Southern California Rental Housing Association Rental Advisor Magazine

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Rental Housing Conference & EXPO How Much Do You Know About Earthquakes? Page 12 Page 18 From the Publisher of March 2023 Common Property Management Legal Issues & How to Avoid Them Page 98
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SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 3 newmanwindows
LICENSE #570472

2023 EXECUTIVE OFFICERS

President

Vice President

Todd Henderson, Independent Owner

Secretary

Natasha Howell, Independent Owner

Treasurer

Buck Buchanan, Independent Owner

Legislative Chair Greystar

Immediate Past President

Lucinda Lilley, CPM®, CAPS®, GRI®, Bridging In uence

2023 DIRECTORS

Abigail Rex, CPM®, ARM®, American Assets Trusts

Alex Winborn, H.G. Fenton Company

Jay Lopeman, CAS®, AZP Multifamily

Jennifer Ford, Douglas Allred Company

Kimmi McBryde, Cushman & Wake eld

Mark Feinberg, Heinz & Feinberg

Matt Ruane, Liberty Military Housing

Natasha Howell, Millcreek, WTS

Shannon Kelly, Independent Owner

Todd Henderson, Independent Owner

Tom Tamar, Independent Owner

HONORARY LIFE ADVISOR

Wesley Harker

Our Address

Southern California Rental Housing Association

MAGAZINE STAFF

Publisher Apartment News Publications, Inc.

Design & Layout Travis Watson, Production Director Editorial Review Lindsey Lee, Marketing Manager

ASSOCIATION STAFF

Alan Pentico, CAE, Executive Director apentico@socalrha.org 858.278.8070

Olivia Galvez, Director of Business Operations/Operational Advice ogalvez@socalrha.org 858.751.2217

Molly Kirkland, mkirkland@socalrha.org 858.751.2200

Kim Zebroski, kzebroski@socalrha.org 858.751.2220

Lorna R. Kindred, Education Manager lkindred@socalrha.org 858.751.2219

Lindsey Lee, Marketing Manager llee@socalrha.org 858.751.2218

Alma Macias, Operational Advisor amacias@socalrha.org 858.278.8070

Toll Free: 888.762.7313

Fax: 888.871.5229 socalrha.org

Southern California Rental Housing Association Rental Advisor Magazine is published by the San Diego Multi-Housing Corporation (SDMHC) a wholly owned subsidiary of the Southern

the author's views and do not necessarily represent those of the Southern California Rental Housing Association or SDMHC.

All rights reserved. Materials may not be reproduced or translated without prior written permission by the publisher. Contact the Southern California Rental Housing Association at 858.278.8070 or visit socalrha.org for more information.

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CONTRIBUTE: Educational articles in Rental Advisor Magazine must be between 500-800

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4 MARCH 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7
Allison P ster, Aiesha Blevins, Greystar

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SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 5 Apartment Management Magazine is published monthly by Apartment News Publications, Inc. at 15502 Graham Street, Huntington Beach, CA 92649. Subscription Rate: $20.00/ year with zip codes beginning with 900-935, (outside of L.A. & Orange counties $69.00/year.). The publisher and Apartment News Publications Inc. assume no responsibility for opinions expressed in articles appearing under an author's name. The contents of this publication may not be reproduced without written permission from the publisher. Bulk rate postage is paid at Bell Post Office BMC, 5555 Bandini, Bell, CA 90201. For Advertising Information: 1-800-931-6666 PRESIDENT’S MESSAGE: OUR MEMBERS, THE STRENGTH OF THE INDUSTRY 7 By Aiesha Blevins EXECUTIVE DIRECTOR’S MESSAGE: ADVOCACY IN ACTION 9 By Alan Pentico, CAE IN CASE YOU MISSED IT 10 By Southern California Rental Housing Association INNOVATIONS IN RENTAL HOUSING CONFERENCE 12 By Southern California Rental Housing Association HOW MUCH DO YOU KNOW ABOUT EARTHQUAKES? 18 By Ali Sahabi WHITE HOUSE RENTAL RIGHTS PROPOSAL: AN APPROACH TO THE AFFORDABLE HOUSING CRISIS, CONTROVERSY INCLUDED .............................................................. 20 By Livable 11 COMMON PROPERTY MANAGEMENT LEGAL ISSUES & HOW TO AVOID THEM 29 By YardiBreeze A CLOSER LOOK AT AFFORDABLE HOUSING 37 By Marc Frenkiel A DOWNPOUR OF LEGAL ISSUES AFTER CALIFORNIA GETS DRENCHED ...................... 41 By Daniel Bornstein, Esq. WHO’S BEHIND CALIFORNIA’S LATEST WEALTH TAX PROPOSAL? 44 By Edward Ring CALENDAR OF UPCOMING COURSES & EVENTS 24 PROPERTY MANAGEMENT DIRECTORY ................................................... 51 SUPPLIER MEMBER DIRECTORY 53 ADVERTISING DIRECTORY 57
Volume 65 Number 03 March 2023 A Closer Look at Affordable Housing By: Marc Frenkiel Pg. 37 11 Common Property Management Legal Issues & How To Avoid Them By: YardiBreeze Pg. 29
FEATURED COLUMNS:

OUR VISION

Reenvisioning quality housing for all OUR MISSION

To create a thriving rental housing community through advocacy, education, and collaboration

SCRHA Housing Provider & Resident Rights and Responsibilities

As members of the Southern California Rental Housing Association, we are partners in creating a thriving community by providing quality rental housing for all We value our residents, our fellow members, and our community and are working to support a healthy housing ecosystem through advocacy, education, and collaboration.

As housing providers, we believe we have the responsibility to provide California renters with:

Quality housing with habitable and healthy living conditions. Freedom from arbitrary eviction, retaliation, or discrimination in line with all federal and state fair housing laws

Fair and equal resident protections and policies that balance the needs of renters, housing providers, and the community

A voice in housing decisions with respect and access equal to that of housing providers

An innovative and collaborative housing ecosystem where government, businesses, housing providers, and rental advocates work together to solve the region’s housing issues by identifying the underlying problems and crafting balanced solutions

Adherence to housing quality and equity standards and regulations

All California renters also have a responsibility to their housing provider to:

Review and follow rental agreement terms, including timely rental payments

Maintain a clean and habitable home

Be a good neighbor by respecting others’ peace and quiet. Provide timely reporting of any issues and necessary repairs. Keep open lines of communication with the property owner or manager

6 MARCH 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7
SOCALRHA.ORG

Aiesha Blevins

2023 President Southern California Rental Housing Association

Our Members, the Strength of the Industry

With the start of March and the lengthening of the days, I see signs of spring all around me daily, especially with my work as president of Southern California Rental Housing Association. We are in the third month of 2023. The Association has already hosted 15 classes while planning the popular Innovations Rental Housing Conference & EXPO with Maintenance Mania on April 27 and the soldout NextGen Bowling Tournament on March 22. And these spring events are just the beginning!

