Hypo Friday: Larry Landlord Retires from the Game.

Years and years of collecting rent, making repairs and dealing with tenants have taken their toll on Larry Landlord.  He and his wife Lisa have decided that it is best for him to retire from the landlord/tenant game and focus on his hobby of building model helicopters.  Trouble is, they like the income they are getting from the rental and want to keep it coming. 

Larry finds out from a friend of his who works at Global College that they are looking for a building to convert into a dormitory for their international students.  The area in which they are looking is serendipitously within miles of Larry's property.  Larry approaches the dean of Global College and they strike a deal to pay Larry to transform Larry's building into a dormitory.

Q: Can Larry pull his property off of the rental market?

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A: Yes.  Larry has two options for repurposing his property:

1. He can make deals with each of the individual tenants and have an attorney draft a Voluntary Vacancy Agreement to make the deal official; or
2. He can follow the procedure prescribed by California's Ellis Act.

The first option, a Voluntary Vacancy Agreement, allows landlords and tenants a lot of flexibility.  Agreements can include anything from free rent to time to relocation payments.  This option is preferred by most parties because it affords them the ability to craft an agreement that is tailored to their needs.

The Ellis Act is a longer process that requires precision in following through each of its steps.  The steps are as follows:

a.    Complete and record the Memorandum Summarizing Non-Confidential Provisions of a Notice of Intent to Withdraw Units from Rental Housing with the County recorder.

b.   File a Notice of Intent to Withdraw Units from Rental Housing Use and the certified, stamped copy of the Memorandum described in step a with LAHD.  

a.    NOTE:  All tenants will be eligible for receiving relocation fees.  Some tenants may be considered “Qualified” if they have one or more children living with them, are disabled, are low-income or are seniors.  Qualified tenants are more costly to relocate. 

c.    Serve tenants with a notice terminating their tenancy.  They must have at least 120 days notice from the date you filed the Notice of Intent to Withdraw with LAHD.

d.   Complete and serve a Notice to Tenant of Pending Withdrawal for each unit.    Serve them concurrently with a blank Notice of Interest in Renewing Tenancy.  Noticing must take place within 5 days of filing the Notice of Intent with LAHD.

e.    Place relocation funds for each unit in escrow for said tenants within 15 days of serving tenants with the Notice to Terminate Tenancy.  

f.     Tenants will have 60 days from service to fill out their Notice of Interest in Renewing Tenancy and send it to you.  You will then have 30 days to provide LAHD notice of their claims.

g.   If tenants do not move within the allotted 120 days, they will not receive their relocation fees and will be subject to eviction by court proceeding.

The attorneys at The Rad Firm, APC can help you navigate through the process of repurposing your rental property. Call us today to find out the right option for you and your investment.

The Rent Race: Rents Continue to Rise in the Nation's Largest Cities

LA Weekly has published the most recent stats regarding rising rents in some of the nation's largest cities and the results are somewhat surprising.  San Francisco continues to top the list as number one - proving that the tech industry is alive and well.  San Diego, however, is a wildcard popping in at number two.  Why do you think there is such growth in San Diego?

Want to know how LA's rental market stacks up?  Read on here.

http://www.laweekly.com/informer/2014/06/05/yes-rents-in-la-continue-to-increase

Southward Bound: SOLA Village is Coming to Downtown LA

While other investors are moving west, one particular investor is heading south.  This Downtown LA live-work-play development is sure to bring more yuppies to the already blossoming scene.  See the link here for more details regarding the development.

Hypo Friday: Harriet Hoarder

Larry Landlord owns a duplex with a long term tenant, Harriet Hoarder.  Larry gets word that the Los Angeles Housing Department is requiring installation of carbon monoxide detectors in all rental units.  Not wanting any trouble, Larry buys some carbon monoxide detectors and knocks on the door of Harriet to do the install.  Harriet is surprised and asks that he come back after giving her more notice.  Larry apologizes for being over-excited about the detectors and comes back the next day instead. 

Once inside the unit, Larry is hit with a horrid stench of feces, urine and trash.  He looks around and sees piles of belongings everywhere.  He manages to wades through the mess to get to the kitchen and do the install.  He gets the detectors functioning as fast as he can and escapes from the smelly unit. 

1) How much notice should Larry have given Harriet before the first attempt to enter the unit?

2) What kind of notice should Larry give Harriet in order to evict her?

