New Laws for Property Owners and Landlords

New laws went into effect on Jan. 1, 2013 in California which property owners and landlords need to be aware of.

The laws discussed here are not meant to be an all-inclusive list and should be viewed only as a summary – not a detailed explanation.

HOME SAFETY

New Smoke Alarms for Landlords Required-- Senate Bill 1394

Beginning Jan. 1, 2013, for properties rented or leased, an owner is generally responsible for testing and maintaining smoke alarms in an apartment complex or other building. Beginning Jan. 1, 2014, this also will apply to a single family home. 

Also beginning Jan. 1, 2014, the property owner will be responsible for installing additional smoke alarms as needed to comply with stricter building standards going into effect in January 2016. Owners should also prepare for January 2014 when all dwelling units intended for human occupancy for which a building permit is issued in excess of $1,000; the issuer will not sign off on the completion of the work unless the owner demonstrates that all smoke alarms are approved by the State Fire Marshal.

To be approved, a smoke alarm must display the date of manufacture, allow a place for the date of installation to be written, incorporate a “hush” feature, incorporate an “end-of life” warning, and, for battery operated devices, contain a non-removable 10 year battery. Per California Association of Realtors (CAR) website, “These existing alarms need not be replaced unless the alarm is inoperable.

New alarms installed may be battery-operated if approved by the State Fire Marshal. These installation requirements for landlords do not apply to fire alarm systems with smoke detectors, fire alarm devices that connect to a panel or devices that use a low-power radio frequency wireless signal.”

Key Note: Beginning in January 2013, landlords will be responsible for the smoke alarms in apartment complexes but not in single family homes until 2014 which is when the larger portion of this bill takes place.

LANDLORD/TENANT

A. Disclosing Notice of Default to Prospective Tenants --Senate Bill 1191. 

Landlords must disclose Notice of Default to prospective tenants beginning January 1, 2013. Every landlord who offers to rent a residential property containing one to four units, must disclose in writing to any prospective tenant the receipt of a notice of default which has not been rescinded. This disclosure must be made prior to executing a lease agreement. The written notice must be made in English, Spanish, Chinese, Tagalong, Vietnamese and Korean.

If a landlord violates this law, the tenant may elect to void the lease and recover one month’s rent or twice the amount of actual damages – whichever is greater- in addition to all prepaid rent. If the lease is not voided and the foreclosure sale has not occurred, the tenant may deduct one month’s rent from future amounts owed.

Property managers will not be held liable for failing to provide the written disclosure unless the landlord has given them written instructions to deliver the disclosure to the tenant. Per CAR, “there is no mention of a requirement to notify current tenants." This law will expire on Jan. 1, 2018.

B. Requiring 90-Day Notice to Terminate After Foreclosure--Assembly Bill 2610.

Tenants are entitled to a 90-Day notice to terminate after foreclosure. Beginning January 1, 2013 a month–to–month tenant in possession of a rental housing unit at the time the property is foreclosed must be given a 90-day written notice to terminate.

For tenants who have a fixed term lease, the tenant can generally remain until the end of the lease term with all rights and obligations under the lease surviving the foreclosure, including the tenant’s responsibility to pay rent. There are, however a few conditions when a landlord may give a tenant on a fixed term lease a 90-day written notice to terminate including (but not limited to) when the new owner will occupy the unit or when the tenant is the borrower, his spouse, child or parent. 

Per CAR, there are four exceptions: (1) the purchaser or successor-in-interest will occupy the property as a primary residence; (2) the tenant is the borrower or the borrower’s child, spouse, or parent; (3) the lease was not the result of an arms’ length transaction; or (4) the lease requires rent that is substantially below fair market rent (except if under rent control or government subsidy).

The purchaser or successor-in-interest bears the burden of proving that one of the four exceptions has been met. Additionally, this law does not apply if a borrower stays in the property as a tenant, subtenant, or occupant, or if the property is subject to just cause rent control.

This law will expire on Dec. 31, 2019. This new California law is similar, but not identical, to the 90-day termination notice requirement under the federal Protecting Tenants at Foreclosure Act (12 U.S.C. § 5201, et seq.) as extended by the Dodd-Frank Wall Street Reform and Consumer Protection Act, which is set to expire on Dec. 31, 2014.

C. Disposing Abandoned Personal Property Less Than $700--Assembly Bill 2521.

Landlords may dispose of abandoned personal property worth less than $700: Beginning Jan. 1, 2013, the total resale value of personal property abandoned by a tenant after termination of a tenancy that a landlord must sell at public auction has been increased from $300 to $700 dollars – if specific procedures are met. This law also prevents a landlord from assessing storage fees if the property is recovered by the tenant within two days of vacating the premises. The landlord’s notices of termination of tenancy and pre-move out inspection must contain specific language that former tenants may reclaim abandoned personal property left on the premises, subject to certain conditions.

Per CAR, “The statutory notices of Right to Reclaim Abandoned Property have been revised to reflect these changes. In addition to sending this notice to a former tenant by first class mail as specified, a landlord may also send the notice by email if the former tenant provided the landlord with the tenant’s email address.”

Key Note: Personal property abandoned by tenants valued at the new $700 limit means that that property valued over $700 must be sold at public auction rather than disposed of or retained at the property owner/manager’s own use. As before, certain procedures must be followed so be sure to contact your own counsel. Owners and property managers should review and update termination of tenancy notices and pre-move out inspection forms for 2013.

Discrimination

Protecting Religious Grooming and Dress Practices-- Senate Bill 1964 and Assembly Bill 2386. 

Anti-discrimination protections for religious grooming and breastfeeding: Beginning Jan. 1, 2013 the California Fair Employment and Housing Act (FEHA) has been expanded to require employers and other covered entities to make reasonable accommodations for an individual’s religious grooming or dress practices.

Additionally, The FEHA protection against sex discrimination has been expanded – not changed – to require reasonable accommodations for breastfeeding or medical conditions relating to breastfeeding. Per CAR, “Religious grooming or dress is to be broadly construed, and includes head, facial, and body hair, head or face coverings, religious clothing, jewelry, artifacts, or other items that are part of the observance of a religious creed.

Segregating an individual is not a reasonable accommodation of someone’s religious grooming or dress practice. No accommodation for religious grooming or dress is required if it violates another law that protects civil rights.”

Key Note: Segregating an individual is not a reasonable accommodation.

I have attempted to offer a synopsis of a few new laws that may be of interest to property owners and tenants. There is a lot of information here and it is abbreviated. I encourage you to spend more time to study how these new laws may affect you. For now, please be prepared. The alternative can be expensive.

Beverly Taki is a California-licensed real estate broker who has represented clients in Malibu for 23 years. She is a Malibu resident and president/broker of Seabreeze Estates Realty. Beverly has earned a certificate in dispute resolution from Pepperdine University, specializing in mediation. Taki can be reached at beverly@beverlytaki.com or 310-456-4843.  Her website is beverlytaki.com.