Friday, September 4, 2015
C.A. Rejects Landlord’s Effort to Circumvent Rent Control Law
Panel Says Local Board Was Correct, Settlement Pact Was ‘Subterfuge’ to Avoid Eviction Limits
By KENNETH OFGANG, Staff Writer
A landlord cannot avoid rent control by serving a notice to quit, then entering into a settlement with the tenant that includes a purported withdrawal of the notice, the First District Court of Appeal has ruled.
Div. Three Wednesday affirmed an Alameda Superior Court judge, who in turn had upheld a ruling by the City of Berkeley Rent Stabilization Board. The ruling limits the rent on one of four units in a Berkeley rental complex to that which could have been charged to the prior tenant, which is less than half of what the current tenant was being charged.
The previous tenant, Elizabeth Burns, occupied her unit for 28 years, but in February 2012, landlords Jason and Karen Mak served a 60-day notice to quit. The notice recited that the landlords were terminating the tenancy so that they could occupy the unit themselves, one of a limited number of grounds for eviction from rent-controlled housing under the state’s Costa-Hawkins Rental Housing Act.
In April, however, instead of evicting Burns, the Maks and the tenant agreed in writing that she would vacate by the end of June, that she would not have to pay rent from April through June, and that she would receive a cash payment, part of it within two days of signing the agreement and the rest upon leaving.
The agreement specified that Burns was not vacating pursuant to the 60-day notice and that the notice would “be conclusively deemed withdrawn.” The landlords never moved into the premises and in March 2013 rented it to Alexander and Andrea Ziem for nearly $2,400 a month.
In May 2013, pursuant to a request by the Ziems, however, the rent board issued a determination that the maximum rent for the unit was $1,078 monthly. In doing so, it agreed with a hearing examiner that a regulation governing owner-move in notices applied.
The regulation provides that if a landlord serves a notice to quit in order to occupy the premises personally, or to move a relative into the unit, and the tenant moves out within one year thereafter, there is a rebuttable presumption that the tenant moved out pursuant to the notice, regardless of any purported withdrawal.
The rent board rejected the Maks’ contention that the regulation was preempted by the Costa-Hawkins law, and held that they had not rebutted the presumption. Because there had been no owner-move in under the notice, the board held, vacancy decontrol did not apply and the Ziems were entitled to the benefit of rent control based on what Burns would be paying.
Justice Stuart Pollak, writing for the Court of Appeal, said the regulation is not preempted because it is consistent with the authority granted to local jurisdictions by the act “to regulate or monitor the grounds for eviction.”
He distinguished Bullard v. San Francisco Residential Rent Stabilization Bd. (2003) 106 Cal.App.4th 488, which invalidated a provision in San Francisco’s rent control ordinance requiring a landlord who evicts a tenant in order to move into the tenant’s unit to offer the tenant another unit at comparable rent if another unit is available.
Berkeley’s regulation only applies when a landlord has failed to comply with the condition of the notice, that the landlord or a relative move into the unit, whereas the invalidated San Francisco enactment applied regardless of the landlord’s good-faith compliance with the state law, the justice explained.
“We agree with the trial court that Regulation 1016 ‘is a reasonable regulation of evictions, as Berkeley can create an administrative deterrent to discourage landlords from serving less than good faith owner move-in notices,’” the justice wrote.
The case is Mak v. City of Berkeley Rent Stabilization Board, 15 S.O.S. 4294.
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