Rent Freeze – Promise Broken

Written by Apartment Management Magazine on . Posted in Blog

For more than 40 years, the City followed a formula for rent increases prescribed by its ordinance. Now, in the face of tremendous inflationary pressures, it has decided to severely reduce the allowable rent increase prescribed under the law after almost 4 years of zero increases and unprecedented inflation. Rental housing providers in the City of Los Angeles will never have an opportunity to even begin a process of recovery and recoupment of their losses at the hands of short-sighted, government officials. It is perfectly clear, particularly when it comes to Councilmembers Soto-Martinez, Hernandez and Raman, each of whom has proudly declared allegiance to the Democratic Socialist Party, that there is no respect on the City Council for private property owners who have sacrificed to make investments that place roofs over the heads of members of their community.

Manufactured Housing: Booming Investments & Cutting-Edge Tech

Written by Apartment Management Magazine on . Posted in Blog

In recent years, manufactured housing has emerged as a crucial component in addressing the affordable housing crisis in the United States. Once viewed as a less desirable housing option, this sector has undergone a transformation, capturing the attention of investors and innovators alike. This article delves into the reasons behind this shift, the challenges faced and the technological advancements propelling the industry forward.

Manufactured housing is a growing investment opportunity

Do manufactured homes hit the sweet spot for investors? The answer is mixed.

REASON TO BE EXCITED

As affordable housing becomes increasingly scarce, consumers are turning to manufactured homes. This has led to a surge in development. In 2022, Lesli Gooch, CEO of the Manufactured Housing Institute, noted the production of over 100,000 units in 2021. This was the first time this has happened since 2006. With regards to affordability, each home averaged $87,000.

Essential Maintenance Tasks for Apartment Owners

Written by Apartment Management Magazine on . Posted in Blog

By Mike Peterson, Freelance Writer

In 2021, there were 400 deaths and 3,100 injuries caused by apartment fires nationwide, costing around $1.7 billion. While various factors led to these sad statistics, the lack of essential maintenance is among them. As an apartment owner, you must ensure that your property is well-maintained to look after the safety and well-being of your tenants and prevent these disasters from happening.

However, performing essential maintenance or starting “do it yourself” (D.I.Y.) projects to increase the property’s value can sometimes lead to unforeseen circumstances, like sustaining injuries. Let’s explore the maintenance tasks that every apartment owner should perform, along with essential safety and liability considerations and tips to increase the value of your apartment property.

Use it now- rules surrounding no-fault ‘substantial remodel’ evictions will soon change and become more scrutinized. 

Written by Apartment Management Magazine on . Posted in Blog

By Daniel Bornstein, Esq.

Currently, owners subject to statewide rent and eviction controls endeavoring to recover possession of the premises by substantially remodeling the property do not have to have their plans drawn up and permits issued before work begins. Not so beginning April 1, 2024. 

We had the opportunity to speak with a rental property owner in Walnut Creek and, after many years, wants to get out of the landlording business, sell her property, and move east to be closer to her adult children. But there are a few hurdles to overcome to accomplish the goal.

So how can she sell her duplex as vacant when both units are occupied by responsible tenants?  The tenants are making timely rent payments and are otherwise exemplary, so we cannot find any theories to evict them for anything they did wrong. No “at-fault” just causes can be identified.

Tens Of Thousands Still Waiting As California COVID Rent Relief Program Runs Low On Cash

Written by Apartment Management Magazine on . Posted in Blog

In March 2021, the Los Angeles film industry was just beginning to roar back to life after a prolonged COVID-induced slump, but Michael Addis, a freelance filmmaker, was still deep in the hole. For more than a year he’d been racking up IOUs to his landlord and the tab stood at $43,792.

So Addis turned to an emergency state program designed to help people like him pay down rental debt accumulated during the pandemic. 

Later, in the summer of 2021, Gov. Gavin Newsom himself had touted the program, Housing Is Key, as the largest of its kind in the nation. “We’re laser-focused on getting this assistance out the door as quickly as possible,” he said at the time.

Addis heard back 20 months after he applied.  

On June 5, 2023 — his 61st birthday — he received an email, which he shared with CalMatters, notifying him that a payment had been approved in full. 

But by then it was too late. Addis had already downsized, moving out of his apartment a few blocks from the Marina Del Rey harbor to a smaller spot in the San Fernando Valley. He had also borrowed money from members of his family to pay his old landlord back, hoping that he’d be able to write off the new debt with the relief funds from the state. But once the company that owns his apartment complex, Equity Residential, received a check from the state, they sent it back, citing program guidelines that deemed Addis no longer eligible for assistance.

