Rental Housing - February 2015

Rental

Housing EAST BAY RENTAL HOUSING ASSOCIATION | FEBRUARY 2015

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Contents

FEBRUARY 2015

East Bay Rental Housing Association Volume XII, Number 2 February 2015 EBRHA OFFICE

360 22nd Street, Suite 240 Oakland, CA 94612 tel 510.893.9873 | fax 510.893.2906 www.ebrha.com

Features & Columns

EBRHA STAFF EXECUTIVE DIRECTOR

Jill Broadhurst | jbroadhurst@ebrha.com DIRECTOR OF STRATEGIC PARTNERSHIPS

Tina Bocheff | tbocheff@ebrha.com PUBLICATIONS & COMMUNICATION PRODUCER

Esteban Cortez | ecortez@ebrha.com ACCOUNTING MANAGER

Cathy Hayden | chayden@ebrha.com EDUCATION & MEMBER MANAGER

Tori Blanca | tblanca@ebrha.com

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Protecting Your Nest Egg

Selecting an Entity for Your Real Estate Investment

BY BY KIRK D. DOBSON,

CFP® CHFC®

BY SCOTT BEATTIE

22

MEMBERSHIP & ADMINISTRATIVE ASSISTANT

Evangelina Salazar | esalazar@ebrha.com EBRHA OFFICERS PRESIDENT Wayne C. Rowland VICE PRESIDENT Luke Blacklidge VICE PRESIDENT Jack Schwartz TREASURER Abbe Sultan SECRETARY Fred Morse EBRHA DIRECTORS

Mark Almeida, Symon Chang, Reggie Hairston, Carmen Madden, Conor Murphy, Rick Philips, Sarah Picker, Judy Shaw, , Menna Tesfatsion PUBLISHED BY

Wayne C. Rowland PRODUCED BY

EBRHA Communications Committee Tina Bocheff, Jill Broadhurst, Esteban Cortez, Wayne C. Rowland

Fraud in High Places

MANAGING EDITOR Jill Broadhurst

BY MICHAEL ST. JOHN

EDITOR Tina Bocheff ART DIRECTOR & COPY EDITOR Esteban Cortez ADVERTISING

Tina Bocheff | 510.318.8303

Features & Columns NEWS

City Seeks Input from Oakland Rental Property Owners for Soft Story Retrofit Program 10

OAKLAND SPOTLIGHT

BY LIZ HART

30

ESQ&A

BY JASON MAUCK

Events & Directory

New, But Not Improved

14

SECURITY DEPOSITS

BY BRENT KERNAN

Protect Yourself With Photos

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Additional vs. Replacement

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36 COMMUNITY CALENDAR 38 M EMBER DIRECTORY 42 M EMBERSHIP APPLICATION 42 A D INDEX

Rental Housing is published monthly for $36 per year by the East Bay Rental Housing Association (EBRHA), 360 22nd Street, Suite 240, Oakland, CA 94612.

Rental Housing is not responsible for the return or loss of submissions or artwork. The magazine does not consider unsolicited articles. The opinions expressed in any signed article in Rental Housing are those of the author and do not necessarily reflect the viewpoint of EBRHA or Rental Housing.

This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting or other professional services. If legal service or other expert assistance is required, the services of a competent person should be sought. Acceptance of an advertisement by this magazine does not necessarily constitute any endorsement or recommendation by EBRHA, express or implied, of the advertiser or any goods or services offered.

Published monthly, Rental Housing is distributed to the entire membership of EBRHA. The contents of this magazine may not be reproduced without permission. Publisher disclaims any liability for published articles. Printed by Jostens Printing Co. Copyright © 2015 by EBRHA. All rights reserved.

COVER PHOTO: CAN STOCK PHOTO

8

Rental Housing (ISSN 1930-2002-Periodicals Postage Paid at Oakland, California. POSTMASTER: Send address changes to RENTAL HOUSING, 360 22nd Street, Suite 240, Oakland, CA 94612.

contributors SCOTT BEATTIE Scott Beattie is a Certified Specialist in Estate Planning, Trust and Probate Law who handles estate planning, real estate and business matters at Beattie & Aghazarian, LLP, with offices in Stockton and Carmel. He has served on numerous professional and nonprofit boards, is a frequent contributor to various magazines and business journals, and has presented at numerous continuing education programs.

KIRK DOBSON Kirk Dobson is a Certified Financial Planner with David White & Associates, where he specializes in Fee Based Financial Planning and Investment Management for individuals and business owners. He has received national recognition as a CFP, as well as the firm’s “Advisor of the Year” award many times over. In his free time, he enjoys classic cars and motorcycles, good wine, and donating time to local charities.

LIZ HART Liz Hart has provided expertise to property owners for over 20 years. She offers consulting services on rent control and property management matters to San Francisco, Oakland and Berkeley property owners as well as being a consultant for the law firm of Fried & Williams LLP. She is a passionate advocate for property owners in rent controlled communities and is always eager to discuss unique issues they face.

ONLINE TENANT SCREENING

To Schedule an Appointment, Call (510) 893-9873 EBRHA provides members with low-cost online resident screening.

Partnered with Contemporary Information Corp. (CIC), resident screening has one objective: to make sure your leasing decisions make the greatest possible contribution to your bottom line. As of 2014, landlords can collect a maximum of $45.16 for an application fee.

MEMBER PRICING Basic Report* . . . . . . . . . . . $15 Bad Check Search. . . . . . . . $10 Social Security Search. . . . . $7

BRENT KERNAN Brent Kernan is an attorney and general counsel at Story Rentals, Inc. Brent has practiced landlord/tenant law in the Bay Area for more than 20 years. He has taught law and served as a judge pro-tem and arbitrator. He is also active in property management both as a general counsel and as a property owner and landlord.

Criminal . . . . . . . . . . . . . . . . $10 Criminal (County) . . . . . . . . $10 Verbal and Fax Reports . . . . . . . Add $20

*Includes TransUnion credit report, FICO score and eviction history

MICHAEL ST. JOHN Michael St. John is a property management consultant and economist and writes extensively about fair return on investment. His research report “Rent Control in Perspective: Impacts on Citizens and Housing” is credited with tipping the balance in favor of the 1995 Costa-Hawkins state law. He served on the Berkeley Rent Board from 1981-83 and has advised property owners about landlord/tenant and rent control issues ever since.

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East Bay Rental Housing Association TEL

510.893.9873 | FAX 510.893.2906 www.ebrha.com

BOTANIST. SWIM COACH. PICKLE EATER. RENTER. APARTMENTS. WE LIVE HERE. Everybody talks about how the population is

and skilled trades, as well as all the local businesses

changing. Baby Boomers downsizing. Echo Boomers

that attract the 35 million botanists, school teachers,

emerging.

veterinarians, textile designers, pickle eaters, data

Stay-at-home dads. Work-at-home jobs.

Couples with – or without – children.

It makes you realize how well apartment homes fit

into today’s communities.

After all, apartments and residents contribute

processors, and cello players who call apartments home.

For a fresh take on today’s housing market – state by state – and an interactive picture of how, with your help, we can develop 300,000 new

$1.1 trillion annually to the economy. That’s a ton of

apartments a year to meet this exciting demand, visit

jobs in construction, operations, leasing, management,

WeAreApartments.org.

WeAreApartments.org

news

A disaster relief center in West Oakland after the 1989 Loma Prieta earthquake

City Seeks Input from Oakland Rental Property Owners for Soft Story Retrofit Program with developing its soft story seismic retrofit program, and anticipates bringing it to City Council by March 31, 2015. As the City finalizes the legislation, it seeks input from Oakland property owners to help fine-tune the program. Owners are encouraged to take the survey at www.oaklandnet.com/ softstorysurvey to help shape this major preventive effort, and attend one of four community forums being held in February. To see the dates, go to www.ebrha.com/getinvolved.

OAKLAND CONTINUES TO MOVE FORWARD

The program will apply to wood-frame residential buildings having two or more stories, five or more units, were built before 1991 and with commercial or parking uses on the ground floor. These are the primary types of structures that collapsed in the Loma Prieta and Northridge earthquakes. Because Oakland has more than 22,000 rental units (1,380 buildings) of this type, seismic retrofitting now, before a major earthquake, is critical to reducing 8 RENTAL HOUSING

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personal injury and loss of life, loss of housing for tenants, and loss of rental income for property owners following a major earthquake. The Hayward Fault, which slices through Oakland from top to bottom, is predicted to likely have a 6.7 or larger earthquake in the near future.

The mandatory retrofit program will be phased in over time. Additionally, the city is developing a package of financial incentives to encourage property owners to retrofit sooner rather than later, including: Community Development Block Grants (CDBG) from a pool of $1 million for properties that meet the CDBG lowto moderate-income levels for tenants and/or owners; CalFirst PACE funding—expanded from solar installation to seismic retrofitting—which requires that property owners borrow from PACE and pay back the loan through their property tax over 30 years; a pool of funds potentially available through the Association of Bay Area Governments, now being explored; and loan packages with local banks. Property owners will be required to complete an engineering evaluation prior to retrofitting.

Alameda City Council Takes Steps on Rent Issues Alameda city council members opted

on January 21 to move forward with a set of recommendations for strengthening the city committee that mediates rent disputes—and over the objections of Mayor Trish Spencer—to consider gathering data on the rent market here and in other cities to inform discussion about additional steps the city could take to protect renters. The council voted unanimously to work toward implementing recommendations to do more to notify tenants about the existence of the city’s Rent Review Advisory Committee and to compel their participation in committee hearings to resolve rent disputes, to expedite hearings if needed and to enforce state law prohibiting retaliation against tenants who exercise their rights. The council also agreed to consider whether to create a minimum threshold a rent increase must meet for a mediation session to be

PHOTO: COURTESY OF CITY OF OAKLAND

COLUMN

UPCOMING WORKSHOPS & EVENTS set, a point the community group didn’t agree to recommend. The group did not recommend, and the council did not consider on Tuesday, putting rent controls in place. Councilwoman Marilyn Ezzy Ashcraft and Vice Mayor Frank Matarrese said they wanted staff to look into what it would take to gather additional data about the scope and impact of rising rents here and the impact of rent controls in local cities that have put them in place.

Councilman Jim Oddie cast the deciding vote to move forward with that effort.

Spencer, a renter in Alameda for 15 years who said limiting rent increases to 5% a year is worthy of discussion, said she wanted to take action on the community discussion group’s recommendations and move on. Back in September, the City Council voted 3-2 to set aside city staff’s recommendation to set up a city-sponsored task force that would generate data on local rents and the impacts of rising rents in favor of a community-driven process run by a local attorney and mediator.

The group held three public forums and a series of behind-the-scene meetings involving a select group of stakeholders.

Council members praised the group’s leader, Jeff Cambra, for bringing renters and landlords together to discuss the issue of rising rents and the challenges of owning and maintaining rental properties.

Source: Michele Ellson, The Alamedan; Wednesday, January 21, 2015; www. thealamedan.org

Vote for EBRHA for Best Nonprofit Group!

EBRHA members are encouraged to vote for East Bay Rental Housing Association for “Best Nonprofit Group” in Oakland Magazine’s 2015 Best of Oakland and the East Bay awards. To vote, go to www.oaklandmagazine.com/OaklandMagazine/2015-Best-of-Oakland-ballot and scroll down to the “Lifestyle & Families” categories. Then, enter “East Bay Rental Housing Association” in the “Best Nonprofit Group” category. Voting ends February 28. Thank you for your support! RH

The Move In/Move Out Process D ATE & TIME

SPEAKER

PRICE

TOPICS

TUESDAY, FEBRUARY 10; 2:00 P.M. - 3:30 P.M.

