional rent was ever paid for the use, then the new owner may have the tenant remove or reduce the use.
If, on the other hand, the new owner is unable to discover any helpful information, then the landlord should be cautious about removing or reducing the tenant’s use of the storage space. A tenant’s use of storage space may be a housing service supplied in connection with a rental unit. As such, it cannot be severed (or reduced) by a landlord without just cause under the San Francisco Rent Ordinance. If the new owner terminates or reduces the tenant’s use of the storage space without just cause, then the new owner may have violated the Rent Ordinance.
—Steve Williams
Q. I have a good tenant who has lived in my building for about five years. Her carpet is a little worn, and I was about to replace it when she asked if I would upgrade her flooring from carpeting to hardwoods. Am I obligated to make this change? Also, if I do this for her, do I have to do it for my five other tenants if they ask?
A. The quick answers to this are no and no. Your obligation is simply to maintain the unit in a habitable condition and to refrain from reducing housing services unless you are willing to grant a rent reduction to compensate for the reduced service.
Every rental agreement has an implied covenant of habitability. No matter what the rent, or how good (or bad) the tenant, the landlord must maintain the premises in a habitable state. Habitability includes conditions that affect health, safety or essential comforts. Examples are found in California Civil Code section 1941.1, which requires adequate weather protection and water proofing; hot and cold running water; plumbing; gas, heating and electrical systems that were up to code at the time of the installation and are maintained in good working order; clean and sanitary premises; adequate trash facilities; and floors, stairways and railings maintained in good order.
Carpeting that is “a little worn” is not a habitability problem, no matter how aggravating the tenant may find it; carpeting that is so moldy or ragged as to present a health or safety risk might be. You are not legally obligated to replace carpeting that does not pose habitability issues. On the other hand, the Rent Board does recognize the provision of accouterments such as carpeting as a housing service, and failure to maintain it in relatively good condition, can, if there is substantial deterioration, result in a finding that the tenant is entitled to a rent reduction. Therefore, it is recommended that significantly worn carpet be replaced with new carpet of the same quality. Nothing, however, requires the landlord to substitute hardwood floors for carpet. As we know, a consequence of replacing carpet with hardwood floors may be noise complaints from downstairs tenants. You are perfectly free to reject the request.
If you do decide to put in hardwood floors, you need not do the same for another tenant. Each rental agreement is a separate contract between the landlord and the individual tenant, and the landlord is free to modify one rental agreement without modifying others. Just don’t deny the benefit only to persons belonging to classes suggesting unlawful discrimination—race, nationality, age, gender, sexual orientation and the like—all of which we are well aware. However, absent that type of discrimination, if you like Sally, and don’t like Jane, you can make this improvement for Sally and not for Jane—at least until the next ordinance amendment is introduced by some grandstanding supervisor.
—Saul M. Ferster
The opinions expressed in this article are those of the author, and do not necessarily reflect the viewpoint of the SFAA or the SF Apartment Magazine. The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Ronnie Gipson represents landlords in complex litigation matters and class actions against habitability claims, violations of the San Francisco Rent Control Ordinance and violations of applicable state law. He can be contacted at 510-444-6800. Marina Franco is with Wasserman-Stern and can be contacted at 415-567-9600. Steve Williams is with Wiegel & Fried, LLP and can be contacted at 415-552-8230. Saul M. Ferster can be contacted at 415-863-2678. Copyright © 2009 by Black Point Press. All rights reserved.