Corporate Check Out
Board of Supervisors President David Chiu recently introduced legislation that would disallow rental housing providers from renting to corporations on a short-term basis, sometimes known as “hotelization.” Chiu said the proposal closes a loophole in city law by prohibiting corporations from signing leases with property owners that are shorter than 30 days. The legislation strengthens the 1981 Apartment Conversion Ordinance, which made it illegal for certain residential properties to be occupied on a lease of less than 30 days in a building of four or more units.
SFAA “opposes” the proposed legislation according to Charley Goss, SFAA’s government and community affairs coordinator. “Business tenants and nonbusiness tenants should be treated in the same manner. No rental housing providers in San Francisco are allowed to rent for less than 30 days and we don’t believe that anyone is violating this law,” he says, adding that the tenant groups who are behind this legislation would not want to see the same regulations apply to tenants who turn their apartments into vacation rentals for extra income.
Contact Supervisor Chiu and your local supervisor and let them know you are opposed to this unfair and unnecessary legislation. Stay tuned to this column for more information and check www.sfaa.org for information on upcoming committee meetings where you can voice your concern.
Digital Deposit Legislation Moves On
Referred to as a “common sense” bill by the Assembly Judiciary Committee, CAA-sponsored AB 1679 (D-Bonilla) has successfully moved unanimously out of the judiciary committee and off the assembly floor. This bill permits a landlord and a tenant to mutually agree to have the landlord return a security deposit through an electronic transfer into the tenant’s bank account and to deliver an itemized security deposit statement by email to the tenant.
Current law is very stringent in its requirement that any remaining security deposit and itemized statement must be provided by the landlord to the tenant personally or by first-class mail, postage prepaid. The requirement to return a security deposit by a physical check was first placed in statute decades ago, long before the advent of modern technology, electronic fund transfer options and email. Today, more tenants are asking that the landlord return any remaining security deposit directly into their bank account.
CAA’s Legislative Steering Committee has met and taken a support position on a number of other quality bills that will have a positive impact on the rental housing industry if signed into law. Here is an overview of those bills.
AB 2521 (D-Blumenfield) provides that the landlord may retain or dispose of a tenant’s property that is left behind after move out if the landlord reasonably believes that the total resale value of the property is less than $700. Current law is $300.
SB 1055 (D-Lieu) would prohibit a landlord from requiring electronic funds transfer (EFT) as the only form of rental payment. The bill allows for other forms of payment, including EFT.
SB 1229 (D-Pavley) prohibits a landlord who allows a tenant to have an animal on the premises, from advertising or establishing rental policies in a manner that requires a tenant or a potential tenant with an animal to have that animal declawed or devocalized as a condition of occupancy.
AB 1918 (R-Jones) would amend the Code of Civil Procedure to give one who is being deposed in an unlawful detainer action five days, rather than the current 30, to approve or make changes in the deposition transcript before the transcript is deemed approved.
AB 2043 (R-Wagner) would allow a court of appeal to hear an order that grants or denies a class action certification.
AB 1504 (R-Morrell) would require each state agency that is considering adopting, amending or repealing a regulation, in addition to those existing economic impact analysis requirements, to complete an economic assessment of the proposed action at least 90 days prior to submitting a notice of proposed action to the office.
AB 1612 (D-Lara) would require agencies to specifically cite “estimated cost of compliance” with proposed regulations and to make available upon request the assumptions and analysis used in arriving at that estimated cost of compliance.
AB 2577 (D-Galgiani) provides that an agency does not have a duty to consider, evaluate or respond to comments received after the expiration of the public review period. The bill would provide that these comments will not be part of the record of proceedings for the Environmental Impact Report, negative declaration or mitigated negative declarations.
SB 1374 (R-Harman) provides that any person who relies upon a written administrative regulation shall not be liable for a violation of a civil statute or regulation in a proceeding if the person pleads and proves the person was acting in conformity with, and in reliance on, an applicable state agency’s written administrative regulations.
AB 1610 (R-Wagner) would give businesses a specified period of time to address special access (ADA) violations without fear of litigation. AB 1878 (R-Gaines), AB 2325 (R-Norby), SB 1163 (R-Walters) and SB 1186 (R-Dutton) all provide similar protections.
Inclusionary Housing in Court
A Mission landlord sued the San Francisco Planning Department recently over the city’s affordable housing program, which requires developers to rent or sell a percentage of units at below the market rate. Last year, the planning department found that Winfield Design International, a Mission company that owns a 54-unit building at 3000 23rd St., was not renting seven units at below market rate, as the city permits required when they were issued in 2003.
