California’s Senate Bills 721 and 326 Mandate Inspections by Statutory Deadlines

By Omid Ghanadiof, EEEAdvisor Engineering

As the deadline for the California Balcony Laws Senate Bills 721 and 326 comes closer and closer, leading California-based engineering inspection company, EEEAdvisor Engineering, offers advice on dealing with inspections of your multifamily properties to help ensure your compliance with state law.

Energy use per square foot is about 10 to 35 percent lower in owner-occupied housing than in rentals, according to a report by Harvard’s Joint Center for Housing Studies.[1] The study attributes the discrepancy to the so-called “split-incentive problem.” If landlords don’t pay utility bills, then they have little incentive to make energy-efficient upgrades. Since tenants don’t own the properties, they don’t usually take on energy projects either. Historically, the split-incentive problem has posed a major challenge to the availability of energy-efficient rental properties. But rising energy costs, the pandemic, and market shifts might be changing that. More than ever, both landlords and tenants can benefit from energy-saving projects that protect the value of real estate investments, cut monthly expenses, improve tenant comfort, and build trust. Here’s why.

By Shari Fykes, Partner Engineering & Science

(Editor’s Note: California Senate Bill 721 generally requires balconies, walkways, staircases, and other “exterior elevated elements” built primarily of wood or wood-based products on residential buildings of three or more units, and that are three or more feet above ground level and extend outside of the four walls of a building to be inspected.)

California’s Balcony Inspection Law, Senate Bill 721, was enacted in 2019. Many multifamily rental property owners were too impacted by the pandemic to address the law’s requirements in 2020 or 2021. Recently, however, there has been a surge of interest by portfolio owners and property managers inquiring about and implementing mandatory balcony inspections and inspection of other elevated exterior elements.

By Daniel Bornstein, Esq.

U.S. Supreme Court deals a blow to PAGA, ruling that arbitration agreements governed by federal law may require arbitration of PAGA claims on an individual basis only. 

Bornstein Law has said many times and in many ways that if landlords do not take care of their tenants or do not follow the law, a six-figure lawsuit can follow. Most of the time, the defendants are not bad landlords or bad people, but simply have an ignorance of the law. But what about taking care of resident managers?

By Brian LeBow, Chief Executive Officer, Bell Properties

There’s been a lot of discussion recently about pets, service animals, and companion animals, especially in property management and real estate circles. This is a hot topic when it comes to renting out your property in California, and you’ll need to be prepared to address tenants who have these animals.

It’s easy to make a fair housing mistake when it comes to dealing with animals and renters. If you try to charge pet rent on an emotional support animal or reject a tenant who needs a Seeing Eye Dog, you could find yourself in a heap of legal trouble.  Therefore, we’ve put together this brief guide on how to navigate the laws and the requirements when it comes to pets, service, and companion animals in your LA County rental home.

By Roderick Wright, California State Senator (Ret.)

Consider the story of the Norman Johnson family, a 70+ year-old retired probation officer and his wife.  He retired from Los Angeles County as a supervisor after over 40 years on the job.  He married his college sweetheart, who became a school teacher, and later promoted to elementary school principal before she retired.  The Johnsons have two grown children, who have moved out of the house and live happy lives. 

The Johnsons initially lived in a small apartment when they first married.  Their plan was to save up for a down payment in order to buy a house.  They drove a modest car, and kept their other expenses down.  Their friends often teased them about being cheap.  They wore simple clothes and made frugal financial choices. 

In the face of the tax policy uncertainty, the question is how to think about current real estate investments and future investment plans.

By Chay Lapin, President of Kay Properties & Investments, LLC

Washington-watchers, including many of us in the real estate industry, are waiting to see if and how federal policymakers change the tax treatment of capital gains and 1031 like-kind exchanges this year.

The capital gains tax rate affects the flow of capital into every investment class, including but not just real estate. Operating companies and operators of hard assets including real estate count on capital and liquidity to be productive. I’m hopeful the current capital gains tax rate will be maintained versus raised as has been proposed.

By Daniel Berlind, Chief Executive Officer of Snappt and President of Berlind Properties.

Rental application fraud prevention has become the scourge of the multifamily industry in the wake of the COVID-19 pandemic. After scanning more than 1 million apartment rental application financial documents, Snappt found that 121,876 had been fraudulently altered, or one out of every eight. The problem is only getting worse. Before the pandemic, 66% of property managers said they’d been hit by application fraud. After the onset of COVID-19, that number skyrocketed to 85%.

“Dark windows. Quiet lobbies. Hushed halls.” These opening lines of a New York Times article from April 2021 describe once-thriving offices in downtown New York. At the start of the pandemic, offices nationwide shuttered and we entered the era of remote work. The article suggests residential housing could come from commercial office conversions. Ideally, such office conversions would help solve the affordable housing crisis and put those “dark, quiet, hushed” buildings to good use.

It sounds like a smart plan, but it hasn’t happened, at least not on a meaningful scale. And it doesn’t look like office conversions to affordable housing are in many developers’ plans. The conversion solution is creative, but it just doesn’t work. This article looks at why commercial buildings aren’t going to solve the housing crisis and what is happening to unused offices spaces instead.

We’ll also show you some housing solutions that actually work (and are happening now).

By Nicole Seidner

The United States is moving closer towards a renter-friendly nation with renter-friendly laws. As renters cheer every time tenant screening laws shift in their favor, landlords and property managers across the nation have to adjust to the turning, pro-renter tide. Despite that, screening is a necessity and there is always one argument you can pose. To be in the rental housing industry means you need to have the information to enable smart leasing decisions and keep yourself safe from litigation.  You need to know about the sex offender registry.