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Most landlords will be in Larry's shoes at least one time during their careers.  Hoarding is a mental illness that can render a good, paying tenant a nuisance.

1) Larry should have given Harriet at least 24 hours notice prior to attempting to enter her unit unless there is a provision in the lease agreement to the contrary.  Notice should be given in writing by either handing the notice to the tenant, handing it to another adult occupant in the unit or posting it on their door.

2) Harriet's living conditions are a health hazard and fire hazard.  Larry should give Harriet a Three Day Notice to Perform or Quit so she can clean up her act.  If she does not clean up, she will be subject to eviction upon the notice's expiration.

The Los Angeles Rent Stabilization Ordinance has strict notice requirements.  The attorneys at The Rad Firm, APC can help you craft a bullet-proof notice that is crafted for your situation.

A safer choice for email?

Privacy is a constant concern in this day in age. From Facebook's continuous privacy policy changes to recent reports that that the NSA was placing spyware on hardware sent overseas. In response to these privacy concerns, Andy Yen and others created ProtonMail. ProtonMail is an email service that is similar to Gmail's system, but provides end to end encryption ensuring emails are in fact private.

Would you consider switching your email provider for a more secure email system?

Leave on Me: Pregnancy Leave

We're back with Part 4 of Leave on Me, our exploration of leave of absence law.  In this installment we discuss pregnancy leave. Becoming a mom is an exciting time in a woman's life. The last thing that an expecting mother needs to worry about is potentially losing her job because she needs to take time off for her pregnancy.

As mentioned in Part 2 of Leave on Me, the Family Medical Leave Act (FMLA) does consider pregnancy a serious health condition that will qualify for leave. The California Family Rights Act (CFRA), however does not consider pregnancy a serious health condition. Rather, in California there is the Pregnancy Disability Leave (PDL) which covers leave for expectant mothers.

While FMLA and CFRA only applies to employers with 50 or more employees within a 75 mile radius,  PDL covers employers with 5 or more employees.  PDL allows for up to 4 months leave for disability caused by pregnancy, childbirth or related medical conditions. Related medical conditions includes prenatal visits, intermittent leave, reduced work schedule, postpartum depression, & loss or end pregnancy. PDL offers the employee the right to return to her same job, as opposed to FMLA or CFRA which gives the employee the right to the same or comparable job.

While CFRA does not consider pregnancy to be a serious health condition, CFRA does allow for baby bonding time. An employee could therefore 4 months of PDL during the pregnancy and then take 12 weeks of CFRA subsequent to the birth. In specific instances, a pregnant employee may be allowed to take her CFRA baby bonding time during the pregnancy but only if the following requirements are met:

1. The employee has exhausted her PDL; and 
2. The employer and employee voluntarily agree to allow her to take her CFRA early.

If you have any questions about pregnancy leaves of absence call the attorneys at The Rad Firm, APC for a free consultation. 

Los Angeles Times: Apartment Construction Surges Across the Southland Amongst Rising Rents

 The LA Times reports that the Southern California economy is beginning to show signs of recovery and many developers are jumping to build more housing for the city.  Will the influx of apartments dilute the market or will the market catch up to the influx?

Hypo Friday:Peter and Pickles

Larry Landlord rents an apartment to Peter.  Peter has one dog, a pug named Pickles.  Larry agrees to Pickle living in the unit.  He has Peter sign a lease agreement with a provision that allows for one dog and requires a $500 security deposit.

Six months later, Peter starts working longer hours and feels like Pickles has lost his pep.  He adopts a chihuahua, Gherkin, to keep Pickles company.  He does not tell Larry about having a second dog.  

A week later Larry sees Gherkin through Peter's window while collecting the rent.  He shrugs his shoulders and accepts the rent without saying a word to Peter.

After four months, Larry's wife, an avid cat lover, finds out about Gherkin and chastises Larry for letting Peter have two dogs on the premises.  She demands that Larry evict Peter.

1) Can Larry evict Peter?

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Yes and no.  Larry could evict Peter for violating a term of the lease.  However, a big issue that will come into play is the waiver defense.  Peter will argue that Larry ratified his behaviour by continuing to take the rent even though he knew about Gherkin.  Whether Peter detrimentally relied on Larry's behavior is a fact to be determined by the court.

The Rad Firm, APC can counsel you so that you do not make Larry's mistake.  If you have any questions about managing your property, contact us.

