Selected Developments
June 2017 Update
Transient Occupancy and Short-Term Rentals. Common interest communities may be subject to either covenants, conditions and restrictions (CC&Rs) or later enacted rules and regulations that place limits on the use of units for short-term or vacation renting. See, e.g., Almanor Lakeside Villas Owners Ass'n v Carson (2016) 246 CA4th 761, cited in §§6.49A, 17.12, 26.24.
A city may amend an already existing municipal code section that regulates private homes as short-term vacation rentals to increase the minimum age of a responsible person for the rental from 21 years of age to 30 years of age. Such a change is not barred by the Unruh Act. Harrison v City of Rancho Mirage (2015) 243 CA4th 162. See §§6.49A, 17.12.
Rights & Obligations During and After Tenancy. Under a new law, the landlord cannot retaliate against a tenant for reporting that a residential unit has bed bugs. Even if no infestation is present, the landlord has the right to inspect and must give a statutory bed bug notice to new residential tenants on and after July 1, 2017, and to existing tenants by January 1, 2018. See §16.3.
A landlord may prohibit smoking on the premises in the lease and then evict for a tenant's violation of the lease. Effective June 9, 2016, CC §1942.5 was amended to adopt the definitions of "smoking" and "tobacco product" in Bus & P C §22950.5. Both include the smoking of e-cigarettes and the inhalation of vaporized liquids. A landlord may also expressly prohibit the smoking of marijuana. On the federal level, the Department of Housing and Urban Development issued regulations that ban smoking in all Public Housing Developments throughout the country in 24 CFR §§965.651–965.655, 966.4(f)(12). See §§6.38, 17.7, 18.14.
Some executive branches of the federal government are charged with adopting housing quality standards by regulation for federally assisted residential housing, or such housing may be governed by local housing codes. See, e.g., 42 USC §1437f(o)(8) (amended in 2016), which establishes both (1) procedures for enforcement for Section 8 housing quality standards and (2) the criteria that trigger mandatory withholding of rental assistance payments to the landlord. See §15.13.
Public entity landlords are not always bound by the same law as private landlords. For example, a tenant who rented from a city was injured by a fire resulting from the city's negligent failure to replace a fire extinguisher, but the court held that Govt C §850.2 immunized the city from the tenant's suit. Puskar v City & County of San Francisco (2015) 239 CA4th 1248. See §15.13.
A government agency, such as a local rent board or building code enforcement department, may alternatively comply with a request for public records by posting the records on its Internet website. Govt C §6253(f). See §15.25.
Modern lease termination provisions allow the tenant to terminate the tenancy if the tenant determines that the premises are not appropriate for its operations for technological reasons. See, e.g., TBM Land Conservancy, Inc. v Nextel West Corp. (D Colo 2015) 131 F Supp 3d 1130. These types of provisions may be challenged if they are not clear enough to prevent a termination that does not in good faith satisfy the condition precedent to termination intended by the lessor. See, e.g., Diversified Capital Invs., Inc. v Sprint Communications (ND Cal, May 24, 2016, No. 15–cv–03796–HSG) 2016 US Dist Lexis 68757. See §19.10B.
Fair Housing. If the grounds for lease termination involve criminal activity or material noncompliance with the lease or state landlord-tenant laws, tenants in HUD-assisted and project-based Section 8 units must be served with a notice according to state law and the rental agreement. This usually means a 3-day notice for tenants in most HUD-assisted programs but a 30-day notice for tenants in Section 202 or Section 811 programs. See Long Beach Brethren Manor, Inc. v Leverett (2015) 239 CA4th Supp 24. See §18.22.
Housing providers should exercise caution when a tenant requests the delay of an eviction as a reasonable accommodation under fair housing law. See Brookside Apartments Realty v Heilman (Pa Sup 2015) 135 A3d 650 (request for accommodation by stay of eviction action was unreasonable because it would impose undue financial or administrative burden on housing provider; dealing with tenants' recurring housekeeping violations, noncooperation with housing maintenance by management, and repeated late payment of rent posed continuing and serious difficulties for manager of apartment complex), cited in §§14.21, 18.27.
A business may validly treat different age groups differently if the pricing policy provides a social benefit to the recipient group, the recipient group is disadvantaged economically compared to other groups paying full price, and there is no invidious discrimination. Javorsky v Western Athletic Clubs, Inc. (2015) 242 CA4th 1386. See §14.20.
