SF Apartment : April 2017


No Ifs, Ands, or Butts

by Various Authors

Q.  An unidentified tenant in my four-unit building is disposing of cigarette butts and beer cans in the shared backyard. I haven’t received any complaints yet, but I’d like this to stop immediately. What can I do?

A.  Littering the shared backyard is probably a violation of the lease agreement and may also be considered nuisance conduct that “unreasonably interferes with the use and enjoyment” of the property by other tenants and the owners. In either case, the law requires that the offending tenant be given notice and an opportunity to correct or “cure” this behavior. Since you are not aware which tenant is doing this, you should send a letter to all of the possible offenders and ask for their cooperation and assistance in identifying the guilty party and request that this conduct cease immediately. The letter should further state that the littering of the yard is a violation of the lease and grounds for eviction under local and state law. If you are unsuccessful at identifying the offending tenant, consider installing surveillance equipment.

Once you have determined who the offending tenant is, and if the tenant’s conduct continues, you should retain an experienced landlord-tenant lawyer to prepare the proper notices and possibly pre-notices that are required to proceed with evicting the tenant. Under the Kim amendments to the Rent Ordinance, an action based on nuisance conduct requires the landlord to prove the offending conduct is “severe, continuing or recurring in nature.” To meet this heightened nuisance standard, the landlord should build a solid paper trail of warnings that establish that the tenant has been given every opportunity to cease the offending conduct. It is also crucial to build the support of other occupants of the building, in this case the tenants who live in the units other than that occupied by the littering occupant. The ability of a landlord to prevail in a case such as this may also turn on unrelated factors. For example, a tenant may claim that the landlord’s dominant motive is something other than the nuisance activity, such as a desire to receive a market rental rate. This can be a very difficult burden and a landlord should carefully evaluate the liability for payment of the tenant’s attorney’s fees in the event of a dismissal or loss at trial. If the tenant’s lease contains an attorney’s fees provision, careful consideration should be given to unilaterally removing this lease provision before commencing an eviction action.

—Andrew Zacks

Q.  I have two single-use restrooms in the lobby of my building; one is labeled a men’s room, and the other is labeled
a women’s room. Does this meet the Equal Restroom Access requirement?

A.  No. Starting March 2017, Health and Safety Code § 118600 requires all single-occupancy restrooms to be made available to any person of any gender, including persons who require assistance, and/or families with children. Under Title 24 of the California Code of Regulations, such restrooms must be marked with the emblem of an equilateral triangle inside of a circle. No written signage is required, but if posted, must clearly identify the restroom as “Unisex,” “All-Gender,” or just simply, “Restroom,” with appropriate characteristics to assist the visually impaired.
Therefore, in your lobby, each restroom shall become unisex under the law, and the labels should be updated accordingly. For more information on this bill, see page 50.

—Matthew Quiring

Q.  What “fine print” should property owners be aware of when considering the addition of an accessory dwelling unit?

A.  On January 31, 2017, Supervisor Aaron Peskin introduced an ordinance amending the Planning Code authorizing the construction of Accessory Dwelling Units (ADUs) in most single-family homes even in neighborhoods that had previously not permitted such uses under current zoning laws. There are some very important aspects of this proposed process that should be carefully evaluated before an owner endeavors to build an ADU.

First and foremost, the home will lose its exemption from the rent limitations of the San Francisco Rent Ordinance. Under the state law known as the Costa-Hawkins Rental Housing Act, single-family homes built before 1979 with a tenancy that began on or after January 1, 1996 are not subject to rent control limitations in terms of rent increases. This means, for example, that the owner may adjust the rent each year to market levels. However, in single family homes that have been subdivided, whether legally or not, the exemption does not apply, meaning the property is treated in the same manner as an apartment: rent may only be increased pursuant to the rent limitations set forth in the Ordinance. If you add a legal ADU, the entire property (BOTH the original home and the ADU) permanently comes under the strictures of the rent limitation provisions of the rent law. Indeed, the legislation states: “An ADU constructed pursuant to this [law] may be rented and is subject to all provisions of the Residential Rent Stabilization and Arbitration Ordinance (Chapter 37 of the Administrative Code)....”

Second, only one ADU may be constructed, and it must be constructed entirely within the “living area” of an existing home. “Living area” is defined to mean the interior habitable space, and specifically excludes garages. As such, you cannot convert your parking spots into an ADU.

Third, no ADU may be used for short-term residential use. This means you may not rent the ADU through Airbnb or other short-term vacation use platforms. Tenancies must be for at least thirty consecutive days or longer.

Fourth, no ADU may be subdivided from the home. Consequently, you may not create an ADU and then apply for condominium conversion. Owners believing that their new two-unit structure could be converted as a two-unit building exempt from the currently suspended lottery need to understand that under no circumstance would condominium conversion ever be permitted.

At the time of publication, we do not know if this legislation will become law. If it does, please consider the above issues before you apply to construct an ADU in your single family home. Perhaps the limitations and loss of rent control exemption for the property do not outweigh the economic benefits of adding another dwelling. Analyze the long-term and permanent ramifications before construction begins.