No Thumbs Up Here: Why You Shouldn't Share Everything on Facebook

After settling an age discrimination and retaliation case for $80,000, Patrick Snay's daughter took to her Facebook page, as most young adults today do to celebrate. Snay was the former headmaster at Gulliver Prep School in Miami, Florida.  The teen posted, " Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT." Needless to say Papa Snay's former employer didn't exactly "like" Little Snay's status and within 4 days of signing, Gulliver informed Papa Snay that he breached the agreement.

As in most settlement agreements, Snay's agreement contained a confidentiality clause. The actual language of the confidentiality agreement stated, "...[T]he Plaintiff shall not either directly or indirectly, disclose, discuss or communicate to any entity or person, except his attorneys or other professional advisors or spouse any information whosoever regarding the existence or terms of this Agreement...A breach...will result in disgorgement of the Plaintiffs portion of the settlement Payments." Little Snay's Facebook post was shared 1200 of her closest Facebook friends, including several former and current Gulliver students.  While Gulliver did pay Papa Snay's attorneys their portion of the settlement, they refused to pay Papa Snay due to the breach.  After seeking to enforce the agreement, an appellate court found against Papa Snay stating, "It is axiomatic that the clear and unambiguous worlds of the contract are the best evidence for the intent of the parties." Gullive Schools, Inc. v. Nay, 121 Fair Empl. Prac. Cas. (BNA) 1421, 2014 WL 769030 (Fla. 3d DCA 2014).  The breach was established when Papa Snay informed Little Snay that he settled the case, not when she shared it with her friends. Needless to say confidentiality sections aren't just for show and can result in real consequences, especially with teenagers.

LA County's Jail System

We are not criminal attorneys but we ARE citizens of Los Angeles. Our office is in the heart of Downtown Los Angeles - just a stone's throw away from Skid Row. We feel compelled to share this story about another facet of our justice system. 

LA's New Entrepreneur in Residence Program Launches

On Monday May 2, 2014, Mayor Eric Garcetti announced the inaugural run of the Entrepreneur in Residence Program. The program lasts for one year and the entrepreneurs chosen will focus on building the economy and creating jobs in the in the city of Los Angeles.

This year's entrepreneurs are Krisztina "Z" Holly and Amir Tehrani.  Holly is the creator of the very first TEDx in 2009 entitled TEDxUSC, the founding executive director of Deschpande Center for Technological Innovation at the Massachusetts Institute of Technology and an advisor to the Obama administration and the world economic forum.  Tehrani served as a US Delegate to the G20Y summit in France, co-chair of the G20 Summit in Washington DC, a founding board member of HUB Los Angeles and Co-Founder of the Legacy Foundation. We can't wait to see what these dynamic entrepreneurs will bring to the city of Los Angeles.

From Wash Rags to Riches: Downtown Los Angeles Carwash Owner Makes Big Bucks on his $500k Investment

The LA Times has reported that a one-time carwash owner is now a multi-millionaire.  No, this isn't the story of Walter White from Breaking Bad, it is a preview of great things to come for Downtown LA investors.  With all of the development, do you think he sold too soon?  Check out the full story by clicking here.

The Largest Tech IPO Yet? Alibaba hopes so.

This may be the big one. Alibaba Group filed papers today with the SEC to begin the IPO process. This IPO is estimated to be exceed $16 billion, eclipsing Facebook's IPO as the largest tech public offering. It's been reported that the mega retailer accounts for 80% of e-commerce in China. While mostly known for e-commerce, Alibaba entered the cloud computing business in 2013 and intends to remain in the arena after it's IPO is completed. Check out Alibaba's filing papers for yourself.

What are your thoughts on this new IPO?

Think Globally, Act Locally: Lessons Learned from the NAI Capital, Inc. 2014 Global Market Outlook Conference

Today, I donned my business finest and made my way to the Beverly Wilshire Hotel for the NAI Capital, Inc. 2014 Global Market Outlook Conference.  I was invited to the event by a NAI Capital broker who is near and dear to me so I thought I would show my support.  I was pleasantly surprised that not only did the "continental breakfast" include quiche, but also that a global outlook could have application to myself and my clients who are local to Los Angeles.

The conference was held in a panel format featuring NAI Capital's chief economist, Dr. Peter Linneman and NAI Capital's Executive Managing Director of International business, Mauro Sarmiento.       Both gentlemen are tremendously accomplished in their field and have travelled the world to bolster their strong roots in academics with real world experience.