Tori Blanca, CCRM, EBRHA Members: Free; Non-members: $69 Establishing Rental Standards, Application Process, Tenant Screening, Selection Process, Fair Housing

Resolutions to Tenant Nuisance Issues D ATE & TIME

SPEAKER

PRICE TOPICS

THURSDAY, FEBRUARY 12; 2:00 P.M. - 3:30 P.M.

Clifford Fried, Fried & Williams LLP Members: Free; Non-members: $69 How to Resolve Tenant Issues, Proper Noticing Procedures, Three Day Notices, Measure EE

EBRHA Office Closed, Mon. Feb 16 Women’s Auxiliary Luncheon DATE/TIME LOCATION

PRICE

DETAILS

TUESDAY, FEBRUARY 17, 11:45 A.M. Scott ’s Seafood Restaurant, 2 Broadway, Oakland Auxiliary members: $20; Guests: $35 RSVP to Anna Alberti at 510-562-1179

Landlord 102 D ATE & TIME

SPEAKER

PRICE

TOPICS

THURSDAY, FEBRUARY 19; 2:00 P.M. - 3:30 P.M.

Tori Blanca, CCRM, EBRHA Members: Free; Non-members: $69 New Laws, Lease Agreements, Security Deposits, Rental Forms, Rent Increases, Addendums

Membership Meeting DATE/TIME SATURDAY, FEBRUARY 21, 10:00 A.M. - NOON TOPIC Legal Q&A — Matthew Quiring, Fried & Williams LLP

Financial Planning & Tax Tips — Kirk D. Dobson, CFP® ChFC®, David White & Associates

Members Only; Parking pass available at EBRHA.com

DETAILS

Online Registration at ebrha.com

Unless noted, all events are held at the:

Sign up, pay registration fees and receive reminders online.

EBRHA Education Center 360 22nd St., Suite 240 Oakland

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COLUMN

oakland spotlight

unit through fraud, intimidation or coercion, including threatening to report a Tenant to U.S. Immigration and Customs Enforcement 7.) Offer buyout payments to a tenant more than once in a six (6) month period, if the tenant has informed the Owner in writing that they do not wish to receive further offers 8.) Attempt to force a tenant to leave What you need to know about Oakland’s new with a buyout offer that is accompanied with threats or intimidation. However Tenant Protection Ordinance. BY LIZ HART the TPO specifically excludes a good faith n October 2014, Oakland’s City offer when there is a pending eviction potentially fine owners for violations.

Council passed a new set of protec9.) Threaten the tenant, by word or Given that the Rent Board has been tions for tenants called the Tenant gesture, with physical harm charged with implementing the new law, Protection Ordinance (TPO). The TPO 10.) Interfere with a tenant’s right to it’s safe to say the Rent Board would is just the first phase of a plan to create quiet use and enjoyment of the rental unit gain these new powers if these changes an enforcement body with authority to 11.) Refuse to accept or acknowledge were enacted. levy steep fines against rental property receipt of a tenant’s rent payment, except With few exceptions, the TPO covers owners. for when a Three Day Pay or Quit notice rental units that have a rental agreement At the prompting of the Causa Justa has been served and the payment period between the owner and the tenant(s). organization, City Councilmember Dan has ended Not covered under the TPO are hotels Kalb spearheaded the effort and intro12.) Refuse to cash a rent check for and motels, nonprofit housing providduced the TPO. Kalb represents District over 30 days unless a written receipt has ers, substance abuse recovery facilities, One, which borders the City of Berkeley nursing homes, short-term housing been provided to the tenant and includes the Temescal district. He is 13.) Interfere with a tenant’s right to facilities for the homeless, owner-occualso up for re-election in 2016. privacy pied duplexes and triplexes, and new The TPO defines what conduct 14.) Request information that violates construction for the first 15 years. would be considered harassment, and a tenant’s right to privacy, including but establishes civil remedies tenants and not limited to residence or citizenship What is Harassment? the city itself may pursue in court to status or Social Security number, except The TPO prohibits owners and their address the owner’s conduct. It also as required by law or, in the case of a agents, employees, contractors or subempowers the Rent Adjustment ProSocial Security number, for the purpose of contractors from 16 forms of harassgram to set up new regulations to obtaining information for the qualificament, including: implement the TPO including mandations for a tenancy, or not release such 1.) Interrupt, terminate, or fail to tory notices to tenants. Even owners information except as required or authoprovide housing services or threaten to of properties exempted from the Rent rized by law do so Control Ordinance, like single-family 15.) Other repeated acts or omissions 2.) Fail to perform repairs and mainhomes, are now required to provide that substantially interfere with or disturb tenance or threaten to do so notice of the TPO to tenants, both at the the comfort, repose, peace or quiet of an 3.) Fail to exercise due diligence in start of the tenancy and with a public occupant and are designed to, likely to or completing repairs and maintenance notice in common areas. The cityactually do cause that individual to leave once started or fail to follow approprimandated notices are available through the unit ate industry protocols noise, dust, lead the Rent Adjustment Program and are 16.) Removing a housing service with paint, mold, asbestos, or other buildavailable on EBRHA’s website. the intention of causing the tenant to ing materials with potentially harmful For each and every violation, a rental health impacts leave, e.g. taking away a parking space property owner found guilty in court knowing that a tenant 4.) Abuse the Owner’s now faces a minimum of $1,000 in “One of the most cannot find alternative right of access into a damages or treble the amount of actual powerful ways you parking and must move. rental unit damages, including mental or emotional as a rental property 5.) Remove from the distress (whichever is greater). owner can protect Protections for rental unit, without prior Furthermore, Causa Justa has your interests and Owners? written consent, any of already gone on record as setting a goal your property is to As written, the TPO the tenant’s personal for 2015 of changing the new law to encourage other does seemingly provide property or furnishings include an administrative enforcement rental housing some protection for 6.) Influence or arm so that tenants may file complaints providers to join rental property owners. attempt to influence a that the city would investigate, and EBRHA.” For instance, tenants tenant to vacate a rental

New, But Not Improved

I

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must provide notice of the violation to the owner before suing. However, the TPO doesn’t require the notice of violation to be in writing. If the tenant does bring suit and wins, the tenant is entitled to recover their attorneys’ fees from the owner.

But if the owner wins and wishes to recover their attorneys’ fees from the tenant, the owner must also prove the tenant’s lawsuit was “devoid of merit” and “brought in bad faith.” Taken together, these provisions leave the owner defending themselves in a “he said, she said” lawsuit. Even if they win, they must attain two additional standards of proof before they can even hope to collect their attorneys’ fees. As always, the devil is in the details.

EBRHA members can find a link to the TPO on the EBRHA website under the “Resources” tab, and by clicking “Oakland Tenant Protection Ordinance.”

The new law should concern anyone who owns residential rental property in Oakland. The subjectivity of words like “interfere,” “intimidate” and “due diligence in completing repairs” could leave owners open to baseless allegations.

Many EBRHA members will have firsthand experience with tenants using the TPO civil remedies as a weapon, rather than the shield it is intended to be. The provision awarding treble damages for “mental and emotional distress” is an invitation to exaggeration.

Strength in Numbers One of the most powerful ways rental property owners can protect their interests and property is to encourage other owners to join EBRHA. EBRHA works tirelessly to alert its membership when important issues like the TPO are being voted on. When contentious issues like this arise, it is critical that EBRHA membership be represented at city council meetings. Watch EBRHA’s magazine and the website calendar for upcoming events or contact EBRHA staff to discuss the ways members can impact these issues. RH The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Liz Hart is a consultant to owners of rental properties in Oakland and Berkeley, and specializes in rent increases and rent board petitions. She can be reached at liz. hart1801@gmail.com or 510-813-5440.

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FEATURE

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SELECTING AN ENTITY FOR YOUR

REAL ESTATE INVESTMENT The importance of deciding the best business structure for your real estate holdings. BY SCOTT BEATTIE

M

any real estate owners acquire their first investment property in their individual names or in a trust and don’t start thinking about business formalities until they have acquired several properties. Whether you are looking to acquire your first investment property or have a number of real estate investments, you should act with care in deciding on the best business structure for your real estate holdings.

The four main choices for entity structure are: (1) acting alone and without the protection of an entity structure as a “Sole Proprietor”; (2) working in the less formal group setting of a “Partnership” (“General” or “Limited”); (3) operating in the highly formal business structure of a “Corporation” (taxed as a “C Corporation” or “S Corporation”); or (4) taking on the world under the Chameleon of legal entities as a Limited Liability Company (“LLC”).

Using my wife’s penchant for comparing things to the animal world, the Sole Proprietorship is the mule of entities. It is the simplest format for business or real estate holdings because it is literally not a business structure at all. Holding bare legal title in your individual name (or in your trust) may get the job done, but it is for the stubborn (or lazy) who refuse to take action to form an entity for their own protection. The Sole Proprietorship is certainly inexpensive since doing nothing costs nothing. But as Benjamin Franklin said “don’t be penny wise and pound foolish.” Sole proprietorships are also the lambs of the entity world in that they are ready for slaughter, providing absolutely no liability or asset protection features in a business world full of risks and predators.

In comparison, the Partnership is the chimpanzee (or acrobat) of the entity world. Partnerships are extremely flexible and can be designed to provide many tax advantages over

other business entities. But Partnerships generally lack asset protection features and have other potential flaws. The only good way to obtain a strong level of asset protection in a Partnership format is to use a Limited Partnership and (1) be a Limited Partner in which case you do not have any control over operations; or (2) form a Corporation or LLC to act as General Partner, in which case you might consider starting with one of those entities rather than requiring two entities to operate. Nevertheless, Limited Partnerships have a legitimate place in the business entity animal kingdom for the reasons discussed further below.

Corporations The aging lion of the entity kingdom is the Corporation. Used for small and global companies alike, Corporations have long held the spot at the top of the entity food chain, providing the strong asset protection features and allowing business owners the greatest separation of their business activities from their personal financial lives. Using a corporation used to be the only way to obtain strong asset protection for risky business activities (and nearly all business activities carry risk). The flaws associated with Corporations are the burden of compliance with operational formalities and the adverse tax consequences.

Corporations taxed under Subchapter C of the Internal Revenue Code are subject to double taxation. Even with the advent of the “S Corporation” which provides some of the tax advantages of a partnership, a Corporation just isn’t as flexible as a partnership is from a tax standpoint.

Add in the difficulties of complying with the legal formalities and it isn’t hard to see why most small business owners no longer use corporations as their go to entity. It is just too ebrha.com

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Tax to all businesses operating as LLCs unless they elect to be taxed as a corporation which may defeat the purpose. As the name implies, the Gross Receipts Tax is based on the gross rather of the net revenue of the Company.

The tax can be as high as an extra $11,790 per year. This tax doesn’t apply to any other type of business entity. So for companies with high gross receipts (generally over $500,000/ annum), it is advisable to consider using a dual entity structure (e.g., operating as a Limited Partnership with an LLC or Corporation acting as a General Partner). Such a combined structure can be used to avoid or reduce the Gross Receipts Tax while still obtaining liability protection for the Partners to the fullest extent of the law. Because the General Partner is either an LLC or a Corporation (e.g., holding a 1% General Partnership interest only), the General Partner will not be an individual with personal liability exposure. Because the main entity is a Limited Partnership (for which 99% of the ownership is held by Limited Partners), the structure can be designed to reduce or eliminate gross receipts tax because the structure will be designed so the LLC acting, for example, as a fractional 1% General Partner, will not directly receive over $500,000 in Gross Receipts.

