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3 Day Notice Changes Response Time Extended

Three day notices are served on a tenant for not paying rent, or violating a term of the lease. For example, if the tenant has not paid rent then the “3-day” notice demands that the tenant pay the rent or move out within three days. If the tenant has violated the lease, such has having an unauthorized occupant, then the notice demands that they correct the violation or move out within three days.

In the past the days that the tenant has to perform has included weekends and holidays. Effective September 1, 2019, AB 2343 changes the existing law to exclude weekends and holidays, adding additional time for the tenant to pay the rent or correct the violation.

Knowledge of this change is important should it become necessary to serve a 3 day notice to your tenant. If you were to proceed to eviction without complying with the new law then you would likely lose your case. The courts are typically not forgiving of errors made by landlords.

Ready for Section 8 in San Diego?

On July 30, 2018, the San Diego City Council passed an ordinance that will require landlords to participate in the Section 8 Housing Program as of August 1, 2019.

If you have a rental property in the city of San Diego then you will be required to accept this government administered program.

At American Heritage Properties, we have experimented with the program several times over the years without success. We are confident that improvements in the system over the years will allow for a smooth transition into the program for landlords.

For more information on the program go to:
https://www.sdhc.org/doing-business-with-us/landlords/

At American Heritage, we will be orienting ourselves on the program over the next years so we are ready for the August 1 start date.

Service/Support Animals–Can a landlord just say no or charge an extra high deposit?

Landlords do not have the right to say no to a tenant who submits the legally required documents in order to establish an animal as a service/support animal.  There are federal and state laws that regulate service and support animals.

In most cases, the landlord may require that the tenant provide a written statement from a health care professional indicating that the person is disabled and is being prescribed the animal in order to allow them to enjoy the home the same way that a non-disabled person would.  A perfect example of this would be a service animal for a person who has impaired sight.   Be aware that a “health care professional” does not mean only a doctor.

When a tenant meets the legal requirements to have an animal as a service/support animal then the landlord cannot charge an extra deposit.  The best way to consider a service/support animal is to treat it like a wheelchair.  You wouldn’t charge an extra deposit to a tenant for their wheelchair, so the same applies to the service/support animal.

If you encounter a tenant/applicant with a support/service animal and do not know how to proceed, it is best to seek legal advice from an attorney who handles landlord/tenant law and is experienced with disability accommodations.

Statewide Rent Control In California Defeated

AB 1506, which would have repealed the “Costa-Hawkins Rental Housing Act of 1995”, was defeated. The bill to repeal never made it to the General Assembly after it failed to receive the required number of votes from the Housing and Community Development Committee.

This is considered a victory for small property owners since they would have had the government regulating and controlling rental rates.

If the rental rates continue to increase at the rate that they have been, then it is likely that we will see more attempts at rent control in the future.

Who pays for lost food when the frig breaks?

If the refrigerator breaks and the tenant’s food spoils is the landlord responsible for reimbursing the tenant for the cost of their spoiled food?

In most cases, the answer is no. Landlords are not insurers of their tenant’s property. If the tenant has renter’s insurance then that would likely cover the loss.

However, if the tenant can prove that the landlord was negligent in maintaining the refrigerator, then they might be able to hold the landlord responsible for the cost. An example of negligence would be repeated requests by the tenant to repair a failing refrigerator that are ignored by the landlord, resulting in the complete failure.

Landlords can protect themselves by promptly and effectively maintaining their property. Tenants can protect themselves by obtaining appropriate insurance coverage for their property.

Can I Limit the Number of Occupants in My Home?

Landlords must be reasonable when they set occupancy limits in order to prevent discrimination against any class of person.  For instance, if you have a three bedroom home and you set the limit at two people then that would likely be considered discriminatory on the basis of family status.  In other words, it would appear that you are trying to prevent families (adults with children) from renting your home since a family would often consist of more than two people.

There has been a long standing guideline accepted in the industry as a occupancy standard–that guideline is call the “two plus one” rule.  The idea is that two people per bedroom, plus one additional for the entire unit would be a reasonable standard that would be safe to use from a fair housing perspective.  This would mean five people for a two bedroom condo–two per each of the two bedrooms, plus one additional for the unit.  Many people feel that five people in a two bedroom home is too much, but that is the guideline that is typically considered safe to use.

There are many factors that can be taken into consideration aside from the “two plus one” guideline.  For instance, occupancy standards based on objective criteria such as square footage are more likely to be considered reasonable as long as the limits set are set appropriately.  In setting occupancy standards, I strongly recommend speaking to an attorney that specializes in fair housing.

As housing prices increase, we are likely to see more occupants per unit as tenants combine households.  I believe the issue of occupancy standards will become more public in the upcoming years.

 

Can I Require my Tenant to get Renter’s Insurance?

There was a case that was recently decided by the California Court of Appeals. The results of the case were an indication that even if your lease requires renter’s insurance, a tenant’s failure to maintain that policy is not a material breech and therefore likely to leave no option for enforcement.

Here is some brief information about the case:

Boston, LLC v. Juarez:  Juarez’s residential lease required him to maintain liability insurance and provided that any breach of the lease allowed the landlord to forfeit and terminate the lease. This decision holds that despite the lease’s broader wording only a material breach of the lease can permit lease termination at the landlord’s option, both because the clause is otherwise unconscionable and because it would violate the public policy embodied in Los Angeles’ Rent Stabilization Ordinance. Furthermore, the renter’s insurance that Juarez was supposed to maintain benefited the tenant, primarily, not the landlord, and the landlord made no showing it was prejudiced by Juarez’s failure to maintain that insurance. Accordingly, failure to maintain renter’s insurance was not a material breach of the lease, did not permit lease termination. Hence, the unlawful detainer judgment in the landlord’s favor had to be reversed.

