New State Law for 2012 Limits Relocation Payments for Temporary Evictions

Congratulations to the SFAA leadership and the California Apartment Association for successfully convincing the California Legislature and the Governor to sign into law a common sense measure that will allow landlords across the states in rent-controlled jurisdictions to successfully suspend a tenancy for repair work without having to pay egregiously high relocation benefits. This new law, which becomes effective January 1, 2013, arose in response to a local tenant relocation payment ballot initiative that passed in 2006. Under that proposition, all SF rent-controlled tenants became entitled to receive at least $4,500 each, regardless of age, if they were evicted for owner/relative move-in, the removal of an illegal unit, the substantial rehabilitation of the building, and, most controversially, on a temporary basis in order to allow the landlord to perform repairs. With the built-in inflationary increase, today’s tenants are receiving over $5,000 in base payments, with an additional $3,400-plus if they are disabled, elderly, or have children. Thus, it has been commonplace to pay households over $15,000 for these types of no-fault evictions.

In the case of owner/relative move-ins, substantial building rehabilitations, and the removal of illegal units, the eviction is permanent, meaning under most scenarios the tenant cannot return. Yet for temporary evictions for repair work, the tenant always is allowed to move back at the same rent. Formerly, a tenant was paid up to $1,000 to relocate while the work was being done. The 2006 law, however, established these new heightened payments automatically, even if the displacement was for a few weeks or days! This led to ridiculous scenarios where landlords had to pay their tenants $5,000, $10,000, or even in excess of $15,000 to vacate for a couple of weeks or even for a long weekend. The statute’s upside-down logic often forced owners to defer maintenance or to conduct dangerous work while the tenant remained in occupancy.

In response, SFAA leadership formally requested CAA to ask several members of the State Assembly to sponsor a bill that would address the inequity of the San Francisco rent relocation law as it pertained to temporary evictions for short periods of time. Not surprisingly, the bill received bipartisan support and was signed by the Governor. Therefore, beginning in 2013, new Civil Code Section 1947.9 provides that compensation for relocations less than 20 days shall be limited to $275 per day per tenant household, plus actual moving expenses if it is necessary to move the possession from the rental unit to perform the work. In addition, the landlord shall have the option to provide a comparable dwelling unit and pay any actual moving expenses in place of the daily compensation of $275. The replacement housing shall be comparable to the unit from which the tenant household is being relocated in location, size, number of bedrooms, accessibility, type, and quality of construction, and proximity to services and institutions upon which the displaced tenant household depends. The daily relocation amount may be adjusted annually in an amount equal to the Consumer Price Index. A “tenant household” means all tenants in the rental unit.

In sum, the new law gives you the opportunity to relocate your tenants on a short-term basis so that unit repairs can be made without breaking your bank. Tenants shall receive enough money to pay for substitute housing, and will not be invited to unfairly profit from the situation. Moreover, owners can now move tenants into comparable units in order to avoid the relocation payments. Thankfully, state lawmakers understood the serious problem created by our relocation law and took appropriate action to rectify the situation.

DW

WASSERMAN STERN

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