News and Events

California Bill to Extend Ban on Renter Evictions in Pandemic Spurs Landlord Concerns

Legislation Would Prohibit 'Unlawful Detainer' Court Actions to Evict Residential Tenants. [caption id="attachment_8924" align="aligncenter" width="1800"] A newly-erected fence blocks the front of a vacant home that Moms 4 Housing activists occupied during a months-long protest which ended in a court ordered eviction, in Oakland, California on January 28, 2020. - According to city officials, an estimated 4,071 people were living on the street, in shelters or in their cars in 2019 in Oakland, a 47 percent increase in two years. Activists, however, estimate the number is probably higher than 6,000, as many people in the city that has a population of 425,000 sleep on someone's couch or in a hotel and are not included in the official count. (Photo by Philip Pacheco / AFP) (Photo by PHILIP PACHECO/AFP via Getty Images)[/caption] read more. . .

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Soon Your Building Might Have A COVID-19 Safety Rating

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FREE – LIVE WEBINAR: TUESDAY, JUNE 9 @ 1PM: Will the CARES Act Reduce My Tax Liability?

Rsvp here: https://bit.ly/3eD2hfr FREE - LIVE WEBINAR: TUESDAY, JUNE 9 @ 1PM Wondering what tax implications it will have on your situation? In this exciting webinar, Tony Watson of Robert Hall & Associates will help you understand what actions you can take now, as well as real life tried-and-true tax strategies used in the real estate industry. Whether you’re an investor, agent, or lender, you will be able to use these tips and tricks to navigate through the 2020 tax year and retain more of your real estate wealth into the next decade! Topics To Be Discussed

• Covid-19 Changes
• PPP & EIDL (Loan programs)
• Qualified Business Income deduction
• How to save on pass-though income
• Can I rent back my home office to myself?
• Mortgage interest deduction
• State & local income tax

About the Speaker - Tony Watson- Robert Hall & Associates Tony Watson services a full roster of clients and has taken on the official role of public speaker for Robert Hall & Associates. He has spoken for over a hundred different trade organizations throughout the state of California. Tony is a federally licensed tax practitioner who can advise, represent, and prepare tax returns for individuals, partnerships, corporations and any other entity with tax-reporting requirements.

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Bill Allowing Commercial Tenants to Renegotiate, Break Lease Deals Advances in Calif.

BY GREG CORNFIELD The state’s Senate Judiciary Committee advanced a bill on Friday that would allow small businesses — like cafes, restaurants and bars — to renegotiate and modify lease deals if they have been impacted by shelter-in-place orders and economic shutdowns. Commercial landlords and property owners across California may need to get a lot of Wite-Out ready. The state’s Senate Judiciary Committee advanced a bill on Friday that would allow small businesses — like cafes, restaurants and bars — to renegotiate and modify lease deals if they have been impacted by shelter-in-place orders and economic shutdowns. If an agreement isn’t reached after 30 days of negotiations, the tenant can break the lease with no penalty. Read More..

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Proposed California Bill Would Allow Retail Tenants To Break Leases With Little Penalty

A proposed bill circulating in California's Legislature would allow a commercial tenant to terminate its lease with a landlord if a resolution taking into account the economic effects of the coronavirus isn't met. If passed, the legislation, Senate Bill 939, would allow a tenant struggling because of state or city shelter-in-place orders to negotiate in good faith with its landlord. But if neither can find a resolution, "the commercial tenant may terminate the lease without any liability for future rent, fees, or costs that otherwise may have been due under the lease by providing written notification to the landlord." SB 939 is backed by California Sens. Scott Wiener, a Democrat from San Francisco, and Lena Gonzalez, a Democrat from Long Beach, and it has finished its third revision. The bill, introduced in March, initially placed a moratorium on commercial evictions for the duration of the coronavirus health emergency. Read more. .

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California Rent-Cutting Bill Postponed

via Connect Media California AB 828, a bill that would authorize the California courts to cut rents by 25%, won’t get a hearing until at least the summer. The bill landed in the Senate Rules Committee last week, which means any possibility of a hearing will be postponed for several weeks. The California Apartment Association led a grassroots campaign to defeat the measure. In recent weeks, more than 55,000 messages opposing the bill have flooded lawmakers’ inboxes. Read more. .

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COVID-19: How the Southland’s Top Property Managers are Working to Get Ready to Exit the Crisis – Will Business Be Different?