The fun continues through the spring and summer with a Salsa Competition in May, Wine Tasting in June, and the member-favorite Golf Class on June 2. I invite you to explore everything the Association offers you this year. Get to know our members, your industry colleagues, and find new ways to grow your network and knowledge.

All of our classes and events provide the opportunity for you to get to know industry colleagues, share your experiences, and learn from industry experts. If you haven’t already, sign up for the Innovations Rental Housing Conference & EXPO. Your registration for this all-day event includes access to six educational seminars, including the keynote from Matt Easton, Leasing University, admittance to the Maintenance Mania competition, and the tradeshow where you can discover new solutions for housing providers.

Housing providers face many serious challenges this year, and the relationships we build and nurture with each other will help us continue to provide quality housing for all. Throughout my years of involvement with the SCRHA, I have always taken pride in our community’s strength, our members’ dedication, and

the care we provide for our community. That pride has only grown since my term as SCRHA president started this year.

I invite you to consider your role in the Association, and I challenge you to find new ways to share your talents with the Association and your fellow members. Whether you join a committee, volunteer at one of our fabulous events, or attend an educational seminar or fun social, there are many ways to get involved with the Association. Your involvement is the backbone of the Association and allows you to meet and build strong relationships with local rental housing professionals.

Families Fund, for the purpose of spending these tax dollars on rental assistance, homelessness, affordable housing, and housing counseling services.

Further, AB 1199 would require a qualified entity, currently defined as a limited liability company or limited partnership, owning multifamily or singlefamily rental homes, to report specified information about the property each year to the Secretary of State’s Office. That office would have to create a searchable database on its website.

What is the definition of insanity according to Einstein? “Doing the same thing over and over and expecting different results.” Well, here we go again. Assembly Member Buffy Wicks has proposed legislation for the third year-in-a-row that would force rental housing providers to register their properties with the government.

If you would like to know more about serving on a committee or see the need for a volunteer role that has yet to be created, please email info@socalrha.org or call the office at 858.278.8070 to share your ideas.

Since the bill is an urgency measure, meaning that if passed, it would take effect immediately, it will require a 2/3rds vote. Usually a high bar, however, with Democrats enjoying more than a 2/3rds majority, it will be difficult to stop. It is hard to believe that someone would introduce a bill to tax property owners for the “privilege” of providing rental housing, especially considering all that has been piled on property owners over the last few years. We would like to see this bill just go away. Very far away.

AB 1188 would require cities and counties to create and administer a rental registry with an online portal designed to receive specified information from landlords who own or operate five or more rental dwellings. The bill would require landlords to provide a variety of information regarding the location of rental property, its ownership, and its occupancy, among other things. It also would prohibit a landlord from issuing various notices to increase the rent or terminate a tenancy unless the landlord has submitted a form on the online portal.

The SCRHA opposed the prior bills and assisted in killing them. We will work toward the same result in 2021 for AB 1188.

The SCRHA is a vibrant resource hub for housing providers and industry suppliers, and our lasting strength is due in no small part to the efforts of our members. Thank you for your continued support; we couldn’t do it without you.

SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 7
16 | Southern California Rental Housing Association Rental Advisor April 2022 april2022.indd 16 5/3/2022 12:40:48 PM

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Advocacy in Action

The new year was off to a whirlwind and shows no signs of slowing down. Trust that Southern California Rental Housing Association is busy representing our members and advocating for you at all levels of government. While your membership in SCRHA provides the rental housing industry with robust representation at a local level, your membership includes representation at the state level through CalRHA and the federal level through the National Apartment Association (NAA).

When the City of San Diego Mayor and Council President first announced a framework for a Tenant Protection Ordinance in October, our members answered our call to action, and our message was heard loud and clear. The revised framework released in December was vastly different than the original proposal, and THAT IS A DIRECT RESULT OF SCRHA’S ADVOCACY.

From all the calls and messages shared with the city council to all the members who attended the October hearing, our message was heard loud and clear. The overwhelming response from our members also showed the strength of our industry and the importance of including the industry’s viewpoint when crafting the ordinance to avoid unintended consequences.

The ordinance is being drafted, and SCRHA remains a key stakeholder in that discussion. Please sign up for our emails and respond to our Action Alerts, as your engagement can make a big difference. To do so, please visit https://socalrha.info/action and subscribe to our emails or call us at 858.278.8070.

The Chula Vista Tenant Protection Ordinance (TPO) goes into effect on March 1, 2023. Are you ready? SCRHA has created the mandatory notifications for existing residents and forms Chula Vista property owners and managers need to comply with the ordinance. A Rental Agreement specific to Chula Vista is also available for tenancies beginning or renewed on or after March 1, 2023.

The City of Chula Vista is still finalizing the Administrative Regulations related to the ordinance. SCRHA is waiting for the City to finalize these regulations to complete the Termination of Tenancy Forms and other guidance. For example, a copy of termination notices must be provided to the City, but there is no information on where to send those yet.

SCRHA has created a resource page for this new law and will update it as needed.

While engagement at the local level is critical, staying alert to challenges at the state and federal levels is essential. Be sure to respond to action alerts from CalRHA and the NAA. It will take all of us working together to make our voices heard.

SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - 9

In Ca s e You Mi s sed It! R ece n t U pd at es from SCRH A

The Chula Vista Tenant Protection Ordinance (TPO) goes into effect on March 1, 2023.

residents and forms Chula Vista property owners and managers

to Chula Vista is also available for tenancies beginning or renewed on or after March 1, 2023.

Property owners and managers should serve the Mandatory

Mandatory Notification

letter that you may customize and serve to your residents. You door. SCRHA has also created an addendum, Form 283 - Chula signed by residents if time permits.

Exemption Notification

Single Family Homes, condos and other properties considered “alienable separate from the title to any other dwelling unit” and not owned by a real estate investment trust, a corporation, or an LLC in which at least one member is a corporation, are exempt SCRHA has created a letter that you may customize and serve to to your resident’s door. SCRHA has also created an addendum, that you may get signed by residents.

Owner Occupancy Addendum

In order for an owner or family member to move into a covered rental unit, for leases entered into on or after July 1, 2020, the tenant must agree in writing to the termination, or a provision of the lease must state this right. Most owners and managers have already accomplished this via the existing SCRHA Rental Agreement or AB 1482 addendum. However, SCRHA has created a letter and an addendum, Form 203 - Chula Vista TPO Owner Occupancy Addendum, with this language and references to the Chula Vista Municipal Code.

Chula Vista Rental Agreement – Form 200CV

For rental agreements commencing or renewed on or after March 1, 2023, the mandatory notice must be included as an addendum to the rental agreement, or as a written notice signed by the tenant, with a copy provided to the Tenant. SCRHA has included this mandatory language in the rental agreement to satisfy this requirement. Additionally, the Chula Vista Rental Agreement contains the Owner Occupancy language and

*Quick Tip: SCRHA recommends that members document their service of letters and forms using Form 455 – Declaration of the letters if posted.

