California Bill Seeking to Force Landlords To Accept Section 8 Vouchers Defeated

California Senate Bill 1053 (Leno) sought to require California landlords to accept HUD Section 8 Vouchers. The bill has been effectively defeated.  Under the Section 8 program, a portion of the tenant's rent is subsidized by the federal government. In order to participate in the program, the landlord is required to enter into a Housing Assistance Payment (HAP) contract with the local housing authority.  The landlord is also required to enter into a lease and Section 8 Addendum with the tenant. The Section 8 program creates additional administrative burdens on the landlord and affects the landlord's ability to increase the rent or terminate the tenancy.

For further information, please contact Ruzicka, Wallace & Coughlin, LLP at (949) 748-3600; website: www.rwclegal.com. 

The law firm of Ruzicka, Wallace & Coughlin, LLP represents landlords, property management companies, institutional and private lenders, employers and insurance companies throughout the State of California in real estate, business and employment litigation. The information provided herein is for general interest only and should not be relied upon or construed as legal advice.

© 2016 Ruzicka, Wallace & Coughlin, LLP.

Purchase and Sale Agreement May Create Landlord-Tenant Relationship Such That Seller May Bring Unlawful Detainer Action

In Taylor v. Nu Digital Marketing (decided February 29, 2016), the Taylors (the "Sellers") and Nu Digital Marketing (the "Buyer") entered into a "Contract of Sale of Residential Property". Under the agreement, the Sellers agreed to sell real property to the Buyer for $1,250,000 subject to various conditions including the requirement that the Buyer make "Probationary Installment" payments of $2,300 per month for 60 months. The agreement further provided that if any payment was late, the Sellers could serve a Five (5) Day Notice to Quit.  If the Buyer failed to cure the payment within the five-day notice period, the Buyer was required to vacate the property.  In June 2013, the Sellers filed an unlawful detainer (eviction) action against the Buyer due to an alleged failure to make certain "Probationary Installment" payments.  The trial court entered judgment in favor of the Sellers and against the Buyer for possession of the property and damages.  The Buyer appealed.  On appeal, the Buyer argued that the agreement created a seller-buyer relationship rather than a landlord-tenant relationship and hence, according to Nu Digital Marketing, the unlawful detainer statutes were not applicable. The Court of Appeal disagreed.  It held that the Probationary Installment payments created a landlord-tenant relationship despite the name of the agreement.  Accordingly, it upheld the trial court judgment. (See, Taylor v. Nu Digital Marketing (2016) 245 Cal.App.4th 283).  

For further information, please contact Ruzicka, Wallace & Coughlin, LLP at (949) 748-3600; website: www.rwclegal.com. 

The law firm of Ruzicka, Wallace & Coughlin, LLP represents landlords, property management companies, institutional and private lenders, employers and insurance companies throughout the State of California in real estate, business and employment litigation. The information provided herein is for general interest only and should not be relied upon or construed as legal advice.

© 2016 Ruzicka, Wallace & Coughlin, LLP.

California Law Prohibits A Tenant From Recording A Property Manager Without Consent

A California statute makes it unlawful to “eavesdrop upon or record” confidential communications without the consent of all parties to the communication. Under California Penal Code section 632, “(e)very person who, intentionally and without the consent of all parties to a confidential communication, by means of any electronic amplifying or recording device, eavesdrops upon or records the confidential communication” shall be subject to fine or imprisonment. Persons injured by a violation of Penal Code section 632 may bring a civil action for treble damages or a statutory penalty of $5,000 for each violation, plus injunctive relief. (Penal Code §  637.2) A conversation is “confidential” within the meaning of the California Invasion of Privacy Act “if a party to that conversation has an objectively reasonable expectation that the conversation is not being recorded or overheard.”

For further information, please contact Ruzicka, Wallace & Coughlin, LLP at (949) 748-3600; website: www.rwclegal.com.

The law firm of Ruzicka, Wallace & Coughlin, LLP represents landlords, property management companies, institutional and private lenders, employers and insurance companies throughout the State of California in real estate, business and employment litigation. The information provided herein is for general interest only and should not be relied upon or construed as legal advice.

© 2016 Ruzicka, Wallace & Coughlin, LLP.

HUD Issues New Guidelines Regarding Use Of Criminal Records By Housing Providers

On April 4, 2016, the U.S. Department of Housing and Urban Development (HUD) issued guidance on the use of criminal records by housing providers.  Landlords are encouraged to review their rental screening criteria to ensure compliance with the new guidelines.  A copy of the guidelines can be found at the following web address:

http://portal.hud.gov/hudportal/documents/huddocid=HUD_OGCGuidAppFHAStandCR.pdf.