In my opinion, everyone (landlord/tenant/management company/neighbors/guests) is better off when a tenant maintains a renter’s insurance policy.  There are so many benefits to the tenant.  A perfect example if this is if a unit were to have a flood–without renter’s insurance there is no coverage for their personal property, and if they cannot stay in the unit then they will likely only receive the pro rated daily rate of rent which is typically considerably less than a hotel or replacement housing.  Renter’s insurance usually provides great coverage for this type of loss and without the renter’s policy then the tenants are usually out of luck.  This is just one example of the many benefits.

The court was wrong in their decision but I don’t think that judges really care much about business owners and property owners in California.

I’m not an attorney, so the information I provide is not legal advice–just my impressions.  If you have any questions contact me, Bill Ausen, at American Heritage Properties renthomes.com.

Financial Considerations When Moving as a Senior

Deciding to sell your home and move into a new place of residence requires careful financial consideration. You’ll need to determine at what price to sell your house, where you should move, and more. Being well prepared gives you assurance that you’re making the smartest decisions for your personal financial situation and future financial goals.

Getting Top Dollar for Your Home

When you’re ready to sell your home, you want to make sure you get top dollar. While setting the asking price for what your home is worth may seem like the obvious thing to do, realtors often suggest shaving 15 to 20 percent off what your house is worth. Doing this will ensure you receive multiple bids, even in the worst markets, which will drive the final selling price over what it’s worth. It seems risky, but HGTV claims, “…it’s the single best strategy to sell a home in today’s market.”

When staging your home, leave your closets, cabinets, and pantry half empty to give the appearance of more storage space. Having ample lighting will also attract buyers. Leave curtains and blinds open, clean the windows, and increase the wattage of your light bulbs. Quick fixes are sure to help your home sale. Apply a fresh coat of paint, replace door handles and cabinetry hardware, and make sure your front door makes a statement.

Lastly, remove the personal touches. The less they see of you, the more they can see themselves living in the house. A good rule of thumb is to move a third of your stuff into storage. This includes family photos, trinkets, memorabilia, and other personal keepsakes. Since you’ll need to place all of your stuff into moving boxes when you make the move anyway, think of it as getting a head start.

Tax Ramifications

Selling a home can result in paying capital gains taxes if you make a profit, and the sale proceeds aren’t used to buy another home. However, it’s possible to exclude all or part of the gain. For example, if the home was your primary place of residence, and you lived in the home for at least two of the five years prior to the date of sale, you can exclude up to $250,000 if you’re single or up to $500,000 if you’re married filing joint and both qualify. The excess amount beyond the exclusion will then be taxed at capital gains rates.

You may still be able to exclude some of the profits if you meet other conditions, such as a change of employment or moving for health reasons. To find out whether you qualify for one of the exceptions, view the “Excluding The Gain: Reduced Maximum Exclusion” section in IRS Pub 523. Before listing your home, contact a tax specialist or professional financial advisor to determine how the sale will affect your finances and to see if you qualify for any exceptions.

Housing Costs

The cost of your home will vary widely based on where you choose to live and the size and type of your residence. In general, the difference between the types of housing will remain the same, so take Florida for an example. Obviously the rates vary by county, but on average a house in Florida costs $200,000, which puts the mortgage around $950. The pricing of the homes in retirement communities, also called 55-and-over communities, is generally comparable to standard houses in the area.

A two-bedroom apartment in Florida averages in at $1,587 per month. The average cost of an independent living facility in Florida is $2,545 per month. As you can see, these options are more expensive than purchasing a home, but they have their perks. Apartments and assisted living facilities come with little to no maintenance, plenty of amenities, and typically include utilities. Some independent and assisted living communities also include food and transportation in their cost, not to mention on-site medical assistance.

As you can see, the decision to sell your home and move into a new place of residence comes with a lot of important financial decisions. Working with a realtor and a financial advisor will help to ensure you make decisions that best fit your unique situation. While cost is definitely important, finding somewhere you can comfortably live and enjoy life is the ultimate goal.

Here are some resources that may be helpful:

 

Courtesy of Michael Longsdon from elderfreedom.net

Do residential leases have a right of rescission?

After signing a lease, a tenant changed his mind and exercised his 72 hour right of rescission to terminate the lease. The problem–there is no right of rescission for residential leases under California law.

California does establish a right of rescission for several categories of consumer purchases, often relating to those transactions occurring at the home, such as a contract to install a pool. However, once the rental agreement is signed it is then binding on both parties without a right to terminate without cause.

Why Not Take Section 8?

In theory, Section 8 is a wonderful program. The idea is that the government subsidizes the rent for those who cannot afford the full rent amount.

So, why doesn’t it work? My answer is bad landlords. Over time there were bad landlords who took advantage of this government program and as a result the government had to put protections in place to ensure the landlords were not taking advantage of tenants and the government.

The government regulations involved with Section 8 put burdens on landlords that make the program less desirable from a business perspective for many landlords.

Here are a few of the regulations that are not appealing to landlords:
1) The Housing Authority may not set the vouchers at realistic fair market values.
2) It can take several weeks for the inspection in order to qualify for the program.
3) Tenant complaints can result in the program terminating the monthly rent, as opposed to the procedures set forth by California Law.
4) It may be difficult to exit the program if the landlord chooses to sell or move back into their property.

Over the years the Section 8 program has improved in some areas but there are barriers that still exist. I have heard rave reviews of the program from those that are well established with the program, but also horror stories from others.

Currently the acceptance of the Section 8 program is voluntary. Some tenant activist groups have been pushing legislators to require that landlords accept the program so sometime in the future you may have no choice but to start doing business with the government.

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