Wednesday, January 8, 2014

When You Hear "S.O.S.," Listen Between The Lines. Landlords See More of The "Season of Sharing."

An eviction for "nonpayment of rent" used to be considered as a more predictable, straightforward kind of an unlawful detainer action, especially when compared against evictions for more sophisticated causes, like nuisance or breach of an obligation other than a payment of rent. But, since the only constant we can rely on is the change [Heraclitus], the change is here and the easiness is no more. "'Tis the Season" say some of the tenants, who fell behind in paying rent, and they don't mean Christmas. They cry "S.O.S.," aka "Season of Sharing," and want landlords to accept their offer without reading the small print. But let us take a closer look.

"Season of Sharing" or "SOS" is not a new concept. According to San Francisco Chronicle, it has been around for 27 years. Until recently, it was relatively unknown to public and operated on its own pace, but an $8 mil. stimulus helped to spread the word around, and, during the past year, almost every non-payment case I have been working on involved at least one SOS organization, while in one case there were two.

The basic idea behind SOS was that a grant or an interest-free loan is offered to those who are temporarily down on their luck. It could be a medical bill or help with some basic supplies. But since in our City the rent payment is the largest monthly expense, often taking 37% of the total income, the instances of down luck inherently include one's inability to pay rent, hence the SOS money are often applied to substitute the rent payment. Many SOS vendors even offer their grants and loans solely for the rental assistance.

An idea of helping a human being at a down moment is laudable and benign, yet we all know that good intentions may pave a path to some unforeseen consequences [St. Bernard of Clairvaux]. For instance, a SOS-kind of rental assistance is offered by "RADCO," the Rental Assistance Disbursement Component of the Eviction Defense Collaborative. It starts with a letter, where the landlord is advised that (s)he is mandated to accept those assistance payments. See an image of a sample letter, with the relevant portions highlighted. Not every recipient of this letter will bother to review the cited San Francisco Police Code, Section 3304. And some of those who will, may end up seeing a cut version, like one here, and think that the subsection (a) is all there is. As a result, many landlords will trust the letter's command, believing that they have no choice.

It literally pays to check the statute's full text from the oficial provider, such as amlegal.com. Their site has an awkward navigation, but you will find this section under "Police Code" -> "Article 33." You will then see that the Section 3304 consists of three sub-sections and that the sub-section (c) defines the exceptions, stating that "Nothing in this Article shall be construed to apply to the rental or leasing of any housing unit in which the owner or any member of his or her family occupies one of the living units and: (1) it is necessary for the owner to use either a bathroom or kitchen facility in common with the prospective tenant; or (2) the structure contains less than three dwelling units." The sample letter discussed above was mailed with regard to a building, where the owner resided and the property was less than a triplex. So, before you decide if SOS rental assistance must be accepted by you, your first step is to check if your situation is exempt from the statute.

The next step will be to ascertain actual rules and conditions of the particular SOS assistance offered. After all, if you are about to enter into a new contractual relationship with an organization you probably haven't dealt with before, it helps to know as much as possible. There are quite a few of different SOS providers available. San Francisco Apartment Association assembled two great reference tables, summary and guidelines. Compare the vendor's name disclosed in the introduction with these references, to see what conditions have to be satisfied. It might be a program with the prerequisites impossible to comply with in your circumstances.

Be aware of the meaning of the "source of income" under SF Police Code, Section 3304(a)(5), which includes a very wide definition of "rental assistance" in the term. The definition is ambiguous. First, it might be contradicting the definition under California Gov. Code, Section 12955 (p)(1), which reads: "[f]or the purposes of this section, "source of income" means lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant. For the purposes of this section, a landlord is not considered a representative of a tenant." (emphasis added). As one court commented on the instance of Section 8 rental assistance payments: "[a] simpler way of stating the point is that [Section 8] assistance payments to the landlord are not included in the tenant's income." Sabi v. Sterling, 183 Cal.App.4th 916, 935 (Cal. App. 2d Dist. 2010).   But see, Morrison v. Vineyard Creek, 193 Cal.App.4th 1254, 1272 (2011), holding quite to the contrary: "[t]he legislative purpose behind the inclusion of the “source of income” language [into GC 12955(a)] was to curb a growing trend among landlords to refuse to rent to anyone on “Section 8” housing or evict an existing Section 8 tenant because the landlord no longer wanted to accept Section 8 vouchers. (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 1098 (1999–2000 Reg. Sess.) as amended Apr. 7, 1999, p. 6; Assem. Com. on Judiciary, Analysis of Sen. Bill No. 1098 (1999–2000 Reg. Sess.) as amended July 8, 1999, pp. 6–7.)"

Second, it might be used to create a contractual relationship with a new third party, as the sample letter demonstrates. The mere fact of taking rent payment from a third party may be viewed as acceptance of that party as a new lessee. "A tenancy may be created by consent and acceptance of rent, despite the absence of a lease." Cobb v. San Francisco Residential Rent Stabilization & Arbitration Bd., 98 Cal.App.4th 345, 352 (2002). This may be deemed so, even if the landlord were to stipulate otherwise and to accept the payment under a stipulation with reservation of rights. Karbelnig v. Brothwell, 244 Cal.App.2d 333 (1966). See also, Civil Code, Section 1526 on acceptance of checks.

Finally, before making a decision, check your lease agreement, see how the payment of rent is defined. Asssess, what stage your landlord-tenant relationship is currently in? If the tenant is behind on the payments, and the notice "To Pay or Quit" has been already served, check when the period stated in the notice set to expire. The landlord may be excused from accepting rent after the notice's term expires, if the notice contained a declaration of forfeiture. Briggs v. Electronic Memories & Magnetics Corp., 53 Cal.App.3d 900 (1975). And vice versa, the landlord may be deemed waiving the notice, if the rent accepted after the notice expired. Myers v. Herskowitz, 33 Cal.App.581 (1917).  Acceptance or non-acceptance of the payment will be measured based on the timing, contents of the notice, and knowledge of the participating parties (about the default and about the notice). And it will be irrelevant at this point, from what source the payment arrived or failed to arrive.


Your options and available strategies will depend on your case's particular facts. If you are currently in a similar situation and need to learn more about your "S.O.S." rights and obligations, make your first step toward taking control over the circumstances, and call my office at (415) 987-7000. I will be glad to assist in guiding you through the jungle. The only thing you can't afford is to stay put and uninformed. My office provides a confidential assessment of your particular scenario, free of charge, and I will share with you the results of the analysis along with my thoughts on available solutions.

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