For further information, please contact Ruzicka, Wallace & Coughlin, LLP at (949) 748-3600; website: www.rwclegal.com. 

The law firm of Ruzicka, Wallace & Coughlin, LLP represents landlords, property management companies, institutional and private lenders, employers and insurance companies throughout the State of California in real estate, business and employment litigation. The information provided herein is for general interest only and should not be relied upon or construed as legal advice.

© 2016 Ruzicka, Wallace & Coughlin, LLP.

California Landlord May Evict a Tenant for Operating an Airbnb Business in Violation of Zoning Laws

In Chen v. Kraft (decided January 13, 2016), a landlord filed an unlawful detainer (eviction) action against a tenant who had been subletting a spare room in the rented premises on Airbnb. The premises were subject to the City of Los Angeles Rent Stabilization Ordinance, which requires good cause for eviction. The landlord filed the eviction action on the ground that the tenant was using the premises for an illegal purpose - namely, operation of a bed and breakfast in a residence zoned R-1.. The tenant claimed, among other things, that the prior owner of the property approved use of the premises for an Airbnb business. The trial court granted judgment for the landlord. The tenant appealed. The Los Angeles Superior Court Appellate Department affirmed the judgment in favor of the landlord.  It determined that the tenant was using the premises for an illegal purpose.  The court further held that a 2009 Addendum wherein the landlord's predecessor in interest expressly agreed, in writing, to allow the tenant to engage in Airbnb activities constituted an illegal contract in violation of existing regulations, and was therefore void and unenforceable. (Chen v. Kraft (2016) 243 Cal.App.4th Supp. 13)

For further information, please contact Ruzicka, Wallace & Coughlin, LLP at (949) 748-3600; website: www.rwclegal.com. 

The law firm of Ruzicka, Wallace & Coughlin, LLP represents landlords, property management companies, institutional and private lenders, employers and insurance companies throughout the State of California in real estate, business and employment litigation. The information provided herein is for general interest only and should not be relied upon or construed as legal advice.

© 2016 Ruzicka, Wallace & Coughlin, LLP.

City of Richmond Repeals Ordinance Establishing a Rent Board and Just Cause Requirements For Evictions

On November 3, 2015, by a unanimous vote of the City Council (7-0), the City of Richmond repealed its rent control and just cause for eviction ordinance. (Ordinance Number 21-15) Consequently, the City of Richmond's rent control and just cause for eviction ordinance has no force or effect, and the City Council may not adopt the same ordinance for one year. 

For further information, please contact Ruzicka, Wallace & Coughlin, LLP at (949) 748-3600; website: www.rwclegal.com. 

The law firm of Ruzicka, Wallace & Coughlin, LLP represents landlords, property management companies, institutional and private lenders, employers and insurance companies throughout the State of California in real estate, business and employment litigation. The information provided herein is for general interest only and should not be relied upon or construed as legal advice.

© 2016 Ruzicka, Wallace & Coughlin, LLP.

The 9th Circuit Court of Appeals Holds That A Bankruptcy Filed By An Occupant of Real Property After Entry of An Unlawful Detainer Judgment and Issuance of a Writ of Possession Does Not Create An Automatic Stay With Respect To A Sheriff Lockout

In In Re Perl, the plaintiff filed a post-foreclosure unlawful detainer action. After the Superior Court entered a judgment in favor of the plaintiff for possession of the premises and issued of a writ of possession, an occupant filed bankruptcy. The plaintiff proceeded with a Sheriff lockout without obtaining an order for relief from the automatic stay.  The occupant thereafter alleged that the plaintiff violated the automatic stay. The 9th Circuit Court of Appeals held there was no violation of the automatic stay because the occupant did not have a legal or equitable interest in the property at the time of the Sheriff lockout.  See  In re Perl (2016) 811 F.3d 1120.

For further information, please contact Ruzicka, Wallace & Coughlin, LLP at (949) 748-3600; website: www.rwclegal.com. 

The law firm of Ruzicka, Wallace & Coughlin, LLP represents landlords, property management companies, institutional and private lenders, employers and insurance companies throughout the State of California in real estate, business and employment litigation. The information provided herein is for general interest only and should not be relied upon or construed as legal advice.

© 2016 Ruzicka, Wallace & Coughlin, LLP.