Landlord / Tenant Questions & Answers

Written by Apartment Management Magazine on . Posted in Blog

By Ted Kimball, Esq., Partner, Kimball Tirey & St. John LLP

  • Question. I was told by my tenant that my notice of increase was bad because it was less than 90 days and was over 10%. I thought it was 60 days for rent increases. Is my tenant correct?
  • Answer. Yes, the tenant is correct in this instance. Beginning in 2020, the Civil Code changed to increase the amount of time from 60 days to 90 days for a rent increase of over 10% within the last 12 months. If you mail out the increase within the state of California, you need to add 5 days for mailing for a total of 95 days’ notice.
  • Question. In our lease agreements we require tenants to pay their rent on the first of the month. If the first falls on a holiday, such as Labor Day, do you have to give the tenants until midnight on the second to pay the rent or can you still enforce the late fee as of midnight on the first?
  • Answer. Rent is not delinquent unless one business day has expired from the date the rent is due. So, if the first is a weekend or holiday, the rent is not late until after one business day has expired.

“ASK KARI”: Professional Know-How for Landlords: Empowering You to Handle Karen Tenants

Written by Apartment Management Magazine on . Posted in Blog

By Kari Negri, Chief Executive Officer, SKY Properties, Inc.

  • Dear Kari, in one of your previous “Ask Kari” articles, you shed light on the challenging dynamics of “Karen” tenants. Well, it seems I’ve got one of those in my building who has a liking for threatening legal action at every turn. Now, I’m left wondering: What’s my best course of action here?

[Editor’s Note: In case you missed the previous article, a “Karen” is a pejorative term used as slang typically for someone who is perceived as entitled or demanding beyond the scope of what is normal.]

In the world of property management, having a firm grasp of both tenant rights and landlord responsibilities is absolutely essential. When you’re well-informed and diligently follow the legal framework, you can face your “Karen” tenant’s threats with confidence. Here are just some things you need to do to empower you to confidently handle your interactions with your difficult tenant.

Be informed on Tenant Laws

Over time, tenant laws have really changed a lot, leaning more and more towards looking out for renters. Lately, many have been talking a lot about things like keeping rent reasonable, making sure people don’t get kicked out of their homes too easily, and keeping tenants’ personal stuff private. So, it’s super important to keep up with what’s new with the ever-changing landlord and tenant laws. You can do this by going to webinars, joining landlord groups, reading local trade magazines or talking to legal experts when you’ve got tricky questions. After all, in the face of challenging tenants like Karen, knowledge is your most formidable ally.

Mastering Senate Bill 721: California’s Balcony and Deck Inspection Law

Written by Apartment Management Magazine on . Posted in Blog

A Comprehensive Guide for Property Managers and Owners

By Paul J. Watrous, President, National Roof Certification and Inspection Association

The revolutionary lyrics of Sam Cooke, “It’s been a long time coming but I know a change is gonna come,” preceded the reforming Civil Rights Act in 1964. Just a few short decades ago, life looked different. Travelers didn’t have to pass through TSA to board a plane, we didn’t have to wear seatbelts, and children didn’t have car seats. Homes are no longer built utilizing lead and asbestos-based products.

Reforming laws are typically passed due to unfortunate and tragic incidents and are in place to better serve the community, promote the safety of its citizens, and protect their most basic inalienable right, life. These things have now become part of everyday life. Many may not think twice about it because we understand and support the greater objective. Sam Cooke’s lyrics still ring true today however, the change is here, and the time is now.

Now, you might be asking what this has to do with California’s Senate Bill 721 (SB 721). In the ever-evolving world, staying informed about the latest legislative developments is essential, especially in the real estate industry. California’s SB 721, commonly known as the Balcony and Deck Inspection Law, has significantly changed the landscape of multi-family investments, property maintenance, and safety. The 2015 tragic incident in Berkeley, California, served as a catalyst for SB 721, and three years later, the bill was enacted in 2018, aiming to take preventative measures in efforts to prevent such incidents from happening again. 

People have the right to life. By ensuring property owners regularly assess and maintain their buildings to promote a safe living environment for their tenants and the public, all Exterior Elevated Elements (EEE) must be periodically inspected and maintained. Initially, changes can sometimes be abrasive and difficult to navigate. But let’s approach this law with the positive mindset that everyone should have the right to life, a safe one at that, without worrying about history repeating itself. This law has far-reaching implications that will only continue to develop over time. 