The Violence Against Women Reauthorization Act of 2013 (VAWA) (42 USC §§14043e–11, 1437d note) prevents a Public Housing Authority (PHA) or landlord participating in all federal housing programs from denying rental to, or terminating the tenancy of, a person who is or has been a victim of domestic violence, dating violence, sexual assault, or stalking. 42 USC §14043e–11(b)(1)–(2). Most recently, amended implementing regulations were published in 81 Fed Reg 80724 (Nov. 16, 2016). See §18.17B.
Recreational use of marijuana in California was legalized beginning November 9, 2016, by Proposition 64, commonly known as the Adult Use of Marijuana Act. It allows persons who are 21 years of age and older to (1) possess, process, transport, purchase, obtain, or give away (without compensation) up to 28.5 grams of non-concentrated cannabis and up to 8 grams of concentrated cannabis and (2) possess, plant, cultivate, harvest, dry, or process up to six living plants. The new law builds on and utilizes many aspects of the comprehensive regulatory structure for commercial medical cannabis. California anticipates a likely rise of marijuana use at residential properties statewide; creating procedures and policies to minimize nuisance allegations and to respond to resident complaints will be important to consider and will be similar to those issues landlords face in response to medical marijuana, discussed in §14.22D.
Anti-SLAPP Motions. The supreme court resolved a court of appeal split and held that if a cause of action includes allegations of both unprotected activity and protected conduct under CCP §425.16, the trial court may strike the protected activity claims within a cause of action while allowing the unprotected claims to remain. Baral v Schnitt (2016) 1 C5th 376. See §§13.51, 17.17C.
An attorney's actions will be considered to arise out of protected activity under CCP §425.16 when the only actions the attorney took were communicative acts in representing clients for pending or threatened litigation; such acts are "unquestionably protected activities" under §425.16. Contreras v Dowling (2016) 5 CA5th 394. See §13.51.
Local Eviction Controls and Constitutional Issues. Buyout agreements for rent-controlled units negotiated in good faith will be upheld. In Geraghty v Shalizi (2017) 8 CA5th 593, a tenant, who had resided in his apartment for 22 years when a new owner bought the building, negotiated an agreement under which the tenant would move out by a set date in exchange for a payment of $25,000 so that the new owner could move in without using the owner move-in eviction process under San Francisco's rent ordinance. The written agreement was upheld when the tenant sued for violation of the rent ordinance. See §17.4A.
Some local ordinances provide that non-rent-controlled units are subject to eviction control. Newly adopted by voter initiative in 2016, see Richmond Fair Rent, Just Cause for Eviction and Homeowner Protection Ordinance, available at http://www.ci.richmond.ca.us/DocumentCenter/View/41144. See §17.5.
A city may not impose a 10-year waiting period between an Ellis Act eviction and a merger of two residential rental units into one unit. San Francisco Apartment Ass'n v City & County of San Francisco (2016) 3 CA5th 463. Moreover, see §§17.14–17.14A.
San Francisco increased relocation payments to tenants being evicted for specified reasons in 2014; the ordinance was held to be unconstitutional by a federal district court in Levin v City & County of San Francisco (ND Cal 2014) 71 F Supp 3d 1072. After the decision in Levin, San Francisco revised the relocation assistance formula (invalidated in Levin) to cap a landlord's payout of relocation payments at $50,000. In a separate state-court challenge, Coyne v City & County of San Francisco (2017) 2017 Cal App Lexis 256, the court of appeal ruled that local ordinances must survive a "prohibitive price" test to overcome a conflict preemption challenge under the Ellis Act and concluded that the relocation payment ordinance did not survive that test. See §17.32.
A court of appeal held that minor children residing with adult tenants are not entitled to relocation payments under the San Francisco ordinance governing Ellis Act evictions. Danger Panda, LLC v Launiu (2017) 2017 Cal App Lexis 304. See §17.32.
In Nozzi v Housing Auth. (9th Cir 2015) 806 F3d 1178, the court found that by using a poorly written flyer, the Public Housing Authority (PHA) administering the rent voucher program failed to provide meaningful information to voucher holders about a change to the rent payment standard, which could mean that a tenant's inability to pay for an unexpected increase in rent and utilities could result in eviction. Thus, the PHA's failure to provide fair notice violated the requirements of both voucher program regulations and procedural due process. See §§18.3B, 18.20A, 18.22.
