Who’s Phony…Who’s Fake…Are you Bona Fide…or Another Lost Legal Case?

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    “If—” is a poem by British Nobel laureate Rudyard Kipling, written in 1895 and states in pertinent part, “If you can talk with crowds and keep your virtue,  Or walk with Kings—nor lose the common touch; If neither foes nor loving friends can hurt you,
If all men count with you, but none too much…”
Or rather put, “Keeping it Real” (Read: Tell the Truth!) was relevant in the 1800s (thanks Rudyard); so here too… it remains true today.
We all know the difference between a truth and a lie…a friend versus an enemy…the difference between the genuine truth and bona fide fraud.
Rather through intuition or experience, all humanity possess the ability to, quite frankly, “keep it real.” And yet humanity, despite the infinite existence of common sense wisdom or universal morality, somehow finds new and novel methods to utilize the alternative, albeit effective, teaching methodology of … failure.
 Now that the Scene is Set…
Enter our Protagonist: Jason and Karen Mak of legal case Mak v. City of Berkeley Rent Stabilization Bd. (2015) 240 Cal.App.4th 60, 192 Cal.Rptr.3d 654.
Jason and Karen Mak (the “Maks”) own a residential rental property with four apartments in Berkeley. In February 2012 they served on Elizabeth Burns, a tenant in one of those apartments for 28 years, a 60-day eviction notice, asserting that Jason Mak intended to occupy the apartment.In April 2012, the Maks and Burns entered a written agreement under which Burns agreed to vacate the apartment, stating that Burns was not doing so pursuant to the 60-day notice, and that such notice “shall upon occupant vacating, be conclusively deemed withdrawn.” Burns vacated the apartment at the end of June and months later the Maks rented the unit to new tenants, Alexander and Andrea Ziem, at more than double the rent that Burns had been paying.
 Let’s stop here for a moment: If after reading the above quoted paragraph(s,), you think to yourself “yea, these Maks … I like these guys …these guys are totally keeping it real”; then, I suggest you stop reading this article and instead permanently hire an attorney to handle your real estate matters moving forward (Read: all your life decisions.)
If on the other hand, you read that paragraph and thought to yourself, “no way that’s legal!”; then, you win the common sense achievement award; where the only trophy is not being featured on a legal blog as an example of what-not-to-do with your lucrative real estate asset.
Let’s take a closer look at what exactly went wrong for the Maks before unveiling the obvious legal outcome.
  1. Termination of Tenancy Requires Legally Sufficient Notice

A real property tenancy may be terminated by providing the requisite statutory notice. An “at will” or periodic tenancy may be terminated for any reason (subject to discrimination, “retaliation,” and/or rent control limitations) by giving notice—normally, statutory notice, unless the lease provides for other notice. [See California Code of Civil Procedure (“CCP”) §§ 1161, 1162] While normally a 30 day notice is required where a tenant resided in unit less than one year absent agreement, the 60-day notice is required where tenant resided in unit at least one year absent agreement. [See Civil Code (“CC”) § 1946.1]

The Maks were doing so well. They followed the initial legal steps to terminate a tenancy by providing the requisite notice and ensuring they sent a legally sufficient 60-day notice, given their subject tenant had resided in the unit for 28 years.

     2.  Termination of Tenancy Usually Requires a Legally Sufficient Rationale

In jurisdictions, not subject to local rent controls, landlords generally need not state a reason for serving a notice—i.e., the notice to terminate may be served for any reason or no reason at all. [See People ex rel. Dept. of Transp. v. Lucero (1980) 114 CA3d 166, 174-176, 170 CR 554, 559-560—absent some government benefit creating enforceable tenant right (e.g., government-subsidized rents or rent control), tenant’s property interest in rental unit does not protect against “non-good cause” evictions]. However, even in non-rent-controlled jurisdictions tenants are protected from both retaliatory and discriminatory evictions. [See CC § 1942.5; See also Unruh Act, the state FEHA, the federal FHA and the Americans with Disabilities Act.]