Naturally, being headquartered in Southern California, this inspection law caught the team’s attention at The National Roof Certification and Inspection Association (NRCIA). Since 1995, the NRCIA has been known for trailblazing the roof inspection industry with best practices and processes. Through research, crafting educational and training courses, and developing tools and resources that target the inspection industry, the NRCIA is committed to promoting safety, transparency, and excellence within the real estate community.

Recognizing the importance of SB 721 compliance, California stakeholders have been inquiring about this training which commenced the development of NRCIA’s newest educational content. “Mastering SB 721: The Comprehensive Guide to California’s Balcony and Deck Safety Law” is designed to assist service providers, property managers, and owners navigate the intricacies of this new law.

After countless hours of combing through the legislation and talking with the parties involved, from building owners to city officials, the NRCIA was able to compile a three-hour course covering the history of SB 721 to understand the law and processes on a deeper level fully. The course comprises modules covering the inspection terminology, requirements, timelines, compliance, procedures, and proper documentation. Upon completion of this course, students will gain insight and sharable knowledge and be equipped to confidently navigate the SB 721 process, adding value to the services they offer. Additional field resources are provided, keeping the course details and the law at your fingertips.

SB 721 represents a significant step forward in ensuring the structural integrity and safety of exterior elevated elements in multifamily buildings throughout California. Property managers and owners must be well-informed and prepared to comply with this law. NRCIA’s course, “Mastering SB 721,” is a valuable resource for staying ahead in this evolving landscape. By prioritizing safety and compliance, property managers and owners can protect their real estate investments and the well-being of both their tenants and the public. 

Berlin, in South Orange County, points out the stereotypical landlord mindset: “if it ain’t broke, don’t fix it.” Breaking long-time habits or strategies can be challenging, especially when it consumes more time, expertise, professional services, and financial resources. After the initial inspection cycles, this law will subsequently edify the property owner’s mindset, shifting from reactive repairs to preventative maintenance, ultimately creating a better life for their tenants. 

As with most changes, friction can occur, and SB 721 is no different. Beyond the initial frustration of another landlord requirement, locating a qualified industry professional to perform these inspections is the first challenge. Only firms who are licensed in California as an architect, engineer, or contractor (“A,” “B,” or “C-5,” who has at least five years’ experience in constructing multistory buildings) or a building inspector affiliated with a recognized association are allowed to perform these inspections.

Due to the additional expectations on inspectors, only a limited number of qualified individuals will offer the inspection service. As we get closer to the January 1, 2025, deadline, these certified inspectors will be overwhelmed with the large number of inspection requests, and finding an available inspector will be a challenge. Most qualified individuals we questioned choose to forego offering the inspections and only perform the more lucrative restorative work.

Bridging the gap from the inspector to the contractor lies another speed bump that could cause delays, which is the financial component. With the typical mindset of “if it aint broke, don’t fit it,” routine preventative maintenance repairs often get deferred, resulting in more extensive and expensive resolutions. Once the initial SB 721 inspection report is delivered, the required restorative repairs need to be determined by a licensed contractor to become SB 721 compliant.

Depending on the condition of the Exterior Elevated Elements (EEE), the extent of the scope of work may put unexpected financial stress on the building owner. After receiving the report, the law permits 120 days to obtain proposals and to pull a building permit; then the restorative work must be completed within 120 days from permit issuance. Scheduling inspections early and utilizing the timeframes properly will allow landlords to budget their time and gather funds for these required repairs before the January 1, 2025, deadline. 

With anything required by law, there are consequences for non-compliance. There are a lot of intricacies to this law, and it is important that building owners or their designated agent consults a trained and certified inspector to perform these mandated inspections to get SB 721 compliant before 1/1/2025. Fines can range from $100-$500 per day until the repairs are completed. In addition, a building safety lien can be filed on the property with associated costs incurred. Complying with SB 721 law may assist in preventing personal injuries and potential lawsuits.  

Ultimately the implementation of the CA SB 721 law and knowing how to navigate the process efficiently will elevate the demand for professional property management and inspection services.For more information about NRCIA’s “Mastering SB 721” course and how it can benefit your property management efforts, visit GoSB721.com/pmo. Stay ahead, stay safe, and stay SB 721 compliant for a brighter future in California’s multifamily housing sector. 