Take homes: 

1) What is going on across the world can affect investment here at home.

The panelists began their discussion of the global state of affairs by focusing on the most topical international crisis, Crimean conflict.  They emphasized that even though many Americans could not pick out Crimea on a map, the conflict can have an effect on our national economy.  The conflict chiefly impacts domestic companies that are invested abroad and are not insulated from embargoes.  This quandary hearkens back to the never-ending debate over the U.S.'s responsibility to police the world.

2) If you want to see your capital grow, you need to go where other investors aren't going.

Foreign investors only want to invest in cities with names they have heard.  London, New York city, and Washington, D.C. are all highly coveted domestic cities for investors but while there is capital going into these cities, the return is not high.  If you are investing domestically but want to be ahead of the market, consider investing in Texas or Virginia where housing is cheap and business taxes are low.

Note: Los Angeles did not make the list of highly coveted domestic cities for investment.  The panelists argued that this is because growth has stunted for the California economy.

3) California is its own worst enemy.

Growth in California has plateaued because of high business taxes and rising home prices.  California has some major businesses present but all of them boast a negative cash flow.  If California would like to rise to its former status, it will need to strongly consider cutting taxes and creating more affordable housing.

4) Low interest rates are not always a good thing.

Low interest rates are helpful to home buyers but still detriment the economy.  Low interest rates mean low rates of return on investments, loans and savings accounts.  Dr. Peter Linneman stated that the fed must increase interest rates to drive up investment.

Don't agree with the panelists?  Comment on this post and let us know your thoughts!

Leave on Me: Reasonable Accommodation and The Interactive Process

Happy Cinco de Mayo all! This is our third installment of Leave on Me, our series on leave of absence law. Last week we discussed FMLA and CFRA and the requirements to qualify for either of these leaves of absence.  This week we will delve into reasonable accommodation and the interactive process. For more info on the basics of leave of absence law, make sure to check out week one here. 

Generally, reasonable accommodation and the interactive process come into play when an employee has a disability. In the context of this series, we are approaching both of these concepts from the perspective of an employee returning from a leave of absence.  Title I of the Americans with Disabilities Act ("ADA") requires that an employer provide reasonable accommodation to qualified employees or applicants for employment, unless to do so would cause an undue hardship. To determine whether a reasonable accommodation is something that is viable, an employer has an obligation to engage in the interactive process with the employee. The interactive process generally consists of a sit down meeting with the employee and management to determine what type of accommodations the employee will need to perform their job duties. This meeting, however, requires more than just an employer talking at an employee. It is called the interactive process for a reason. There should be an honest dialogue where the employee can discuss exactly what their limitations are and the employer can discuss just how much they can accommodate them. 

A reasonable accommodation can look like a variety of scenarios; an extended leave, part time work, limitations of physical duties. The employer is required to do research on what type of reasonable accommodations could work in a particular employee's situation. The reasonable accommodation requirement balances the interests of the employee maintaining their employment with not placing an undue hardship on an employer. An undue hardship generally means significant difficulty or expense and focuses on the resources and circumstances of the particular employer. The employer is not required to waive essential job functions of the position, including lowering or waiving productivity standards consistently applied to all employees in the position or creating a new position for the employee. 

To better illustrate exactly how the process works let's try an example. Bill has been an employee of Acme Limited for 10 years as an accountant. Acme Limited has 400 employees and is based in Los Angeles, CA. Bill was diagnosed with cancer and informed his employer that he would need to undergo at least four rounds of chemotherapy. Acme's Human Resource department informed Bill that he was entitled to FMLA/CFRA Leave and provided him all of the requisite notices. Bill took the full 12 weeks off for his treatments. At the end of the 12 weeks, Bill's doctor released Bill back to work but with certain restrictions. Bill was not to work more than 5 hours a day due to the side effects of his treatments.  When Bill returned to work he had a meeting with Human Resources where he explained his current physical state and Human Resources agreed to comply with Bill's restrictions, though he did not have any additional leave available. Bill was therefore able to receive a reasonable accommodation after going through the interactive process. 

If you have any questions regarding reasonable accommodations or the interactive process contact the Attorney's at The Rad Firm, APC. 