Winfield Design claims that the city cannot impose the notice of violation because the requirement is illegal under state law. “[The Planning Department], without compensating petitioner, required a conditional use permit that denied petitioner its right to establish rental rates,” complaint documents state.
The city attorney’s office claims that Winfield Design is misinterpreting the law and asked the judge to dismiss the lawsuit, according to the city attorney’s response.
Thomas Shuen, the CEO of Winfield Design, erected the building at the site of his former paper company in 2005 after a long and acrimonious permitting process. When the Board of Supervisors approved the project, Winfield Design agreed to provide seven BMR units to satisfy the city’s 12% BMR requirement, according to the city attorney’s office. The Planning Department subsequently learned that rents for the units exceeded the required BMR. The building manager occupied one of the designated BMR units, and a BMR unit tenant had been evicted, according to the city attorney’s office. The Planning Department issued a notice of violation on May 9, 2011, which carries a $250-a-day fine until the violation is abated.
Winfield claims that the city cannot impose a notice of violation because the conditions set by the affordable housing requirement are illegal under the Costa-Hawkins Rental Housing Act, a state law that allows landlords to establish the initial rental rate for a housing unit.
A recent ruling in Southern California, known as the Palmer decision, found that a Los Angeles affordable housing mandate violated that act. Winfield’s lawyer believes that the Palmer decision applies to this case. But San Francisco’s city attorney has said that the city is not forcing developers to provide BMR units, as was the case in Los Angeles; rather, the developer chooses to develop the condominiums and agrees with the city to also include affordable housing units.
Crumbling Staircase Leads to Tenant Death
A San Francisco landlord is being accused of negligence following the death of a tenant who fell through a crumbling staircase. Renters at the Nob Hill apartment building said they’ve made repeated requests to have the staircases replaced and that several other tenants have also fallen through.
Rory Moore, 62, was heading down the stairs to do laundry when they gave way back in February. After the three-story fall, the longtime bartender was rushed to the hospital and was in intensive care for weeks before finally succumbing to her internal injuries.
The landlord, CitiApartments, has not responded to media requests for comments. A court settlement last year called on the business to make changes, including responding to tenants’ request for repairs within 72 hours. Neighbors said the woman’s family has hired an attorney.
In Memoriam: John Peara Baba
SFAA is sad to report that John Peara Baba passed away on March 24, 2012, in San Francisco. Baba was a passionate attorney, a tough competitor and a man who enjoyed life to the fullest.
He was born in Chicago and moved to California’s Central Valley with his family when he was a child. He graduated from high school in Merced and then set off to pursue a career in rugby in Australia. He later went on to receive his bachelor’s degree in philosophy from Reed College in Portland. He received his law degree from Golden Gate University in 2001, where he participated in the Landlord-Tenant Clinic with Professor Myron Moskovitz.
In 2000, Baba began his legal career at the law office of Wiegel & Fried, LLP, where he worked as a summer intern. He subsequently worked for two semesters during his third year of law school as a legal extern in the Law and Motion Department of the San Francisco Superior Court with Judges David A. Garcia, Ronald Evans Quidachay and A. James Robertson, II. He later rejoined Wiegel & Fried as an attorney, where he focused his practice of law in the areas of civil writs and appeals, commercial and residential lease disputes, and pretrial motion pleading. He was selected as a “Rising Star” in Super Lawyers for 2009 through 2011.
Before Baba became the lead plaintiff in the case of Baba v. Board of Supervisors of the City & County of San Francisco, landlords in San Francisco had no First Amendment rights. It was this published decision from 2004 that upheld a landlord’s right of free speech when communicating with tenants and led the way for thousands of tenant buy-out agreements in San Francisco and elsewhere. Baba did much of the legal work on this case. The case is still good law and is often cited in other published rent control cases. Ironically, the Baba decision was cited in one of Baba’s last appellate victories in 2011: Norman T. Larson v. City & County of San Francisco. The Baba and Larson decisions went a long way to secure the rights of property owners, and for that SFAA and landlords throughout the city will always be thankful.
From 2010 until his death, Baba was a senior associate at Wiegel Law Group, providing critical briefing on complex litigation. Wiegel Law Group and Baba’s close friends are planning a celebration in remembrance for early this month. Anyone wishing to be on a mailing list for more information as the event draws near should email Andrew@WiegelLawGroup.com.