Termination of Tenancy Forms:

Regulations related to the ordinance. SCRHA is waiting for

Termination of Tenancy Forms and other guidance. For example, a copy of termination notices must be provided to the city, but there is no information on where to send those yet.

SCRHA has created a resource page for this new law and will be updating it as needed. If you missed one of the SCRHA webinars on the topic, you may view it and other valuable classes on the SCRHA Recorded Webinar page.

North San Diego County Assemblymember Introduces Tenant Protection Bills

Assemblymember Laurie Davies announced two new bills to help protect renters. AB 485 would limit application/screening fees to $40. Under current law, the maximum screening fee increases annually based on the Consumer Price Index. The maximum screening fee is currently $55.58. She also introduced AB 500, which would require a 90 day notice to increase rent regardless of the percentage increase. Under current law, increases of 10% or less require a 30 day notice, and increases over 10% require a 90 day notice. Davies represents Laguna Niguel, San Juan Capistrano, Dana Point, San Clemente, Camp Pendleton, Vista, and Oceanside. SCRHA will provide more updates on these bills and more as the Legislative Session proceeds.

10 MARCH 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7 1 MARCH 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7

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Legislative Update

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Back to Basics: Risk Management Panel

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SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 11 A P R I L
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SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 13
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HOW MUCH DO YOU KNOW ABOUT EARTHQUAKES?

TEST YOUR KNOWLEDGE OF RISK, AND GEOLOGICAL AND STRUCTURAL DEFICIENCIES THAT COULD MAKE YOUR APARTMENT BUILDING VULNERABLE

Californians are all too familiar with earthquakes. But how much do we really know about the risks they present to us? Understanding these threats is important, particularly when buildings are essential to your livelihood. Wonder how much you really know? Try taking this little quiz, for starters.

1. What is the most dangerous region in the United States for projected earthquake loss?

a. Seattle

b. Charleston, S.C.

c. Los Angeles

d. San Diego

2. What are the odds that a major earthquake will strike in the next 30 years?

a. 99.7% chance of a quake equal to or larger than Northridge hitting California

b. 59% chance of such a quake (6.7 magnitude) striking the southern San Andreas

c. 46% likelihood of a magnitude 7 hitting L.A.

d. 31% chance of a magnitude 7.5 – a colossal quake – striking Los Angeles

3. How many buildings would be damaged in a 7.8 earthquake, according to the USGS?

a. 1 in 8

b. 1 in 16

c. 1 in 350

d. 1 in 1,500

4. What is the No. 1 earthquake risk factor for soft-story buildings?

a. Number of stories

b. Proximity to an earthquake fault

c. Year of construction

d. Soils composition

5. Soil conditions are an important factor in earthquake hazard. Which of these conditions presents the highest risk?

a. Solid bedrock

b. Sandstone

c. Alluvial soils

d. Mud

SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 15
Answers on Page 16
See

ANSWERS:

1. C. Seven of FEMA’s top 10 regions for annualized earthquake loss risk projections are in California: Here are the 10 most vulnerable regions: (1) Los Angeles/Long Beach/Anaheim; (2) San Francisco/Oakland/Hayward; (3) Riverside/San Bernardi-no/Ontario; (4) San Jose/Sunnyvale/ Santa Clara; (5) Seattle/Tacoma/Bellevue; (6) Port-land/Vancouver/Hillsboro; (7) San Diego/ Carlsbad; (8) Oxnard/Thousand Oaks/Ventura; (9) Santa Rosa; and (10) Charleston.

2. All of the above. (Yes, it was a trick question.) The numbers vary, based on location and magnitude. The most comprehensive statewide analysis of earthquake probabilities de-termined that the chance of having one or more magnitude 6.7 or larger earthquakes in California over the next 30 years is 99.7%, according to the U.S. Geological Survey. The fault with the highest probability of such earthquakes is the southern San Andreas — 59% in the next 30 years. For powerful quakes of magnitude 7.5 or greater, there is a 37% chance that one or more will occur in the next 30 years in Southern California, ac-cording to the Earthquake Country Alliance, an organization comprised of the National Earthquake Hazards Reduction Program, the Federal Emergency Management Agency, the California Governor’s Office of Emergency Services, and the Southern California Earthquake Center.

3. B. A detailed scientific assessment by the USGS of the likely damage in a big San Andreas earthquake in Southern California estimated that 300,000 buildings in southern Califor-nia would be damaged at a moderate level (losing at least 10% the value of the build-ing) as modeled in the M7.8 ShakeOut scenario earthquake. This represents 1 out of every 16 buildings in the region.

4. C. The fatal collapse of the Northridge Meadows apartment complex in 1994 revealed serious design flaws in soft-story buildings constructed before 1978. Some of these buildings have been retrofitted, but most have not most have not gotten that relatively inexpensive protection.

5. C. Hard ground propels the seismic energy quickly with a small amplitude, while soft ground slows the energy down and increases the amplitude or severity of the motion. The USGS ranks the following soil types for susceptibility to strong ground movement from an earthquake, with solid bedrock (both igneous and volcanic) as the least suscep-tible, and alluvial soils and artificial fill as the most.

There are many factors to consider when weighing your risks to earthquakes and the benefits of fortifying your building. If you have questions, contact Optimum Seismic at 833 978-7664 or visit optimumseismic. com to arrange for a complimentary consultation.

16 MARCH 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7
Recently appointed to Los Angeles Mayor Karen Bass’ Transition Team, Ali Sahabi, previously received the California Governor’s Environmental and Economic Leadership Award for taking a sustainable approach toward community development and environmental restoration in the 543-acre Dos Lagos mixed-use development in Corona, CA. A licensed General Engineering Contractor (GEC), Sahabi is an expert in building resilience and sustainability. He is Co-Founder and Chief Operating Officer of Optimum Seismic, Inc., which has completed more than 3,500 structural retrofit and adaptive reuse projects for multifamily residential, commercial, and industrial buildings throughout California.

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R e c o g n i z e e x c e l l e n c e i n r e n t a l

h o u s i n g b y s u b m i t t i n g a n o m i n a t i o n f o r

t h e 2 0 2 3 M a r k o f E x c e l l e n c e A w a r d s .

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S a n D i e g o , C a l i f o r n i a

S O C A L R H A . O R G

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10 FEBRUARY 2023 - APARTMENT MANAGEMENT MAGAZINE
AMM7
San Diego (38428)

WHITE HOUSE RENTAL RIGHTS PROPOSAL: AN APPROACH TO THE AFFORDABLE HOUSING CRISIS, CONTROVERSY INCLUDED

The White House recently proposed a comprehensive plan to address the affordable housing crisis in the country. The proposal, which focuses on rental rights, aims to ensure that renters are treated fairly and that the rental market works in the best interests of everyone involved. The proposal has faced significant pushback from the industry, as some believe it would impede the development of new housing and further damage the market, driving up rental prices and limiting access. But the White House remains committed to the proposal and believes that it will help to create a fairer and more just rental market.

