Public health scare concerning for the rental housing industry
Bornstein Law certainly does not want to be part of any hysteria surrounding the continued spread of the coronavirus, but there are some serious concerns for the rental housing industry that must be addressed.
We were looking forward to announcing an April event at the Fort Mason Center, but that gathering has been put on ice. Instead, we are left talking about the most rudimentary of duties for a landlord - to protect life and limb.
UPDATE: San Jose move to ban coronavirus-related evictions
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It should go without saying that the paramount goal of owners and property managers is to ensure the health and well being of employees, and the tenant community. This is no more important during a season of increased flu activity and the enlarged public health concerns over a novel strain of COVID-19.
We are encouraged that there is no shortage of educational resources to share information about the coronavirus, and while the agency is not attempting to cite a state of panic, HUD has encouraged multifamily owners, agents, lenders, and public housing authorities to educate people on how to stay safe during the pandemic.
We have written quite a bit about Ben Carson on our blog, someone who has fundamentally re-sculpted fair housing policies and Section 8 in particular, but as the most qualified pediatric neurosurgeon to ever run HUD, he has been inserted into a role of managing and mitigating the coronavirus pandemic.
Restraint is in order when raising rents
Tragically, wildfires have become the new normal and have triggered price-gouging bans and the reasoning behind this is obvious. During a time of need, people should come together and not exploit vulnerable individuals who are down and out. Under Penal Code Section 396, rent hikes of 10% or more are prohibited during emergency declarations.
Although the Attorney General has said that price-gouging bans will be enforced throughout California and not just in fire-ravaged areas,some rental property owners have gotten a false sense of bravado when rent increases occur in locales that have not been incinerated. Enter the coronavirus, which is much more pernicious and clearly not limited to a scorched area, and so we expect these bans on exorbitant rent increases to be enforced more liberally.
We have always advised owners and property managers to consult our offices when these types of massive rent increases are contemplated, but it is especially important to get informed guidance due to increased scrutiny.
Although many of our clients are hamstrung to raise rents because they are subject to local rent control rules, it may be tempting for some of you to raise rents to the tune of double digits if the unit is exempt, or if you can rely on capital improvements and other “passthrough” costs. Before you do, please reach out to us first.
San Francisco's City Attorney's office has put landlords on notice that it will prosecute offenders of anti-price gouging laws under Section 17200 of the California Business and Professions Code, which is generally viewed as California’s main consumer protection law. Other officials throughout California have echoed the disfavor of massive rent increases in a state of emergency.
RELATED FROM OUR BLOG: Price gouging bans on rental units amid an emergency declaration
Common sense prevails
Owners and property managers should enact enhanced cleaning protocols in common areas and encourage tenants to use the best practices in sanitizing, but the sky is not falling. Ordinarily, it is prudent to clean and disinfect areas where people congregate, and we just advise landlords to be more mindful and diligent.
Parting thoughts
We have weathered many storms at Bornstein Law and Bay Property Group, though nothing biological in nature. We have full trust in our medical professionals and scientists, and take a deep breath. Elderly tenants and especially elderly tenants with pre-existing medical conditions are at risk of complications, but the vast majority of healthy individuals will be just fine.
This, too, shall pass.