Friday, September 11, 2015

California Appeals Court: Owner's Use Of Bad Faith "Move-In" Eviction Notice To Initiate Buy-Out Negotiations To Strong-Arm Long-Time (28 Years) Tenant To 'Volunatarily' Vacate Premises Nothing More Than "Landlord's Transparent Attempt To Circumvent" Local Rent Control Regulations

From an Opinion Summary from Justia US Law:
  • Mak owns a Berkeley[, California] rental property with four apartments. In 2012 Mak served on Burns, a tenant for 28 years, a 60-day eviction notice, asserting that Mak intended to occupy the apartment.

    Two months later, Mak and Burns entered a written agreement under which Burns agreed to vacate the apartment, stating that Burns was not doing so pursuant to the 60-day notice, and that such notice “shall upon occupant vacating, be conclusively deemed withdrawn.”

    Burns vacated the apartment and months later the Maks rented the unit to new tenants (Ziems), at more than double the rent that Burns had paid.

    In response to Ziems’s application to the Rent Stabilization Board to lower the permissible rent to that paid by Burns, Mak contended that Burns had voluntarily vacated, so that under the Costa-Hawkins Rental Housing Act, Civil Code 1954.50, the Board was prohibited from limiting the rent at the commencement of the new tenancy.

    The Board(1) and the trial and appeals courts rejected the “landlord’s transparent attempt to circumvent” rent control. The Act creates a rebuttable presumption that a tenant who moves out within one year of service of an owner move-in eviction notice has moved out pursuant to that notice. Mak failed to present evidence overcoming the presumption.
Source: Opinion Summary - Mak v. City of Berkeley Rent Stabilization Bd.

For the court ruling, see Mak v. City of Berkeley Rent Stabilization Board, No. A143671 (Cal. App. 1st Dist. Div. 3 September 2, 2015) (Certified for Publication).

Representing the new tenants (ie. the Ziems) who were illegally gouged by the scheming, double-talking landlord for more than double the permissible rent was the East Bay Community Law Center, the community-based component of the Clinical Program of the University of California - Berkeley's Boalt Hall School of Law, where, under the supervision of its clinical instructors, law students provide direct legal services to low-income clients and community groups in Alameda County, California.

(1) From the California appeals court ruling:
  • The Rent Board decision recites substantial evidence that Jason Mak never intended to occupy the premises and that the sequence of events preceding Burns' departure "is squarely within that described in the legislative history of Regulation 1016; specifically, an owner notifies a tenant of their intent to end the tenancy for the owner or a relative to move in, and a tenant who initially refuses to move ends up negotiating a move-out agreement with the owner if an eviction proceeding is begun.

    Then, the owner rents the vacated unit at market in the belief that the tenant `voluntarily' vacated the unit." Here, the decision continues, "It is true that Ms. Burns willingly agreed to move out for a certain sum of money. What hasn't been shown, however, is whether there would have been an agreement at all had the [Maks] not set things in motion by informing her that owner Jason Mak intended to reside in her unit. As to that question, no testimony or other evidence was presented. In fact, the evidence presented suggests otherwise."

    As both the Rent Board and the superior court recognized, Regulation 1016 is a reasonable means of discouraging a landlord from evicting a tenant based on the false representation that the landlord or a family member intends to occupy the premises, and then re-renting the premises at a higher rental rate than could have been charged to the former tenant.

    The record amply demonstrates that this is what occurred in the present case. When Burns agreed to vacate the premises and to enter the agreement undoubtedly prepared by Maks' attorney, she had no reason to believe that the Maks had misstated their intentions and that her eviction was not authorized by the Berkeley ordinance. Nor did she have any reason not to sign the agreement acknowledging that the notice of termination would be withdrawn if she vacated and accept the substantial cash payment offered her by the Maks. Burns had no reason to doubt that if she did not sign the agreement she would still have been required to vacate the premises, without receiving the cash consideration; indeed, the agreement expressly provides that the termination notice would be withdrawn only if she did vacate the premises.

    Under the circumstances, the termination notice inevitably was a significant factor causing Burns to agree to the termination of her tenancy. The finding that the tenancy was terminated pursuant to the termination notice can hardly be questioned, notwithstanding the attempt to mischaracterize the situation in the agreement that Burns agreed to sign. Maintaining the rent level of the former tenant is a rational and proportional deterrent to the use of such an artifice in the future.


    The judgment is affirmed. The Rent Board and the Ziems shall recover their costs on appeal.

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