INFORMATION SHARING AND TENANT SCREENING PRACTICES

One of the key components of the proposal is the examination of information sharing and tenant

screening practices in the rental market. The proposal calls for increased transparency in the tenant screening process and aims to ensure that tenants are only evicted for good cause. The plan also calls for the creation of a database of evictions, which would allow tenants to challenge evictions that are not based on good cause. Of course, “good cause” can vary from city to city and state to state, so what may be good cause in one area may not be in another.

Tenants often face evictions without knowing the reason and housing providers aren’t always required to provide one. Many residents don’t have access to the information they need to challenge an eviction if it’s not “good cause.” The proposed database of evictions would provide tenants with the information they need to challenge evictions, both at the time of the eviction and when looking for new housing.

20 MARCH 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7
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One of the key focuses of the proposed regulations is the examination of information sharing and tenant screening practices in the rental industry. The plan proposes to improve the accuracy of tenant screening reports by requiring landlords to provide prospective tenants with a copy of the report the landlord received from the screening, as well as an explanation of their rights under the Fair Credit Reporting Act. This would give tenants the opportunity to challenge any inaccurate information that may be affecting their ability to secure housing and would help to ensure that tenant screening reports are more accurate and fair.

The plan also aims to improve information sharing between landlords. Under the proposed regulations, landlords would be required to share information about tenants who have violated the terms of their lease or caused damage to their rental units. This would help landlords make more informed decisions about who to rent to and would help to reduce the number of incidents of property damage and lease violations.

In addition to these changes, the proposal includes several other important changes to the rental market. Those include stronger protections against eviction in the first place, expanded access to legal counsel for lower-income tenants, and increased penalties for landlords who violate housing codes.

RENT CONTROL: A CONTROVERSIAL ASPECT OF THE PROPOSAL

One of the most controversial aspects of the White House proposal is the examination of rent control policies. Rent control policies, which limit the amount that landlords can charge for rent, including annual rate increases, have been the subject of much debate in recent years. Proponents argue that rent control is necessary to protect tenants from skyrocketing rents and to ensure that everyone has access to affordable housing. Critics, on the other hand, argue that rent control policies limit the supply of rental units and reduce the incentive for landlords to maintain their properties, which ultimately hurts tenants.

While rent control policies have been controversial, they are an important part of the conversation about the future of the rental market. The White House proposal aims to address this controversy by examining the effects of rent control policies on the rental market and by exploring alternative solutions to the affordable housing crisis. The plan first calls for a comprehensive study of the effects of rent control policies on the rental market, including an examination of the impact on housing supply, the behavior of landlords and the

welfare of tenants. This information will be used to inform future policy decisions and to determine the best way to address the affordable housing crisis.

“At Livable, we want to keep residents and property owners up to date on issues that impact everyone in the rental market. We sympathize with tenants having financial issues, especially in the current inflationary climate. But we also recognize that housing providers are investors. Livable helps protect the health of those investments while educating residents on conservation, which saves everyone money and helps the planet.”

Whether the study will result in the adoption of new rent control policies remains to be seen, especially with some areas banning them statewide, but it is clear that the White House is taking the affordable housing crisis seriously and exploring a variety of solutions to the problem.

Regardless of the outcome, any White House proposal on rental rights is likely to affect the rental market for tenants and landlords alike. Whether that’s for better or worse remains to be seen. The focus on information sharing and tenant screening practices, as well as the examination of rent control policies, may help ensure that renters are treated fairly and that the rental market works in the best interests of everyone involved. It may also inhibit the housing supply, creating an unintended backlash of higher housing costs.

Sharabi says housing providers who are considering shifting away from master-billed utilities need to pay special attention to the language of any rent control initiatives in their areas. “In Pasadena, California, residents voted for a rent control measure that also limits the ability of housing providers to recover rising utility costs from residents,” he explains. “Housing providers who were already enrolled in RUBS or another utility recovery program may be grandfathered in, but those who want to enroll now are subject to the same limits as if they raised rents directly. It’s more important than ever to take action now to get started with RUBS. To find out how Livable can save you money, check out livable.com/ANP or call (877) 789-6027.

SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 23
- Livable CEO, Daniel Sharabi

CALENDAR Register at socalrha.org

Register for events and classes online at socalrha.org. Please note, that all in-person classes

Register for events and classes online at socalrha.org. Please note, that all in-person classes

March 14

Questions? Contact us at events@socalrha.org or 858.278.8070

Questions? Contact us at events@socalrha.org or 858.278.8070

March 13

Maintaining a Safe Work Environment

The is class will cover the five (5) most violated OSHA rules and regulations.

Instructor: Peter Cline, The Phoenix Staffing

Renovate, Repair and Paint Rule (RRP) Class

This course meets the EPA training requirements for individuals performing renovations in pre-1978 housing and childcare facilities.

Instructor: Felipe Ruiz, National Econ Corporation

March 17

March 15

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What You Need to Know about Emotional Support Animal Processing!

From the 101 basics to the 2020 HUD Assistance Animal Notice, join us to learn what you need to know now about assistance animals and accommodation requests.

Instructor: Victoria Cowart, CPM, Director of Education and Outreach, PetScreening.Com

Level I Electrical for Apartment

This class is an introduction to an overview of electricity and typical residential wiring, including troubleshooitng.

24 MARCH 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7
2 FEBRUARY 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7 MARCH 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7
CALENDAR
8:30 AM
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March 29

March 22 - 24

Take your career to the next level and enhance your professional growth in the apartment industry by becoming a Certified Apartment Leasing Professional (CALP)!

ICON KEY

This session is designed to provide you with the tools necessary to build relationships with members of the apartment industry, thereby increasing your possibilities for successful sales interactions.

April 10 - 14

It is time to take that leap in the rental housing industry by becoming a Certified Apartment Manager (CAM).

April 18

This two-part series provides an in-depth look for individuals looking for refresher training or for a company looking to train new and seasoned employees.

Instructor: Attorney Susie Lein, Kimball, Tirey, & St. John LLP

SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 25
ICON KEY
SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 3
Success Course (CAS Prerequisite)
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Certified Apartment Leasing Professional
9:00 AM - 4:00 PM 8:30 AM - 5:30 PM 8:30 AM - 5:00 PM
Fair Housing Part I & II Certified Apartment Manager Full Series

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26 MARCH 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7
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OF
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April 2022 socalrha.org | 17
“ ARE YOU DONE WITH THE HEADACHES
RENTAL
CALL YOUR LOCAL DST ADVISOR

11 Common Property Management Legal Issues & How To Avoid Them

Property management can be a rewarding career path for those who love helping others build a life and settle into a community. But along with the joys of the business are costly legal pitfalls you need to know and avoid at all costs. Some are easier to avert than others. Let’s take a look at the most common property management legal issues along with steps to avoid them.

As you read, you’ll notice a common thread: better technology and standardized procedures and routines can protect you from most legal issues in property management.

