March 14, 2012

Landlord-Tenant Law II

In a prior post I discussed helpful tips for a new residential landlord. This week I thought I would write about tactics a landlord should not pursue. The following are 5 no-nos for a residential landlord.

1. Wrongfully turning off the utilities

Many landlords, for foolish reasons, do not like to use the legal process to remove a tenant from the rental unit. Even though eviction proceedings are largely expedient and straight-forward, many landlords nonetheless engage in non-judicial evictions, which is unlawful and potentially criminal. The term for this is "self-help." Even though it sounds harmless and borderline patriotic given the U.S.' self-reliance mentality, it is very much frowned upon by the law.

Assume that Thomas, the tenant, has not paid rent for the month of March. Leonard, the landlord, is irate over this because Thomas has been delinquent in paying rent for the past couple of months and Leonard has warned Thomas about being prompt with rent. Leonard then goes to an attorney who tells him that Thomas can delay eviction proceedings for weeks if he pulls the right legal levers. Incensed that he has to wait weeks to evict Thomas, Leonard decides to cut the power line to Thomas' unit because no rational human can live in a dwelling without electricity. Therefore, Thomas will naturally want to leave the unit immediately. 

The obvious problem with this is two-fold. First, California law says that a landlord is prohibited from tampering with utilities in order to terminate the tenant's occupancy. CC § 789.3. The civil penalties for this include (1) actual damages; (2) up to $100 for each day that the landlord violates CC §789.3, but not less than $250 for each separate cause of action and subsequent or repeated violations being treated as separate causes of action subject to separate awards of damages; (3) attorney fees; or (4) injunctive relief. Second, it may be considered criminal to interfere with utility equipment. Pen C § 591.

2. Improperly entering the unit

A residential landlord may enter the rented premises only during specified situations at certain times and typically only after giving the tenant written notice. CC §1954. Many landlord mistakenly assume that they can just show up to the rental unit without prior notice and demand entry into the unit to inspect the premises. The following are the permissible reasons to request entry into the unit
  1. in an emergency;
  2. to make necessary or agreed-on repairs, decorations, alterations, or improvements;
  3. to supply necessary or agreed-on services;
  4. to exhibit the unit to prospective or actual purchasers, mortgagees, tenants, workers, or contractors;
  5. to make an inspection under CC §1950.5(f);
  6. when the tenant has abandoned or surrendered the premises; or
  7. under a court order.
Reason #5 relates to a security deposit inspection in case you were curious what CC §1950.5(f) meant.

Although it should be noted that a landlord may enter without prior notice if done to 
  1. to respond to an emergency.
  2. if the tenant is present and consents to the entry at the time of entry.
  3. after the tenant has abandoned or surrendered the unit.
Two additional key components of the landlord's right of entry is the fact that notice of the entry must be given in writing and the landlord may only enter the unit during business hours.  
CC §1954(d)(1). Unfortunately there is no definition of "business hours" in civil code. Still, the reasonable interpretation of business hours is 8:00 - 5:00pm or 9:00 - 6:00pm Monday - Friday. Although the lease agreement may define what constitutes business hours such that the weekend is included.

If the landlord commits a significant and intentional violation of CC § 1954, the tenant can receive up to $2,000. CC § 1940.2(b). 

3. Appropriating the tenant's valuable belongings

A common scenario is where the tenant breaks the lease early and the landlord is relegated re-renting the unit as required by law. CC § 1951.2. The tenant will often leave behind belongings, e.g. clothes, furniture and/or appliances. The landlord will then decide that since the tenant put them in a bind, the landlord will return the favor by appropriating their possessions left behind. Surprisingly, a landlord is legally able to keep the tenant's property provided the landlord has served them with a notice of abandonment and the value of the property is less than $300. CC § 1988(a). However, if the value of the property is above $300, the landlord is obligated to sell the property at public auction.  CC §1993.07. 

Since the landlord is granted the discretion to appraise the value of the tenant's belongings and is probably disgruntled that the tenant left behind some possessions, it is easy to see that this situation is ripe for abuse. For example, the landlord can easily devalue or deflate the true value of the items because there is no check on their discretion, plus they already view the tenant in a negative light for breaking the lease early. Moreover, many tenants are not prepared to litigate over a $275 couch and $50 mattress that the landlord misappropriated since attorneys charge that for an hour of time typically. Still, a landlord should know that just because the tenant left behind some property, this does not give them a license to appropriate the item for their own personal use. Rather the landlord needs to value the items and then make the appropriate legal determination.

4. Improperly raising rent for a month-to-month tenancy

When a new landlord takes over, he or she often likes to increase rent to put their unique stamp on the situation. In other words, the new landlord wants to show that they are in charge. However, California law is very specific as to when rent increases become effective. If the rent increase is 10% or less of the rent charged during the 12 months preceding the increase, the landlord needs to give 30-day notice before the rent increase becomes effective. CC §827(b)(2). If the rent increase is more than 10% of the rent charged during the 12 months preceding the increase, the landlord needs to give 60-day notice before the rent increase becomes effective. CC §827(b)(2).    

5. Retaliating against the tenant's lawful conduct

Retaliation seldom leads to positive results in life and the landlord-tenant relationship is no different. California law bars a landlord from retaliating against a tenant who invokes his or her tenant rights. CC § 1942.5. 

A common example is where the tenant complains to a city's housing authority about the habitability of the unit and when the landlord learns of this, attempts to evict the tenant. In short, this is prohibited by California law. CC § 1942.5. Moreover, if a tenant engages in protected tenant activities, the landlord is barred for 180 days from terminating the tenancy, increasing rent or decreasing any services, if done in retaliation. CC § 1942.5. This can be particularly frustrating to a landlord because they will have to endure a tenant they clearly dislike for an additional 6 months unless the tenant leaves under their own free will. In light of this, whenever a tenant invokes the right to live in habitable unit, a landlord should not reflexively think "eviction" to eliminate the problem immediately. Instead, the landlord should constructively engage the tenant or else they run the risk of having to deal with the tenant for at least another 6 months.