Counsel’s Corner: SFR Landlords Should Be Educated on State and Local Laws for Their Own Protection

Puneet Singh is the Managing Partner of the Northern California offices of Kimball, Tirey and St. John LLP, and is engaged primarily in the practice of landlord/tenant law and litigation. Ms. Singh advises, counsels, and represents owners, management companies and institutions in unlawful detainer actions and other landlord/tenant litigation and transactional matters. Ms. Singh also sits on the Board of Directors for numerous local real estate associations for which she regularly provides seminars. Puneet talked with DS News recently at the inaugural Five Star Institute Single-Family Rental Summit in Las Vegas.

What is are some of the big current issues in the area of landlords vs. tenants' rental rights in the single-family rental space?

Our clients are primarily landlords, property owners, and property management firms. We want to make sure they are aware of the different laws and obligations on the state level and the local level, so that when they acquire a single-family home, they should know, for example, they have to send a notice of change of ownership within 15 days of acquiring the property. Otherwise, they can’t charge the tenant rent. In Sacramento, you have to register the property with the city. If you are aware of the requirements that are imposed at the state and local levels, you’ll be in a good position should your tenant end up not paying rent.

The second thing we often see is that when you acquire a single-family home, oftentimes you don’t know what the condition of the property is. You serve them a notice to pay rent or quit, and you hear about a slew of inhabitability issues in the unit that the previous owner never took care of. California is a very, very tenant-friendly state. It’s very difficult to evict. Tenants have lots of rights. You want to make sure you don’t get sued for retaliation or wrongful eviction, or for violating the warranty of inhabitability. So you want to make sure your property is good condition before you even think about evicting a resident.

Another common issue we see in California is fair housing. A lot of time, tenants may request a disability accommodation. So what do have to do from a landlord perspective when your tenant makes a request such as having all the cupboards lowered in a property, or having an entrance ramp installed. There are certain rights that you have to allot to them. You have to know what your obligations are in that situation, because disability is the number one area of lawsuits that we see within the fair housing realm, and those types of cases tend to be very expensive. When you file an eviction, sometimes they go in and file a discrimination lawsuit at the same time, and that aspect of the lawsuit can be very, very costly. So you want to make sure you get good housing training as well, which is something that our firm offers.

What type of recourse does the landlord have if the tenant won’t pay rent or won’t keep up the property?

If the tenant doesn’t pay rent, you can serve them with a three-day notice to pay rent or quit. If they don’t pay rent in three days—and this is just for market housing, because with subsidized housing, you may have to give them a longer notice period—but generally speaking, if it’s not an affordable housing property, they get a three-day notice to pay rent or quit. If they don’t pay rent within three days, at that point you can start the eviction process. It can take four to six weeks for an uncontested eviction, or six to eight weeks for a contested eviction. If the tenant knows how to work the system, it can take up to a year. Evictions tend to take longer in areas like San Francisco, Oakland, or Los Angeles, because you’ve got a lot of legal aid groups that are there to assist the tenants.

If the tenant is not taking care of the property and destroying the home, you can serve them with a notice to perform covenant or quit, which basically says you have three days to perform this covenant in your lease agreement. They can also be held liable for the property damage from the monetary perspective. For example, if they punched holes in the wall, they have to pay for it in that sense. You want to make sure you have the right disclosure in the lease agreement so that you can enforce those covenants in that situation.

Are there a lot of tenants who know how to work the system in California?

Yes, there are. When you file an eviction, a letter from the court goes to the tenant letting them know they are being evicted. That letter also tells them where they can go for legal assistance. So the tenants will go to these agencies—and you have to be under income in order to get free legal assistance. It’s not offered to everyone. There are a lot of resources that were not available before. You also have the Internet, and the Internet has a lot of free legal advice and templates they can download to delay case, for example.

We’ve got what’s called the Shriver Act in California, which is a pilot program that started in various cities. It’s not statewide yet. In that program, if you can’t afford an attorney, basically one is appointed to you for free. What that means is more contested evictions and more costly evictions, because when there’s an attorney on the other side, obviously they’re going to do whatever they can do delay the case and drive up the cost. The question I get asked a lot is, “Who pays for that attorney?” The filing fees went up for filing evictions, so part of those filing fees are allocated toward this free legal assistance. I know the funding has been cut off in a few areas, like in Sacramento, you don’t see that anymore. It’s still very heavy in Los Angeles and San Diego. The program is up for review later this year or early next year, and they’ll decide whether they’re going to continue it or not.