“DETERMINING THE APPROPRIATE CAPITAL AND COMPENSATION STRUCTURE WITHIN AN ENTITY IS AS ESSENTIAL AS SELECTING THE RIGHT TYPE OF ENTITY AND SHOULD NOT BE IGNORED.” difficult to maintain. You can’t just file your articles with the Secretary of State and forget about it. Corporations require organizational meetings, annual meetings of shareholders and directors, proper capitalization, ongoing operations must comply with the strict requirements of stated bylaws, and periodic written resolutions are necessary to approve acts of the officers for things as simple as opening new bank accounts or as complex as authorizing loans, approving certain types of contracts, officer salaries and employee benefits, etc.

The need to comply with all these formalities to keep liability protection in tact leaves the average business owner groaning under the weight of the corporate entity structure. Without complying with the required formalities, creditors can pierce the veil of liability protection and go after the personal assets of the shareholders in the event of a mishap.

Limited Liability Company (LLC) Never fear, over the last decade we have seen the Limited Liability Company (LLC) move into its own as the entity of choice for many business activities, especially real estate investment and rental activities. The LLC doesn’t work in all cases, but in general it is the chameleon of the business entity world. For tax purposes, LLCs can operate as any type of entity. Using the IRS “check the box” regulations you can form an LLC: (1) taxable as a sole proprietorship (provided there is only one member); (2) taxable as a partnership (provided there are two or more members); or (3) taxable as a corporation (provided you are really, really certain you want to be taxed as a corporation).

Regardless of the tax structure chosen, the LLC is generally granted the same strong liability protection as a corporation, without requiring nearly as many operational formalities. For instance, LLCs do not have to hold annual Member meetings to maintain limited liability status (although it may be advisable).

Nor do LLCs have to have resolutions authorizing most common business activities. Of course, care must still be taken to properly form the company under state law, choose the appropriate tax structure, and pay annual franchise tax fees and file required documents with the Secretary of State (such as Statements of Information). For any entity structure to provide asset protection, the owner must also properly capitalize the entity.

Gross Receipts Tax LLCs do have some added costs for the privilege of doing business in this entity format. California applies a Gross Receipts 14 RENTAL HOUSING

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Estate and Gift Tax Planning Business entities, particularly LLCs and Limited Partnerships, are also popular structures used to facilitate estate and gift tax planning. With real estate, this is typically done in high net worth estates to effectuate an “estate tax freeze”. Senior generation family members freeze the value or growth of their estates by forming an LLC or LP and making gifts or other transfers of portions of their real estate equity to younger generation family members. The goal is usually to take advantage of annual gift tax exclusions ($14,000 per donor per done), and valuation discounts applicable to minority interests for lack of control and lack of marketability.

By forming the entity, funding it with real estate investment holdings, and making gifts and/or sales of Membership or Limited Partnership Interests, senior generation family members can leverage their Gift Tax Annual Exclusion ($14,000 per donor per done), their Estate Tax Applicable Exclusion (now $5,430,000 in 2015) and transfer future appreciation to younger generation family members. Often very favorable Estate and Gift Tax results are achieved, provided the entities are properly formed under State Law, properly funded, and operated in compliance business formalities. You must have a good business purpose and respect the entity structure, keep business assets in the entity strictly segregated from personal assets, and comply with a number of other formalities to achieve these tax results, but the results can indeed be phenomenal in producing estate and gift tax savings.

Income Tax Planning LLCs and Partnerships can also be used to meet income tax planning goals. One simple strategy (often combined with the estate tax planning strategies described above) is to shift income

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ARE YOU MAKING EBRHA.COM WORK FOR YOU?

EBRHA launched a new and improved website in 2014. As before, you can: Download exclusive rental forms 24/7 Conduct tenant screening Determine current rental rates Read issues of Rental Housing magazine Connect with local service providers via online vendor directory Even better, you can now: Renew your membership online Pay invoices online Register for workshops See EBRHA’s calendar of events Get discounted group insurance Learn how to go green (under “Education” tab) Stay on top of legislative news and ways to get involved Find useful links to additional forms and applications, local organizations, government offices, and housing resources

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to younger generation family members who may be in much lower tax brackets than senior generation family members. The entities can be structured so that senior generation Members are still in control of business decisions, while shifting enough equity so that a significant portion of income is taxable to younger generation family members. Overall, the family is subject to a lower income tax burden which allows greater accumulation of wealth.

Property Tax Planning An often overlooked tax in planning is property taxation. Moving property in and out of corporations, partnerships and LLCs subjects the property to possible reassessment. Proper reporting requirements such as filing preliminary change in ownership reports must be complied with. A transfer can be designed to intentionally trigger a reassessment (such as where the Prop 13 maximum value is above present fair market value) or to avoid reassessment using one or more exclusions such as the proportional interest exclusion as allowed under California R&TC Section 62(a). Much can be done to leverage the $1.0 Million per parent, parent-child exclusion from reassessment. Unfortunately we don’t have room to go into all the details of property taxation in planning entity structure and business succession.

That will have to be the subject of its own complete article.

Suffice it to say that this is a very tricky area of the tax law and great care is required when moving real property into and out of business entities and trusts to avoid inadvertently triggering tax changes.

Other Issues This article covers only the most basic aspects of the entity selection process. It is too short to go into depth with many of the nuances that come into play in the business entity selection and design process. Readers should not rely on this general article without seeking advice related to their specific situation.

A few of the many issues beyond the scope of this article include the capital structure of the entity (e.g., use of debt versus equity, capital contributions versus loans or leasing of capital assets, special tax allocations of profits and losses, preferences for certain partners or shareholders), how to avoid (or intentionally trigger) property tax reassessments, how to best compensate business owners, key executives, and other participants (e.g., guaranteed payments, salary vs. draws, division of profits and losses, allocation of tax and fringe benefits, to name but a few). Options, rights of first refusal, and buy-sell arrangements can be extremely important if you are doing business with others.

Determining the appropriate capital and compensation structure within an entity is as essential as selecting the right type of entity and should not be ignored. Before leaping into the complicated jungle of business entity structures contact your trusted tax and legal advisors for assistance. The benefits of obtaining good advice far outweigh the costs. RH Scott G. Beattie (Beattie & Aghazarian, LLP) is an attorney who practices in the areas of estate, business and tax planning. Mr. Beattie has a Masters of Law Degree (LLM) in taxation and is a certified specialist in Estate Planning, Trust and Probate Law. He can be reached at 209-222-3686 or 831-233-3562.

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FEATURE

Protecting Your Nest Egg Proper estate planning helps protect assets.

BY KIRK D. DOBSON, CFP® CHFC®

M

any successful people have spent decades building their financial holdings and yet never find the time to properly design an estate plan to help their family distribute the assets in a thoughtful and tax efficient manner.

Simply put, estate planning directs the right assets to the right people, at the right time. It may serve to reduce taxes, eliminate family squabbles, and protect those that need individual attention, such as a special needs family member. Estate planning may also address problems pertaining to bad judgment or chemical dependencies, and additionally serve to protect family assets from creditors or divorce proceedings.

Competent financial planning addresses a wide array of topics and requires a personalized approach to obtain the best results possible for you and your family. If you have assets, financial and estate planning needs to be at the top of your bucket list. Maybe you did your planning years ago, and new limits and laws have made your previous planning obsolete.

You owe it to yourself and your family to organize and protect what you have worked so hard to produce.

Estate Planning Basics

The 2015 Estate, Gift and Generation Skipping tax exclusion is $5,430,000 per person, which can be doubled for a married couple with the proper planning (the exclusion is currently adjusted for inflation annually), and the estate tax maximum rate is 40%.

2015 Gifting limits that are not subject to taxation

are $14,000 per recipient, meaning that a couple can gift $28,000 to each recipient. This technique is called “gift splitting” and is a non-taxable event.

Important Considerations

It is important to know that gifted property retains the cost basis of the previous owner, and may lead to big taxes at the time of sale, and inherited property gets a stepped up basis to the date of death value Before the increased estate tax exclusion, many real estate investors engaged in estate tax reduction strategies that involved gifting and/or discounting of their interests to next generation family members. Some examples are Grantor Retained Annuity Trust (GRAT), Grantor Retained Unitrust (GRUT), Family Limited Partnerships (FLP), Family Limited Liability Companies (LLC) and Irrevocable Trusts. These may still be suitable for some and not for others. The increased tax exclusion amounts, coupled with loss of step up, may cause these plans to be less appropriate.

Often times the cost basis transferred to these plans is low due to lower purchase price and annual depreciation. If the recipient chooses to sell the property there may be substantial tax due. If the grantor’s estate now falls near or below the current estate tax intended to reduce tax, it may now result in a higher tax than without this strategy.

What to Do?

Talk with your estate planning attorney and your CPA/ ebrha.com

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Real Estate Exchange Strategies and Proposed Legislation

“Simply put, estate planning directs the right assets to the right people, at the right time. It may serve to reduce taxes, eliminate family squabbles, and protect those that need individual attention, such as a special needs family member.”

EA. Explore if “undoing” previous plans may benefit your situation. Be sure to get competent advice and have estate taxes forecasted to estimated mortality, as well as any current tax implications that may arise.

Enter the Irrevocable Life Insurance Trust (ILIT)

An ILIT provides money outside of your estate, is not subject to estate taxes, and can be used for paying estate tax. An ILIT is generally in addition to your other estate planning. The ILIT normally owns a permanent life insurance policy, and the ILIT insurance premium may be funded with gifts that fall under the $14,000 annual gift limit. Gift splitting is allowed. For example, let’s assume you are married and have three children. Your annual gift limit is $84,000.00 (2 parents x $14k for each child x 3 children). If your limit is lower than the insurance premium, your lifetime exclusion can be accessed.

Other important ILIT details: 1) the death benefit is not included in your taxable estate, as the premium dollars were “gifted” away; 2) for couples, a “2nd to die” policy insures both spouses and pays only at the death of the last insured, which is often a suitable choice; 3) ILIT formation is relatively easy and inexpensive; 4) rules and procedures must be followed, and good record keeping is important; and 5) consult with a competent life insurance agent that is familiar with advanced insurance planning.

Liquidity and the Importance of Diversifying Your Assets

Real estate investors often have most of their net worth tied up in real property, with low liquid assets, or those that can be easily converted to cash.

Some common problems associated with illiquidity include: property maintenance or vacancy can affect cash flow without having sufficient reserves; illiquidity complicates estate transfer to beneficiaries, as some may not be interested in real estate ownership, or being partnered with siblings; if there is limited cash on hand when estate tax is due, determining if it is best to sell the property—which can be particularly difficult in down markets—or borrow funds.

In short, owning other asset classes provides additional opportunity, liquidity and risk management.

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The House Ways and Means Committee is studying proposed legislation to eliminate 1031 tax exchanges. Other proposals seek to limit the annual amount that can be excluded.

This would affect conventional and alternative exchanges described below.

Alternative Exchange Possibilities: Sold as Securities

Investor Requirements: There are a number of options available for Accredited Investors, defined by the Securities and Exchange Commission as: a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of purchase. Excluding the value of the primary residence of such a person; or a natural person with income exceeding $200,000 in each of the two most recent years, or joint income with a spouse exceeding $300,000 for those years, and a reasonable expectation of the same income level in the current year; or a trust with assets in excess of $5 million, not formed to acquire the securities offered whose purchases a sophisticated person makes.