Paul J. Watrous is president of the National Roof Certification and Inspection Association. As a fourth generation in a family of builders specializing in roof systems, he has completed more than 12,500 inspections. He has assisted in developing educational courses, exams, and web-based reporting software to share knowledge and tools to promote transparency and expertise in the inspection industry.  For more information, contact: Paul Watrous, Paul@nrcia.org.

Eviction Horror Story

Written by Apartment Management Magazine on . Posted in Blog

By Avi Sinai, Esq.

This is a story about the worst case of a ‘professional tenant’ in my professional career. Over $100k in unpaid rent, over 9 months of litigation, jury trial, appeal, countless motions, and a lot of bad faith.

Late 2021

My client visits her property after the tenants notified her they are moving out. It’s an apartment in Santa Monica, 3-Bedrooms with hardwood floors, ten blocks to the beach. Rent at the time was about $3700/m (market rate was about $5,500).

She opens the door and is greeted by an unknown occupant, a middle-aged woman who says ‘she is living here, that’s my house’. She won’t leave, the police are called but they can’t do anything. “Civil matter – you have to evict her.” So this is where I come in.

Turns out one of the former tenants subleased one of the rooms for extra cash and did not notify my client. The occupant was so obnoxious and rude, all the rest of the tents fled elsewhere shortly after she moved in. They found her on CraigsList.

The occupant only paid the first month rent, but did not make a single rent payment after she moved in late 2021.We had to wait until the moratorium was over to file an eviction (March 2023). The moratorium restricted evictions not just on unpaid rent, it also protected ‘unauthorized occupants’ from eviction. My client could not inspect the unit for more than 2 years since refusal to access the property was also protected under the moratorium.

After we filed the eviction, the tenant got free help from a local non-profit, which represented her zealously and aggressively.

A list of what we fought in litigation:

  • Motion for judgment on the pleadings
  • 64 document requests; 51 special interrogatories; 31 RFAs, and a total of almost 230 discovery requests.
  • 4 different requests to delay the trial date, 1 emergency request to delay so the defendant can attend a voluntary “math bootcamp” at a local community college.
  • 9 months of litigation
  • Jury trial – the defense initially requested 5 days(!) for the trial. Luckily the judge pushed the case through, and we did it in less than 1.5 days.

Every offer to settle and gain possession in litigation was rejected by the lawyers for the Defendant. In mediation, the only offer she would consider is full waiver of the rent ($80,000 at the time) and a new lease, for $1300/m, with veto power on who will be her roommates. My client rejected that offer and we went to trial.

On the day of the scheduled jury trial, after confirming with opposing counsel in writing of Defendant’s availability – turns out she couldn’t make it since she was vacationing in Mexico and her return flight delayed, so trial got delayed again, despite pleading to the judge to move forward with the trial.

At trial, Defendant perjured herself repeatedly on the stand, defamed me, defamed my client, admitted to committing fraud, and testified for several hours in a 1.5-day trial.

Defendant had 2 lawyers represent her in the trial, and they objected to every Plaintiff’s verdict form, and almost every piece of evidence presented by the landlord. The defense even objected to their own exhibits to enter into evidence, once it was clear those documents were detrimental to their defense.

Defendant’s lawyers removed each and every property owner juror from the panel. We ended with a panel of 100% renters.

On the stand, Defendant admitted to taking close to $9,000 in covid-19 rent aid, pocketing the check, forging the paperwork, and not giving it to the landlord. She still has the money to this day.

Jury gave a unanimous verdict, for the Plaintiff, possession and damages.

In the weeks after the trial, the tenant continued to file or attempt to file multiple emergency motions to reverse the judgment. I received 13 different post-trial, ex-parte notices of motions to delay or cancel the lockout from the defendant.

She got 2 actual hearings to vacate the judgment on the court’s calendar, both were rejected by the judge.

Due to a severe shortage of manpower in the County’s Sheriff office, it took 9 weeks from the moment we submitted the writ of possession until we got the sheriff to show up. 2.5 months after the jury verdict.

Day of the lockout

Sheriff officers show up. We have a locksmith ready. Despite her being in the unit – she refused to let the sheriff officers inside. They had to break the door with a ram (see picture). For absolutely no reason, just another way to cost the landlord more money.

She continued to stay in the unit, arguing for about 45 minutes on why she should stay. Didn’t help – she was evicted and now out of the unit.

Once we walked into the unit, we were shocked at how well she lived. When you don’t have to pay for rent for 2 years, you have plenty of money to spend on other things.