1. LOCKING A LATE-PAYING RESIDENT OUT OF THEIR HOME

It’s understandable to feel frustrated when a resident doesn’t pay rent on time. It’s against the law, however, to retaliate in any way that doesn’t conform with federal and state statutes. You cannot change the locks on a resident for nonpayment, no matter how

many times you’ve warned them or reminded them to pay. The only way to deny a resident entry to their dwelling is through the eviction process. Even so, eviction can take weeks or months to complete and must be resolved in your favor.

If mediation doesn’t work and eviction is your only option, lean on your attorney to keep everything above board.

COMMUNICATE THROUGH OFFICIAL CHANNELS

It’s best to send important notices through official means, such as a professional email sent via your property management software and/or letter delivered to the residence. (State and local laws around correspondence apply.) The nice thing about software is that it ensures permanent, paperless evidence of all correspondence for your records.

2. SETTING DIFFERENT SCREENING CRITERIA FOR APPLICANTS

When evaluating potential tenants, it’s important to follow all HUD regulations under the Fair Housing Act.

SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 29

The most important goal is to avoid discrimination against protected classes (i.e., race, color, religion, national origin, sex, disability and familial status). Keep in mind that an accidental or careless violation can be punished just as heavily under the law as an intentional violation.

USE SOFTWARE TO AVOID DISCRIMINATION

You avoid screening-based property management legal issues when you automate the process. Resident screening is an essential part of your business. Decisions must be based on objective factors such as credit history, income and criminal background. To do this efficiently, you’ll need property management software with resident screening built into the online application process. Yardi offers ScreeningWorks Pro, which goes above and beyond other screening tools by offering terrorist, drug trafficker, sex offender and Social Security fraud and rental/eviction history. You get near-instant, trustworthy results that will help you make smart, lawful decisions.

3. ENTERING A UNIT UNANNOUNCED OR WITHOUT CONSENT

This is a common property management issue that’s easy to avoid. Unless there’s an emergency with obvious cause for entry, property managers must give reasonable notice before entering a residence. Failure to give proper notice can result in a violation of the covenant of quiet enjoyment — among other laws — which can lead to legal action. Additionally, entering a tenant’s unit without consent is usually illegal, even if you have provided proper notice.

GIVE RESIDENTS THE SAME RESPECT YOU’D EXPECT IN THEIR POSITION

How much notice should you provide? The standard minimum is 24 hours, but state and local laws may vary. For the sake of maintaining friendly relations, try to accommodate the residents’ schedule as much as possible. If the tenant is not cooperating, contact an attorney, document everything and follow proper procedure.

4. RAISING RENT MID-LEASE

It is unlawful to raise rent during the current lease term. In addition, most states require a minimum 30-day notice. Property management software is once again your best friend here. It will track upcoming lease renewals and provide this information to you on an easy-to-read dashboard. You’ll never have to wonder whose lease terms are coming to an end or when to send a renewal letter out — all important dates and information are securely stored in the cloud.

PROVIDE PROPER NOTICE

Laws around rent increases can differ by state. In California, for instance, notice must be provided in writing.

5. NOT FOLLOWING ADA & FHA REGULATIONS

The Americans with Disabilities Act (ADA) and Fair Housing Act (FHA) protect individuals with disabilities. Property managers must ensure that all units and common areas comply with both acts and make necessary modifications to units upon request. The important thing to remember is that you are responsible for following the laws to the letter, and even an accidental slip-up can result in a lawsuit.

Sometimes, the FHA goes even further than the ADA in its renter protections. This is the case when it comes to accommodations for emotional support animals (ESAs). We’ve written on ESAs and assistance animals, including how to deal with unauthorized animals from visitors, so check those out for more insights.

CONSULT AN ATTORNEY IF IN DOUBT

As stated, and it bears repeating, failure to comply with the ADA and FHA could result in legal action and significant fines. You could also suffer reputational damage in the form of bad online reviews. Rely on counsel from a legal professional to ensure that you are fully compliant with these laws.

6. REFUSING OR WITHHOLDING PROPER REPAIRS & MAINTENANCE

As caretaker of your property, you’ve already estimated maintenance costs and built them into the rent. In a sense, that means your residents are pre-paying for upkeep and repairs. Unless stated otherwise in your lease agreement, you must respond to maintenance requests promptly and completely. Even if you are dealing with a non-paying tenant or moving through the eviction process, you must provide adequate maintenance services. You cannot withhold service as a form of punishment or “incentive” to encourage payment. (This connects back to point #1 on our list.)

STREAMLINE MAINTENANCE TRACKING

It’s extremely difficult to track maintenance requests without software in place. Email systems get cluttered, requests get lost, vendor info needs to be manually retrieved, tracking is difficult, payments need to be managed in a different system and so on.

Please turn to page 32

30 MARCH 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7
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Secure resident portals make it easy for residents to upload pictures and descriptions of the issue and send them directly to the property management office or designated maintenance crew. Your onsite staff can either act on the issue or connect with their preferred vendor. Residents also love the ability to log in to their portal and see status updates in real time.

7. WITHHOLDING SECURITY DEPOSITS UPON MOVE-OUT

Experienced property managers know security deposits are not sources of income and must be returned in the absence of damages. Further, the cost of any such damages must be documented so former residents can see why they’re being charged. If there’s any cleaning or unit prep that the tenant is expected to do prior to moving out, these expectations must be both legal and put into the lease.

For instance, if you find damage to carpeting that goes beyond normal wear and tear, you may have valid grounds to withhold some of the security deposit — but only as much as it costs to make repairs or replacements. In California, if a tenant causes enough damage to a carpet such that it must be replaced earlier than excepted, they can only be charged for the amount of time they took off the carpet’s expected lifespan. You can’t withhold an entire security deposit simply because the carpet made it seven of the 10 years it should have lasted.

TRACK PAYMENTS & DEPOSITS IN ONE PLACE

Once again, property management software will come in handy. Security deposits, tenant-caused damages and work invoices can all be stored in the system, making it easy to track information, communicate with renters and assess fines. Such comprehensive and easily accessible documentation is immeasurably useful for legal purposes as well.

8. KEEPING UNSECURED RECORDS

We can’t discuss property management legal issues without getting into security. Property managers are entrusted with a lot of personal data: social security numbers, financial data, etc. A 2020 NMHC survey showed that 73% of leases were signed electronically, and we expect this percentage to rise over time. That means the vast majority of renter data is in the cloud. How this data is stored matters, and local servers may be less secure than you think. Of course, if you’re still keeping paper records, you must manually organize, safeguard and dispose of physical copies, which is more costly and time-consuming.

PROTECT YOUR ASSETS

Reliable property management software providers use heavy encryption and top-of-the-line protections to safeguard this data. Anything less can put your applicants, residents and even your business at risk. Make sure everyone on your team knows the correct way to handle sensitive information. Doing so can prevent data-related legal issues from arising.

9. MAKING VERBAL OR NONWRITTEN AGREEMENTS

If it isn’t documented, it didn’t happen. That’s how the law will likely treat any property management legal issues that arise. Don’t expect a “he said, she said” debate to end in a favorable result for property managers: it is the professional’s job to keep proper records. Absent documentation, you might be in trouble.