Reasons to Consider Alternative Exchange Possibilities Sold as Securities

The following are some reasons to consider alternative exchange possibilities sold as securities: “Like-Kind” rules are fairly liberal; some people get tired of managing or operating properties, but high tax at the time of sale holds them captive; estates with multiple beneficiaries causes concerns; and you do not have to exchange to another single-owner property.

Tenants in Common (TIC) or Delaware State Trust (DST) ownership qualifies for exchange. They offer regular income, and often triple or prefunded double net leases. Some programs offer national tenants, where rent is paid corporately regardless of individual store performance.

Estate transfer is simple, as beneficiaries are issued shares and are not partnered with siblings, or need real estate management experience. Other details on TIC’s and DST’s: 1) retains step up at death; 2) normal 1031 rules apply regarding 45 day naming rules, 200% rule and 180 day funding rule; 3) can also be used in 1033 exchanges; and 4)may qualify as a Passive Income Generator (PIG).

IRS Form 8582 and You

Most real estate owners file form 8582 with their tax returns, which track “passive loss carry forwards”. Losses may be used at time of sale of associated property to offset gain. Losses may be reduced or lost at your death if you still own associated property.

PIG/PAL (Passive Income Generator/Passive Activity Loss) investing allows you to use your losses now, against current income, from passive income generator investments, such as rental property. This does not require the sale of the property,

and can be funded from other sources, or the sale of current securities. If you hold current investments that produce taxable earnings, consider investing in a tax free PIG/PAL strategy. Investment can be real estate, leasing, energy, etc., and some have lower accredited investor requirements. Simply check your tax return or ask your accountant if your return includes form 8582

Paying the Estate Tax Bill

BY MIGUEL DELGADO, DAVID WHITE & ASSOCIATES

Options for Estate Transfer with Multiple Beneficiaries

For estates with multiple beneficiaries, many of the methods mentioned here will provide easily divided assets, including the DST/TIC securities used in 1031 exchanges and PIG/PAL investing. An ILIT provides liquidity that does not have to be divided equally, and has no requirement stating it is only for estate tax needs.

Permanent life insurance is a useful tool that can be used when one child prefers real estate and the other cash. The same applies when children would not make good business partners, which is true for many families. Finally, term life insurance can pay mortgages at death.

Planning for Success

PHOTO: FLICKR / TIMOTHY VALENTINE

Proper estate planning with a qualified financial services consultant—including regular reviews of existing plans—is critical to the health and well-being of both your investment and your beneficiaries.

Good planning insures that your financial legacy lives on in a manner that is consistent with your goals, alleviates potential losses, and reduces stress for recipients.

Always strive to diversify, adding liquid investments where possible. RH

The information contained in this article is general in nature. Consult the advice of an attorney or expert for any specific problem.

Kirk Dobson is a Certified Financial Planner and can be reached at 925-277-2649 or kdobson@dwassociates.com. Miguel Delgado can be reached at 925-277-2635 or mdelgado@ dwassociates.com. Securities and investment advisory services are offered solely through Ameritas Investment Corp. (AIC). Member FINRA/SIPC. AIC and David White & Associates are not affiliated. Additional products and services may be available through Kirk Dobson, Miguel Delgado or David White & Associates that are not offered through AIC.

The federal government will not accept a percentage of your estate as payment for your estate tax bill. Instead, your estate tax bill must be paid in cash, and it must be paid within nine months after your death. If your estate is subject to the federal estate tax, there are FOUR ways to provide your estate with the cash needed to pay your estate tax bill: 1. 100% METHOD You could accumulate enough cash in your estate to pay your estate tax bill outright. Rarely, however, does a successful person accumulate such large sums of cash. Instead, the reason for financial success is usually due to the investment of cash in appreciating assets, rather than accumulating it in a bank.

2. 100% PLUS METHOD Your estate could borrow the cash needed to pay your estate tax bill.

This, however, only defers the problem, since the money will then have to be repaid with interest.

3. ASSET LIQUIDATION METHOD Your estate could liquidate sufficient assets to pay your estate tax bill.

This choice may make sense if your estate owns considerable assets that can be readily sold for a gain following your death. Keep in mind, however, that if a forced liquidation is necessary, it may bring only a small fraction of the true value of your assets. In addition, sales expenses are bound to be incurred.

4. DISCOUNT METHOD Assuming you qualify, you can arrange now to pay your estate tax bill with life insurance dollars. For every dollar your estate needs, you can give an insurance company from approximately one to seven cents a year, depending on your age and health. No matter how long you live, it is unlikely you will ever give the insurance company more than 100 cents on the dollar. In addition, the life insurance policy can frequently be structured to accommodate your unique premium payment requirements.

Contact an expert for more information on estate taxation and strategies you may be able to use in order to minimize your estate tax bill.

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FEATURE

BERKELEY

FRAUD IN HIGH

PLACES The unfair practices of the Berkeley Rent Stabilization Board.

BY MICHAEL ST. JOHN

W

PHOTO: FLICKR / DECASECONDS

e know that the Berkeley Rent Stabilization Board (RSB)—Board and staff alike—is fundamentally protenant. That’s to be expected. That’s wrong in my view, but it is expected.

But the events of the past several months have revealed in new ways the depths to which the Berkeley RSB will sink in their one-sided attempt to protect—and even scam— tenants from rent increases allowed by Costa-Hawkins or by Regulation 524, the pied-a-terre regulation.

The recent attempt by staff to distort the obvious meaning of their own regulations and of state law is fundamentally wrong. That they have done it in secret, by hiding relevant documents from public view, by lying to Board members and the public, and by speaking untruths as if they are true. This is doubly wrong and should be stopped.

Undemocratic Ways This episode reveals the undemocratic ways in which the Berkeley RSB sometimes operates. Following the letter but not the spirit of the law, the Board and staff are engaging in what might in another context be called racketeering. That they can get away with it reveals that the way the Berkeley RSB is structured is fundamentally undemocratic. The Board members are elected. The electorate is predominantly pro-tenant.

Property owners are a tiny, disfavored minority. No wonder most Board members are pro-tenant.

The pro-tenant Board then hires a pro-tenant director, who in turn hires pro-tenant staff members.

It is a conspiracy of sorts. All of these people are civil servants. Civil servants are supposed to be impartial.

They are supposed to apply the law even-handedly.

Tenants have legitimate interests. Property owners have legitimate interests. The purpose of the rent law is to protect the interests of both owners and tenants.

Unfortunately, some Board and staff members seem to forget this.

Gaming the System I have been writing articles for the past two years about tenants who game the system—tenants who attempt to retain their rent discount when they live elsewhere, use their unit for storage, as an office or as a pied-a-terre, or sublet their rent-controlled unit to others, sometimes making a profit. These cases sometimes get quite contentious. Tenants hide the truth, and sometimes lie directly, about where they live. Rental property owners then do investigations, sometimes involving private investigators, to try to discover the truth. Property owners ask pressing questions at hearings. Tenants and their attorneys often play “hide the ball.” Hearing examiners do little or nothing to level the playing field. Too often, the hearing examiners themselves reveal pro-tenant bias both at hearings and in their decisions.

When property owners discover at hearings that tenants really are living at the property, we drop the ebrha.com

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proposed changes prohibited property owners from introducing evidence proving that tenants were living elsewhere.

Staff made up the new interpretation, not present in either Regulation 524 or CostaHawkins, that “intent” could be considered, and that a tenant intended to live at the Berkeley apartment would be considered as proof that a tenant did live at the Berkeley apartment. Never mind that intent is not mentioned in the rent law, in Regulation 524, or in Costa-Hawkins.

Staff’s recommendations would have limited the evidence property owners could bring. The recommended changes would have prevented property owners from bringing evidence of past absences from the rent-controlled unit. Staff was trying to stack the deck, making it impossible for property owners to introduce relevant information in hearings. Property owners would be cut off at the pass by these changes. Tenants who scammed in the past would get off scot-free.

We brought to staff’s attention that the Board could not change Regulation 524 because that regulation was a condition of the settlement agreement of a lawsuit against the Board by the Berkeley Property Owners Association (BPOA). The settlement agreement said that the Board could not change the regulation in the future. It said that should a legal challenge be brought following the amendment of Regulation 524, the Board was obligated to defend the original Regulation in court. That stopped them.

“THE RECENT ATTEMPT BY STAFF TO DISTORT THE OBVIOUS MEANING OF THEIR OWN REGULATIONS AND OF STATE LAW IS FUNDAMENTALLY WRONG.” case. When it is unclear, the hearing examiner decides. Sometimes, property owners win these cases, sometimes they lose.

That’s to be expected. Sometimes property owners or the tenant appeals the decision. Sometimes property owners win on appeal, and sometimes they lose. That’s to be expected too. If a party is dissatisfied with the decision on appeal, that party can take the case to court. That’s the system.

These cases are often messy, but this is the system. It’s imperfect, but everyone gets his or her day in court. Everyone can present their evidence. Everyone can appeal if they wish to.

Early last fall, Berkeley RSB staff decided to intervene in this system to further protect tenants from rent increases allowed under the pied-a-terre regulation or by Costa-Hawkins. It seems that staff wanted to prevent property owners from bringing cases against tenants who don’t live there. It seems that staff wants tenants to be able to retain the rent discount even when tenants live elsewhere.

Why staff would do this? Why would staff want to protect tenants who game the system? Why would staff want to protect tenants who hang on to a rent-controlled unit when they don’t actually live there? Why would staff or the Board want to protect tenants who lie under oath at hearings, or tenants who—by subletting their rent-controlled unit for more than the lawful rent ceiling—make a profit while living elsewhere?

Some people have suggested that individual staff members must gain personally by doing this. I don’t think so. I think it is ideological. I think some staff members are so embedded in a tenant-protection mentality that they can’t distinguish between legitimate and illegitimate tenant protections. These staff members are so ideologically off-balance that they lose their moral compass, losing the ability to tell right from wrong. Some staff members—attempting to rig the system so that tenants more consistently win these battles—are acting in secret, unethical, undemocratic ways.

Amending Berkeley Laws Here’s what happened last fall. Staff, without seeking public input or notifying property owners or the public, drafted amendments to Regulations 524 and 1018 that basically said that tenants who were gaming the system would win, almost always. The amendments revised Regulation 524 and interpreted Costa-Hawkins such that tenants would be able to live elsewhere, essentially forever, and retain their rent discount. The 24 RENTAL HOUSING

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An Unfair Resolution Abandoning the regulation change, staff drafted a “Resolution” to replace the prohibited regulation change over a November weekend in 2014. Despite emphatic protests by BPOA and EBRHA members, the Board passed the resolution without much debate and without change the following Monday. There are many things wrong with the resolution: • It was passed without discussion by the relevant committee and without advance public notice.

• The Resolution says that Regulation 524 was enacted “to preserve the affordability of rental housing,” whereas this was not the purpose of the regulation.

• The use of a “resolution” in place of a “regulation” attempts an end-run around the prohibition in the settlement agreement.

• The Resolution blames property owners for making these cases contentious, whereas these cases become contentious because tenant fail to tell the truth and because hearing examiners don’t insist that the truth be told at hearing or that the factual record be complete.

• The Resolution says, falsely, that “Board staff has always used the date of the initial hearing as the relevant date to determine whether someone qualifies as a ‘tenant in occupancy’…”

• The Resolution rules that the date of the initial hearing shall be the relevant date, meaning that tenants who live else-

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where can, between the petition date and the date of hearing, rush back to occupy the unit, thereby presumably retaining the rent discount to which they have no right.

