Rinat B. Klier Erlich

Real estate agents and brokers manage properties. They are often subject to claims by the Department of Real Estate, Department of Fair Housing, Department of Consumer Affairs, criminal prosecution and civil lawsuits by tenants. This article lists the main Do’s and Don’ts with respect to managing real property.

 Do’s

• Lease: Generate a lease that includes all terms you intend to enforce during the lease period. Keep all funds received in a trust account.

• Accommodation: You must accommodate your tenants as long as accommodation is reasonable. This will include, financial accommodation. If a tenant is asking to pay his/her rent after a certain date in the month due to disability payment, you must agree.

• Bed bugs: A written notice regarding bed bugs must be provided pursuant to Civil Code section 1954.603. You cannot always charge the tenant for bed bugs remediation, because it may be impossible to prove that the bed bugs came from the tenant.

• Deposit deduction: You must comply with Civil Code section 1950.5 by providing the tenant with a notice of pre-moving out inspection and items of repair, and by sending the list of repairs deducted from the deposit within 21 days, with actual invoices attached. If the repair was performed by your employee, the number of hours worked and the hourly rate must be provided. If you only have an estimate of the cost then send the estimate timely and follow up with mailing the final invoice when it is obtained. Failure to comply with this section could subject the landlord to twice the deposit amount, adding the cost of the deducted amount, and attorney’s fees.

• Accessibility: You must provide accessibility to all including, disabled. This includes parking for the disabled, as long as such accommodation is reasonable and the space is available. If a tenant requires a special parking place, assign that place to the tenant. If you assign the parking spot as a disability spot per the American Disability Act, then that spot must be available for all disabled persons coming onto the property. Providing access to the disabled also includes access to digital content on website and apps. Digital access must include for example, voice commands that the blind can follow.

• Marijuana: If you have concerns about marijuana, because it may relate to disability, you can simply have a ‘smoking free’ environment and those tenants who wish to use weed can use it in other forms.

• Vacations: If you want to advertise a vacation rental, you need to make sure that there is no local ordinances that prohibits it. Make sure your lease does not allow subleasing to a vacation rental so that you do not lose control.

• Mold: In any water intrusion event consider hiring an expert mold company to provide assessment for mold and proper remediation.

 Don’ts

• Social security: If you ask for a prospective tenant’s social security number it can be perceived as discrimination against immigrants. The Fair Housing Act does not allow discrimination against protected classes, one of which includes national origin. There are also new laws that protect people’s social security numbers due to increased identity theft, although a landlord has a right to use social security to ascertain credit information. It may be best practice to simply have the tenant provide his/her credit information, but make sure it belongs to the person applying for lease.

• Pets: Do not make the property pet free. An animal can be a service animal, a guide animal or an emotional support animal. You can ask for a certificate showing the above, but a certificate can be loosely prepared by someone who is not a medical professional but knows the tenant well. Once a certificate is provided, it is difficult to dispute whether the certificate is sufficient under the circumstances.

• Rental increase: You may not be able to increase rent during any local or state of emergency. Penal Code section 396 make that a violation. The Code does not clarify where the state of emergency must be declared, so a proclamation of a state of emergency in an adjoining County may be sufficient to prevent a rental increase during that period.

• Families: You may not impose rules that apply primarily to kids, even if you try to justify them as applying universally. Those rules may include, no skateboarding, no making noise at certain hours and no running or playing in a certain area. Such rules will be perceived as discriminatory against families; a protected class. You cannot limit occupancy based on housing standards (2 tenants per room +1).

• Deposit: Do not ask for a deposit fee that is more than twice the rental amount. Civil Code section 1950.5(c). You cannot ask for an animal deposit, if the animal is a support animal, because that may be considered discrimination against disability. You may ask for regular pet deposit, as long as the deposit in total is not more than twice the rent.

• Disparate impact: Beware of actions or inactions that may cause disparate impact. Disparate impact is discrimination that impacts a certain class without discriminatory intent. A landlord may have a valid business practice (such as checking for criminal record) but if that practice causes discrimination (for example, of African Americans or immigrants if it is shown that their classes would have greater criminal records) then the landlord must also show that there is no less discriminatory alternative to achieve such legitimate practice.

• Preferences: Do not show any preference to tenants from a certain nationality, class, familial status, sex, or even who work in a certain area or a certain business, even if this seems like a good marketing technique. It can be perceived as violation of the Fair Housing Act.

• Harassment: You cannot harass or discriminate against a tenant with mental disability. However, a tenant cannot cause nuisance to others, so if the interference is significant and/or the disabled tenant is putting others at risk, you may terminate the tenancy. A tenant who fails to comply with rules and regulations similarly cannot be harassed or treated differently (quid pro quo or showing any hostility). Failure to follow regulations can cause the lease to terminate, if the lease provides that.

• Mental disability: You may not discriminate against any disability, which may also include hoarding; a mental disease. However, you may require that the tenant company with rules and regulations that can include access within the unit. If you know or suspect a mental disability, you may have to evaluate whether the tenant in causing nuisance to others and violating reasonable rules and regulations.

• Late fee: Late fee must be part of the lease, based on actual charges and must be reasonable. You cannot charge an unreasonable late fee, then charge interest on that amount and seek to evict the tenant for failing to pay. Unfair business practices may include charges such as, transfer fee and breaking lease penalty. Like with late fees, it must be based on actual cost, must be reasonable and must be part of the lease.