legal corner q&a

By Various Authors

Q. I know that state law says I need to return my tenant’s security deposit within 21 days of vacancy. But it looks as though I will still be making repairs to the unit and won’t know the cost of those repairs until the time is up. What do I do?

A. California Civil Code section 1950.5 provides that no later than 21 calendar days after the tenant has vacated the premises, the landlord must furnish the tenant with an itemized statement indicating the basis for, and amount of, any security received and its disposition, and return any remaining portion.

The landlord must include copies of documents showing charges incurred and deducted to repair or clean the premises, including a reasonable description of work performed by the landlord and/or his employee. The itemized statement must include the time spent and the reasonable hourly rate charged. If the landlord or landlord’s employee didn’t do the work, the landlord must provide a copy of the bill, invoice, or receipt supplied by the party who did. The itemized statement must provide the name, address and telephone number of that person or entity, if not included on the bill. A copy of the bill, invoice or receipt must be provided for any deduction for materials or supplies, and if a particular material or supply item is purchased on an ongoing basis, the landlord may verify the cost by
providing vendor documentation reasonably demonstrating the cost of the item used in the unit.

Section 1950.5(3) gives you the breathing room you need. That section provides that if a repair cannot reasonably be completed within 21 calendar days after the tenant has vacated the premises, or if the documents from a person or entity providing services, materials or supplies are not in the landlord’s possession within 21 calendar days after the tenant has vacated the premises, the landlord may deduct the amount of a good faith estimate of the charges that will be incurred and provide that estimate with the itemized statement.

If the reason for the estimate is that the documents from a person or entity providing services, materials or supplies are not in the landlord’s possession, the itemized statement must include the name, address and telephone number of the person or entity. Within 14 calendar days of completing the repair or receiving the documentation, the landlord must supply the relevant information.

Finally, the landlord need not provide detailed accounting and receipts if the deductions for repairs and cleaning together do not exceed $125, or if the tenant waived the detailed accounting. To be effective, the waiver must be signed by the tenant at the same time or after a notice to terminate a tenancy has been given, or no earlier than 60 calendar days prior to the expiration of a fixed-term lease, and must substantially include the text of Section 1950.5(g)(2), which describes the landlord’s reporting obligation.

- Saul M. Ferster

Q. One of our tenants has been using his apartment for a business purpose, though he claims he isn’t. What should we do to prove that he is, and if we can prove it, what then?

A. First, the landlord should look to the lease agreement and determine whether there is any prohibition about using the apartment for commercial or business use. Assuming the tenant has signed the SFAA lease agreement, the use of the apartment is governed by Paragraph 11 (“Use”).

Paragraph 11 states outright that the apartment is to be used “for residential purposes only and for no other reason . . . No retail or commercial or professional use . . . shall be made unless such use conforms to applicable zoning laws and the prior written consent of the Owner is obtained in advance of such proposed use.”

The question doesn’t indicate specifically for what “business purpose” the tenant has been allegedly using his apartment. Generally speaking, home-office use is considered reasonable and therefore permissible. In the high-tech Bay Area, many jobs like web designers, computer programmers, and similarly themed trades really only require a computer and an internet
connection. Seeking to evict a computer programmer tenant on the grounds that their office is also their home would likely prove unsuccessful.

In fact, one might be surprised at what uses are acceptable under the San Francisco Planning Department’s zoning laws for “RH” (Residential House) or “RM” (Residential Mixed) districts. Residential care facilities, child care centers, and even group housing are uses “permitted as of right” in those zones.

In this particular case, the landlord has a belief that the tenant is using the apartment for some sort of business, the landlord indicated to the tenant her suspicions, but the tenant claims otherwise. Whether the tenant is being honest or not, the landlord is clearly on notice and should take some action in order to prevent the tenant from later claiming that the landlord knew about the business and allowed it to continue, thus waiving her rights to prohibit the commercial use under the lease. This is a constant struggle landlords face: suspicion that there is something going on, but waiting to make sure they have enough information to be successful in an eviction. Wait too long and the tenant might successfully argue that the landlord has waived their right.

The landlord should look for signs of “commercial use” above and beyond mere telecommuting. Are there clients or employees coming into the building? Are there multiple daily deliveries from UPS or Fed Ex? Arguably, this escalates a mere “home office” into a more commercial venture, and thus would be prohibited under the SFAA lease and possibly planning codes.

If the particular tenant isn’t being forthcoming about his use of the apartment, ask other tenants in the building if they have any information about a business being run from the apartment. The landlord may even want to hire a licensed private investigator to do some sleuthing.

Once the landlord has collected the information, she should contact her attorney in order to determine whether there is enough probable cause to serve a “Three Day Notice to Perform Covenants or Quit” based on the tenant’s use of the apartment for his business. This notice would inform the tenant that he must stop his commercial use within three days or, in the alternative, surrender possession of the apartment. If the tenant fails to do either, the landlord would then file an unlawful detainer action in court. The court case would hinge on the landlord proving that the tenant breached the lease by using the apartment for commercial use, and also failed to correct the violation within the three-day period after receiving the notice.

- Marina Franco

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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. Saul M. Ferster can be reached at 415-863-2678. Marina Franco is with Wasserman-Stern and can be reached at 415-567-9600. Copyright © 2008 by SF Apartment Magazine. All rights reserved.