SR-12-16-2014-7CCity Council Meeting: December 16, 2014
Agenda Item: Ic
To: Mayor and City Council
From: Marsha Jones Moutrie, City Attorney
Subject: Introduction And First Reading Of Ordinance To Expand Protections
Under Tenant Harassment Ordinance
Recommended Action
Staff recommends that the City Council introduce for first reading the attached
ordinance which would amend the City's Tenant Harassment Ordinance ( "THO ") to
expand protections to tenants, by modifying the state -of -mind requirement, clarifying the
scope of certain prohibited conduct, and increasing penalties.
Executive Summary
The proposed ordinance would amend the THO in the following respects:
• Modify the required state of mind for violations of the THO from "malice" to "bad
faith"
• Clarify the scope of prohibited conduct as to improper entries into units and
invasions of privacy
• Increase the maximum potential civil penalty for violations to $10,000
• Increase civil penalties for violations committed against senior or disabled tenants
The proposed ordinance would also add new notice and reporting requirements for
owners who engage in buyout negotiations with tenants similar to those recently
adopted in San Francisco.
Background
At its meeting on September 23 2014, Council directed staff to evaluate various
proposals to expand tenant protections under local law to address concerns expressed
at the meeting.
Staff's current proposal fulfills Council's directive by making several changes to the
existing THO as well as creating a new section of the law to address concerns over
tenant buyout offers and agreements.
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Santa Monica's Tenant Harassment Ordinance (S.M.M.C. sections 4.56-010-040) was
adopted in October 1995 in the No e° statewide decontrol, p
residential tenants from abuses by property owners intended to cause tenants to vacate
their units to make room for new, market -rent tenants. The THO currently prohibits
when performed with "malice
twelve different kinds of wrongful actions by landlords
i.e., an intent to annoy or harass the tenant. It contains civil and criminal remedies and
can be enforced by the City, the tenant, or any other person.
Discussion
Amendments To The THO
first three are intended to clarify
Staff recommends five amendments to the THO. The
enalties for violations.
existing language, while the latter two provide added p
First, staff proposes changing the current requirement of "malice" on the part of the
landlord in the THO, to a standard of "bad faith. The operative state of mind standard
will stay essentially the same, but community input indicates that the use of the term
"malice" in the THO may have been confusing, since that word has a narrower meaning
in other legal contexts. So, changing the standard to bad faith should help avoid such
potential confusion in the future.
Second, staff proposes clarifying the sub - section relating to improper entries of
tenants' apartments (S.M.M.C. section 4.56.020(d)), by specifying certain types
misconduct covered by the law. There have been increased reports of owner and
managers making unlawful "inspections' of units solely as a pretext to search for
possible grounds for eviction; and of otherwise valid entries that were extended into
improper areas for similar reasons, or simply to harass tenants. Although the THO
already prohibits such conduct, staff agrees that specifying some examples will increase
the law's deterrent effect and increase public understanding of its scope.
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Third, staff proposes clarifying sub - section "(I) of the THO relating to invasions of
privacy in a similar manner and for the same reason. This area has substantial overlap
with sub - section (d) and improper entries. However, clarifying the scope of privacy
protections with examples is important on its own as well since some privacy violations
occur independent of any entry into the tenant's unit.
Fourth, staff proposes increasing the civil penalty for violations of the THO from the
current fixed sum of $1,000, to an amount of up to $10,000. The new rule would give
courts important discretion to award various amounts of penalties depending on the
severity of the case, rather than the single fixed amount under current law. Also, staff
believes that the law should provide a far greater deterrent than $1,000 for those cases
with serious misconduct but where there is only one violation (or a small number of
violations). In such cases, the amount of $1,000 may be too small either to deter
unlawful behavior in advance, or to provide a meaningful deterrent to other potential
violators. In a similar vein the City of New York recently increased its maximum tenant
harassment penalty from $5,000 to $10,000, as reported in the New York Times on
September 30, 2014.
Fifth, staff proposes adding a separate civil penalty for violations of the THO that are
committed against elderly or disabled tenants. Staff has noticed that these vulnerable
segments of the population are especially susceptible to being harassed out of their
apartments and entitled to increased protection under the law. The added penalties are
intended to further deter owner misconduct directed at these two groups.
New Requirements For Buyout Negotiations And Agreements
Staff also recommends that Council add a new local law to increase protections for
tenants who receive buyout offers from their property owners.
