What new 2004 laws should I be concerned about?

Sadly, after we spend so much time and energy on the offensive at the local level, Sacramento has been busy passing a series of laws that, for the most part, adversely impact the rights of property owners. A lot of this legislative flury can be traced to the pre-recall desparation of ousted Governor Davis coupled with the aggression and power of Mr. Burton and other lawmakers seeking to please their liberal constituencies. On Thursday December 11, 2003 at 7:00 P.M., and again on January 15, 2004 at 7:00 P.M., landlord attorney Jeff Woo and I will be teaching the 2004 legislative update seminar at Fort Mason. For those who cannot attend, here is a brief synopsis of the new 2004 landlord-tenant laws.

The first law is actually good for the industry, as it allows owners to enter a unit without written notice to make repairs or other agreed-upon services if the tenant makes the request. Thus, owners no longer have to serve written notice 24 hours in advance when the tenant calls in a repair. You should still document the entry in writing for your records, and leave written notification inside the unit informing the tenant when you or your agent entered and what repairs were done.

There are two new laws that increase penalties for landlords who "defraud" a tenant or use force, threats or menacing conduct. In addition, a landlord who increases rent on a unit that has outstanding "Notices of Violation" from the Department of Building Inspection may be fined by the court up to $5,000. Undoubtedly, these laws will be used frequently in San Francisco.

Another new law authored by our own Mark Leno withdraws the right to use the Ellis Act for operators of residential hotels in San Francisco, Los Angeles, and San Diego. Formerly, any property owner could go out of business by withdrawing all of the units in a building from the rental market through invocation of the Ellis Act. This new law prohibits SRO and residential hotel operators in SF, LA and San Diego from using the Ellis Act if the Ellis Notice has not been served prior to January 1, 2004. (The law must be imposed locally by the Board of Supervisors, but I believe it is safe to say that our Board will implement this restriction immediately.)

The third series of laws have to do with security deposits. First, no move-out inspection will be required when the tenancy is being terminated by way of a three-day notice (e.g., three day to pay rent or three day to cure breach of lease covenant). In 2003, owners were justifiably confused when terminating a tenancy by way of a three-day notice, and then having to serve the "pre" move-out inspection form which allows a tenant to request a move-out inspection two weeks before leaving. The timeline did not make sense in the three-day eviction context, so this law really helps. The second security deposit law mandates that owners provide tenants with receipts, invoices or a vendor price list for any labor or materials that the owner purchases and then deducts from the tenant's security deposit. Tenants may waive the right to receive these receipts via a written waiver, and total expenditures under $125 are exempt. SFAA President Eric Andresen wrote an extensive article on this law that appears in the January 2004 SFAA magazine.

Finally, there is new legislation that requires business owners who negotiate a transaction in Chinese, Tagalog, Vietnamese or Korean to provide copies of these contracts in those languages. This is compodium legilsation to another law that requires contracts or agreements negotiated primarily in Spanish to be translated into Spanish prior to the contract's execution. Rules and regulations governing a tenancy and inventories of furnishings provided by the business are not included in the term "contract" or "agreement" and need not be provided in Spanish. However, SFAA is advising its membership not to negotiate lease agreements, or any other aspect of the tenancy, in a foreign language. Becuase of these laws and potential interpretations by the courts, members are advised to keep lease negotiations in English, as well as all lease addendums, common area signs, and "change in terms of tenancy" notices. This consistency, which comports with the English-language PPMA lease, will serve the landlord well.

Finally, the new PPMA 2004 lease is set for release in February or March. The new lease incorporates most of the recent legislative changes (both locally and statewide), and also includes many of the membership's suggestions. Please make sure you are using the most current version when signing up a new tenant.

-Dave Wasserman