KEEP EVERYTHING IN WRITING

Electronically signed leases are easy to store in cloudbased property management software, and they are accessible at all times to residents and your office.

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forward-thinking. Now, Gen Z is not as concerned with recreation or downtime at the office, rather a financial investment in their future. However, stock options and a standard 401(k) won’t cut it when they are actually searching for “student loan assistance, tuition reimbursement, and maternity and paternity benefits.” This generation values a work-life balance and is highly optimistic for the future, so these types of benefits will not only attract but also encourage them to stay and take advantage of these opportunities.

They Want to See Diversity and Inclusion

This highly educated, highly diverse generation is craving a passion and dedication to diversity and inclusion from their employers. As a result, “86% of

Gen Z job seekers cite a company’s commitment to diversity as an important factor in deciding whether or not to accept an offer.” Here it is very important for a company to talk the talk and walk the walk. Diversity and inclusion cannot just be a phrase in your company’s mission statement or a committee that meets once a quarter. This dedication needs to be seen in initiatives like asking one’s pronoun preference, adequate accommodations for those who are differently-abled, policies to ensure fair and equal pay, etc.

They Want an Offer, and They Want it NOW

Standard HR procedures make it difficult to establish a hiring committee and follow the correct protocol when extending an offer. Gen Z wants no part of that. They

feel if it’s a right fit, the offer should be made. “Nearly one in five Gen Zers expect a job offer one week from the initial phone screen. The majority expect an offer within two weeks.” Whether this expectation is realistic or not, companies that make an actionable change to speed up their hiring process will win top Gen Z talent.

*Statistics pulled from Yello

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Everything should be covered there, and since all a resident has to do is log in to their portal, they can always review the agreement themselves if a dispute should arise. There should be no question as to when payments are due, who is responsible for cleaning and maintenance, what move-out will look like, how many pets are allowed per unit, etc.

10. RETALIATING AGAINST TENANTS FOR NONVALID REASONS

It’s illegal to retaliate against or evict tenants for reasons such as race, religion and political beliefs. Such action would violate the Fair Housing Act and can result in legal action from the affected tenants. If you must go through with eviction, it’s important to give proper notice, follow due process and avoid the appearance of retaliation or discrimination. If you are unsure about the eviction process or the legal requirements for, consult with your attorney.

In addition to non-valid eviction, it is illegal to retaliate against tenants for any reason. In point #1, we discussed how it is not lawful to lock non-paying residents out of their homes. That’s one example of retaliation. There are many other actions that could be considered retaliation, including:

• Refusing services (e.g., maintenance, landscaping)

• Ignoring communications

• Behaving in a hostile manner

• Banning them from common areas

It is illegal to retaliate for their opinions, religion, ideas or even nuisance behavior that rubs you the wrong way. Even if other residents are filing complaints about the person (which you should document), that is not grounds for retaliation.

Property managers must remain professional and handle all tenant complaints and requests by the book. This includes how well you respond to repair requests, address complaints, provide equal opportunities for protected classes, and generally

speaking, how you perform every aspect of your work.

STANDARDIZE ALL PROCEDURES

While every tricky situation you encounter may be unique, experienced property management teams have procedures and routines that do not change. Property management software is a critical asset because it’s where complaints, payments, maintenance requests and possibly all or most communications take place. Software provides instant documentation. It also lets you respond quickly and in the appropriate manner.

11. SELLING THE PROPERTY & PUSHING OUT RESIDENTS MID-LEASE

While it may be legal to sell your property mid-lease, it is generally not acceptable to dismantle the terms of your renter’s lease. An independent rental owner (IRO) can do what they wish with their property: it’s their property! However, leases are binding. Even if your lease contract is month-to-month, in most cases, you will need to provide 30 days’ notice. Check state and local laws and consult with an attorney for the correct procedure in your area.

WORK WITH YOUR RESIDENTS

Avoid this property mangement legal issue by talking to your residents about your plan to sell. They might be willing to move out early and be released from their lease agreement. They might be interested in purchasing the property. Whatever the case, work with them to figure out times for property showings, renovations or maintenance projects, etc. As always, document everything that goes on in your property management software. You never know when those records will come in handy.

DISCLAIMER : This article was prepared for general information purposes only, does not constitute legal advice, must not be acted upon as such and is subject to change without notice. Always consult a lawyer or qualified housing expert for legal advice regarding your business.

SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 35
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36 MARCH 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7
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A CLOSER LOOK AT AFFORDABLE HOUSING

Affordable housing refers to housing that costs less than 30% of a household’s income. Harvard University and Habitat for Humanity’s 2022 State of the Nation’s Housing report shows 30% of all U.S. households in 2020 had rent or mortgage payments exceeding 30% of their household income —a 1.5% increase from the year prior. The research also shows that more than 1 in 7 households paid over half of their income on housing in 2020. With home prices and rents rising even more significantly from 2021 to 2022, housing unaffordability has undoubtedly worsened in the past two years since the report was written.

WHY IS HOUSING AFFORDABILITY IMPORTANT?

It may seem obvious why housing affordability is important on an individual level. Paying 30% or more of one’s income on housing doesn’t leave much left over to pay for additional expenses, which are growing costlier. The U.S Department of Health and Human Services Social Determinants of Health (SDOH) Literature Summaries include a section on housing quality that cites research drawing the

connection between housing affordability and both psychological and physical health. For example, low-income families may be more likely to live in older homes that may be under-insulated, lack air conditioning, and cost more to heat, leaving homes too hot or too cold, which has negative health consequences.

But going beyond the individual, a lack of affordable housing has ramifications for entire communities. Unaffordable housing pushes away vital members of the community like teachers, police officers, and social workers, as well as tradespeople — the backbone of society. Businesses located in these high cost of living areas may find themselves at a competitive disadvantage due to the higher wages required to attract and retain team members.

WHY IS THERE AN AFFORDABILITY CRISIS?

Years of underbuilding following the Great Financial Crisis of 2008 have led to a shortage of affordable homes for sale or rent. This shortage was worsened by the pandemic, as more millennials than expected formed new households, baby boomers stayed put and did not downsize as previous generations have,

SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 37

and new construction failed to keep up with housing demand. According to a New York Times report citing U.S. Census and Department of Housing and Urban Development (HUD) data, the U.S. now has a deficit of 3.8 million homes. Part of the challenge lies in the fact that most new homes and rentals are being priced at the upper end of the market due to the current economics of construction. A different New York Times article explains:

“The affordable end of the market has been squeezed from every side. Land costs have risen steeply in booming parts of the country. Construction materials and government fees have become more expensive. And communities nationwide are far more prescriptive today than decades ago about what housing should look like and how big it must be. Some ban vinyl siding. Others require two-car garages. Nearly all make it difficult to build the kind of home that could sell for $200,000 today.”

THE SOLUTION: AFFORDABLE HOUSING PROGRAMS

Housing affordability has been an issue for a very long time, and was first addressed by the government with the Housing Act of 1937. Since then, several important programs have emerged. Today, Affordable Housing programs administered by government agencies are an important part of the solution to the nation’s affordable housing challenges.

