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New S.F. Ruling Clarifies When (and if) Landlords May Change Terms of an Existing Lease - Foster v. Britton

On December 2, 2015, the First District Court of Appeal of the State of California published its decision in Foster v. Britton. This case deals with a common scenario for landlords and tenants in San Francisco: A new landlord takes over a building with existing tenants, and then wants to add new “house rules.”

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At Bogaards Davis we deal with landlord-tenant cases all the time, and we believe that this case will affect landlords and tenants all across our beautiful city.

New “House Rules”

In the particular facts of this case, a new landlord, W.J. Britton & Co. (“Britton”), bought a multi-unit apartment building in San Francisco. The building’s tenants included Ms. Foster (“Foster”), who had lived there for 40 years. Foster had enjoyed several aspects of living in the building, including her special storage shed in the backyard, the building’s garbage service, and hanging her laundry on her porch.

Enter Britton, the building owner, who hands Foster and the other tenants new “house rules.” The court summarized:

Among other provisions, the house rules required tenants to share the back yard equally, unless all tenants agreed otherwise; to maintain their own garbage service; to keep all property inside the unit, out of view; and to use an outside laundromat rather than washing clothes in the sinks or tubs in their units. It also prohibited tenants from having pets and from storing their belongings anywhere except in their rental units or areas designated by the landlord. 

 

The landlord set out these new house rules in a document, which stated that the rules went into effect in 30 days’ time. Any tenant who didn’t like the rules was given the option to simply move out (with 30 days’ notice, of course).

The tenant, Foster, did not agree to the new rules. Foster argued that her lease had always included the above-listed perks (garbage service, etc.), and that she would not agree to Britton’s unilateral changes to this agreement.

In the dispute that followed, the landlord, Britton, took the position that California Civil Code section 827, subdivision (a) preempted Rent Board Rule 12.20, and that Britton therefore had the right to evict Foster for not agreeing to these new house rules.

State Law v. Local Law

Judge Maria P. Rivera discussed two relevant laws on this topic: one from the City of San Francisco (Rent Board Rule 12.20) and the other from the State of California (Civ. Code § 827).

On first glance, these laws certainly seem to contradict each other:

·         Civil Code § 827 – This state law says that a landlord may change the terms of a month-to-month lease after giving 30 days’ notice. The new terms then become part of the lease after the 30 days pass. (Read the text of the Civ. Code § 827 here.

·         Rent Board Rule 12.20 – This city rent ordinance says that a landlord may only evict a tenant if the tenant has violated a term in the original lease. But a new term may be added to the original lease if the term is (1) authorized by the city’s rent control ordinance, (2) required by law, or (3) accepted in writing by the tenant. (Read the text of Rule 12.20 here.)

Generally, if a state law conflicts with a local law, then a judge will rule that the state law wins (i.e., the state law “preempts” the local law). Here, based largely on a decision by the California Supreme Court (Birkenfield v. City of Berkeley (1976) 17 Cal.3d 129, 142), the Court decided that the two laws coexist without conflict. In other words, the court found that § 820 does not preempt Rule 12.20. Rule 12.20 is a substantive limit (i.e., “why” a landlord may evict) on the grounds for eviction, while § 827 is a procedural limit (i.e., “how” a landlord may evict). The state law gives landlords the mechanism for eviction, while the city’s rent ordinance says that a landlord can’t evict a tenant based on a unilaterally-imposed term:

Section 37.9, subdivision (a)(2) of the Rent Ordinance allows a landlord to evict a tenant who has violated a lawful obligation of tenancy; Rule 12.20 "fill[s] up the details" of the Rent Ordinance by clarifying that a "lawful obligation or covenant of tenancy" does not include a unilaterally-imposed obligation to give up housing services associated with a rental unit, which include parking, laundry facilities, trash service, garden privileges, and storage spaces.

 

This part of the decision was good news for the tenant who rejected the new landlord’s new “house rules.”

What Will This Mean for Landlords and Tenants in San Francisco?

Here are the most important "takeaways" for landlords and tenants:

·         Write the lease to identify and encompass all of the services that are included and excluded.

·         After the original lease is signed, it’s going to be difficult for a landlord to change any terms that affect “housing services associated with a rental unit.” This includes terms such as:

o   Parking

o   Laundry facilities

o   Trash services

o   Garden privileges

o   Storage spaces

·         A landlord may successfully impose a new term in an old lease ONLY if it is (1) authorized by the Rent Ordinance, (2) required by law, or (3) agreed to by the tenant in writing.

·         SF’s rent ordinance Rule 12.20 is valid and enforceable.

o   The SF Rent Board had sufficient legislative power to implement Rule 12.2; and

o   Rule 12.20 doesn’t conflict with Civ. Code § 827.

·         Civ. Code § 827 is an outline for how to evict—it doesn’t affect a landlord’s grounds for eviction.

 

Any questions? If you are a landlord or tenant, and have questions about the SF Rent Ordinance, the California Civil Code, or other laws affecting your rights, please don’t hesitate to contact us.

 

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