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With the rebounding of both the rental and real estate markets, the disparity between
rent - controlled and market rate rentals has continued to grow in recent months. As
such, landlords have greater incentives to induce tenants in rent - controlled units to
move out. Similarly, many landlords are selling their property knowing that an
unoccupied unit can command a significantly higher sale price than an occupied one.
Instead of evicting tenants, some landlords offer cash buyouts in exchange for the
tenants vacating rental units. Even buyouts worth tens of thousands of dollars, or more,
can be recouped by a landlord retaining ownership and re- renting at market rates or
selling the unit. Anecdotal evidence indicates that many buyout negotiations are not
conducted at arms - length, and landlords sometimes employ high - pressure tactics or
intimidation to induce tenants to sign the agreements. Some landlords threaten tent
with eviction if they do not accept the terms of the buyout. For example, by threatening
a specific no -fault eviction (such as under the Ellis Act) and then convincing a tenant to
vacate rather than receiving the eviction notice, a landlord will avoid various legal
responsibilities and restrictions.
These tactics sometimes result in tenants entering into buyout agreements without a full
understanding of their rights. The buyouts vary widely in amounts and, in some cases,
are even below minimum relocation benefits which are required to be paid for all no-
fault evictions. Disabled, senior, and catastrophically ill tenants can be particularly
vulnerable, and can face greater hurdles in securing new housing.
The main purpose of the proposed new law is to increase the fairness of buyout
negotiations and agreements by requiring landlords to provide tenants with a statement
of their rights and allowing tenants to rescind a buyout agreement for up to 30 days after
signing the agreement, thus reducing the likelihood of landlords pressuring tenants into
signing buyout agreements without allowing the tenants sufficient time to seek advice.
Another goal of this new provision is to help the City collect data about buyout
agreements. At present, the City and Board lack comprehensive information about the
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number, location, and terms of such agreements, making it hard to understand the true
level of tenant displacement in Santa Monica. Likewise, it would help even the playing
field of buyout negotiation if tenants had information available from other buyout
agreements at similar properties.
The City and County of San Francisco recently approved a similar ordinance to protect
tenants subject to buyout offers. The same policy considerations apply here, and staff
recommends that Santa Monica follow a similar approach, with limited exceptions.
Under the proposed ordinance:
• All buyout offers would have to be in writing.
• Landlords would have to give tenants a written disclosure of their rights before
making buyout offers. (San Francisco broadens this notice period to any time "prior
to commencing buyout negotiations," which is somewhat vague and subject to
dispute.)
Landlords would have to file copies of all buyout agreements with the Rent Control
Board, or if the Board chooses not to implement this requirement, then filings could
be made with the City. The data would be available to the public.
® Tenants would have a 30 -day period to rescind buyout agreements. (San Francisco
extends the period to 45 days.)
Tenants and others could bring a civil action for damages and penalties for
violations of the new rules.
San Francisco's ordinance goes further in several respects. It extends the cooling -off
period to 45 days; it requires landlords to register offers with the Rent Board in addition
to agreements; and it requires the Rent Board to maintain a searchable database of
such offers and agreements.
The proposed ordinance would apply only to rent - controlled units. This is primarily
because the profit incentive and rent discrepancies described above exist only in those
controlled units that are rented below market rates. Also, the logical agency to receive
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and disseminate information from the buyout agreements is the Board, whose
jurisdiction extends only to controlled units.
Other Deveio enema ����u,.,,. � - � -
Community Liaison, whose duties will include
The City Attorney's Office has hired a new
investigating claims of tenant harassment and providing information to the public
regarding the City's landlord- tenant laws. The new hire is starting work this month.
The City Attorney's Consumer Protection Division and the Rent Control Agency co-
presented a public forum on landlord- tenant laws in Virginia Park on December 3, 2014.
Staff has disseminated written materials on landlord and tenant rights and
responsibilities to all local renters and owners, and will continue this process with
upcoming information sheets, including a specific form designed to educate the judiciary
about Measure RR and just -cause protections.
Finally, the City Attorney's Office will convene a task force to address issues and trends
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compliance, related to tenant harassment on a regular basis. Coml Police Department, from the City Attorney, Rent Control Agency,
Legal Aid.
Alters
Council could consider whether to extend the proposed amendments to the law as
nsider taking the amendments yet
described above, including Council could also co
further, in the manner adopted by San Francisco.
