Q: My client bought her home in Oakland five years ago and for the last three years has rented out one of the bedrooms with an adjoining bathroom that only her tenant can use. The tenant also has the right to use the kitchen and dining room as long as the tenant does not interfere with the owner’s use and enjoyment of her home. The lease was drawn up by the owner’s attorney. The owner has had some financial reversals and she notified the tenant that the rent would have to be increased. The tenant said the Property was subject to “rent control” and the proposed increase was illegal. I thought renting out single-family dwellings was excluded from rent control? What should I tell my client?
A: Yes, it is possible that the tenant may be protected by the local rent control laws and/or eviction control regulations. The client should be advised to immediately consult with her own qualified California real estate attorney who specializes in landlord-tenant laws in the city or county where the Property is located.
TWO CURRENT CASES ON: “WHAT IS A SINGLE DWELLING UNIT?”
In most jurisdictions, the local rent control laws exclude the renting of a single-family home. However, two recent decisions have held that when the owner is renting out a portion of a single-family dwelling to one or more tenants, that situation may be construed as converting the single-family dwelling into a multi-family dwelling and thus would be subject to rent control.
A recent Alameda County Superior Case dealt with whether a four-bedroom single family detached home is exempt from Oakland’s Rent Adjust Program (“RAP”) even though the owner rents out some of the bedrooms to tenants. On April 19, 2019, the Judge in Owens v. City of Oakland’s Department of Housing concluded that for purposes of landlord-tenant law, the terms “a dwelling or a unit” is not the entire property that is owned but “any area understood to be committed to the habitation of a given tenant or tenants to the exclusion of others.” Thus, the rooms that were rented out were not exempt from rent control even though they were part of a single-family home. Although this Superior Court case is not a precedent and is not binding on other cases, it may well signal how the RAP will be applied to other single-family homes located in Oakland.
One recent decision that does set a precedent is a Second Appellate District Court case entitled Chun v. Fredy Del Cid (Filed April 26, 2019). Mr. Chun owned a 9-bedroom, single-family dwelling; he rented out 4 of the bedrooms to 4 different tenants who had sole access rights to their own bedrooms and they shared access to the bathrooms and kitchen. When Mr. Chun attempted to evict two of the tenants, the trial judge ruled in favor of the tenants and denied the unlawful detainer action.
The issue for the Appellate Court was whether the Property fell within the single-family dwelling exemption to the Rent Stabilization Ordinance of the City of Los Angeles. The Appellate Court concluded that:
“regardless of the original design and use of the Property, its current configuration (nine bedrooms, two bathrooms, and one kitchen) and current use for occupancy (four individual bedrooms rented to separate households who share the kitchen and bathrooms, but who alone have exclusive access to and use of their rooms) does not qualify for the single-family dwelling exemption from the Ordinance, because it is not a “detached dwelling containing only one dwelling unit.”
PRACTICE TIPS:
- Recognize that landlord-tenant laws are often subject to ever-changing state and local regulations; landlord-tenant laws may differ dramatically not only from one city to the next but also over time. Avoid providing any advice regarding the extent to which any landlord-tenant laws apply to any Property.
- Only a qualified California real estate attorney who specializes in landlord-tenant law in the city or county where the Property is located is qualified to provide advice or make recommendations to property owners as to whether or not any given situation falls under local ordinances that regulate how much rent can be charged and/or under what circumstances a tenant can be evicted.
- When clients ask for information about any type of landlord-tenant issue, recommend that the client contact their own qualified California real estate attorney who specializes in landlord-tenant laws in the jurisdiction where the Property is located.
WEEKLY PRACTICE TIP: DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
© Copyright Broker Risk Management 2019 07/05/19