All in the Family
When children grow up and move out of their parents’ rent controlled apartments, do they have a claim to the tenancy once parents move on?
Q. An older couple has been living in a rent controlled unit of mine for about ten years. I noticed they have officially added their adult son’s name to their checks. As far as I know, he doesn’t live in the apartment and hasn’t for five years. If I cash these checks, will I be recognizing him as a tenant?
A. With Proposition 10 behind us, Costa-Hawkins lives to fight another day. Among other things, it allows landlords to establish a new rental rate when the last “original occupant” vacates. But until that happens, landlords must remain vigilant to avoid “waiver” of this right by establishing a relationship with any other occupant. Disputes over this status can be fought at the Rent Board or Superior Court, but when tenants choose the fight, the weapons of choice are clumsy, messy facts that give significant leeway to the fact finder.
Your attorney will want to review the history of this tenancy with an exacting eye. Your question is missing some information necessary to evaluate the son’s status here, but your choice of words is interesting: “he hasn’t lived there for five years,” while the parents have been there for ten. I imagine he moved in at the same time they did, and as a matter of fact, he could even have been a child back then, and Costa-Hawkins would still consider him an “original occupant” for the purposes of rent control rights. (That’s a bit different than him being your “tenant,” but the effect is the same.)
While the landlord bar continues to advance the cause, under current law (at least as it’s applied in San Francisco housing court), it may not even matter that an original occupant moved out, if he later opportunistically tries to capture rent control when his parents move on. And you’re right to be suspicious; many grown men (especially overworked associate attorneys) rarely return their parents’ phone calls, and this one suddenly has joint checking in the era of Venmo? This is odd, and you should resolve the uncertainty now, while the facts appear to be in your favor (after all, he’s not currently
One option is to reject payment from anyone other than the lessees on the contract. (The “teeth” of this option is an eviction notice for nonpayment of rent if your tenants want to play games with payment.) If you prefer leading with the carrot instead of the stick, a new law presents a novel opportunity to force the issue. Civil Code Section 1947.3 requires landlords to accept rent payments from third parties. This officious law apparently aims to prevent tenant default, and the disrespect to contract law would be shocking, but for a neat estoppel provision. Landlords can require a third-party payee to sign a written acknowledgment stating, “I am not currently a tenant of the premises.” Obviously this is untested as a method to box out Costa-Hawkins waivers, but on paper, it seems to pin your tenants and their son to a specific story about their joint checking, while setting you up for success if/when he tries to inherit their rent control.
Q. I’m an owner-occupier in a four-unit building with a shared porch. One of the tenants hangs political signs and has a row of potted plants set up, creating a tripping hazard. I have asked her to move them, but she refuses. At this point, we’d like to repaint the porch. Can I require that she move her things to paint? And if so, permanently?
A. The answer to this question requires balancing the tenant’s right to political speech, which is explicitly protected under California law, and the tenant’s duty and responsibility to maintain his or her unit or use of the common areas of the building in a manner that does not interfere with the comfort, safety or enjoyment of the landlord or tenants in the building.
Section 1940.4 of the California Civil Code provides that “a landlord shall not prohibit a tenant from posting or displaying political signs” relating to a legislative vote, including an election of a candidate to public office; the initiative, referendum, or recall process; or issues that are before a public commission, public board, or elected local body for a vote. The statute further provides that a tenant may post or display a political sign “in the window or on the door of the premises leased by the tenant in a multifamily dwelling, or from the yard, window, door, balcony, or outside wall of the premises leased by a tenant of a single-family dwelling.” A landlord can limit the amount of time a tenant may post a political sign (and require its removal after a certain amount of time) based either upon a local ordinance setting the time allowed for the posting of such signs or, if no local ordinance exists, the landlord may establish a reasonable time period for the posting and removal of political signs (a reasonable time period for posting and removing political signs must begin at least 90 days prior to the date of the election or vote to which the sign relates and end at least 15 days following the date of the election or vote).
Notwithstanding the law’s explicit protection of political speech, expressed through the displaying of political signs, a tenant does not have an unfettered right to such speech if that speech would interfere with the comfort, safety or enjoyment of the landlord or tenants in the building. Displaying a political sign in a manner that would create a tripping hazard would certainly interfere with the safety of the landlord and other tenants in the building and would most likely constitute a nuisance. The San Francisco Rent Ordinance defines a nuisance as something that would interfere with the “comfort, safety or enjoyment of the landlord or tenants in the building, [and] the activities are severe, continuing or recurring in nature.”
The landlord here would be on solid ground to require the tenant to remove the political sign. First, in a multi-unit building, the law allows a landlord to restrict the display of political signs to the tenant’s own window or door of his unit, not a balcony shared by other tenants. Second, a landlord can require that a tenant not engage in activities that create safety hazards to either the landlord or other residents in the building.
Q. I use an online tool to collect rent payments. Each master tenant has a profile connected to their bank account in our online payment portal. I noticed that the bank account connected to a unit’s online profile changed to a different name—someone who is not on the lease. If I accept a rent payment, will I be acknowledging this new person as a tenant?
A. You run the risk of acknowledging this person as an “original occupant” or what you are referring to as a master tenant. First, you should figure out who this person is. Are they living in the unit? Or is this person providing financial assistance to your tenant? Come right out and ask your tenant who this new person is.
Costa-Hawkins and rent increases
As of now, a property owner is permitted to raise the rent to market rent (whatever rent a property owner can get) when the last “original occupant” vacates. The Costa-Hawkins Act states that the acceptance of rent does not waive an owner’s enforcement of a provision prohibiting a sublease or assignment or the owner’s rights to establish the initial rent unless you have written notice from the tenant and thereafter accepted rent.
It seems that you only discovered a possible sublease or assignment after you noticed a change in your tenant’s profile. Acceptance of rent alone does not give this unknown person the status of an original occupant. However, you need to consider the totality of the circumstances: how long has he been paying rent, has she been made known to the property owner/agents of the property owner, etc. Consult with a landlord-tenant attorney before moving forward with a Costa-Hawkins rent increase.
Keep in mind, AB1482 is pending in the State Legislature. If passed, this bill would prevent California owners from increasing rents by more than an unspecified percentage above inflation each year and could potentially get rid of Costa-Hawkins rent increases altogether.
Third party payment of rent
Recently, there was an amendment to Civil Code §1947.3 requiring property owners to accept rent payments through a third party, if the payor provides a signed acknowledgment stating they are not currently a tenant of the premises and the acceptance of rent payment does not create a new tenancy with the third party.
If this person is merely paying the rent, request that this person sign an acknowledgement saying that they are not a tenant of the premises and that by accepting rent a tenancy is not being created. If this person does not provide a signed acknowledgment, you should not accept rent.
The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Justin A. Goodman is with Zacks, Freedman & Patterson, P.C. and can be reached at 415-956-8100. Michael J. McLaughlin is with Bay Area Property Lawyers and can be reached at 415-655-9753. Angelica A. Sandoval is with Fried & Williams LLP and can be reached at 510-625-0100.