Financial impacts & Budget Actions
The increased educational and enforcement measures included in the proposed
ordinance would be performed by existing City staff. No significant financial impact or
budget action is anticipated beyond the addition of the Community Liaison Position for
the City Attorney's Office. That position is already in the office's budget.
Prepared by: Adam Radinsky, Chief Deputy, Consumer Protection Division
Approved:
JM,ars Jon Mo utrie rn y
Forwarded to Council:
Rod Gould
City Manager
Attachment: Ordinance Amending Chapter 4.56 of the Santa Monica Municipal Code
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City Council Meeting: December 16, 2014
Santa Monica, California
ORDINANCE NUMBER __-
(CCS)
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA CODE TO CLARIFY AND 4.56 OF THE SANTA
PROTECTIONS AGAINST MUNICIPAL
TENANT
CO O HARASSMENT
WHEREAS, Santa Monica has experienced an increase in reported instances of
harassment of tenants during the past year; and
WHEREAS, many believe that it is difficult than to prove violations of the current
tenant harassment ordinance due to its requirement of "malice," a term that may be
confused with stricter standards in other areas of the law; and
WHEREAS, Santa Monica has experienced an increase in reported instances of
local residential landlords and managers entering
tenants' units without legal
justification, or to harass tenants, or extending those entries beyond their proper scope
to improper locations and reasons; and
ed invasions of their privacy by
WHEREAS, tenants have reported increas
property owners and managers, in particular through the use of "inspections" not
authorized by law; and
WHEREAS, the current fixed civil penalty of One Thousand Dollars ($1,000.00)
for violations of the tenant harassment ordinance is insufficient to deter violations of that
law and provides judges insufficient flexibility to assess proper penalties; and
WHEREAS, the civil penalty for violations of the tenant harassment ordinance
should be amended to the range of up to Ten Thousand Dollars ($10,000.00); and
WHEREAS, senior and disabled tenants are both disproportionately subjected to
tenant harassment, and more vulnerable to its ill effects; and
WHEREAS, with the rebounding of both the rental and real estate markets, the
disparity between rent - controlled and market rate rentals has continued to grow in
recent months; and
WHEREAS, landlords have greater incentives to induce tenants in rent - controlled
units to move out and many are selling their property knowing that an unoccupied unit
can command a significantly higher sale price than an occupied one; and
WHEREAS, some landlords offer cash buyouts in exchange for tenants vacating
rental units; and even buyouts worth tens of thousands of dollars, or more, can be
recouped by a landlord retaining ownership and re- renting at market rates or selling the
unit; and
WHEREAS, many buyout negotiations are not conducted at arms - length, and
landlords sometimes employ high - pressure tactics or intimidation to induce tenants to
sign the agreements; and
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WHEREAS, landlords' tactics sometimes result in tenants entering into Buyout
Agreements without a full understanding of their rights and in amounts even below
minimum relocation benefits which are required to be paid for all no-fault evictions; and
WHEREAS, legislation is needed to promote fairness in buyout negotiations and
agreements by requiring landlords to provide tenants with a statement of rights and
allowing tenants to rescind a Buyout Agreement for up to 30 days after signing the
agreement, thus reducing the likelihood of landlords pressuring tenants into signing
Buyout Agreements without allowing the tenants sufficient time to seek advice; and
WHEREAS, collecting data about Buyout Agreements would help the City
compile comprehensive information about the number, location, and terms of such
agreements, and thereby assess the true level of tenant displacement in Santa Monica,
and collecting data will help promote fairness in buyout negotiations by fostering
transparency.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Section 4.56.010 of the Santa Monica Municipal Code is hereby
amended to read as follows:
Section 4.56.010 Definitions.
through unlawful conduct.
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be a" ]YOut Aareement."
(a )(d) Fraud. Intentional misrepresentation, deceit or concealment
of a material fact.
q_ e Housing Service. Housing services include, but are not
limited to, hot and cold water, heat, electricity, gas, refrigeration,
elevator service, window shades and screens, storage, kitchen,
bath and laundry facilities and privileges, janitor services, refuse
removal, furnishings, telephone, parking, effective waterproofing
and weather protection, painting, and any other benefit, privilege or
facility that has been provided by the landlord to the tenant with use
or occupancy of any rental housing unit. Services to a rental
housing unit shall include a proportionate part of services provided
to common facilities of the building in which the rental housing unit
is contained.
(G)M Landlord. An owner, lessor, sublessor, or any other person
entitled to receive rent for the use and occupancy of any rental
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housing unit, or an agent, representative or successor of any of the
foregoing.
per -sor}.