Terminating Tenancies and Eviction Actions. In Taylor v Nu Digital Mktg., Inc. (2016) 245 CA4th 283, the court found that a real property sales contract, which included monthly payments that were not credited to the purchase price of the property but were in fact "rent," operated like a lease; when the defendant ceased making such payments, the landlord was able to use an unlawful detainer action to regain possession. See §§1.2, 13.12, 13.13A, 19.2.
The legislature repealed former Health & S C §§50580–50591, which provided for evictions from "transitional housing" programs. In 2016 that law was repealed, and its provisions were revised and codified in CC §§1954.10–1954.18. See §3.10.
Although the Ninth Circuit has not yet addressed this issue, a district court in Dickman v Kimball, Tirey & St. John, LLP (SD Cal 2013) 982 F Supp 2d 1157 held that a law firm's conduct to enforce rent obligations, by sending pay rent or quit and other notices to a tenant before filing an unlawful detainer action, was subject to fair debt collection laws. See §6.20A.
Under CCP §1167.1, effective January 1, 2017, if the landlord does not file with the court a proof of service of the summons within 60 days of filing the complaint, the court may dismiss the action without prejudice. See §§1.4, 11.11.
When the court withdraws a fee waiver order and an indigent party had obtained payment of costs under the Transcript Reimbursement Fund (see Bus & P C §8030.2, operative until January 1, 2020), that party must repay the fund the full amount received from the fund within 90 days of the court's order withdrawing the fee waiver. Bus & P C §8030.2(d)(2). See §§10.8–10.9.
Under a temporarily amended version of CCP §472(a), a landlord may amend its filed complaint once without court permission (1) at any time before the tenant's answer or demurrer is filed, or (2) after the demurrer is filed but before the demurrer is heard as long as the amended complaint is filed and served no later than the date for filing opposing papers to the demurrer (in effect only until January 1, 2021). See §§13.2, 13.36A, 14.53.
In North 7th St. Assocs. v Constante (2016) 7 CA5th Supp 1 (Constante II), the tenant prevailed on a defensive summary judgment motion in an unlawful detainer action, in which he had contended that the unit lacked a building permit and a certificate of occupancy, the landlord could not enforce any rental obligations for the unlawful unit, and therefore the 3-day notice to pay or quit was defective. On appeal, the appellate division of the superior court agreed. See §§6.18, 14.23, 15.52, 17.6, 17.9, 22.3.
When a landlord uses a submeter to charge a tenant separately for water service to an individual dwelling unit and imposes requirements on landlords, CC §1954(a)(5) allows the landlord to enter a dwelling unit for specified purposes relating to a submeter or water fixture if certain requirements are met, and the tenant's lack of cooperation may be grounds for eviction. See §17.10.
In Minick v City of Petaluma (2016) 3 CA5th 15, the court noted that to obtain relief for attorney error under the discretionary provision of CCP §473, counsel's neglect must be excusable; then the court found excusable neglect because the attorney filed a declaration stating that he filed an inadequate response to a summary judgment motion because of his serious illness and the side effects of prescribed medications. See §12.13.
Although all courts agree that mandatory relief from default under CCP §473(b) is not available when the error causing the default is the client's alone, the courts are divided on whether relief is available when the error is partly the client's and partly the attorney's. See Martin Potts & Assocs. v Corsair, LLC (2016) 244 CA4th 432. See §§12.14, 22.2.
Although no reported case has ruled on whether a landlord can evict a tenant for using medical marijuana, which remains illegal under federal law, attempts to use antidiscrimination laws to protect medical marijuana users have not been successful in challenges to local ordinances in California. See, e.g., The Kind & Compassionate v City of Long Beach (2016) 2 CA5th 116, 126 (rejecting all theories that city ordinances regulating (and then banning) medical marijuana dispensaries discriminate against persons with disabilities), cited in §14.22D.
A landlord who unsuccessfully prosecutes an eviction action and who is found to have violated CC §1942.4 is liable for the tenant's reasonable attorney fees and costs under CCP §1174.21, even if the landlord's liability under CC §1942.4 was not specifically litigated at the jury trial on the issue of habitability. See Active Props. LLC v Cabrera (2016) 6 CA5th Supp 6. See §§14.24A, 15.48, 26.33.