I should add, the Defendant filed an appeal, which is still ongoing, although in default. Thankfully, an appeal of a UD judgment does not stay the lockout.

The Defendant attempted to break back into the unit 3 weeks after the lockout. Luckily there were workers there to block her path. Police showed up again, and we had to bring paperwork to prove she was trespassing.

This ‘professional tenant’ is well versed in the eviction legal system. Based on our research, we found out she went through 4 different evictions in the past 12 years. All followed the same pattern – jury trial, lies, fraud, appeal, violence, and trespassing.

After one of these evictions, she called a locksmith to break in back into the unit. Police got involved and arrested her for trespassing after the landlord presented evidence. That was 10 years ago.

Recently, I received an email from the City Attorney’s Office, inquiring about how my office violated a ‘court order’ and my client was harassing the now evicted tenant. The lawyer from the city wanted to get on a call and discuss.

I asked the city attorney what evidence he had to initiate the call and make those allegations. He said “None. I am just checking since the tenant called us a lot, we have to verify those claims”. After explaining to him what transpired he assured me the investigation will go nowhere.

This is not the first time the City Attorney’s Office contacts me without evidence. When I asked the lawyer for the city why they are placing the burden on the landlord to prove there was no harassment or violation – he insisted they are not. He could not provide an answer why he didn’t ask the tenant for proof before contacting me.

The non-profit that represented the tenant dropped her after the jury trial. In one of the motions the tenant filed on her own to reverse the judgment, she then had the ultimate hutzpah to ask the judge to reverse the judgment as a result of her lawyers malpractice.

She went as far as attaching email communications she had with her lawyers, waving her att-client privilege. In the emails she attached to the motion her lawyers begged her to settle before trial, however the tenant just refused.

Other various reasons she cited as support for reversing the judgment – her disabilities (she listed a dozen, all mental health related), COVID-19, the war in Israel, her part-time status as a 55-year-old community college student, and the “pro-business city council of Santa Monica”.

This is not even the full story

A lot was not included, for many reasons. This tenant will not face any consequences. She has no assets, no income, no family, and no career prospects. There is zero chance to collect any of the $25k judgment against her (remember – most of the rent owed was during covid, so we had to sue for that amount separately). I said it before – there are zero consequences for not paying rent in LA. I mean that literally. You can not pay rent, delay proceedings for months, and it would still make sense for the landlord to settle with you before trial, waive the rent, seal the record, and even offer you move out costs. Zero consequences.

Tenants deserve protections. But we have to ask ourselves at what point these legal burdens/costs are pushing mom and pop landlords out of the business. If Los Angeles wants only ruthless private equity landlords, this is a surefire way to get there.

Avi Sinai started to practice law in 2011, focusing on business and real estate transactions. Through aggressive representation of his clients mainly in the commercial real estate field – he helped solve clients’ needs outside the court and helped them avoid future litigation.

Our goal is to create value for our clients. We believe that legal fees should provide a positive return on investment to our clients. This is what guides every decision we make, and what helps us grow and expand our customer base all of Los Angeles and Orange County.

Mr. Sinai has written extensively on all matters of landlord-tenant law and commercial real estate in several national and local publications, including the Los Angeles Times, Santa Monica Mirror, and the Huffington Post.  To learn more about Sinai Law Firm visit: https://sinailawfirm.com

The Los Angeles Rent Freeze Saga Continues

Written by Apartment Management Magazine on . Posted in Blog

What else can I say, but “here we go again…” A few City of Los Angeles Councilmembers had proposed to further delay the resumption of annual rent increases on rent-controlled units in the City by six months. Since March 2020, for about 3 and a half years and counting, the City of Los Angeles has banned rent hikes under so-called “temporary” and “emergency” measures related to the pandemic. Yet, despite everything and anything being “open for business,” City Councilmember and declared Socialist Democrat, Hugo Soto-Martinez, had introduced a motion to push the February 1, 2024, “freeze” expiration date back to August 1, 2024. The motion was seconded by Councilmember and fellow Democratic Socialist Party member, Eunisses Hernandez. Fortunately, the motion did not make it out of the City’s Housing Committee, but the audacity of the proposal is clear.

However, what did get pushed through the Housing Committee was a proposal championed by “comrade” Soto-Martinez to lower the current maximum rent limitation of 8% to just 4%, a 50% reduction – the proposal was made and passed by the committee without any call for a study of the impacts this may have on housing providers who are struggling today to survive under skyrocketing costs and no rent increases.