No Excuses for Unprofessional Management

We hear a lot about the proverbial ‘mom-and-pop’ owner-operators of rental housing. They are hailed as hard-working, upstanding community members who have scrimped and saved to buy a ’nest egg’ on which they can fall back in retirement. But anecdotal accounts suggest these owners are also our least-professional property managers. Here’s a snapshot of some poor practices.

We have heard time and again from the Apartment Association of of Greater Los Angeles that mom-and-pop owners and operators of rental housing are suffering the most from recent changes to the rent stabilization ordinance. These owners are frequently pushed to the forefront of the debate by the industry association to show how onerous regulations and rent stabilization ‘bureaucracy’ is driving them out of the business.

One of the arguments is that it is expensive to maintain older housing stock and the additional burden of rent control makes that operation unsustainable. The flaw in that argument is that these same small owner-operators drive most of the tenant complaints about housing conditions. If those properties are expensive to maintain, it is because they have electrical, plumbing and sewage systems that were never updated during the 80-year or so life of the property — a lack of investment (made worse with hasty patches by unlicensed handymen) that is driving our housing stock into the ground.

What Does Unprofessional Property Management Look Like?

Anecdotal accounts from tenants who contact Renters Alliance provides a cross-section of grievances with unprofessional management. The following representative bad practices are each annotated with the provision of the law that prohibits it.

• Managers intimidate tenants and even threaten them across the apartment transom. Menacing conduct or threats which can be construed to make a tenant fearful violate the rental agreement’s implied covenant of good faith and fair dealing. Intimidation interferes with the tenant’s quiet enjoyment of the property (literally when it happens at the front door) and is unlawful too. The remedy is civil: file an action in Superior Court against the landlord for damages.
• Managers explicitly threaten to evict. This is simply intimidation when not accompanied by a notice of termination or notice to correct. But the landlord holds the trump card because no-just-cause tenancy termination is still on the books in Beverly Hills. Without documented evidence the tenant has no cause of action.
• Managers retaliate against tenants for actual or perceived complaints to a public agency, or for some other protected activity like tenant organizing. The California Civil Code explicitly protects a tenant from retaliatory eviction for up to six months after a documented code complaint and explicitly protects against retaliation for organizing. Both implicate a civil remedy.
• Managers seize on a pretext to allege a breach of the rental agreement and then use that as grounds for termination. A for-cause termination obligates no relocation fees, which makes this a tempting approach for the unscrupulous operator. The pretext may itself be grounds for termination, but when unsubstantiated, or when pursued in a pattern of harassment, then the pretext will not stand scrutiny for cause. The tenant could face a 3-day termination notice and an unlawful detainer action in court.
• Managers imposes unreasonable limits on guest visits or demand that guests be positively identified to the manager. The lease or rental agreement can impose some limitations on guests but it must be a reasonable limitation and not interfere with the quiet enjoyment of the premises. And that does not include the checking of guest IDs! Disabled tenants in particular are accorded ‘reasonable accommodation’ for caregiving in both federal and state disability law (not only care-giving but also a live-in caregiver). The tenant’s remedy is civil: an action in Superior Court for damages or corrective action.
• Managers unlawfully limit or prohibit certain behaviors. For example, the manager that imposes limits on the activities of children, say, or posts unreasonable ‘house rules’ that interfere with the tenant’s enjoyment of the property. Under the law, the manager may not establish arbitrary standards of behavior or enact any prohibition on everyday life activities. Again, the remedy is civil. (In cases where a house rule is reasonable but onerous, note that any change in the terms of tenancy requires 30 days to become effective.)
• Managers access the unit without advance notice or outside of business hours or for no specific purpose. Such as regular inspections or using a repair as a pretext to have a look around the house. We’ve known of instances where the manager takes pictures that are later used to allege a breach of the rental agreement. The state’s Civil Code imposes strict restrictions on access to units and regular inspections are not allowed; there must be a reason (perhaps in response to a tenant repair request). The law requires advanced notice, too, specifically 24 hours advance notice and no off-hours access. That precludes surprise visits. Again the tenant’s remedy is civil.
• Managers thumb their nose at laws concerning required permits or the prohibition of after-hours work or weekend work. The landlord cannot undertake construction on the weekend without a special permit. Units cannot be remodeled without permits. Kitchen and bathroom work in particular often implicate plumbing and electrical work, but demolition of any kind is a red flag. Such construction can proceed only after the proper permit is issued. The remedy here is a call to city building and safety: (310) 285–1119.
• Managers rent illegal units or unlawfully rent them for short-term periods. No surprise here: spaces unpermitted as housing are not lawful to rent as housing. A tenant who is forced out of an unlawful unit will be owed relocation fees for the involuntary termination too. The law bars retaliation for reporting an unpermitted unit. On a related note, cash rent cannot be required except under very specific conditions.
• Managers cannot engage in ‘constructive eviction.’. The law forbids the maintenance of conditions that appear calculated to encourage a voluntary vacation of the unit. This includes excessive noise or other unregulated environmental conditions and unaddressed pest or vermin infestation. This can be a criminal violation; the tenant’s remedy is provided by the city prosecutor.