LOW INCOME HOUSING TAX CREDITS (LIHTC)

Created with the Tax Reform Act of 1986, the LIHTC program may be the most important resource for creating affordable housing in the United States. Low Income Housing Tax Credits come in two forms: a 9% tax credit to incentivize new development and a 4% tax credit for the rehabilitation and preservation of existing properties. According to the National Housing Preservation Database, LIHTCs have helped create about 2.5 million rental units.

SECTION 8

Commonly known as Section 8, after the Section 8 amendment to the Housing Act of 1937, this HUD program is “the federal government’s major program for assisting very low-income families, the elderly,

and persons with disabilities to afford decent, safe, and sanitary housing in the private market.” There are two types of section 8 assistance programs:

HOUSING CHOICE VOUCHERS (HCV)

The HCV program began in 1974 and provides targeted assistance to very low-income households. Renters spend 30% of their adjusted monthly income on rent, and the balance is covered through a subsidy attached to the renter, not the unit. This means that a renter who has a Housing Choice Voucher may move to another location and still receive assistance. Vouchers are awarded by local housing authorities to qualified applicants and can be used at any rental property that accepts Section 8 Vouchers.

PROJECT-BASED RENTAL ASSISTANCE (PBRA)

In the Project-Based Rental Assistance (PBRA) program, the subsidy is attached to the property, not the person. If the recipient of PBRA moves, the voucher can’t be transferred. Similar to the HCV program, the resident pays 30% of their income and HUD will pay the difference between what the renter pays and the market rent on the unit directly to the property owner.

AFFORDABLE HOUSING TRENDS

While the December 2022 CPI report shows that housing costs rose .8% percent in December, Apartment List data shows that property owners charged .8% less on new leases signed in December than the preceding month. According to Igor Popov, Chief Economist at Apartment List, new lease prices have been falling for the past four months, but that data will take a while to show up in the CPI estimates:

“They’re meant to represent what average Americans are paying for their rent, and average Americans don’t renew their leases every single month.”

While falling shelter costs may be welcome news for American renters, they may not be falling enough to make a meaningful difference in overall affordability, the crux of which boils down to a supply and demand imbalance, and higher construction costs that make financing affordable housing more difficult, including properties leveraging LIHTCs.

Founded in 2006, AppFolio is a company that offers powerful cloud-based property management software that property managers use to get their work done from anywhere, maintaining business continuity and keeping connected to their teams and customers. AppFolio is a different kind of property management software, and the company is laser-focused on its customers and their success. AppFolio works tirelessly to develop intuitive technology that really works. Explore why AppFolio is the last property management software you’ll ever need. For more information, go to: https://www.appfolio.com/.

38 MARCH 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7
SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 39
6 | Southern California Rental Housing Association Rental Advisor July 2021 Response 18 | Southern California Rental Housing Association Rental Advisor April 2022
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A DOWNPOUR OF LEGAL ISSUES AFTER CALIFORNIA GETS DRENCHED

As long as water runs through pipes and people live on a property, there will be leaks and spills. This is nothing new to us.

But after historic rainfalls, we have never seen such widespread water damage. It was saddening to see hundreds of residents displaced from an East Oakland apartment complex after the parking garage flooded and PG&E cut power. Tenants ushered in the New Year in a cold, dark, and smelly apartment building with instructions to leave. Weeks later, they remain transplanted and it’s become a multimillion-dollar crisis for the management of Coliseum Connections.

It seems not so long ago, we were talking about being “water-wise.” Conserving water in rental units and water submetering requirements. These topics were not top of mind for many in our community at the time. But now, water is a very real issue as it penetrates buildings and in some instances, forces tenants to seek temporary shelter elsewhere.

There is a whole host of legal issues that are raised in the aftermath of recent storms, and let’s touch briefly on each.

Our recent rainfalls not only pose a risk to the structural integrity of the building but also creates the perfect breeding ground for mold and mildew growth.

Please turn to page 43

More than a practitioner in landlord-tenant law, Daniel Bornstein is the Broker of Record for Bay Property Group, a property management company that protects and optimizes the investments of landlords. He is also renowned for his educational seminars and is called upon as an expert witness in complex real estate litigation matters. To avoid or resolve friction within rental units and cauterize risk, Daniel is happy to dispense informed advice to owners, property managers, and other real estate professionals looking to survive and thrive in today’s challenging and litigious rental housing market. Call 415-409-7611 or email daniel@bornstein.law.

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Continued from page 41

We need to address this in a timely manner or rental property owners are in violation of California’s implied warranty of habitability.

TENANT DISPLACEMENT

If the tenant is displaced because the unit is uninhabitable, they will generally have to be relocated at the owner’s expense. There is a patchwork of laws that govern the landlord’s obligation to assist in this temporary transition depending on the length of time the occupants are uprooted, the number of household members, the scope of the work to be performed, etc.

SAFEGUARDING THE BELONGINGS OF ANYONE WHO HAS BEEN DISPLACED

When disaster strikes, tenants do not have the luxury of taking all of their personal articles with them. When personal property and items are left behind, landlords must take reasonable steps to protect them.

ANGRY RENTERS WHO WANT TO RETURN TO THEIR HOME

Despite a landlord’s best efforts to give tenants temporary lodging as necessary repairs are made, some residents will be hellbent on staying put.

We often see this in other regions when a hurricane is predicted. Most people heed the warning and a mass exodus ensues but a cohort of people put up some boards on their windows and stay during the eye of the storm.

We’ll have to deal with this recalcitrance.

THE TENANT WANTS TO BE COMPENSATED FOR THEIR DAMAGES

If a tenant’s personal belongings are damaged as a result of storms, rest assured that he or she will raise the question of who is responsible for covering it.

We’ll have to look at the individual insurance policies and exclusions for both owners and tenants, but we regret to say that anyone that does not have a distinct flood policy, they are out of luck when there is water coming from the exterior of the building.

Whoever thought in a drough-plauged state, Californians would need a flood insurance policy?

PERMISSION TO ENTER TO EFFECTUATE REPAIRS

When there is water intrusion in a tenant-occupied

unit, the residents may or may not complain and instigate a request.

If there are no complaints by the tenant, the landlord may be curious about how the property has withstood the recent storms. Now we migrate into rules on permissible reasons for the landlord to enter with advanced notice (barring an emergency).

As a sidebar, it is not uncommon for tenants to deny access whatsoever. If there are leaks, bed bugs, whatever the discomfort, there is something to hide from the landlord, their agent, or a contractor. There may be damage, unauthorized subletters, or a marijuana farm in the rental unit, and these tenants can go through elaborate means to hide whatever is going on in the rental unit.

In events like this, we can get involved.

PARTING THOUGHTS

The precipitation has filled our reservoirs but made its way into buildings and we’ll have to deal with it.