(e)(g) Rental Housing Agreement. An agreement, oral or written or
implied, between a landlord and tenant for use or occupancy of a
rental housing unit and for housing services.
obj Rental Housing Unit. A housing unit in the City that
constitutes either a controlled rental unit pursuant to City Charter
Section 1800 et seq., (including a room in a single - family home,
hotel or motel, rooming house or apartment, single - family home,
mobile home or mobile home space, trailer or trailer space); or a
rental unit pursuant to City Charter Section 2300 et seq.
(M(l Tenant. A tenant, subtenant, lessee, sublessee or any other
person entitled under the terms of a rental housing agreement to
the use or occupancy of any rental housing unit.
SECTION 2. Section 4.56.020 of the Santa Monica Municipal Code is hereby
amended to read as follows:
Section 4.56.020 Prohibition.
No landlord shall, with respect to property used as a rental housing
unit under any rental housing agreement or other tenancy or estate
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at will, however created, do any of the following ,n44-ma4ce
in bad
faith:
(a) Interrupt, terminate or fail to provide housing services required
by contract or by State, County or local housing, health or safety
laws;
(b) Fail to perform repairs and maintenance required by contract
or by State, County or local housing, health or safety laws;
(c)
Fail to exercise due diligence in completing repairs and
maintenance once undertaken;
(d) Abuse the landlord's right of access into a rental housing unit
as that right is specified in California Civil Code Section 1954. This
otherwise lawful entry;
(e) Abuse the tenant with words which are offensive and
inherently likely to provoke an immediate violent reaction;
(f) Influence or attempt to influence a tenant to vacate a rental
housing unit through fraud, intimidation or coercion;
(g) Threaten the tenant, by word or gesture, with physical harm;
R
(h) Violate any law which prohibits discrimination based on race,
gender, sexual preference, sexual orientation, ethnic background,
nationality, religion, age, parenthood, marriage, pregnancy,
disability, AIDS or occupancy by a minor child;
(i) (1) Take action to terminate any tenancy including service of any
notice to quit or other eviction notice or bring any action to recover
possession of a rental housing unit based upon facts which the
landlord has no reasonable cause to believe to be true or upon a
legal theory which is untenable under the facts known to the
landlord. No landlord shall be liable under this subsection for
bringing an action to recover possession unless and until the tenant
has obtained a favorable termination of that action.
(2) This subsection shall not apply to any attorney who in good
faith initiates legal proceedings against a tenant on behalf of a
landlord to recover possession of a rental housing unit;
(i)
Interfere with a tenant's right to quiet use and enjoyment of a
rental housing unit as that right is defined by California law;
(k) Refuse to acknowledge receipt of a tenant's lawful rent
payment;
(1) Interfere with a tenant's right to privacy including but not
_ ♦_1 L. �n1YllY
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SECTION 3. Section 4.56.040 of the Santa Monica Municipal Code is hereby
amended to read as follows:
Section 4.56.040 Enforcement and penalties.
(a) Criminal Penalty. Any person who is convicted of violating this
Chapter shall be guilty of a misdemeanor and upon conviction shall
be punished by a fine of not greater than one thousand. dollars or
by imprisonment in the County Jail for not more than six months, or
by both such fine and imprisonment.
(b) Civil Action. Any person, including the City, may enforce the
provisions of this Chapter by means of a civil action. The burden of
proof in such cases shall be preponderance of the evidence. A
violation of this Chapter may be asserted as an affirmative defense
in an unlawful detainer action.
(c) Injunction. Any person who commits an act, proposes to
commit an act, or engages in any pattern and practice which
violates Section 4.56.020 may be enjoined therefrom by any court
of competent jurisdiction. An action for injunction under this
subsection may be brought by any aggrieved person, by the City
Attorney, or by any person or entity who will fairly and adequately
represent the interest of the protected class.
(d) Penalties and Other Monetary Awards. Any person who
violates or aids or incites another person to violate the provisions of
this Chapter is liable for each and every such offense for the actual
U-
damages suffered by any aggrieved party or for statutory damages
in the sum of one up to Ten Thousand Dollars ($10,000.00),
whichever is greater, and shall be liable for such attorneys' fees
and costs as may be determined by the court in addition thereto.
