SF Apartment : February 2017

LEGAL Q&A

Dour Shower

by Various Authors

Q. The hot water went out in our rental apartment before a three-day weekend. I wasn’t able to get the water heater repaired until the following Tuesday. Does this qualify as a “decrease in service”? Am I responsible for covering the hotel costs for each of the three adult tenants?
A. Section 37.2(g) of the San Francisco Administrative Code defines housing services as “repairs; replacement; maintenance; painting; light; heat; water; elevator service; laundry facilities and privileges; janitor service; refuse removal; furnishings; telephone; parking” and other rights under the lease or rental agreement.

Section 10.10(a)(2) of the San Francisco Rent Board Rules and Regulations allows for a reduction of rent for “failing to provide housing services reasonably expected under the circumstances.”

A broken water heater would be a reduction of housing services, but only if it was not repaired within a reasonable time. Assuming that the landlord made a good faith effort to repair the heater as soon as the issue was known, and three days was the soonest it could be repaired in light of the availability of parts and/or labor, a three-day delay is probably not so unreasonable as to entitle the tenant to a reduction in rent. “Reasonableness” is necessarily in the eye of the beholder, but although going without hot water would be inconvenient, it would not be as severe as having no water at all.

As for paying for the cost of putting the tenants up in a hotel, such costs are generally only legally obligated if the tenant was necessarily displaced from the premises, because either the repairs or the damage were so extensive that the unit effectively became uninhabitable. An example would be an apartment damaged by fire, flood, or lacking heating, plumbing, or electricity.

Nonetheless, offering a hotel room can be a wise gesture of good faith to your tenants, and might help avoid future disputes, such as a petition based on reduced housing services. In that case, an ounce of prevention can be worth a pound of cure.

—Matthew Quiring

Q. About two years ago, I rented a 2-bedroom apartment to two roommates. One tenant has just notified me that she is getting married and moving out. The remaining tenant would like the lease changed to her name only. Is that advised?
A. The short answer is no. There is a general misconception among landlords and tenants that a lease no longer applies to someone that has moved out. Indeed, many tenants routinely contact their managers requesting to be removed from the lease because they are vacating. Often landlords will agree to remove departing co-tenants. This author believes that the landlord is not required to remove a departing co-tenant and, under most circumstances, should not do so.

A lease agreement is like any other contract. In a general sense, the lease creates an obligation to pay rent and, in exchange, the landlord is required to provide habitable housing. Most lease agreements do not extinguish a tenant’s financial obligation to the owner simply because one tenant decides to vacate but leaves behind other co-tenants. The 2017 SFAA Residential Tenancy Agreement addresses this point directly:

“Each person who signs this Agreement, whether or not said person is or remains in possession of the Premises, shall be jointly and severally responsible and liable for the full performance of each and every obligation of this Agreement, including, but not limited to, the payment of all rent due and the payment of costs to remedy damages to the Premises, regardless of whether such damages were caused by Tenant, Tenant’s guests, or Tenant’s invitees. These joint and several liabilities apply for as long as any one of the Tenants remains in possession.”

Taking a departing co-tenant off of the lease will essentially extinguish that co-tenant’s financial liability to you if the lease is later breached. For example, you rent to tenants A and B. A has a lucrative job, but B does not. A leaves and is removed from the lease. Months go by, and B fails to pay rent. The landlord, by removing A, has effectively foreclosed the ability to obtain a judgment against A, and instead can only collect from the less financially well off B. Conversely, if A were still on the lease, A would remain jointly liable for the judgment and, to that end, would be motivated to help you remove B.

In addition, removing a co-tenant from the lease likely obligates you to return that person’s portion of the security deposit. Normally, no part of the deposit should be returned until the apartment is completely vacated. As such, departing co-tenants are incentivized to remove all persons, including subtenants, when they decide to depart. By removing a co-tenant and returning part of the deposit, you are probably unable to force the remaining co-tenant to replenish the deposit amount and thus you will be under-secured for the remainder of the tenancy. 

Lastly, a departed co-tenant could always come back during the tenancy. This author has seen that occur many times. If the now re-emerged co-tenant returns, possession will be resumed but you will not be able to hold this occupant financially accountable if you amended the lease. So, for all of these reasons, do not remove co-tenants from the lease even if they give notice of their departure and request or demand to be extracted.

