Landlord P's & Q's

Basic landlord etiquette is one of the most effective ways to avoid big problems.

Why should landlords practice good etiquette?

To avoid trouble, minimize problems, and enhance your tenants’ experience, it is wise to follow etiquette. Etiquette is the conduct or procedure prescribed by society or authority to be observed in social or official life. For landlords, this means following the law and treating your tenants with respect during all stages of their tenancies, from before the tenancy commences through and including the end of the landlord-tenant relationship.

Advertising

In San Francisco, while it is illegal to discriminate against standard protected classes (race/nationality/gender/religion/sexual orientation etc.), it is also a violation of the Penal Code to discriminate against people based on their source of income. This means landlords cannot state in rental listings “Section 8 need not apply” or similar language warning renters with housing assistance to look elsewhere. Refusing to rent to people with housing subsidies can result in either a civil damages action by the applicant, a Department of Fair Employment and Housing complaint, or both.

Introductory Letter

When a new owner or manager takes over responsibility for a property, or when signing a new lease, California law requires that the tenant must be informed of the name and contact information of each person to whom rent must be paid and how rent should be paid, each person authorized to manage the property, and each person authorized to receive service of process and notices. Alternatively, this information can be posted in two conspicuous locations in the property.

A successor owner or manager must provide this information within 15 days of becoming the new owner or manager. If this information is not timely provided, the owner/manager is prohibited from serving a notice to pay rent or quit and from commencing unlawful detainer proceedings against a non-paying tenant.

The same statute requiring this information also requires landlords to provide tenants with a copy of their lease within 15 days of signing, and annually thereafter within 15 days of a tenant’s request.

Creating the Tenancy

When signing a new written lease (always recommended), it is wise to conduct an initial inspection and complete a checklist noting the condition of the unit, have the tenants sign the checklist, and take photos or video showing the condition of each room. This only takes a few minutes but can prevent significant exposure if the tenant turns litigious.

If your property has a unit that shares a utility meter with another unit, you should have all parties sign a written agreement stating how the utility charges will be divided. If a tenant with a meter that serves areas outside the tenant’s unit has no written agreement governing payment of the charges, you could be ordered to reimburse the tenant for all utility payments measured by the meter.

During the Tenancy

Landlords can require tenants to pay the rent using a specific method, such as checks or money orders, but they cannot require that rent be paid in cash (initially) or via electronic transfer. If a check is returned due to insufficient funds, or if the tenant stops payment on a check, the landlord can require that further rent payments be made in cash for up to three months. The landlord must notify the tenant of the cash payment requirement in writing, with evidence of the insufficient funds attached.

Sometimes tenants having difficulty paying their rent get assistance from third parties. Attentive landlords have traditionally refused to accept rent from third parties for fear of giving the third-party tenancy rights at the property. Starting in January 2019, however, California law requires landlords to accept rent payments from third parties if the payment is accompanied by a signed acknowledgment that the third party is not a tenant and acceptance of the payment does not create a new tenancy.

Numerous issues arise during most tenancies. In general, etiquette requires landlords to promptly and professionally respond to tenant requests and reports of defective conditions. Landlords should handle repairs using qualified professionals and not accept tenants’ offers to make repairs. Disputes over repairs can lead to Rent Board petitions for decreased housing services or lawsuits for damages based on breach of the warranty of habitability or even constructive/wrongful eviction. Landlords should therefore maintain documentation of tenant complaints and responsive actions.

Unless a tenant gives permission to enter in writing, always post written notice at least 24 hours in advance with the date, approximate time, and a valid reason for entry. State law requires landlords to leave evidence of entry, such as a note, if they enter when the tenant is not present. If the tenant is not present at the noticed time, landlords are still permitted to enter and inspect as noticed. It is good etiquette to try to accommodate tenants who want to be present or absent during the entry.

If a tenant is late paying the rent, there is no need to immediately serve a three-day notice to pay rent or quit. Contact the tenant and ask what the issue is with paying the rent. Be firm and inform the tenant in writing that the rent is due on the first of each month and late payments are not acceptable. If a three-day notice is necessary, it must include a place to pay in person and cannot dictate the payment method. Note that the law now excludes weekends and holidays from the three-day period altogether.

Landlords can raise the rent once each year via written notice. If the unit is covered by the Rent Ordinance’s rent increase limitations, the small percentage published by the Rent Board is the maximum allowable rent increase. Note that a major change in the law became effective in January 2020: the fact that a property was built after 1979 no longer exempts it from the rent increase limitations.

Privacy

Good landlords respect tenants’ rights to privacy and provide reasonable peace and quiet enjoyment of the premises. They do not enter a tenant’s unit without permission or advance written notice.

Landlords may, and arguably should, install security cameras at entrances and in common areas, so long as they record only video—not audio—and the field of vision does not permit them to see inside any tenant’s unit. Cameras should be easily visible. Security cameras can provide both a deterrent to misconduct and evidence of said misconduct. It is much easier to convince a tenant and their attorney that the tenant should vacate voluntarily when you can show them videos or photos of egregious misconduct that constitutes a just-cause ground for eviction or violation of a behave-and-stay settlement agreement.

Security Deposits

California law permits residential landlords to collect refundable security deposits up to the amount of two months of rent. State law also prohibits them from making security deposits non-refundable. In San Francisco, landlords must pay interest on each security deposit annually at a rate published by the Rent Board.

When a landlord learns that a tenant is terminating the tenancy, the law requires the landlord to notify the tenant of the option for an initial inspection within two weeks before the vacate date. If the tenant opts for the inspection, the landlord must identify all visible damage beyond wear and tear so the tenant has the chance to abate the damage and avoid deductions for those items. Landlords are not required to move furniture or pick up rugs—they can still deduct for damages they discover after the tenant vacates.

Then, within 21 days of the date the tenant vacates, the landlord must refund the deposit or detail the deductions and provide supporting evidence, such as receipts, along with any remaining refund. Security deposit disputes generally involve small amounts of money, making it advisable to compromise to avoid the waste of time involved in Small Claims court.

If one or more tenants vacate but leave others behind in the unit, the departed tenants might ask the landlord to refund their share of the security deposit. Legally, they have not surrendered possession of the unit so the landlord has no duty to refund any of the deposit. But it is good landlord etiquette to work with the departed and remaining tenants to keep everyone happy. It can be productive to ask the departed to recoup their share of the deposit from the remaining tenants. If the departed and remaining tenants are not getting along, which is a common reason for some tenants to relocate, the landlord should ask the remaining tenants to submit the equivalent of the departed tenants’ portion of the deposit and then the landlord can send the refund to the departed.

Adhering to basic landlord etiquette tips might not always be easy, but good etiquette is almost always required to avoid, or at least minimize, bigger problems.

© 2020 by Fried & Williams LLP. All Rights Reserved. The information contained in this article is general in nature. For advice on any particular matter, please consult with our attorneys because the facts of your situation may be unique and the law changes from time to time