Retaliatory evictions may also be unlawful housing discrimination: e.g., the FEHA proscribes tenant evictions when the “dominant” purpose is retaliation against a person who has opposed practices unlawful under the Act, informed law enforcement of practices believed to be unlawful under the Act, testified or assisted in any FEHA proceeding, or aided or encouraged a person to exercise or enjoy rights protected by the Act. [Gov.C. § 12955(f); see 42 USC § 3617 (federal FHA), 42 USC § 12203(a) (ADA)]

The Maks were required to have a just cause reason for eviction given that the subject property was in a rent-controlled jurisdiction of Berkeley, CA. [See Berkeley Municipal Code Chapter 13.76.]

3Termination of Tenancy in Rent Controlled Jurisdictions

On the other hand, a “good faith” reason for eviction is usually mandatory in rent control jurisdictions (e.g. Oakland, CA or Berkeley, CA). Indeed, 30/60-day notice in these jurisdictions is permitted only for grounds specifically authorized by the rent control ordinance.

Where eviction controls have been lawfully enacted, a residential tenant’s occupancy cannot be terminated for any reason not authorized by the applicable ordinance (except to the extent otherwise required by statute). [See Rental Housing Ass’n of Northern Alameda County v. City of Oakland (2009) 171 CA4th 741, 755-756, 90 CR3d 181, 191-192; Gross v. Super.Ct. (Victoria Mews Consortium) (1985) 171 CA3d 265, 272, 217 CR 284, 287-288]

Two of the typical grounds for which a 30/60-day notice for eviction in jurisdictions with “eviction controls,” are as follows: (1) to accommodate occupancy by the landlord personally or the landlord’s immediate relative[But See CC § 1947.10, owner (or immediate relative) must maintain residence in evicted tenant’s unit for at least six continuous months and is otherwise subject to statutory wrongful eviction damages; See also e.g., Oakland Municipal Code Section 8.22.360(A)(9) outlining Oakland’s more extensive 36-continuous month requirement]; or (2) to accommodate occupancy for a unit being sold to a Bona Fide Purchaser. [CC § 1946.1(d)(1)]

In the Maks case, they evicted the tenant for the purpose of the Maks’ personal occupancy. All is well right? Not so fast.

     4.  Where the Maks Failed to Keep it Real 

The Maks are a typical case of people who do not keep it real. (The Rent Board and Court findings would concur with the same.) The Maks suggest, at first glance, their nondiscriminatory/ non-retaliatory reason is the owner’s desire to occupy the hotspot themselves.

When the tenant takes the bait, moving out without a fight; the Maks reneged on their position. Subsequent to the tenant’s veil of voluntary withdrawal, the Maks rent the hotspot back on the market for double the rent paid by the evicted tenant. (Charles Ponzi would be proud.)

What do you think happened when the new tenants, the Ziems, demanded of the court and the city for a rent reduction sufficient to revert the current rent paid back to the previous rent paid by the evicted tenant?

As with most reasonable and competent demands of the law, the Ziems got exactly what they demanded; but not before the Maks wasted extensive legal services to be rendered and utterly rejected by one rent board administration, one superior court and a court of appeals. (Read: Third time’s a charm…gone horribly wrong … litigation style.)

     5. Keep it Real: Include only honest statements in any eviction 

Don’t be like the Maks, Keep it real at all times.

The advice for landlords who have reason to anticipate a retaliatory eviction defense is as follows: Even when the landlord is not bound to state a “good cause” reason for eviction in the notice, doing so may well foreclose a potential discrimination/retaliation defense.

However, this practice could also be risky: When a good cause reason for eviction is stated, the tenant might introduce evidence disproving the existence of such a reason and then argue more convincingly that the eviction is indeed impermissibly “discriminatory.”

If you require more information regarding real estate dispute and litigation, please contact the Law Offices of Terance Orme today for a consultation.

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