Any violator shall be liable for an additional civil penalty of up to
Five Thousand Dollars ($5 000 00) for each offense committed
against a person who is disabled or aged sixty -five or over. The
court may also award punitive damages to any plaintiff, including
the City, in a proper case as defined by Civil Code Section 3294.
The burden of proof for purposes of punitive damages shall be
clear and convincing evidence.
(e) Nonexclusive Remedies and Penalties. The remedies provided
in this Chapter are not exclusive, and nothing in this Chapter shall
preclude any person from seeking any other remedies, penalties or
procedures provided by law
SECTION 4. Section 4.56.050 of the Santa Monica Municipal Code is hereby
added as follows:
Section 4 56 050 Buyout offers and agreements.
(a) Applicability of Section This section shall apply to every rental
housing unit in the City that is a controlled rental unit pursuant to
City Charter Section 1800 et seg., (including a room in a single-
family home hotel or motel rooming house or apartment single-
0
family home mobile home or mobile home space trailer or trailer
space).
(b) Disclosure Prior To Buyout Offers Prior to making a Buvout
Offer, the landlord shall provide each tenant in that rental unit a
written disclosure on a form developed and authorized by the Rent
Board that shall include the following:
(1) A statement that the tenant has a right not to enter into a Buyout
Agreement;
(2) A statement that the tenant may choose to consult with an
attorney before entering into a Buyout Agreement
(3) A statement that the tenant may rescind the Buyout Agreement
for up to 30 days after it is fully executed;
(4) A statement that the tenant may visit the Rent Board for
information about other Buyout Agreements in the tenant's
neighborhood and other relevant information;
(5) Any other information required by the Rent Board consistent
with the purposes and provisions of this Section; and
(6) A space for each tenant to sign and write the date the landlord
provided the tenant with the disclosure.
The landlord shall retain a copy of each signed disclosure form for
five years along with a record of the date the landlord provided the
disclosure to each tenant.
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(c) Requirements for Buyout Agreements. Every Buyout
Agreement shall:
(1) Be in writing The landlord shall give each tenant a copy of the
Buyout Agreement at the time the tenant executes it.
(2) Include the following statements in bold letters in at least 14-
point type in close proximity to the space reserved for the signature
of the tenant(s).
"You may cancel this agreement in writing at any time before
the 30th day after all parties have signed this agreement."
(B) "You have a right not to enter into a Buyout Agreement." (Cl
"You may choose to consult with an attorney or the Rent Control
Board before signing this agreement The Rent Control Board may
have information about other Buyout Agreements in your
neighborhood."
A Buyout Agreement that does not satisfy all the requirements of
this subsection shall not be effective and may be rescinded by the
tenant at any time.
(d) Rescission of Buyout Agreements A tenant shall have the right
to rescind a Buyout Agreement for up to 30 days after its execution
by all parties In order to rescind a Buyout Agreement the tenant
must hand - deliver, email or place in the U.S mail a statement to
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the landlord indicating that the tenant has rescinded the Buyout
Agreement.
(e) Filing of Buyout Agreements The landlord shall file a copy
of the Buyout Agreement no sooner than the 31st day after the
Buyout Agreement is executed by all parties and no later than 60
days after the agreement is executed by all parties. Buyout
Agreements shall be filed with the Rent Control Board unless the
Board opts not to adopt regulations implementing this section in
which case Buyout Agreements shall be filed with the City Clerk.
This filing requirement does not apply to Buyout Agreements
rescinded under subsection (d).
SECTION 5. Any provision of the Santa Monica Municipal Code or appendices
thereto inconsistent with the provisions of this Ordinance, to the extent of such
inconsistencies and no further, is hereby repealed or modified to that extent necessary
to effect the provisions of this Ordinance.
SECTION 6. If any section, subsection, sentence, clause, or phrase of
this Ordinance is for any reason held to be invalid or unconstitutional by a
decision of any court of competent jurisdiction, such decision shall not affect the
validity of the remaining portions of this Ordinance. The City Council hereby
declares that it would have passed this Ordinance and each and every section,
subsection, sentence, clause, or phrase not declared invalid or unconstitutional
without regard to whether any portion of the ordinance would be subsequently
declared invalid or unconstitutional.
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SECTION 7. The Mayor shall sign and the City Clerk shall attest to the
passage of this Ordinance. The City Clerk shall cause the same to be published
once in the official newspaper within 15 days after its adoption. This Ordinance
shall become effective 30 days from its adoption.
APPROVED AS TO FORM:
MA SHA J ES MOU RIE
City torn y
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