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Fed is Deploying It’s “Full Range of Tools” and Challenges Washington To Follow Suit

  Today’s Fed meeting and subsequent press conference by Fed Chair Powell was like no other in history. First off, Powell said, “We are going to see economic data for the 2nd quarter that is worse than any data we have ever seen”, this after the 1 quarter GDP contracted at a 4.8% annualized rate, the worst reading since 2008.  Also, Powell’s speech and Q&A was virtual, with reporter questions being asked via a webinar. He expressed some hope for a significant bounce back in the 3rd quarter as stay at home measures are gradually rolled back. Of course, so much is dependent on the virus. Markets rallied significantly today on positive news regarding a potential treatment.Full Range of Tools: The Fed Funds rate will remain at near zero for a while (possibly for 2-3 years) and the Fed continues to purchase about $10-15 billion per day in Treasuries and $8 billion in mortgage bonds, daily injections of capital into the repo markets. Up next: A Main Street Lending Program will provide 4 year loans to businesses too large to benefit from the PPP program and more purchases of corporate debt. But, Powell noted that the Fed is authorized to “provide loans not grants” and the most vulnerable American individuals and businesses are not in a position to pay back loans as they have been hit so hard by this crisis. “This is the time to use the great fiscal power of the United States to do what we can to support the economy and try to get through this with as little damage to the longer-run productive capacity of the economy as possible”.  Powell declared in a direct message to Congress to provide this aid. He is implying that the fiscal policy so far is good but not enough and he is continuing to push monetary policy to the limit. Focus on central banks continues tomorrow with the ECB’s policy announcement. Bank of Japan opened the week on Monday pledging unlimited bond buying, as the international adoption of Modern Monetary Theory continues. Stay tuned.

Phone: 310.867.2976 Email: dpascale@gspartners.com Twitter: @Pascale_of_GSP DRE License: 01749437

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LIVE Webcast: What We Can Expect from Sacramento and Our State’s Legislature

 

***LIVE WEBCAST - FREE ADMISSION - LIMITED SPACE AVAILABLE*** COVID-19: What We Can Expect from Sacramento and Our State’s Legislature Tuesday, April 28th | 11a - 12p Join us online for an important information session on April 28, 2020 at 11:00 AM. Hear a briefing by Apartment Association of Greater Los Angeles lobbyist, Kate Bell, Partner of Capitol Advocacy in Sacramento, one of the State’s most prestigious lobbying firms. Kate spends much of her time meeting with the Governor and his staff in addition to holding regular meetings on housing policy with members of the State’s legislature. Due to the COVID-19 pandemic, the State Legislature has been on recess and expected to return “with a vengeance” in early May. It is expected that the Legislature will concentrate on housing and assisting those adversely impacted by COVID-19. This is your opportunity to hear about the latest proposed regulations from a true Sacramento insider. Planned Topics Include… Proposed Assembly Bill 828, which would impose a 25% reduction in rent for 12-months and impose unbalanced eviction regulations Governor’s executive ordes and how they impact rental housing providers Statewide rental registry Balcony inspection “fix-it” Bill sponsored by AAGLA Update on Proposition 10, Version 2.0 – The Rental Affordability Act ballot initiative Proposal for Statewide Renter Assistance State Option to Purchase Housing Left Vacant for 90 or More Days Unit Splitting Bill sponsored by Apartment Industry Legislative priorities And much more! As the situation surrounding COVID-19 continues to evolve, in this engaging webcast, we will do our best to address all of your questions! CLICK HERE TO LEARN MORE

THANKS TO OUR TITLE SPONSOR! SCOTT PROPERTIES GROUP Scott Properties Group (SPG) is a proactive property management firm specializing in Southern California commercial and residential properties, including: multi-family apartments, retail, mixed use, shopping centers, office buildings, single family residences and industrial properties. Click here to learn more

Kate Bell, a partner with Capitol Advocacy, has lobbied in the state for over 15 years and is recognized as one of Sacramento’s most effective lobbyists on tax, procurement, and general business issues. Kate’s ability to articulate issues, find solutions, and her knowledge of California’s complicated bureaucracy gets results for the firm’s clients. Kate is widely respected by the Capitol community for her ability to frame issues effectively and knowledgeably. On the tax front, Kate has won several multi-million-dollar settlements, tax refund claims, and new business incentives before the State Board of Equalization, California Department of Tax and Fee Administration, Franchise Tax Board and the Governor’s Office of Business and Economic Development, as well as passed major tax incentive legislation in the state

Daniel Yukelson is currently the Executive Director of The Apartment Association of Greater Los Angeles (AAGLA). As Certified Public Accountant, Yukelson began his career at Ernst & Young, the global accounting firm, and had served in senior financial roles principally as Chief Financial Officer for various public, private and start-up companies. Prior to joining AAGLA, Yukelson served for 12 years as Chief Financial Officer for both Premiere Radio Networks, now a subsidiary of I-Heart Media, and 3 years for Oasis West Realty, the owner of the Beverly Hilton and Waldorf Astoria Beverly Hills where he was involved with the development and construction of the Waldorf.”

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AM I MY – OR MY MANAGEMENT COMPANY’S – RESIDENT MANAGER’S KEEPER?

