Many Proposed Bills to Have a Negative Impact on Owners

Written by Ron Kingston | 05 May 2011

A large number of bills that, if passed, would have a negative impact on our industry have been proposed in Sacramento. The bills are targeting everything from water conservation and rental contracts to rent control and tenants' signs. They are hitting us from all sides. Let's take a look at a few of these proposed measures.

Senator Kehoe from San Diego proposed SB 337 providing that a landlord may not prohibit tenants from posting or displaying non-commercial signs, posters, flags, or banners on or within any portion of a leased premises unless it violates the law.

This means that a property owner will no longer be able to impose rules to prevent their tenants from posting signs and posters that cause visual blight on their property or are offensive to others. This includes political and campaign signs.

While those who support this measure see it as a matter of free speech, AACSC disagrees. We are opposed to SB 337 because:

• Tenants would be allowed to post purposely objectionable and offensive signs. This could lead to tension and retaliation among other tenants and could ultimately lead to damage to your building (i.e., a rock being thrown through a window to retaliate against the posting of an offensive sign).
• The terms of the bill would be enforced by government. When a violation of law is at issue concerning the legality of the sign, government will be the only entity to determine and enforce the law. Often signs are of low priority, making the process slow, painful, and arduous.
• Due to the economic situation in the state and most local municipalities, most governments are currently overburdened with meeting basic needs and obligations. Because of this, we can expect infrequent or no enforcement.
• The bill overreaches on private property rights by creating visual blight. Blight is well known to invite crime and violent acts against person or property and it disrupts the legal rights of tenants for "quiet enjoyment of the property."
• Owners can expect to be challenged by tenants who wish to display signs which may be considered objectionable or blight.

Another bill, AB 934 (Feuer), seeks to invalidate two recent appellate court decisions (which are beneficial to landlords) and assures local governments to enact and enforce laws relating to tenant harassment, eviction, termination of tenancy and rent control. It would also grant local governments authority to regulate contractual terms of rental and lease agreements for the first time in law.

There are some opponents to the measure that are informing their members of the Legislature that the bill removes the protections of the "litigation privilege" of real property transactions regarding rents, termination of tenancy and eviction actions. Did I lose you yet? Let's look at the issue in digestible and better-understood language.

We are opposing the bill because:

• Most importantly, cities and counties would be granted vast authority to adopt different and conflicting landlord and tenant laws which will be a massive problem for everyone and the courts. Just think of many cities adopting their own laws regulating evictions, termination notices, and the manner in which landlords and agents may talk to tenants about late payments!
• Contrary to supporters' claims, the two court cases did not interfere with the right of tenants to adequately defend against any eviction action. Courts have not and will not decide in favor of wrongful eviction actions.
• Tenants and their counsel continue to have a tremendous hammer over any landlord and his or her attorney who have committed perjury and engaged in unfair business practices.
• The decisions by the courts did not change the right of any tenant to file complaints with district attorneys against any landlord or his or her counsel for unlawful acts.
• Proponents argue the recent court decisions preclude tenants from adequate representation which is not the case. Once tenants successfully defend the underlying eviction, they should always follow-up with legal action---including filing a claim with the State Bar of California against any (landlords) attorney that has violated the law.
• Contrary to proponents' claims, the number of malicious eviction actions has not changed due to the recent judicial decisions. Those same people argue that a few attorneys have refused to represent tenants as a result of the two judicial decisions. Every one of those attorneys should represent tenants in unlawful detainer actions and once they are successful, they have every long-standing legal remedy at their fingertips to pursue many causes of action.

Another bill we are OPPOSING is AB 265 (Ammiano), a bill that would require all landlords to give tenants at least a half month's additional time to pay rent (changing the 3-day notice requirement to 14 days).

Some argue that the bill is unnecessary or inadequate, and it creates an undue financial burden on landlords. While this is true, many Legislators may not be persuaded by those arguments.

Let's look at some of our reasons to oppose the bill in the Legislature:

• Some suggest other creditors are required to provide longer grace periods and it follows that similar time periods should apply to landlords and tenants. Most billing statements and payments for those creditors are mailed and therefore payment periods are appropriate. There is no parallel to extend intentional delays in the payment of rent. Tenants have agreed, in writing, to pay a set amount of rent each month, due on the same day each month.
• On occasion, tenants run into hard times. Today landlords may work out a payment plan with the tenant in those cases. If this bill becomes law, however, landlords will have no reason to negotiate and they will be counseled to stop negotiating a delayed date to pay rent.
• Landlords face financial obligations and their creditors do not have statutory waiting periods to pay employees, gardening and similar services, and mortgage payments for the building.
• Landlords will be forced to impose much tighter credit requirements on all tenants. Prospective tenants that have low credit scores will really feel the adverse impact of the bill.
• The bill undermines a landlord's ability to seek a timely and lawful eviction against the tenant that does not pay rent.

We have just featured three bills that should get your blood boiling. We will be more than pleased to continue to write about more bills affecting your business. This assumes, however, that you have the stomach for it!