The NEWS
Safe Harbor
Complying with Proposition 65 just got a little easier for property owners.
The California Apartment Association has made it easier for landlords to comply with new Proposition 65 “safe harbor” warning requirements, which apply to all California companies with 10 or more employees.
This summer, because of a new regulation secured by CAA, landlords will be able to use their rental agreements to communicate most Prop 65 warnings to tenants—a better alternative than the onerous safe harbor under a prior regulation that took effect in August of 2018.
Prop 65, enacted by voters in 1986, requires businesses with 10 or more employees to warn about exposures to chemicals known to cause cancer and birth defects or other reproductive harm. It does not apply to businesses with nine or fewer employees. In many instances, the owner of the property is not subject to Prop 65, but the management company is typically required to comply because the management company has 10 or more employees.
The new apartment regulation, which takes effect July 1, 2019, will allow landlords to comply with Prop 65 by providing most warnings in the lease or through an annual written notice. Ultimately, owners should remove the generic warning signs that they have been posting at all entrances to the property and buildings since 2005 or earlier.
CAA secured the new apartment regulation through its work with the state’s Office of Environmental Health Hazard Assessment, or OEHHA. CAA also has published a new set of compliance documents, including a Prop 65 Addendum and instruction sheet, an Annual Proposition 65 Annual Warning Notice and instruction sheet, and an updated Industry Insight background paper. CAA also held a webinar on Prop 65 that can be purchased for streaming. The documents and webinar are available to CAA members at caanet.org.
When a property owner or management company follows CAA’s warning instructions, they will fall under a “safe harbor” for complying with Prop 65. Technically, the new warning methodology is not mandatory; a business may determine its own way to comply. The safe harbor, however, is the only way to be sure that a warning complies with the law without going to court.
This apartment regulation taking effect this summer offers landlords a better alternative to a safe harbor Prop 65 warning scheme under current regulations.
Without the regulation change obtained by CAA, owners and companies with 10 or more employees would have been required to post a warning, listing one or more specific chemicals that can cause cancer or reproductive harm in each “affected area.”
In other words, the property would have to be festooned with a variety of warning signs: one sign would be about chlorine or bromine by the pool, another about chemicals in the foam cushions of lobby furniture, and another warning about lead paint, yet another about pesticides used in landscaping.
After Prop 65, warnings are issued to all tenants and adult occupants through the lease or annual notice, generic Prop 65 signs can be removed, as they are no longer required for the safe harbor.
Note: Prop 65 signs for rental properties are still required in two places. Under a separate regulation that took effect last August, property owners and management companies with 10 or more employees must display specific types of Prop 65 signs at enclosed parking garages and designated smoking areas, regardless of warnings listed in the lease or annual notice. These signs are available from CAA, along with detailed instructions, at caanet.org.
The above content was provided by Heidi Palutke, senior vice president, compliance and education, California Apartment Association.
Nonprofits Right of First Refusal Update
The San Francisco Board of Supervisors unanimously voted to give housing nonprofits the first bid on buildings for sale to preserve affordable housing. The legislation was initially written because nonprofits have said it’s difficult to compete with other investors and cash buyers when purchasing property. Supervisor Sandra Lee authored the proposal, deemed the Community Opportunity to Purchase Act (COPA), in December.
Sellers of buildings with three or more residential units, buildings under construction, and vacant lots will be
required to notify a list of nonprofits (composed by the Mayor’s Office of Housing) before the property hits the market. The nonprofits will have five days to express interest. Sellers can decide to reject a nonprofit’s offer and
sell at market rate, however, after receiving an acceptable offer, they must give the nonprofit an opportunity to match that offer. If sellers move forward with a housing nonprofit, they will receive a partial cut on the transfer tax.
San Francisco Apartment Association and other industry groups are reviewing options to have the courts look at the ordinance. Please look out for future updates or reach out to the SFAA office for updates on the COPA ordinance and its status.
Soft-Story Retrofit Reminder
The September deadline for the Mandatory Soft Story Retrofit program is quickly approaching. Please do not delay. Take the next step to ensure your property, and your tenants, are better protected by complying with San Francisco’s Mandatory Soft Story Program (MSSP). Failure to submit permits and plans to DBI by the deadline will result in code enforcement action and monetary penalties. For more information, visit www.sfdbi.org.
Attention Tier Three Soft Story Property Owners
If you are a property owner of a multi-unit building with three or more stories, five or more units, your Certificate of Final Completion must be filed with the Department of Building Inspection by no later than September 15, 2019, which is only about three months from now. You also may be able to add accessory dwelling units to your property when performing a seismic retrofit.
To learn how to passthrough the costs associated with MSSP to tenants, visit sfdbi.org.
Energy Efficiency Education for Tenants
It’s almost summer again, and for San Francisco apartment owners, investors or builders, that can mean an increased strain on your HVAC and other energy systems as tenants try to beat the fluctuating temperatures.
Helping tenants use energy more wisely and efficiently can help owners minimize maintenance and repair costs, saving time and money while protecting California’s environment. Energy Upgrade California®—a statewide initiative committed to helping Californians be more energy efficient—gives owners a valuable (and free) resource to help tenants both use less energy and use it in smarter ways.
Engaging your tenants in energy-saving behaviors can help you save money and protect your investments. As an owner, you can access any of the information and resources on the Energy Upgrade California website at https://www.energyupgradeca.org/. Direct your tenants to the site or send them some of the energy efficiency tips and tools. It won’t cost any money to give tenants a little nudge in the right direction, and your efforts will pay off in the long run as tenants reduce their energy consumption and improve their energy behaviors. Some of the energy-saving tips and reminders include:
- Change your light bulbs. LED bulbs
last 25x longer and use at least 75%
less energy.
- Unplug electronics when not in use. 23% of the electricity used to power home electronics is consumed while the products are turned off.
- Wash clothes on the cold cycle.
Approximately 90% of the energy used for washing clothes is used to heat the water.
There are also important business programs and rebates sponsored by local energy companies that can help offset or cover the costs of purchasing energy efficient washers and dryers, dishwashers, and other appliances. In conjunction with smarter energy management, these free improvements can go a long way in reducing your tenants’ energy impact, both on your investment and on California. Get started by visiting the Energy Upgrade California website and see how a few small changes can yield major energy—and cost—savings.
The above content was written by Jennifer Weber, www.webberpublicaffairs.com.