—Dave Wasserman

Q. I noticed a tenant in a single-family home of a rent increase. He replied that he is under rent control pursuant of civil code 1954.52(d), because of serious code violations from the previous building owner. Is there anything I can do?
A. In general, single-family homes are exempt from local rent controls under a state law known as the Costa-Hawkins Rental Act (“Costa Hawkins”). Costa Hawkins provides that, notwithstanding any other provision of law, an owner of a single-family home may establish the initial and all subsequent rental rates. Accordingly, a tenancy at the single-family home would not be subject to the rent limitations imposed by the San Francisco Rent Ordinance. 

Costa Hawkins does not provide a landlord with carte blanche right to increase the rent for single-family homes. Here are some circumstances where a landlord’s right to raise the rent for a single-family home are not permitted under Costa Hawkins: the current tenancy was created prior to January 1, 1996; the preceding tenancy was terminated by the landlord with a termination notice (this does not include terminations based upon a tenant’s default under the rental agreement or nuisance); the preceding tenancy was terminated upon a change in terms of tenancy; the home contains serious health, safety, fire, or building code violations, which have remained unabated for six months or longer preceding the vacancy. 

Your tenant refers to the last circumstance above as his reason why you cannot increase his rent. However, simply because code violations may have existed under the prior owner’s watch does not by itself prevent you from raising the rent under Costa Hawkins. Your tenant would have to establish not only that the serious code violations existed, but that they existed for at least six months and actually resulted in a vacancy. If that was the case, then the Costa Hawkins rent control exception would not apply to the next tenancy. 

In addition to the above, it is important to know that if there are current code violations at the home, then your rights to increase the rent may be also restricted. A separate state law prohibits a landlord from demanding, collecting, or increasing rent when a citation for dangerous conditions has been issued and those conditions have not been corrected for 35 days. So, whether the conditions existed prior to your ownership or after, you should always promptly repair any dangerous conditions. Otherwise, you may be precluded from collecting rent until those conditions are corrected. 

—Steven Williams

Q. Do I have the right to conduct annual physical inspections of my tenant-occupied rental property?
A. There is no statute or regulation expressly giving you the right to conduct annual physical inspections, but arguably you should do so. The scope of annual physical inspections is debatable. At a minimum, it is advisable to enter each unit and test and possibly replace all smoke and carbon monoxide detectors on an annual basis. While testing the detectors, it is advisable to conduct as broad an inspection as possible without unduly disturbing your tenants, because you have a duty to maintain your property in good repair and you could be liable for not addressing defective conditions that you know or should know exist. 

California Civil Code section 1954 governs a landlord’s right to enter a tenant-occupied apartment, and limits it to four categories: 1) in case of emergency, 2) to make necessary or agreed repairs, decorations, alterations or improvements, supply necessary or agreed services, or exhibit the dwelling unit to prospective or actual purchasers, mortgagees, tenants, workers, or contractors or to make an inspection pursuant to subdivision (f) of Section 1950.5 regarding security deposits, 3) when the tenant has abandoned or surrendered the premises, or 4) pursuant to court order. As you probably know, you must serve written notice to enter and inspect at least 24 hours in advance, unless you are responding to an emergency, the tenant is present and consents to the entry, or after the tenant has surrendered possession or abandoned the unit.

With no law governing annual inspections, the alternative is to include language in the lease permitting you to conduct annual inspections. You should be careful, however, to phrase such a clause so it does not create an additional landlord obligation that could lead to liability if you do not do the inspection.

Some tenants might object to you entering for an annual inspection because it does not fit squarely into any of the categories identified in Civil Code section 1954. Difficult tenants might accuse you of harassment or violating the Rent Ordinance if you push for an inspection when no known defective condition exists. Depending on the circumstances, it could be advisable to refrain from further attempts to inspect such units.

You should note that landlords have an affirmative duty to inspect units between tenancies, when no tenant has the exclusive right to possession. At least one appellate decision has been published holding that when units are not occupied by tenants, the landlord has a right of entry and control and, on that basis, an affirmative duty to enter and correct any dangerous or defective conditions. You also have an affirmative duty to enter and inspect after you have evicted a tenant because there is a heightened risk that an evicted tenant will neglect or damage the unit.

—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. Steven Williams, David Semel, and Matthew P. Quiring are with Fried & Williams, LLP and can be reached at 415-421-0100.