• Staff failed to give Board members and the public copies of the memoranda which justified the regulation on passage in 2003, a serious breach of democratic process.

• Most annoying, the resolution states a falsehood: “That the foregoing is a recitation of how the Board has always interpreted how Regulations 524 and 525 have been applied …”

Saying something is so doesn’t make it so. There is absolutely no evidence that the date of hearing has been consistently used as the determining date. To the best of my knowledge, there is only one case in which this issue was addressed explicitly. The hearing examiner ruled in that case that whether or not the tenant was living there on the hearing date was irrelevant in the face of substantial evidence that the tenant had not lived there for many previous years.

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Operating Out of Bounds The Resolution should be rescinded. It probably won’t be, but it surely should be. It is filled with false statements. It is a black mark on the face of the Board, a demonstration of the fact that the Berkeley RSB is operating outside the bounds of standard democratic procedure.

The 19th century political advisor to British Prime Minister Gladstone, Lord Acton, most famous for having said that “Power corrupts and absolute power corrupts absolutely” also said, “The one pervading evil of democracy is the tyranny of the majority, or rather of that party, not always the majority, that succeeds, by force or fraud, in carrying elections.”

We have seen a lot of this in national elections in recent decades. Now we are seeing this locally in the operation of our own Rent Stabilization Program. RH

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This article is based on the author’s experience with the Berkeley Rent Stabilization Board, and the information contained is available via public records. Michael St. John is a property management consultant who has assisted Berkeley property owners with tenant and rent control problems for 35 years. He can be reached at msjetal@pacbell.net, or by phone at 707-937-3711 or 510-845-8928.

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security deposits

Protect Yourself with Photos

Documentation is your best defense when making security deposit deductions. BY BRENT KERNAN the tenant for the cleaning or repairs that are done to restore the unit to marketable condition.

There are three stages at which you should memorialize the state of a rental unit for security deposit purposes: 1) at move-in; 2) during the initial moveout inspection; and 3) during the final move-out inspection.

Although most owners use an inspection report of some kind for this purpose, a written inspection report does little to accurately establish comparable states of the rental unit.

S

o, you are charging a tenant for repairs and cleaning at moveout and deducting those charges from the tenant’s security deposit. You review your move-in and move-out inspection forms. You prepare the itemized disposition of the security deposit form (ideally, using the EBRHA model form), send a check to the tenant for the balance, and you’re done. Right?

Possibly not. A tenant can still challenge your retention of the security deposit in small claims court on the basis that it is not justified under California Civil Code §1950.5. §1950.5 draws a very bright line on what can be charged against a tenant’s security deposit, and you must be ready to defend your decisions with evidence.

Only a photographic or video record can properly establish whether a rental property owner is justified in charging 28 RENTAL HOUSING

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ers do a walkthrough video recording because of the ability to capture a more complete record of the condition. For cleanliness, in particular, narrate as you proceed through the unit, noting where surfaces have been newly painted or reflect an objective standard of clean.

Similarly, damaged items requiring repair should be documented through comparable photographs or video. Photos and video can help to establish that a condition needing repair is not the result of ordinary wear and tear.

When used for these purposes, the creation of video or photographic records poses no privacy issues, and with simple precautions the records can be fully admissible in court.

How to Create the Digital Record Today, digital recording is cheap and easy.

If you’re planning to use video, make sure you have a recorder that includes audio as well. And any digital tool you use—camera or video recorder—should allow for all records to be automatically time-stamped. Once you’ve created the records, it is not necessary to do anything other than keep them as computer files in case your deductions are challenged. You don’t have to print them or even disclose them to the tenant.

Move-in Inspection A walkthrough video can be done as you Document for both Cleanliness inspect the unit with the tenant. Be sure and Damages to pick a time that affords a lot of natural California Civil Code §1950.5(b) states light. Sound recording will provide comthat security deposit funds can only be mentary on what you are viewing and used for: “(2) The repair of damages to can also be used to show the tenant’s the premises, exclusive of ordinary wear position on pre-existing conditions. As and tear, caused by the tenant or by a long as you can establish when, where guest or licensee of the tenant. (3) The and how the video was taken, this is cleaning of the premises upon terminaadmissible evidence. tion of the tenancy necessary to return the unit to the same level of cleanliness Initial Move-out Inspection it was in at the inception of the tenIt’s a little more compliancy.”

“Although most cated if an initial moveAlthough an inspeclandlords use an out inspection is done. tion report can provide Before the inspection for a statement of cleanli- inspection report of some kind for this you will need to memoness, it cannot provide purpose, a written rialize explicitly in a precise levels of cleanliinspection report written “itemized stateness of the unit at the does little to accument” of instructions three important stages— rately establish com- how the tenant is to only comparative photos parable states of the clean the unit to return or video can do this. It is rental unit.” it the same level of recommended that own-

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PHOTO: MARTIJN VAN EXEL

COLUMN

cleanliness as they received the unit [Cal. Civil Code §1950.5(f)(2)]. By implication, this would apply to any condition that the tenant could repair as well.

This necessarily means reviewing the condition of the unit at the beginning of the tenancy. That is, the photos or video taken at the time of the move-in inspection. Thus, you should make use of your archived move-in photos at the time you prepare the initial move-out itemized statement.

After the initial move-out inspection is done, you and the tenant should have a written agreement about what is to be done for him/her to secure a 100% refund of the security deposit. Also, specify the time frame for completion of the work, which will usually correspond to the timing of the final inspection.

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Final Move-out Inspection At this stage, you’re comparing the condition of the unit to the summary of cleaning and/or repairs agreed to during the initial move-out inspection. This stage should still be memorialized, whether the final inspection is perfectly satisfactory or not. You will then have a complete record of the initial condition of the unit, any changes to that condition, and any remedy the tenant executed to restore the unit’s condition.

The Burden is on the Owner Civil Code §1950.5 places the burden of proof on the owner to justify deductions to a tenant’s security deposit. This means that a judge will be looking to the owner to present the evidence at court—not the tenant [Cal. Civil Code §1950.5(l)]. This is called burden shifting, and it emphasizes that owners must retain evidence of the justifiability of a security deposit deduction for as long as the tenant can challenge the deduction.

This is why it is important to protect yourself affordably and easily by taking copious photographs or a complete video recording of the rental unit at the three stages of inspection during tenancy. RH Brent Kernan is an attorney and general counsel at Story Rentals, Inc and has practiced landlord/ tenant law in the Bay Area for over 20 years. He can be reached at bkernan@aol.com or 510-7122900.

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COLUMN

esq. & a

Additional vs.

Replacement What is the best way to handle roommate requests in your rental units? BY JASON MAUCK

Q

Do I have to allow an existing tenant to get a roommate?

What if it is a studio apartment and he wants to get two roommates?

Also, can I require applicants to pay an application fee and screen them?

A

These are some very common and reasonable questions for any landlord. Since they are so distinct, I’ll break them down by topic.

Permissive Roommates The question of roommates can turn into a very complex issue depending on the facts of a given tenancy. The short answer to the question is no, you do not have to allow a tenant to get a roommate. As long as the apartment was only leased to one tenant there’s no one law saying you have to permit a second tenant (absent some extraordinary circumstances). Where the question can get complicated is when the tenant is replacing other tenants or sub-tenants.

There are a few preliminary issues with this question that need to be addressed—and many regular readers of this magazine will already know this issue—specifically, what does the lease say? Does the tenant already have a roommate he or she is replacing? And finally, what city is this property located in?

30 RENTAL HOUSING

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Let’s start at the end and work our way backward: If the tenant brings on a roommate without the owner’s consent, the owner’s remedy is to evict the tenant through the unlawful detainer process. One basis for a notice to evict is the breach of a material term of the lease. Many leases contain a provision forbidding assigning the lease or sub-letting. For example, the California Department of Consumer Affairs has a form lease which contains this provision: 6. OCCUPANTS: Guest(s) staying over 15 days without the written consent of OWNER shall be considered a breach of this agreement. ONLY the following individuals and/or animals, AND NO OTHERS shall occupy the subject residence for more than 15 days unless the expressed written consent of OWNER obtained in advance: [ Tenant’s Name ] Provisions similar to this are common among most residential leases—in fact, you would have a hard time finding a written lease that did not state the names of the tenants and contain a provision barring the addition of other tenants. Terms like this are material because they are fundamental, substantial and significant terms of the lease.

If your lease has a provision like this, you don’t have to permit a tenant to

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get a roommate. A tenant violating this term could be grounds for an unlawful detainer.

The substantial caveat is, if your tenant already had a roommate and wants to replace that roommate, you may have waived your right to enforce this provision of the lease. If an unauthorized roommate has lived in the unit for a significant period of time and you, as the owner, knew about it and did nothing to enforce this provision, a court may decide that the term is not material since it has not been enforced, and that you cannot deny your authorized tenant the ability to bring someone else in.

The same would apply to rent control jurisdictions with respect to the initial denial of permission. If you only have one tenant and he or she wants to add people to the lease, you are not required to permit the addition of new tenants.

However, under various rent controlled jurisdictions, a tenant has rights with respect to replacing roommates, which includes a one-for-one replacement or a procedure for approving or rejecting replacement roommates. These matters can be complicated, especially if there is a rotating cast of tenants and the original tenant who signed the lease is no longer a resident. If you have one of these issues it is best to contact a lawyer to know your rights.

Application Fees and Screening The short answer to your question regarding applicant fees is yes, you can charge a fee. The fee for applications is governed by California Civil Code §1950.6. This law went into effect in 1996 and imposes a cap on the fee you can charge which readjusts every year.

According to EBRHA, the max fee is $45.16. This fee must be used for the actual costs incurred in gathering information about the tenant, which brings me to the second part of the question.

You, as an owner, are absolutely allowed to screen the tenant. This usually takes the form of credit checks and an investigation into past owner/tenant relationships. Organizations such as EBRHA can help with tenant screening.

One factor to consider is that there are

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The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Jason Mauck is an attorney with Ericksen Arbuthnot. He can be reached at 510-832-7770, ext. 120 or jmauck@ericksenarbuthnot.com.

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certain guidelines when using a credit report as a basis for screening a tenant.

For example, if you base your decision on a prospective tenant’s credit history you have to let the prospective tenant know of that decision in writing, the credit agency you used and you have to make available a copy of the credit report you obtained (See CA Civil Code §1785.1, et seq.). Further information regarding the use of credit reports can be found on the Federal Trade Commission website at http://business.ftc.gov/documents/bus49using-consumer-reports-what-landlordsneed-know. There are other issues that come into play when screening tenant— such as discrimination—but those are for another article. —JASON MAUCK RH

| FEBRUARY 2015 |

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RENTAL HOUSING 33

THE POLITICAL EFFORTS OF EBRHA COME FROM ITS POLITICAL ACTION COMMITTEE. The EBRHA-PAC is a nonprofit and nonpartisan committee, the purpose of which is to support local ballot measures and candidates that have a positive impact on the rental housing industry.

TO GET INVOLVED OR TO DONATE TO THE EBRHA-PAC, CONTACT: NEWS@EBRHA.COM OR VISIT EBRHA.COM/PAC-DONATION

Rent Board Matters & Management Expertise

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DON’T GET LEFT OUT! FOR ALL OF THIS MONTH’S EVENTS CHECK OUT THE CALENDAR PAGE ON PAGE 36

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RENTAL HOUSING 35

community calendar EVENTS & CLASSES

february

march

TUESDAY, FEBRUARY 10

THURSDAY, MARCH 12

The Move In/Move Out Process Tori Blanca, CCRM, EBRHA Members: Free; Non-Members: $69 2:00 p.m. – 3:30 p.m.

