Friday, December 14, 2018

Landlord's duty to update contact information - CC § 1962(c) interpreted by the court

In DLI Properties v. Hill, (Los Angeles App. Dep't Super. Ct., Sept. 17, 2018, No. BV 032016, 2018 WL 6192245) the court addressed the recently added sub-division (c) to Civil Code Section 1962, which provides that the landlord is barred from evicting a tenant for non-payment of rent during the period such landlord failed to inform the tenant about a change in the contact information.

This may apply in a rent-controlled jurisdiction, such as San Francisco, where the local municipal ordinance also contains requirements for the owners to inform about the changes.

First, about the statute and the DLI Properties case.

The statewide statute itself (link) requires a landlord to make certain disclosures and within 15 days from execution give the tenant a copy of the written lease [sub-d(a)(4)] or a statement summarizing the terms of the oral lease [sub-d(b)].  The subdivision (c) added in 2013 also imposes a running duty to keep the information current and update the tenant within 15 days of a change, such as in a succeeding owner or manager. Same subdivision contains a mysterious sentence saying, on one hand, that the landlord is barred from evicting a tenant for the period while the landlord is not in compliance, while, on another hand, confirming that the tenant is not relieved from the rent payment obligation during that period. Whether it means that recovery of such unpaid rent can be done by other means, or that recovery can be done after the landlord is back in compliance, is something remaining in want for a further interpretation. The DLI Properties decision is the step toward it.

Although in this particular case, the court upheld judgment for the landlord, they did so based on the fact that the landlord was a new owner in its own right, not a subsequent owner stepping into a preexisting lease relationship. The win for this landlord was based on an unusual fact that a new lease was executed between the parties: «In this case, after plaintiff purchased the subject property, it did not assume the existing lease and its terms and conditions. Rather, it’s management company, Strategic, executed a new and separate lease with defendant.» Id.,  2018 WL 6192245, at *4.  If not for this twist, the landlord would have been barred from seeking eviction, because «The undisputed evidence presented at trial established plaintiff’s noncompliance with disclosure requirements.»

How it may play out in a rent-controlled municipality with its own provisions for disclosures.

In San Francisco, new owners are required to make disclosures to existing tenants within 30 days, (S.F. Admin. Code § 37.9(k)(2)) and, in the case of a sale, the selling owners are also required to do the same, although without a stated time limit (S.F. Admin. Code § 37.9(k)(1)).  Similarly, within 15 days following foreclosure, "the person or entity that takes title" must also disclose their identity and contact information (S.F. Admin. Code § 37.9D(e)(i)). This local ordinance also requires compliance with CC § 1962 (S.F. Admin. Code § 37.9D(e)(iii)).

Provided that the new owner (1) complies with the applicable Rules (comes to mind the language of Rule 12.20), (2) avoids a pitfall of timing with regard to the changed/new rules (see, Civ. Code § 827, and the nonpublished decision of Hayes v Kardosh, as amended), (3) identifies him-/her-/itself efficiently in the new lease, and (4) catches up on required disclosures, a new owner may still get the judgement under the reasoning of DLI Properties (I don't say here "under the holding," since the decision is not published), at least in the case of a foreclosed property, because Section 37.9D(e)(iii) implies that a purchaser of a foreclosed property may cure noncompliance before endeavoring to recover possession.

With regard to the missed disclosures in a regular sale, the following solutions seem to be viable, if there is an issue of unpaid rent: either to proceed with the notice and the consequent unlawful detainer for a lesser amount (excluding the rent accrued during the non-compliance period), or to take a route with a regular civil action for damages to recover that portion of unpaid rent, or do both.

More real property posts

If you are concerned about your rights and obligations in a landlord-tenant relationship, 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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