Thursday, June 1, 2017

Hayes v Kardosh - Rule 12.20 explained and limited

In April an appellate decision came down in Hayes v. Kardosh, containing a detailed discussion about the extent of Rule 12.20 limitations in changing the terms of a tenancy, explaining its meaning within the San Francisco Rent Ordinance and particularly applying it to the Rules 6.15 regarding prohibition on subletting. It is too bad the decision is not certified for publication, but its reasoning still worth reading.
The lion share of the decision is concerned with the ability of a landlord to change a pre-existing written lease with a new one, and whether the landlord can evict a tenant under the terms of that new lease (particularly, for a violation of a stricter prohibition term against subletting), even if said tenant expressly disagreed with the proposed new lease and never signed it.

The answer is ... yes indeed, so long that the proposed additional or changed terms of the imposed new lease are themselves authorized by the applicable laws (including the rent ordinance).

The court also takes a jab at the good-faith requirement, whether the burden of proof of it is imposed on a tenant rather than on a landlord, under Cal. Evid. Code 500. This is an argument worth your time reading, yet keep in mind that the applicable part of the ordinance (37.9(c)) has been amended in 2015, after this case already went through the trial.

Full cite to this decision is: Hayes v. Kardosh, App. Case No. A142573, Cal. Ct. of Appeals, 1st Dist., Div. 2, filed April 18, 2017; appeal from the San Francisco City and County, Superior Court No. CGC-13-530191. Please note, the decision is unpublished.

Now, compare this 2017 decision in Kardosh with 2015 holding in Foster v. Britton (2015) 242 Cal.App.4th 920, where the court “conclude[d] that section 827 does not preempt Rule 12.20 and that the Rent Board did not exceed its powers in adopting the challenged regulations.” Like Kardosh, Britton is concerned with Rule 6.15 as well, albeit its sub-rule 6.15C.

In both cases, the changes to the tenancy came under CC § 827. Also in both cases, the tenant informed the landlord about tenant's disagreement with the proposed changes. The tenant won in the 2015 published case and lost in 2017 unpublished one. The only material difference I was able to observe is that the eviction basis in Britton was not one authorized elsewhere by the Rent Ordinance (changes in housing services without just cause), while the ground in Kardosh (imposing "a lease term requiring the landlord's reasonable preapproval of a subtenant") was found not to be conflicting with the ordinance. This seems to be not the last point made in this discussion, and I expect it to be more harmonized in the near future.


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