When a landlord has failed to comply with federal housing quality standards for subsidized tenancies, the government may withhold or suspend payments to the landlord; the tenant can then defend an eviction action for nonpayment of rent on the basis that the subsidy is not the obligation of the tenant. See Scott v Kaiuum (2017) 8 CA5th Supp 1 (Section 8 tenancy), cited in §§15.13, 15.48, 18.13.
The California Supreme Court accepted for review Shaw v Superior Court (review granted Nov. 12, 2014, S221530; superseded opinion at 229 CA4th 12), because there is uncertainty about whether a party may get immediate review of the denial of a request for a jury trial by way of a writ of mandate or instead must wait until after a bench trial to appeal the issue. See §§25.18, 25.21.
An order denying a peremptory challenge is not appealable and may only be reviewed by way of a petition for a writ of mandate. CCP §170.3(d); People v Superior Court (Tejeda) (2016) 1 CA5th 892. See §§25.30, 25.33.
An amendment to CCP §1033.5 provides that fees for electronic filing or service of documents through a provider if a court requires or orders electronic filing or service of documents are recoverable as costs. See §26.17.
To protect the privacy of tenants, beginning January 1, 2017, CC §1161.2(a)(1)(F) provides that court-filed unlawful detainer records will remain sealed, unless the landlord prevails within the first 60 days, or unless access is otherwise authorized under CC §1161.2(a)(1)(A)–(E). Under §1161.2(a)(1)(F), if a default judgment is set aside more than 60 days after the unlawful detainer complaint was filed, the court file access restrictions apply as if the complaint was filed on the date the default was set aside. See §§1.5, 12.32A, 25.1, 26.38.
In Kabran v Sharp Mem. Hosp. (2017) 2 C5th 330, the supreme court clarified that while the deadline to file a motion for new trial is jurisdictional, the time period for filing affidavits supporting or opposing a new trial motion are not jurisdictional. The trial court may rely on late-filed affidavits to grant a new trial, and if the nonmoving party fails to object in the trial court, it may not do so on appeal. See §27.16.
If a tenant is evicted under a writ of possession issued on an unlawful detainer judgment and then prevails on appeal, the tenant need not file a cross-complaint seeking restitution of possession to obtain that relief. Beach Break Equities, LLC v Lowell (2016) 6 CA5th 847 (noting that trial court has discretion to grant or deny restitution, even if appellate court directed it to provide tenant with appropriate restitution hearing and to restore tenant as far as possible to position occupied before eviction). See §§29.5, 29.37.
Postforeclosure Evictions. The occupant (person holding over) after foreclosure under a deed of trust can be evicted only if the purchaser acquired title that was "duly perfected." According to some courts, this means that the deed must have been recorded before the purchaser (new owner) serves the 3-day notice to quit. See U.S. Financial, LP v McLitus (2016) 6 CA5th Supp 1, 4. But see Dr. Leevil, LLC v Westlake Health Care Ctr. (2016) 2017 Cal App Lexis 192. See §20.4.
Because CCP §1161b will expire in its entirety by its own terms at the end of 2019 unless extended, on January 1, 2020, the current 90-day notice period for terminating month-to-month residential tenancies after a foreclosure will revert to a 30-day period as required by CCP §1161a. See §20.6.
A court of appeal reaffirmed that a subsequent fraud or quiet title suit founded on allegations of irregularity in the foreclosure sale is barred by a prior unlawful detainer judgment. But when the claim asserted in the later action "encompasses activities not directly connected with the conduct of the sale," the court noted that the applicability of the res judicata doctrine, either as a total bar to further proceedings or as a source of collateral estoppel, is much less clear. Orcilla v Big Sur, Inc. (2016) 244 CA4th 982, 1010. See §§20.8A, 20.9, 20.13A, 21.1.
An owner or tenant may defend an eviction after a foreclosure sale if the evidence shows the foreclosing bank did not own the mortgage, did not have the authority to foreclose, and did not convey valid title to the purchaser. Despite the decision in Yvanova v New Century Mortgage Corp. (2016) 62 C4th 919, more recent cases considering the more narrow issue of invalid mortgage loan assignments hold that an assignment that merely fails to comply with the terms of a trust agreement is merely voidable and not void, making the decision in Yvanova less significant for such an owner or tenant. See, e.g., Yhudai v IMPAC Funding Corp. (2016) 1 CA5th 1252; Saterbak v JPMorgan Chase Bank (2016) 245 CA4th 808 cited in §20.9.