Landlord Basics Tori Blanca, CCRM, EBRHA Free to Member and Non-members 2:00 p.m. – 3:30 p.m.

THURSDAY, FEBRUARY 12

TUESDAY, MARCH 17

Resolutions to Tenant Nuisance Issues Clifford Fried, Fried and Williams LLP Members: Free; Non-Members: $69 2:00 p.m. – 3:30 p.m.

Women’s Auxiliary Luncheon Scott’s Seafood Restaurant in Jack London Square Auxiliary Members: $20; Guests: $35

MONDAY, FEBRUARY 16

TUESDAY, MARCH 17

11:45 a.m.; Contact Anna Alberti at 510-562-1179 for more info

EBRHA Office Closed TUESDAY, FEBRUARY 17

Women’s Auxiliary Luncheon Scott’s Seafood Restaurant in Jack London Square Auxiliary Members: $20; Guests: $35 11:45 a.m.; Contact Anna Alberti at 510-562-1179 for more info THURSDAY, FEBRUARY 19

Landlord 102 Tori Blanca, CCRM, EBRHA Members: Free; Non-Members: $69 2:00 p.m. – 3:30 p.m.

Money, Women & Real Estate: Taking Charge of Your Financial Future Terry Allen, CFP, Enhance Wealth Advisors Members: Free; Non-Members: $69 2:00 p.m. – 3:30 p.m.

SATURDAY, MARCH 21

EBRHA General Membership Meeting Topics: • Legal Q&A by Daniel Riley, Attorney at Law

• Maintenance: Planning for Success - Speaker TBD 10:00 a.m. - 12:00 p.m.

TUESDAY, MARCH 24

SATURDAY, FEBRUARY 21

EBRHA General Membership Meeting Topics: • Legal Q&A by Matthew P. Quiring, Fried & Williams LLP

• Financial Planning & Tax Tips by Kirk Dobson, David White

& Associates 10:00 a.m. - 12:00 p.m.

The Applicant Screening Process Dan Firestone, Contemporary Information Corporation Members: Free; Non-Members: $69 2:00 p.m. – 3:30 p.m.

No Refunds on no shows; Seats fill fast, register in advance! To register and pay, visit ebrha.com or call (510) 893-9873. Unless noted, all classes and events are held at the EBRHA Education Center, 360 22nd St., Suite 240, Oakland 36 RENTAL HOUSING

| FEBRUARY 2015 |

ebrha.com

Oakland RENT ADJUSTMENT PROGRAM FEE

Annual fees are $30 per unit and are due March 1. Owners are allowed to pass through $15 to tenants.

BUSINESS TAXES & REGISTRATION

Registration fee is $60 and is due March 1. Tax is based on annual gross rental income at a rate of $13.95 per $1,000 of gross rental income. Tax renewal declarations are mailed at the beginning of the year.

LANDLORD PETITION FOR EXEMPTIONS

Claims covered include new construction, substantial rehabilitation, and single-family homes or condominiums.

ANNUAL ALLOWABLE RENT INCREASE

2014-15 (1.9%) A CPI increase of 1.9% became effective on July 1, 2014. Tenants may only receive one increase in any 12-month period, and the rent increase cannot take effect earlier than the tenant’s anniversary date. In addition, California law requires that for tenancies receiving greater than a 10% increase, a 60-day notice is required; if the increase is 10% or less, a 30-day notice is required. Owners can only impose “banked” rent increases equal to three times the current annual allowable rent increase rate. See schedule at right.

PERI OD

AM O U N T ( % )

JULY 1 ‘14 - JUNE 30 ‘15 . . . . . . . . . 1.9 JULY 1 ‘13 - JUNE 30 ‘14 . . . . . . . . . 2.1 JULY 1 ‘12 - JUNE 30 ‘13 . . . . . . . . . 3.0 JULY 1 ‘11 - JUNE 30 ‘12 . . . . . . . . . 2.0 JULY 1 ‘10 - JUNE 30 ‘11 . . . . . . . . . 2.7 JULY 1 ‘09 - JUNE 30 ‘10 . . . . . . . . . 0.7 JULY 1 ‘08 - JUNE 30 ‘09 . . . . . . . . . 3.2 JULY 1 ‘07 - JUNE 30 ‘08 . . . . . . . . . 3.3 MAY 1 ‘06 - JUNE 30 ‘07. . . . . . . . . . 3.3 MAY 1 ‘05 - MAY 30 ‘06 . . . . . . . . . . 1.9 JUNE 1 ‘04 - MAY 30 ‘05. . . . . . . . . . 0.7 JUNE 1 ‘03 - MAY 31 ‘04. . . . . . . . . . 3.6 Visit www.ebrha.com/members to see previous adjustments.

CAPITAL IMPROVEMENTS INCREASE FORMULA

FOR FURTHER INFORMATION CONTACT:

Oakland Rent Board 250 Frank H. Ogawa Plaza, Ste. 5313 Oakland, CA, 94612 510.238.3721 | www.oaklandnet.com

(70 % of Improvement Costs ÷ Number of Units) 60 months or 5 years REFER TO ORDINANCE FOR QUALIFICATIONS AND AMORTIZATION PERIODS.

Berkeley RENT STABILIZATION BOARD FEES

Annual fees are $194 per unit and are due July 1. Owners are allowed to pass through $4 to tenants.

RATES OF ANNUAL PAYMENT OF SECURITY DEPOSIT INTEREST P E R I OD A MO UN T FEDERAL RESERVE RATES

DEC. 2014. . . . . . . . . . . . . . . . . . . . . N/A DEC. 2013. . . . . . . . . . . . . . . . . . . 0.3% DEC. 2012. . . . . . . . . . . . . . . . . . . 0.5% DEC. 2011. . . . . 0.4% (CORRECTED 11/3/2011) DEC. 2010. . . . . . . . . . . . . . . . . . . 0.4% DEC. 2009. . . . . . . . . . . . . . . . . . . 1.1% DEC. 2008. . . . . . . . . . . . . . . . . . . 3.4% DEC. 2007. . . . . . . . . . . . . . . . . . . 5.3% DEC. 2006. . . . . . . . . . . . . . . . . . . 5.1% DEC. 2005. . . . . . . . . . . . . . . . . . . 3.4%

ANNUAL ALLOWABLE RENT INCREASE

2015 (2.0%) PERI OD AM O U N T

Beginning in 1998, adjustments are not allowed for the year following a tenant’s initial occupancy. To obtain the maximum amount for a specific address, please use the “Rent Ceiling Database” calculator on Berkeley’s Rent Board website.

Visit www.ebrha.com/members to see previous adjustments.

2015. . . . . . . . . . . . . . . . . . . . . . . . 2.0% 2014. . . . . . . . . . . . . . . . . . . . . . . . 1.7% 2013. . . . . . . . . . . . . . . . . . . . . . . . 1.7% 2012. . . . . . . . . . . . . . . . . . . . . . . . 1.6% 2011. . . . . . . . . . . . . . . . . . . . . . . . 0.7% 2010. . . . . . . . . . . . . . . . . . . . . . . . 0.1% 2009. . . . . . . . . . . . . . . . . . . . . . . . 2.7% 2008. . . . . . . . . . . . . . . . . . . . . . . . 2.2% 2007. . . . . . . . . . . . . . . . . . . . . . . . 2.6% 2006. . . . . . . . . . . . . . . . . . . . . . . . 0.7% 2005. . . . . . . . . . . . . . . . . . . . . . . . 0.9% 2004. . . . . . . . . . . . . . . . . . . 1.5%, + $3 (1% + $3 IF TENANCY CREATED AFTER JAN. 1999)

2003. . . . . . . . . . . . . . . . . . . . . . . . . 0% *ADDITIONAL ADJUSTMENTS ARE ALLOWED IF AN OWNER PAID FOR ELECTRICITY OR HEAT.

BERKELEY RATES

FOR FURTHER INFORMATION CONTACT:

DEC. 2014. . . . . . . . . . . . . . . . . . . 0.1% DEC. 2013. . . . . . . . . . . . . . . . . . . 0.1% DEC. 2012. . . . . . . . . . . . . . . . . . . 0.2% DEC. 2011. . . . . . . . . . . . . . . . . . . 0.3%

Berkeley Rent Board 2125 Milvia Street Berkeley, CA 94704 510.981.7368 | www.ci.berkeley.ca.us/rent ebrha.com

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vendor directory — CONTACTS, PRODUCTS & SERVICES Law Offices of Daniel Riley Daniel Riley 415-823-6129 driley_813@msn.com Law Offices of Elaine Lee Elaine Lee 510-848-9528 www.elaineleeattorney.com Law Offices of Leon H. Rountree III Leon H. Rountree III 510-343-6299 www.leonrountree.com Matthew Quiring - Attorney at Law 510-225-1345 mpquiring@gmail.com Richards Law John Richards 925-231-8104 www.richards-legal.com The Evictors Ed Nagy 510-839-2074 The Shepherd Law Group Michael Shepherd 510-531-0129 www.theshepherdlawgroup.com

ABATEMENT SERVICES

Environmental Remedies, Inc. Jaime Tamayo 925-519-6354 www.environmentalremedies.com P.W. Stephens Environmental Kimberly MacFarlane 510-651-9506 www.pwsei.com Water Damage Recovery Rick Walker 800-886-1801 www.waterdamagerecovery.net ACCOUNTING & TAX

Collins, Mason & Company LLP Teresa Mason 510-891-9000 www.cmcaccountants.com The Lee Accountancy Group, Inc. Jong H. Lee, CPA 510-836-7400 jhlee@theleeaccountancy.com APPLIANCE SALES & PARTS

Appliance Parts Distributor Mike De Fazio 510-357-8200 www.apdappliance.com Appliance Warehouse of America David Jepsen 510-921-1071 www.appliancewhse.com

ATTORNEYS - LAND USE/CONDO CONVERSION

APPRAISERS

Access Appraisal: Apartment Specialists Joe Spallone 510-601-1466 www.accessappraisal.com Mark Watts Commercial Appraiser Mark A. Watts 415-990-0025 www.markwattscommercialappraisal.com ARCHITECTURE

InsideOut Design Pennell Phillips 510-655-1198 www.aboutinsideout.com ASSOCIATIONS

BOMA Oakland/East Bay Stephen Shepard 510-893-8780 www.bomaoeb.org Oakland Association of Realtors Sally Dunker 510-836-3000 www.oar.org Oakland Chamber of Commerce Barbara Leslie 510-874-4808 www.oaklandchamber.com ATTORNEYS - EVICTIONS/PROPERTY OWNER DEFENSE

Bornstein & Bornstein Daniel Bornstein 510-836-0110, x1007 www.bornsteinandbornstein.com Buresh, Kaplan, Feller & Chang Fred Feller 510-548-7474 www.bureshkaplan.com Ericksen Arbuthnot Jason Mauck 510-832-7770 www.ericksenarbuthnot.com Fried & Williams LLP Clifford Fried 510-625-0100 www.friedwilliams.com 38 RENTAL HOUSING

| FEBRUARY 2015 |

Law Offices of Daniel Riley Daniel Riley 415-823-6129 driley_813@msn.com Law Offices of John Gutierrez John Gutierrez 510-647-0600, x2 www.jgutierrezlaw.com Richards Law John Richards 925-231-8104 www.richards-legal.com ATTORNEYS - REAL ESTATE/CORP.