By Gary Ganchrow I never have actually counted them, but the California Labor Code contains what feels like a gazillion laws governing the employer- employee relationship, and the California Government Code contains several more. Most seem intended to protect the employee’s rights. Despite this fact, my experience – as someone who frequently represents property owners and management companies in connection with resident manager employment claims – is that many property owners do not think of themselves as employers (or of their resident managers as employees). In a way, this is unsurprising. After all, resident managers frequently also are tenants, do not necessarily engage in activities we traditionally think of as “work,” and may or may not receive a paycheck or payment beyond some type of rent credit or free lodging. It is a mistake, however, to not recognize that your resident manager possesses the same employee protections that would, say, an office worker – potentially a very costly one if your relationship with your resident manager sours. I have written extensively in the past about these issues and how to avoid them; they are not the subject of this article. But there exists another, often overlooked, implication to the fact that the law views your resident manager as your employee. Specifically, no matter how much (or little) work your resident manager performs, and regardless of whether you consider him to be legally mandated space- filler or someone who plays an important role in managing your property, that resident manager is your legal agent. In other words, for all intents and legal purposes, he or she is you.1 This can be a dangerous proposition when your resident manager serves as your chief point of contact with your sometimes-cantankerous tenants. After all, there exists a reason companies hire polished public relations experts with years of schooling and advanced degrees to serve as spokesmen. In fact, that is the entire premise behind 25 CCR §42, which may require an owner to place a manager on site in the first place. Please turn to page CS-45 Just as an employer can be held vicariously liable for its employees’ conduct, you may be liable for your resident manager’s conduct. For example, if your resident manager sexually harasses a tenant, you – the property owner – may be liable. If your resident manager discriminates against a tenant, you may be liable. If your resident manager is a gossip and discusses one tenant’s private information with another, you could be liable. The nature of the claims you could face are limited only by the legal creativity of the tenant’s lawyer. I have seen claims asserted for housing discrimination, Unruly Act violations, breach of contract, breach of the covenant of quiet enjoyment, defamation, invasion of privacy, public disclosure of private facts, intentional infliction of emotional distress, retaliatory eviction and constructive eviction. It also is worth mentioning that your insurance likely does not provide coverage for several of these claims. Absentee or very-hands-off owners may be particularly vulnerable because they likely provide resident managers with even greater responsibility and latitude. But what if you hire a property management company to manage your multi-unit property? Surely then you have insulated yourself from these types of claims, right? Right? Not so fast. Many property management contracts designate the resident manager to be the owner’s employee. As an aside – and I don’t want to make any property management companies mad at me, least of all those I represent – I have never fully understood the point of doing this. At the very least, the law will consider the property management company to be the resident manager’s joint employer along with the owner. A joint-employer relationship exists when two or more employers exert significant control over the same employees. Such a relationship exists if an entity, i.e., the property management company in this case, retains the right to direct the activities of the worker or the manner and method in which he performs the work – which clearly is true with respect to a management company and resident manager. In addition to asserting the resident manager is the owner’s employee, a property management company is likely to point to an indemnity provision in its property management contract in which the owner agreed to indemnify the management company for claims arising from its property management. Therefore, a property management company will turn around and tender to the owner any tenant claim made against the resident manager. As a result, even if the owner does not have direct liability, he will end up financially responsibility for any liability anyway. Now that I have articulated the potential issues, what can you do about them? For one thing, choose your resident managers carefully and run background checks on them. Should problems arise, you do not want to learn after-the-fact that a simple background check would have exposed a history of prior problems. And if you are an owner that is contractually responsible for the resident manager’s conduct, do not allow your property management company to hire him or her without your approval. Second, take seriously tenant complaints about the manager. That does not mean you must give credence to every kvetch of every disgruntled tenant, but if a tenant complains about mistreatment at the hands of your property manager, look into it. You must do this because if a similar problem recurs, either with the same tenant or a different one, you will be deemed to have been on notice. Furthermore, document (in writing) the steps you have taken to investigate, what follow-up steps you have taken to address the complaint, if any, and why you took no action if you decide to do nothing. This will be particularly important if a tenant makes a legal claim and seeks punitive damages against you, as employer, on the basis that you “ratified” the manager’s misconduct. “Ratification” does not necessarily require you to stamp “approved.” Cases find ratification when an employer fails to intercede in a known pattern of misconduct or fails to investigate or discipline an errant employee once the misconduct becomes known. Lastly, if the circumstances suggest you need to terminate your resident manager, then do so. I have witnessed way too many examples of owners and employers whose kindness towards their resident managers was not in the end reciprocated, and the result was costly – emotionally and financially. As I sometimes tell clients, “no good deed goes unpunished.” Do what you need to in order to avoid learning this lesson the hard way.

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