Unfortunately we do have owner-operators who are capable of harassment, vindictive treatment and worse. In Beverly Hills, scant regulation and zero sanctions have let some bad practices persist and on occasion they seems baked into the landlord-tenant relationship with some owners.

What Do Landlords Say

The landlords’ answer this problem was to suggest hiring additional code enforcement inspectors. That is a doubling-down on the current system but one that has largely failed tenants who suffer problematic management. Local remedies are elusive because our rent stabilization ordinance says little about those practices. Remedies come through state Superior Court when they come at all.

Landlords themselves obliquely acknowledged the city’s limited regulation on management practices when they suggested to tenants at this summer’s roundtable dialogue:

• “Hire a private attorney…they want to do it on contingency, like personal injury.” But landlords know that bringing a civil action is impractical for many tenants, and simply not affordable for some. Attorneys are not lining up for cases on contingency because the potential damages are too scanty to motivate them.
• “Talk to a legal aid organization.” These organizations means-test, which would exclude many, if not most, tenants in Beverly Hills. Few legal aid clinics today take new clients because they’re swamped with more pressing evictions and discrimination cases.

And the most disingenuous suggestion among them: “take it to the city attorney.” Known to them is that our city attorney does not bring civil actions on behalf of tenants. Even a potential criminal action faces an uphill climb with the city prosecutor because Beverly Hills has has enacted no local ordinance that would provide a basis for enforcing bad management practices.

Heck, our city attorney and city prosecutor are not even city staffers: we outsource it!

Other Cities Suggest an Alternate Approach

Santa Monica takes a different approach: Municipal Code Chapter 4.56 (Tenant Harassment) prohibits misrepresentation, deceit or concealment by a landlord. Landlords are also explicitly prohibited from threatening tenants “by word or gesture” or violating the tenants’ privacy under that ordinance.

City of Los Angeles looks to head off the most common complaint: substandard property maintenance. The city conducts its own unit inspections every four years so the landlord knows he has to meet the basic rental housing standard under the law. The inspections take out of the tenant-landlord relation a source of tension.

West Hollywood mandates the replacement of interior fixtures, paint and furnishings every seven years, which obviates a common tenant inquiry to Beverly Hills City Hall: units that never see any investment in renewed furnishings. In West Hollywood, if the landlord does not comply then tenants know to request a rent reduction.

But here in Beverly Hills, landlords enjoy a relatively laissez-faire environment. We have no local habitability standard (yet) and no ordinance would mandate the renewal of interior furnishings. Our city conducts no housing inspection!

There is No Excuse for Unprofessional Property Management Practices

City of Los Angeles conducts property management education seminars to reach smaller mom-and-pop operators who don’t have the resources or experience of the larger operator. (Why doesn’t Beverly Hills offer that too?) But there exists many resources for owners to learn how to profitably and professionally manage the property.

A mom-and-pop owner need only pick up a copy of ’Every Landlord’s Guide to Managing Property,’ which bills itself as “the ultimate property management guide for the do-it-yourself landlord.” Nolo Press publishes a Rights and Responsibilities guide that is chock full of good guidance.

There is a whole industry association dedicated only to professional management practices: the National Association of Residential Property Managers. The mission: “Resources for residential property management professionals who desire to learn, grow, and build relationships.” It has established sound management practices courses for landlords and even certifies for ‘Residential Management Professional’ and ‘Master Property Manager.’

NARPM also publishes a Code Of Ethics and Standards Of Professionalism that should be required reading. For example:

The Property Manager shall endeavor to eliminate, through the normal course of business, any practices which could be damaging to the public or bring discredit to the profession… The Property Manager shall comply with all relevant local and state ordinances…[and] shall not exaggerate, misrepresent, misinform, or conceal pertinent facts in the advertising, leasing, and management of property. – NARPM Code Of Ethics and Standards Of Professionalism (2016).

Ignorance is no excuse for management practices that violate the law and cause no end of grief to tenants who uphold their end of the agreement: they pay the rent!