Buresh, Kaplan, Feller & Chang Fred Feller 510-548-7474 www.bureshkaplan.com Burnham & Brown Jack Schwartz 510-444-6800 www.burnhambrown.com Ericksen Arbuthnot Jason Mauck 510-832-7770 www.ericksenarbuthnot.com Fried & Williams LLP Clifford Fried 510-625-0100 www.friedwilliams.com Law Offices of John Gutierrez John Gutierrez 510-647-0600, x2 www.jgutierrezlaw.com Richards Law John Richards 925-231-8104 www.richards-legal.com AUTOMOTIVE

Ken Betts Towing Services Ayub Azam 510-532-5000 www.kenbettscompany.com BANKING/LENDING

Chase Commercial Josh Milnes 510-891-4545 josh.milnes@chase.com ebrha.com

Chase Commercial Ted Levenson 415-945-5430 ted.levenson@chase.com Chase Commercial Neil O’Callaghan 415-315-8901 neil.ocallaghan@chase.com Cooperative Center Federal Credit Union Chris Perez 510-647-2127 cperez@coopfcu.org First Federal Savings & Loan Assoc.

Anthony Moreno 415-460-2657 www.ffsavings.com First Republic Bank Jeff Fung 510-336-3907 www.firstrepublic.com Intervest Mortgage Marc Lipsett 510-622-8515 www.intervest-mortgage.com Luther Burbank Savings Larry Miller 925-627-2790 www.lutherburbanksavings.com NorthMarq Capital Brian Esquivel 415-433-4145 www.northmarq.com Opus Bank William Craun 925-648-5915 www.opusbank.com SF Fire Credit Union Herman White, Jr. 415-674-4808 www.sffirecu.org Torrey Pines Bank Mike Popovich 510-899-7548 mpopovich@torreypinesbank.com BATHROOM & KITCHEN REMODELING

American Bath Enterprises, Inc. Larry Arcadi 510-785-2600 www.americanbathind.com APT Maintenance, Inc. Keith Berry 510-747-9713 www.aptmaintenanceinc.com KMK Contracting & Property Services Kevin Knobles 925-292-8667 www.kmkcontracting.com SGK Home Solutions Vladmir Merabian 408-264-6964 www.sgkhomesolutions.com CABINETS & COUNTERTOPS

Elegant Stone & Cabinets Linh Duong 925-954-8845 www.elegantstoneandcabinets.com CARPET CLEANING

Cleaner Carpets Ron Russell 510-522-1344 cleanercarpet@juno.com CODE COMPLIANCE/CONDO CONV.

Armstrong Development Barbara Armstrong 510-337-1998 barbaraarmstrong@comcast.net

vendor directory COLLECTION AGENCIES

Credit Bureau Associates Kathy Parsons 800-564-6440 www.cbacredit.com CONSTRUCTION

A-One Construction Dirksen Rogers 510-747-9713 www.a-oneconstruction.com APT Maintenance, Inc. Keith Berry 408-690-0890 www.aptmaintenanceinc.com Bayside Building Services & Pest Elimination Helmut Tutass 510-717-3506 pestcontrol1@writeme.com D.W. Hamilton Construction, Inc. D.W. Hamilton 510-919-0046 www.dwhamiltonconstruction.com Going Green Dan Antonioli 510-652-7593 www.going-green.co KMK Contracting & Property Services Kevin Knobles 925-292-8667 www.kmkcontracting.com Schafer Construction, Inc. Mike Barker 510-568-7200 www.schaferconstructioninc.com Smart Building, Inc. Sheryl Dron 510-444-7678 www.getsmartbuilding.com SpottCheck Consulting Susan Spott 510-816-1452 www.spottcheck.com W. Charles Perry & Associates W. Charles Perry 650-638-9546 www.wcharlesperry.com West Coast Premier Construction, Inc. Homy Sikaroudi 510-271-0950 www.wcpc-inc.com CONTRACTORS/RESTORATION

ARC Water Damage Nina Lauffer 510-835-3073 www.arc-ca.com Water Damage Recovery Rick Walker 800-886-1801 www.waterdamagerecovery.net DOORS & GATES

R & S Overhead Garage Door Sean Boatright 510-483-9700, x14 www.rsdoors.com Rex Key and Security Joe Towbis 510-527-7000 www.rexkey.com SGK Home Solutions Vladmir Merabian 408-264-6964 www.sgkhomesolutions.com Statcomm Inc. Cherie Anderson 650-988-9508 www.statcomm.com

Urban Ore Marylou Van 510-841-7283 www.urbanore.com ELECTRICIANS

Thomas Electric Co. (TEC) Thomas Hurtubise 510-814-9387 www.tecelectric.net ELEVATOR REPAIRS

Paramount Elevator Corp.

Mark Pipoly 510-835-0770 www.paramountelevator.com FINANCIAL PLANNING

David White & Associates Miguel Delgado 925-277-2635 www.dwassociates.com FIRE ESCAPE SERVICE

Great Escape Susan Giaquinto 415-566-1479 www.greatescapeinc.com FIRE PROTECTION

Bay Alarm Limor Margalit 510-639-2652 www.bayalarm.com Detect All Security & Fire Amy Roither 510-835-4100 www.detectall.com Sentry Alert David Ingham 510-549-0306 www.sentryalert.com Statcomm Inc. Cherie Anderson 650-988-9508 www.statcomm.com FLOOR COVERINGS

Bay Area Contract Carpets, Inc. Kerry Plain or Ken Scott 510-613-0300 www.bayareacontractcarpets.com Dick’s Carpet One Dan Biles 510-633-9533 www.dickscarpetoneoakland.com GOVERNMENT AGENCIES

Housing Authority of the City of Alameda Mike Pucci 510-747-4325 www.alamedahsg.org Oakland Housing Authority Leased Housing 510-874-1500 www.oakha.org GREEN BUILDING

Going Green Dan Antonioli 510-652-7593 www.going-green.co Smart Building, Inc. Sheryl Dron 510-444-7678 www.getsmartbuilding.com Urban Ore Marylou Van 510-841-7283 www.urbanore.com

GUTTER CLEANING

Mr. Sparkle Dylan Kelly 510-504-7048 www.mrsparkle.biz HANDYMAN SERVICES

APT Maintenance, Inc. Keith Berry 408-690-0890 www.aptmaintenanceinc.com Bayside Building Services & Pest Elimination Helmut Tutass 510-717-3506 pestcontrol1@writeme.com Halcyon Properties Roger Shane 510-847-7075 rbshane@aol.com KMK Contracting & Property Services Kevin Knobles 925-292-8667 www.kmkcontracting.com Start to Finish Christopher Bailey 510-727-9128 cpmbailey@sbcglobal.net HAULING SERVICES

KMK Contracting & Property Services Kevin Knobles 925-292-8667 www.kmkcontracting.com Urban Ore Marylou Van 510-841-7283 www.urbanore.com HEATING & AIR CONDITIONING

Advanced Home Energy Shira Henry 510-540-4860 www.advancedhomeenergy.com Albert Nahman Plumbing & Heating Albert Nahman 510-843-6904 www.albertnahmanplumbing.com Black Diamond Mechanical Robert Lopez 510-522-4196 robertlopez@blackdiamondmechanical.com Hassler Heating & Air Conditioning Mike Hassler 510-848-3030 www.hasslerheating.com INSPECTIONS

SpottCheck Consulting Susan Spott 510-816-1452 www.spottcheck.com INSULATION

Advanced Home Energy Shira Henry 510-540-4860 www.advancedhomeenergy.com INSURANCE

Bulloch Insurance Brokers, Inc. Curt Bulloch 925-640-0485 www.curtbulloch.com Commercial Coverage Insurance Paul Tradelius 415-436-9800 www.comcov.com CSE Insurance Group David Earwood 925-817-6497 www.cseinsurance.com ebrha.com

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vendor directory Capital Insurance Group John Reynoso 1-800-682-9255, x7519 jreynoso@ciginsurance.com Commercial Coverage Insurance Paul Tradelius 415-436-9800 www.comcov.com David E. Quan Agency Insurance Brokerage Xavier Quan 510-653-8880 www.dquanagy.com The Greenspan Co./Adjusters Int’l.

Rich Hallock 866-331-4790 www.greenspan-ai.com Jain L. Williams - State Farm Insurance Jain L. Williams 510-530-3222 www.jainwilliams.com Kelly Lux – State Farm Insurance Kelly Lux 510-521-1222 Kelly.lux.gjcg@statefarm.com Ruth Stroup Insurance Agency Ruth Stroup 510-874-5700 www.stroupinsurance.com Stone Creek Insurance Agency Tom Lynch 925-297-4202 www.stonecreekinsurance.com Yonas Hagos - Farmers Insurance Yonas Hagos 510-763-1030 www.farmersagent.com/yhagos INTERCOMS & ACCESS CONTROLS

R & S Overhead Garage Door Sean Boatright 510-483-9700, x14 www.rsdoors.com Rex Key and Security Joe Towbis 510-527-7000 www.rexkey.com Statcomm Inc. Cherie Anderson 650-988-9508 www.statcomm.com

LAUNDRY EQUIPMENT

Coinmach Carlos Barraza 510-429-0900, x54435 www.coinmach.com Innovative Coin Cheri Guffey 510-259-1494 www.innovativelaundry.com LEAD, MOLD & PEST MANAGEMENT

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PEST & VECTOR CONTROL

Alameda Co. Vector Control Services Daniel Wilson 510-567-6826 daniel.wilson@acgov.org Terminix Robert Sater 510-489-8689 www.terminix.com Times Up Termite Mike Barker 510-568-7200 www.timesuptermite.com PLUMBING/WATER HEATERS

Albert Nahman Plumbing & Heating Albert Nahman 510-843-6904 www.albertnahmanplumbing.com Frank Bonetti Plumbing Dan Bonetti 510-582-0934 www.bonettiplumbing.com Pacific Drain & Rooter Service Nasir Jalil 510-452-4606 nasirjalil80@gmail.com Roto-Rooter Martin Alvarez 510-755-1262 sanactma@aol.com

PROPERTY MAINTENANCE SUPPLIES

Alameda County Healthy Homes Dept.