—David Wasserman

Q.  Can I charge a tenant, against his security deposit, legal fees that I paid to enforce his lease?

A.  You cannot use a security deposit to satisfy or defray “legal fees” connected to lease enforcement. Civil Code § 1950.5(b) provides only four bases for permissible deductions: (1) to compensate a landlord for unpaid rent, (2) to reimburse the landlord for the cost of repairing damage to the premises caused by the tenant, (3) to reimburse the landlord for the cost of cleaning the premises, and (4) to remedy a tenant’s future default(s) with respect to the restoration, replacement, or return of personal property or appurtenances in the premises. The list does not permit any deduction for “legal fees,” whether they be process-serving costs, court costs, attorneys’ fees, or otherwise.

But this does not mean that you cannot recoup legal fees. With process-serving fees, a lease can obligate the tenant to pay them, and a small claims action could be filed to recover them. But if only process-serving costs are involved, that is probably not worth the hassle. With court costs generated by litigation (e.g., filing fees, transcript costs, etc.), a prevailing party is entitled to recover specified costs as a matter of right under Code of Civil Procedure § 1032(b).

Attorney’s fees, however, are trickier. Code of Civil Procedure §§ 1021 and 1033.5(a)(10) provide that, absent a contract, statute, or law entitling a prevailing party in litigation to recover attorneys’ fees from the other side, each party must bear his own attorney’s fees. Under Civil Code § 1717(a), any lease provision that provides for an award of attorney’s fees to a party in litigation must be mutual. It was common for older leases to provide that only the landlord could recover his attorney’s fees in the event he had to file suit to enforce any term of the lease. Because of the mutuality provision in Civil Code § 1717(a), this meant that the tenant would be entitled to recover his attorney’s fees if he won any such lawsuit filed by the landlord.

The conventional wisdom is that, unless the tenant has a high income or meaningful assets, a tenant is probably “judgment proof.” In other words, it could be very unlikely or very difficult for a landlord to satisfy an award of attorney’s fees in his favor and against the tenant. But the reverse is not true—a landlord likely has assets to satisfy an award of fees to the tenant. While fee clauses tend to promote reasonable behavior between landlords and tenants, they can become disastrous for the landlord if litigation does ensue. Hence, absent a good reason to include one, leases should not have fee clauses, as they only incentivize tenant lawyers to either commence or defend litigation on behalf of tenants. For this reason, the SFAA lease does not contain an attorney’s fees clause. If you still feel compelled to have a fee clause in your lease, understand that it will be a mutual provision by operation of law. If you want to minimize your potential exposure to attorney’s fees, you can provide a cap on recoverable fees. Fee caps are enforceable. In 511 S. Park View v. Tsantis, 240 Cal.App.4th Supp. 44 (2015), the trial court ignored a lease provision which capped recoverable attorney’s fees at $750, and instead awarded the prevailing party tenant $12,375 in fees. The Appellate Division ruled the cap was enforceable and reversed the award. You must therefore decide what level of risk you can bear when it comes to the recovery of attorneys’ fees, and risk management can include dispensing entirely with a fee clause, or having one with a specified cap that is within your comfort zone.

—Curtis Dowling

Q.  We are adding a third unit to our duplex through the Accessory Dwelling Unit program. Will this officially change our building from a duplex to a three-unit building? What are the differences in fire-safety requirements between duplexes and three-unit buildings?

A.  Adding an Accessory Dwelling Unit (“ADU”) to a two-unit building will certainly change it to a three-unit building and require changes in your approach to fire safety. Buildings with one or two units fall into the R-3 Occupancy Group, while buildings with three or more units fall into the R-2 Occupancy Group. The San Francisco Fire Department has jurisdiction over R-2 buildings, but not R-3 buildings. This means the Fire Department will probably be required to approve your building permit for the new unit.

The San Francisco Board of Supervisors recently passed new legislation meant to promote fire safety. While owners of two-unit buildings must simply comply with fire-safety requirements regarding egress, smoke and carbon monoxide alarms, and fire extinguishers, owners of buildings with three or more units must disclose written fire safety information to new and existing tenants; post copies on each floor of the building; and keep a record of the disclosure, either a Resident’s Statement or, if the tenant is unwilling to sign, an Owner’s Statement.

Fire sprinklers are required in all new residential units in California, but the number of units determines the type of sprinkler system required. NFPA-13R sprinkler systems are designed for use in homes and will be accepted by the Fire Department if you are adding a unit to a single-family home and have a sprinkler system in the garage. When you have three or more units, the Fire Department will likely require the use of a more extensive NFPA-13R system throughout the ground floor. If the building is more than two stories, the first floor must be separated from the upper floors by 1-hour fire rated construction. Also, the water main should be flow-tested to determine sufficient water pressure for the sprinkler system, and an auxiliary pump might be required.

Regardless of the numbes of units in your building, you are required to provide each tenant with written notice of smoke alarm requirements on a form provided by the Fire Department on or before January 31 of each year. Owners of buildings with three or more units must also post a copy of the Annual Smoke Alarm Notice in at least one conspicuous location in a common area of each floor. (All of the above mentioned forms are available at sf-fire.org.)

—David Semel

The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. David Wasserman is with Wasserman-Stern Law Offices and can be reached at 415-567-9600. Matthew P. Quiring and David Semel are with Fried & Williams, LLP and can be reached at 415-421-0100. Curtis Dowling is with Dowling & Marquez, LLP and can be reached at 415-977-0444.