Attorney Fees Awards. Attorney fees are recoverable on causes of action for constructive eviction and for breach of the covenant of quiet enjoyment and of the warranty of habitability, which are actions or defenses arising from the contract for purposes of CC §1717, as long as the lease contains an attorney fee clause. Hjelm v Prometheus Real Estate Group (2016) 3 CA5th 1155. See §§14.47, 15.50, 26.18–26.19.
When a landlord voluntarily dismisses an unlawful detainer action, usually no attorney fees may be awarded to the tenant under CC §1717, which allows attorney fees in actions on a contract when the contract provides for them. But attorney fees may be awarded to the tenant after such a dismissal when a statute or ordinance (such as the Los Angeles rent escrow ordinance) provides for attorney fees to the "prevailing party." Intelligent Investments Corp. v Gonzales (2016) 1 CA5th Supp 1. See §§15.13A, 26.21, 26.31–26.31A.
The American attorney fee rule is that, absent a statute or contract to the contrary, each side bears its own attorney fees. But the court of appeal in Ling v P.F. Chang's China Bistro, Inc. (2016) 245 CA4th 1242 held that the American rule does not apply when an employee sues under two statutes, one of which has a one-way fee-shifting provision that precludes the defendant employer from recovering fees under any circumstance. In such a case, the prevailing defendant may not recover fees on an intertwined claim. See §26.20.
In Laffitte v Robert Half Int'l Inc. (2016) 1 C5th 480, a class action lawsuit that settled before trial for $19 million with the agreement that class counsel would receive no more than a third of that recovery as attorney fees, the supreme court clarified that when an attorney fee is awarded out of a common fund preserved or recovered by means of litigation, the award is not per se unreasonable because it is a percentage of the fund. See §§26.24, 26.27.
On calculating reasonable attorney fees, see Mountjoy v Bank of America (2016) 245 CA4th 266 (court of appeal held that trial court may not simply engage in across-the-board reduction of hours but must consider number of hours actually included in flawed entries). See §§9.20, 26.24, 26.27.
Tenant Bankruptcies & Stay Relief to Complete Eviction. While not directly ruling on whether CCP §715.050 was preempted by the Bankruptcy Code, the Ninth Circuit held that a debtor (the former property owner) had no legal or equitable interest in the real property after issuance of state court's unlawful detainer judgment and writ of possession following a foreclosure; thus, the automatic stay created by the debtor's subsequent bankruptcy was not violated by the eviction. Eden Place, LLC v Perl (In re Perl) (9th Cir 2016) 811 F3d 1120. See §§20.13, 21.1–21.2.
A debtor-tenant in a Chapter 7 bankruptcy successfully argued under New York law that the debtor's interest in her rent-stabilized lease (in a rent-controlled city) was exempt from her bankruptcy estate as a "local public assistance benefit." See In re Santiago-Monteverde (2014) 998 NYS2d 144, 147, discussed in §§21.1D, 21.6.
Some debtors try to avoid the dismissal of the bankruptcy on the creditor's or the court's motion by attempting to voluntarily dismiss the case before the hearing. This is not allowed in the Ninth Circuit if the debtor had filed the bankruptcy in bad faith; further, the court can convert a Chapter 13 case on finding the debtor acted in bad faith and deny the debtor's motion to dismiss. In re Brown (Bankr SD Cal 2016) 547 BR 846. See §21.3.
Attorney fees are not be recoverable in stay relief litigation, which is not considered to be an action on the contract for purposes of fee recovery. See Green Tree Servicing v Giusto (ND Cal 2016) 553 BR 778. See §§21.2, 21.8.
Debtors must remain current on postpetition rent arising under nonresidential real property leases pending assumption or rejection. 11 USC §365(d)(3). But if a lease is deemed terminated and expired before the bankruptcy, the debtor would not be obligated to make immediate payment of postpetition rent under §365(d)(3), because that section only applies to unexpired leases, but the landlord may have an administrative claim for holdover rent and related charges. See In re Art & Architecture Books of the 21st Century (Bankr CD Cal 2016) 2016 Bankr Lexis 878. See §§21.1A, 21.6.