Julie Twichell 510-567-8252 www.aclppp.org

LITIGATION SUPPORT SERVICES

PAINT SUPPLIERS

Dunn-Edwards Paints Jim Perry 925-822-7535 www.dunnedwards.com

PROPERTY MAINTENANCE

INVESTMENT OPPORTUNITIES

Trulia Pierre Calzadilla 415-400-7260 www.trulia.com/rent

LOCKSMITH EVICTION SERVICES

Golden Gate Locksmith Co Ralph Scott 510-654-2677 kgglocksmith@yahoo.com Rex Key and Security Joe Towbis 510-527-7000 www.rexkey.com

APT Maintenance, Inc. Keith Berry 510-747-9713 www.aptmaintenanceinc.com KMK Contracting & Property Services Kevin Knobles 925-292-8667 www.kmkcontracting.com

Martinez Real Estate Investment Jose Martinez 510-769-0436

LISTING SERVICE

SpottCheck Consulting Susan Spott 510-816-1452 www.spottcheck.com

Ferguson Enterprises, Inc. Jermane Griffin 916-752-7608 jermane.griffin@ferguson.com Wilmar Nick Mraz 800-345-3000 www.wilmar.com PROPERTY MANAGEMENT

Advent Properties, Inc. Benjamin Scott 510-289-1184 www.adventpropertiesinc.com Bay Property Group Daniel Bornstein 510-836-0110 www.baypropertygroup.com

ebrha.com

Beacon Properties Carlon Tanner 510-428-1864 www.beaconprop.com Caldecott Property Management Services Ronald Reece 510-594-2400, x226 www.caldecott.com Canyon Pacific Management Tom Scripps 415-495-4739 www.canyonpacific.com Cedar Properties Jonathan Weldon 510-834-0782 www.cedarproperties.com Crane Management Kit Crane 510-918-2306 www.cranemanagment.net The Enterprise Company William McLetchie 510-444-0876 ERI Property Management Sasha Bermudez 510-883-7017 www.erirentals.com Lapham Company Jon M. Shahoian 510-594-7600 www.laphamcompany.com Marquardt Property Management Karen or Judi Marquardt 510-530-2050 www.mpmoakland.com MSB Property Management Nik Bhachu 510-649-3380 www.msbmanagement.com Oaktown Urban Properties Michael Moynihan 415-572-0334 www.oaktown-up.com OMM Inc./Mason Management Janice Mason 510-522-8074 www.ommhomes.com Premium Properties Sam Sorokin 510-594-0794 www.premiumpd.com Shaw Properties Liz Hart 510-665-4350 www.shawprop.com Sphinx Property Management Jon Goree 510-798-9299 www.sphinxpm.com Wellington Property Company Jillian Loh 510-338-0588 www.wellingtonpropertyco.com Woodminster Property Management Nicholas Drobocky 510-336-0202 www.woodminstermanagement.com PROPERTY MANAGEMENT SOFTWARE

Buildium Sam Clarke 888-414-1933 x152 sam@buildium.com

vendor directory REAL ESTATE BROKERS & AGENTS

Advent Properties, Inc. Benjamin Scott 510-289-1184 www.adventpropertiesinc.com ARA Pacific Mike Colhoun 415-273-2177 www.arausa.com Caldecott Properties Andy Read 510-594-2400 www.caldecott.com CBRE Keith Manson 510-874-1919 www.cbre.com Coldwell Banker – Apartment Specialist John Caronna 925-253-4648 www.eastbayIREA.com Coldwell Banker Commercial Henry Ohlmeyer 925-831-3390 www.coldwellbanker.com Edrington & Associates Steven Edrington 510-749-4880 sedrington@msn.com Home & Investment Realty George Vassiliades 510-710-6826 www.propertiesbygeorge.com Lapham Company Tsegab Assefa 510-594-0643 www.laphamcompany.com Litton/Fuller Group Luke Blacklidge 510-548-4801, x130 www.littonfullergroup.com Marcus & Millichap Eli Davidson 510-379-1280 eli.davidson@marcusmillichap.com Marcus & Millichap David Wolfe 510-379-1200 www.marcusmillichap.com NAI Northern California Grant Chappell 510-972-4941 www.naikilpatrick.com Paragon Commercial Brokerage Ben Weil or Zack Ward 415-874-5018 thebenweilteam@paragon-re.com Property Counselors Link Corkery, Inc. Link Corkery 510-886-1212 www.pclclink.com Red Oak Realty Kevin Hamilton 510-250-8780 kevin@redoakrealty.com Woodminster Real Estate Co Inc. Nicholas Drobocky 510-336-0202 www.woodminsterrealty.com RECYCLING/REUSE

DR3 Mattress Recycling Robert Jaco 510-798-3734 www.mattressrecycling.us

Urban Ore Marylou Van 510-841-7283 www.urbanore.com

SEISMIC ENGINEERING

Earthquake & Structures, Inc. B.K. Paul 510-601-1065 www.esiengineers.com W. Charles Perry & Associates W. Charles Perry 650-638-9546 www.wcharlesperry.com

RENT CONTROL CONSULTANTS

Alan K. Beales 510-339-9776 Bay Property Group Cristian Villarreal 510-474-7404 cristian@baypropertygroup.com

TENANT SCREENING SERVICE

Contemporary Information Corp. (CIC) Dan Firestone 888-232-3822 www.continfo.com

Edrington & Associates Steven Edrington 510-749-4880 sedrington@msn.com

TOWING SERVICE

Liz Hart 510-813-5440 liz.hart1801@gmail.com

Ken Betts Towing Services Ayub Azam 510-532-5000 www.kenbettscompany.com PPI Towing Stephanie Gipson 510-533-9600 www.ppitowing.net

RENTAL SERVICES

Cal Rentals Elaine Perkins 510-642-3644 www.calrentals.housing.berkeley.edu Hamilton Properties Bay Area Delesha Hamilton 404-606-2141 www.hamiltonpropertiesbayarea.com

TREE SERVICE

Bartlett Tree Experts Tony DeMola 925-934-6306 www.bartlett.com Coastal Tree Service Hans Waller 510-693-4631 www.coastaltreeservice.com

ROOFERS

A-One Construction Dirksen Rogers 408-690-0890 www.a-oneconstruction.com Fidelity Roof Company Steve Parry 510-547-6330 www.fidelityroof.com Frank Fiala Roofing Frank Fiala 510-582-6929 www.ffialaroofing.com General Roofing Company Michael Wakerling 510-536-3356 www.generalroof.com

TUB, TILE & COUNTERTOP REFINISHING

Discovery Coatings Gargie Balarbar 415-971-8207 www.discoverycoatings.com WASTE & WASTE HANDLING EQUIPMENT

DR3 Mattress Recycling Robert Jaco 510-798-3734 www.mattressrecycling.us Waste Management Company David Tucker 510-430-8509 www.wastemanagement.com

SECURITY/ SURVEILLANCE

Bay Alarm Limor Margalit 510-639-2652 www.bayalarm.com Detect All Security & Fire Amy Roither 510-835-4100 www.detectall.com R & S Overhead Garage Door Sean Boatright 510-483-9700, x14 www.rsdoors.com Sentry Alert David Ingham 510-549-0306 www.sentryalert.com

WATER MANAGEMENT

HydroPoint Colleen Moore 415-602-6984 cell cmoore@hydropoint.com WINDOW WASHING

Mr. Sparkle Dylan Kelly 510-504-7048 www.mrsparkle.biz WINDOWS

SEISMIC CONSTRUCTION

Adobe Soil & Structures Mark Almeida 510-919-1880 www.adobesoils.com B.A.S.S. Seismic Retrofit D.W. Hamilton 510-919-0046 www.bassseismicretrofit.com West Coast Premier Construction, Inc. Homy Sikaroudi 510-271-0950 www.wcpc-inc.com

Advanced Home Energy Shira Henry 510-540-4860 www.advancedhomeenergy.com SGK Home Solutions Vladmir Merabian 408-264-6964 www.sgkhomesolutions.com Urban Ore Marylou Van 510-841-7283 www.urbanore.com

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ad index

PRODUCTS & SERVICES

EAST BAY RENTAL HOUSING ASSOCIATION

Membership Application for Property Owners and Managers

ABATEMENT

P.W. Stephens. . . . . . . . . . . . . . . . . . . . . . . . . 34 APPLIANCE PARTS & SALES

Appliance Parts Distributor. . . . . . . . . . . . . . 3 ATTORNEYS

FREE RENTAL FORMS

Bornstein & Bornstein. . . . . . . . . . . . . . . . . . 33 The Evictors. . . . . . . . . . . . . . . . . . . . . . . . . . 32 Fried & Williams LLP. . . . . . . . . . . . . . . . . . . 25

MONTHLY MEMBERSHIP MEETINGS

BATHTUB & SHOWER ENCLOSURES

JOIN TODAY AND RECEIVE BENEFITS SUCH AS:

American Bath. . . . . . . . . . . . . . . . . . . . . . . . 25

LEGAL REFERRALS

BUILDING MATERIALS/HARDWARE

EDUCATIONAL CLASSES

Urban Ore. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

FREE SUBSCRIPTION TO RENTAL HOUSING MAGAZINE

CARPETING & FLOORING

LEASING SERVICE

Bay Area Contract Carpets, Inc.. . . . . . . . . 31

MANAGEMENT ASSISTANCE

KMK Construction. . . . . . . . . . . . . . . . . . . . . 34 West Coast Premier Construction. . . . . . . 35

CONSTRUCTION

SEMINARS & WORKSHOPS

ENGINEERS

TENANT SCREENING SERVICE

Adobe Soil & Structures. . . . . . . . . . . . . . . . 15 Earthquake and Structures, Inc.. . . . . . . . . 27 West Coast Premier Construction. . . . . . . 35 INSURANCE COMPANIES

NAME

CIG Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 5 Jain Williams - State Farm. . . . . . . . . . . . . . 35

COMPANY

LAUNDRY

ADDRESS

LENDERS

Innovative Coin . . . . . . . . . . . . . . . . . . . . . . . 32 Wash Multifamily. . . . . . . . . . . . . . . . . . . . . . 35

CITY

STATE ZIP

JPMorgan Chase Bank. . . . . . . . . . . . . . . . . 29 Torrey Pines Bank . . . . . . . . . . . . . . . . . . . . . 31 LOCKSMITH EVICTION SERVICES

Golden Gate Locksmith Co. . . . . . . . . . . . . 35 PEST CONTROL

PHONE EMAIL

Team Too. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 PLUMBING

RENTAL PROPERTY LOCATION

Albert Nahman Plumbing . . . . . . . . . . . . . . 33 PROPERTY MANAGEMENT

ANNUAL MEMBERSHIP DUES (TAX DEDUCTIBLE):

1-2 UNITS = $249.00

3-4 UNITS = $269.00

Maisel Property Management. . . . . . . . . . . 34 PROPERTY MANAGEMENT & SALES

Bay Property Group . . . . . . . . . . . . . . . . . . . 33 Beacon Properties. . . . . . . . . . . . . . . . . . . . . 35

5-8 UNITS = $289.00

9-16 UNITS = $299.00

17+ UNITS = $299.00 + $5.00 PER UNIT

REAL ESTATE BROKERS

TOTAL DUE:

$

MASTERCARD

VISA

John Caronna—Coldwell Banker. . . . . . . . . . 11 Paragon Commercial Brokerage. . . . . . . . . 15 RECYCLING

CHECK (PAYABLE TO EBRHA)

AMERICAN EXPRESS

StopWaste. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 RESOURCES

CARD NUMBER

EXPIRATION DATE

ECHO Housing. . . . . . . . . . . . . . . . . . . . . . . . 27 RENT BOARD CONSULTANTS

Liz Hart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 ROOFING SERVICES

NAME ON CARD

Frank Fiala Roofing. . . . . . . . . . . . . . . . . . . . 32 General Roofing Co. . . . . . . . . . . . . . . . . . . . 33

SIGNATURE

SECURITY

DETACH THIS FORM AND FAX OR MAIL TO THE ADDRESS BELOW East Bay Rental Housing Association 360 22nd Street, Suite 240 Oakland, CA 94612 TEL

510.893.9873 | FAX 510.893.2906

ebrha.com

42 RENTAL HOUSING

| FEBRUARY 2015 |

ebrha.com

Sentry Alert. . . . . . . . . . . . . . . . . . . . . . . . . . . 31 TREE SERVICE

Bartlett Tree Experts. . . . . . . . . . . . . . . . . . . 26 WATERPROOFING

Applied Waterproofing Systems . . . . . . . . 34 WINDOWS, DOORS & SIDING

SGK Solutions.. . . . . . . . . . . . . . . . . . . . . . . . 44 Acceptance of an advertisement by this magazine does not necessarily constitute any endorsement or recommendation by EBRHA, express or implied, of the advertiser or any goods or services offered.

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