Laws Skewed to Favor Tenants over Landlords

Timothy L. Coyle
Consultant specializing in housing issues

In California, it’s legal to be a squatter. That is, the law allows individuals to occupy a rental house or apartment without a lease or filling out a rental application or going through any sort of renter-qualification process. They can just pick a vacant residence, live there and be virtually shielded from eviction.

That’s precisely what happened to a property owner in Torrance, CA thanks to an arcane provision in state law governing landlord-tenant rights.

Among the many thousand statutes in Sacramento, is one which has been there since 1872 and it contains a free pass for squatters. It’s called “adverse possession” and was originally aimed at abandoned properties or toward resolving disputes over property lines. However, squatters who pay delinquent property taxes use the law today to gain possession of vacant homes.

There are many more laws like this one that work directly against the interests of landlords. Here’s a sampling:
* • A law, frequently abused, that requires a landlord to accept a requested jury trial – with all of its additional time and expense – for evictions;
* • A law that requires a property owner to give a year’s notice to certain tenants before de-commissioning a rental unit;
* • A law that changes notice periods from three or five calendar days to court days, which just gives unruly or dangerous tenants an additional period of time to occupy the rental unit (and abuse the rental privilege); and
* • A law that allows de minimis “habitability” violations (cracked switch plate, minor leak) to effectively stall evictions for non-payment of rent.

These are among the worst of the worse – especially when abused – says premier California rental housing lobbyist Steve Carlson. They are just the sort of rules – with their added expense and general hassle – owners must follow here in the state that end up discouraging them from renting out their properties at all. Of course, these laws don’t compare to the many frivolous and expansive ideas introduced every year in the Legislature, before being defeated.

Carlson has been at this a long time – well over 30 years. He’s fought nearly all the rental-housing fights in Sacramento of the last three decades, including scoring a major victory back in 1995. That was the year the Legislature – believing what most pundits and academics were saying about the ills of rent control – improbably passed the Costa-Hawkins Rental Housing Act.

If you recognize that law it’s probably because it’s what this year’s Proposition 10 is trying to undo. Proposition 10 would repeal Costa-Hawkins, which now places limitations on what localities can have in their rent control ordinances. For example, the law prohibits rent control being imposed on single-family housing and post-1995, newly constructed rental housing. It also de-controls rents on units vacated by tenants after 1995.

Certainly, rent control is the greatest, most insidious landlord-tenant offense of them all. In tight housing markets like the ones we’re currently experiencing in California, under rent control an owner – having to now deal with an arbitrary limit on his or her investment – is usually better off selling the property. And, usually does. That consequence creates the worst condition for the tenant, by far. Sure, there’s no landlord to deal with, but there’s no housing either. The same thing happens with rent control on newly constructed buildings.

Back to the house in Torrance which, because of a recent tenant leaving, was supposed to be vacant. But, a family of three – probably after having scanned the most recent edition of CraigsList or Apartments.com, where the vacant unit was being advertised – just moved in. Because the law lets them.

Jason Burris, a real estate attorney from Santa Ana, said most squatters study public records for foreclosures and other signs of financial distress. “They check to see if people have passed away and didn’t pay their property taxes,” Burris said. “That’s when they strike.”

The tiresome back and forth that went on between the owner and the Torrance Police Department during the initial dispute period is expected to be repeated – and get profoundly more expensive – as a prolonged court battle will probably ensue. Indeed, in court, things get much worse. The squatter will likely get a free attorney, either through legal aid or on contingency.

“That free attorney will demand depositions, written discovery, jury trial – all the expensive mechanisms of litigation,” said Rikka Fountain, also a real estate lawyer serving landlords in the Southland. “There are no such resources for property owners. They have to pay their attorneys – usually between $300 and $400 an hour.” That expense comes directly out of the property owner’s pocket.

The legal proceedings for the Torrance property are expected to last several weeks – even months. Meanwhile, the squatters live rent free.

“Evictions are portrayed as an abuse of the poor, rather than the result of tenants breaking their contracts by not paying their rent,” explained Fountain. “So, the issue is painted as fat-cat landlord versus the oppressed little guy.”

That is the general sentiment among lawmakers in Sacramento and, as long as that attitude prevails, California will get a continuum of absurd state laws. Those listed above are only a very few. What these laws have in common with most of the rest is their blatant and seemingly unchecked hostility toward landlords.

But, as this hostility prevails, we will likely see the real “little guy” – the Mom and Pop who invest their life savings into owning four to six rental units – disappear. When that happens, the Legislature will only have the (less-forgiving) “big guys” to deal with – which means more conflict and more bad laws are ahead.

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