There will be tenants of different temperaments, be they amenable and easy to compromise with, or those who are unreasonable and infuriated,, but remember this: the tenant is paying rent and is entitled to live in their abode. If unable to do so, we have a very pressing concern on our hands.

Fortunately, you can rely on a law firm well-versed in responding to crises and managing difficult rental relationships.

When You Call A Vendor

SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 43
“The foremost responsibility of landlords is to provide a habitable dwelling.”
Let them know that you saw their ad in APARTMENT MANAGEMENT MAGAZINE

WHO’S BEHIND CALIFORNIA’S LATEST WEALTH TAX PROPOSAL?

If at first you don’t succeed, try again. This adage applies well to ideas for new ways to tax Californians. Every election cycle we see new ways to be taxed, and higher tax rates, but rarely will we see a tax get repealed.

So it is that Assemblyman Alex Lee (D, San Jose) has introduced Assembly Bill 259, the Wealth Tax Act, which will impose an annual “worldwide net worth” tax of 1 percent on net worth above $50 million, rising to 1.5 percent on net worth over $1.0 billion.

Everything about this bill is goofy. It’s unconstitutional, it applies to intangible assets like goodwill or trademarks, it applies as well to assets that have subjective, wildly fluctuating values, such as fine art, and it even applies to equity owned in private companies that the holder may never convert into real money.

Already weighing in at nearly 16,000 words, AB 259 is riven with loopholes. And this typifies governance in California today — a state awash in laws and

Please turn to page 44

Edward Ring is a contributing editor and senior fellow with the California Policy Center, which he co-founded in 2013 and served as its first president. He is also a senior fellow with the Center for American Greatness, and a regular contributor to the California Globe. His work has appeared in the Los Angeles Times, the Wall Street Journal, the Economist, National Review, Forbes, and other media outlets. Ring’s undergraduate degree is in Political Science from UC Davis, and he has an MBA in Finance from USC. Ring is the author of two books: “Fixing California – Abundance, Pragmatism, Optimism” (2021), and “The Abundance Choice – Our Fight for More Water in California” (2022).

44 MARCH 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7
SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 45

Continued from page 46 regulations so capricious and so complicated that they only reward those willing to laboriously scheme their way through the bureaucratic maze and opportunistically search for cracks in the walls, while penalizing those who aren’t sufficiently devious and instead prefer to do productive work. California is losing those good people.

A wealth tax will accelerate an exodus already in progress, as the wealthy will flee to more hospitable states, joining California’s small businesspeople, its vanishing middle class, aspiring youth, skilled workers, honest tradesmen and contractors, fixedincome retirees, and everyone else who can no longer afford to live here.

There’s a reason nobody can afford to live in California, and laying even more taxes onto the rich won’t fix it. But that isn’t the point, if you’re Alex Lee. Because taxes fund the state government, and the state government pays state employees, and labor unions collect dues from state employees. In the November 2022 election, apart from contributions from the State Democratic Party, every one of Lee’s top twenty contributors were unions, starting with the California Teachers Association.

Alex Lee and his union-controlled allies in the state legislature aren’t operating alone. As Lee proudly proclaimed in a press release issued January 23, AB 259 was issued “in coordinated effort with seven additional states,” Connecticut, Hawaii, Nevada, New York, Maryland, Illinois, and Washington. These bills vary, but all of them tax wealth.

There’s something else these bills share. As reported in the Los Angeles Times last month, “In the absence of a federal wealth tax, the State Innovation Exchange, a progressive nonprofit, and the State Revenue Alliance, which works with labor groups to call for taxing rich people, gathered a handful of states to create policy as part of the ‘Fund Our Future’ campaign.”

With what labor groups, you might ask? The State Innovation Exchange Board of Directors includes Mary Kusler, National Education Association, Michelle Ringuette, American Federation Of Teachers (AFT), and Brian Weeks, American Federation Of State, County, And Municipal Employees (AFSCME). The Advisory Committee for the State Revenue Alliance includes Amie Baca-

46 MARCH 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7
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48 MARCH 2023 - APARTMENT MANAGEMENT MAGAZINE AMM7 SECRegisteredInvestment Advisor.Financ not legal or ta xadvice. Thereare material ri risks, potential adverset ax consequences, 12 | Southern California Rental Housing Association Rental Advisor April 2022 april2022.indd 12 5/3/2022 12:40:37 PM

Continued from page 46

Oehlert, Colorado Education Association, Marc Stier, who has worked as a campaign manager for the SEIU, and Charles Khan, the “Organizing Director at the Strong Economy For All Coalition, a Coalition of Labor Unions and Community groups.”

The other people overseeing and staffing the State Innovation Exchange and the State Revenue Alliance have backgrounds that typify big government and social justice activism — their resumes include copious references to familiar labor slogans — Defund The Police, Fight for $15, “campaigns for social, racial, and economic justice,” “racial equity,” “gender equity,” etc. As for the umbrella group “Fund Our Future,” it was founded by the American Federation of Teachers in 2019.

Behind this drive to impose a wealth tax is not merely a presumptuous resentment, i.e., the mission of the State Revenue Alliance is that “corporations and the ultra rich pay what they owe.” There is also a profound ignorance informing this movement. The “ultra rich” typically buy assets using after-tax income. Then if they collect dividends or rents off those assets, they pay taxes again. If they ever sell their assets, they pay taxes on whatever gains

they realize. There is already property tax on real estate, and we can thank the Biden administration and the 117th U.S. Congress for a new luxury tax on expensive planes, boats, and automobiles.

Based on current law, it might appear that America’s wealthy, especially those living in California, already “owe” plenty.

What unions in general, and public sector unions in particular, fail to understand is that in their drive for higher taxes on the rich and higher wages for their members, they are raising the cost-of-living for the rest of us.

The unions’ relentless push for more regulations and higher taxes make doing business more expensive, which translates into higher prices for goods and services. As such, union-backed taxes are regressive, and achieve the exact opposite of what unions purport to care about: they hurt working families.

Unions and their political front groups will never stop pushing these bad policies, however, because it runs contrary to their own financial interests.

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forward-thinking. Now, Gen Z is not as concerned with recreation or downtime at the office, rather a financial investment in their future. However, stock options and a standard 401(k) won’t cut it when they are actually searching for “student loan assistance, tuition reimbursement, and maternity and paternity benefits.” This generation values a work-life balance and is highly optimistic for the future, so these types of benefits will not only attract but also encourage them to stay and take advantage of these opportunities.

They Want to See Diversity and Inclusion

This highly educated, highly diverse generation is craving a passion and dedication to diversity and inclusion from their employers. As a result, “86% of

Gen Z job seekers cite a commitment to diversity important factor in deciding whether or not to accept Here it is very important company to talk the talk the walk. Diversity and cannot just be a phrase company’s mission statement a committee that meets quarter. This dedication to be seen in initiatives asking one’s pronoun preference, adequate accommodations those who are differently-abled, policies to ensure fair and pay, etc.

They Want an Offer, and Want it NOW

Standard HR procedures it difficult to establish a committee and follow the protocol when extending Gen Z wants no part of

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