Foursquare Divides Into Two

Often times we see the large tech companies purchase or absorb smaller companies to build their overall brand and portfolio. Today Foursquare decided to do something a little different when it announced that it will be dividing the popular app into two separate apps. The first of these apps is called Swarm, an app that allows users to find nearby friends. Swarm allows users to still check-in to locations like good 'ol Foursquare was known for. Foursquare itself will be revamped and unveiled in its new form in roughly a month. The new Foursquare will no longer allow for check-in capabilities, but rather will present itself as a competitor to Yelp. 

What are your thoughts on this new change to a giant in the social networking game?

Hypo Friday: To Tell or Not to Tell?

  On a sunny Sunday, Chris Brownstone and Brihanna were making their way toward a party when they got into an argument.  They turned back home and carried on the argument in their apartment for all of their neighbors to hear.  They had gotten into it before, but this time, they got violent.

  A neighbor heard Brihanna cry out, "I am friends with the monster that's under my bed" and called the police in fear for Brihanna's safety.  The police arrived at the apartment complex within minutes to break up the fight.  They arrested Brownstone and took him to jail.  Larry Landlord heard about the incident and was alarmed but did not yet move to evict Brownstone.

  One day later, Brihanna called her friend D. Rake to help her gather her items and move.  She was anxious but D. Rake reassured her, "Just hold on, we're going home."  Brihanna finished packing her belongings and moved out.

  Brihanna decided not to press charges against Brownstone and instead recorded a scathing song with rapper, Skittle to get her revenge.  Brownstone was released from jail.

  When Brownstone returned to his apartment, he began the process of finding a roommate to supplement the rent.  He finally found Smiley Skyrus and she submitted her paperwork to Larry Landlord for processing. 

  Larry Landlord processed Skyrus' credit and approved of her moving in with Brownstone.  Just when Larry Landlord called Skyrus to give her the good news, Skyrus asked him, "So, I sort of came in like a wrecking ball and met Brownstone on Craigslist...what do you know about him?"

Q) Does Larry Landlord have an obligation to tell Skyrus about Brownstone's violent altercation?

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A) YES.  Larry Landlord has an obligation to tell Skyrus about the existence of a police report related to a roommate altercation.

  A landlord has a duty of care to protect his or her tenants from harm.  More specifically, a landlord is required to disclose "latent defects" or dangerous and defective conditions within the leased premises that would not be obvious to a tenant.  This duty to disclose extends from providing the obvious lead paint disclosure to providing information about a potentially violent person on the premises.

  In Hamida Madhani v. Glenn Cooper (2003) Cal. App. 4th, 412, the court held that a landlord has a duty of care to protect a tenant from foreseeable future assaults of a co-tenant.  Madhani had repeatedly complained to her landlord about being physically assaulted by her neighbor but the landlord failed to evict the neighbor.  As a result, Madhani sustained yet another harmful beating and sued her landlord for negligence.  The court held that it was reasonably foreseeable that the neighbor would assault Madhani again and that the landlord had a duty to protect Madhani. 

  Our hypothetical is a bit different than the Madhani matter because there isn't a string of violent altercations about which Larry Landlord knows.  Larry Landlord only knows that there was some sort of fight and that the police responded to that fight.  However, Skyrus' very general question regarding what Larry knows about Brownstone opens Larry up to liability should he fail to tell her about the existence of a police report.  Larry does not need to get into details, but he should at least tell Skyrus about the police report to insulate himself from liability should another altercation ensue.

  If you have questions about your disclosure requirements, contact the attorneys at The Rad Firm, APC for guidance at (310) 461-3766.

Forget $9! Seattle plans for a $15 minimum wage.

The minimum wage debate has been in the forefront of everyone's minds lately. Check out Seattle's planned changes for minimum wage.

Leave on Me: FMLA & CFRA

Welcome back for part two of Leave On Me, our series exploring leaves of absence and the laws that surround them. Last week we discussed the basics of leave law. This week we are discussing the major players of leave law: FMLA and CFRA. The Family Medical Leave Act (FMLA) is a federal law that sets out protections for employees with serious health conditions, or employees whose specific family members have serious medical conditions. The California Family Rights Act is the state equivalent to FMLA.

Which employers and employees do FMLA and CFRA apply to?

As mentioned last week, FMLA and CFRA only applies to employers with 50 or more employees within a 75 mile radius. Employees must have been employed by a covered employer for at least 12 months.  Here is where we meet our first distinction between FMLA and CFRA.  For FMLA, the employee must have worked the employer the previous 12 months prior to their leave.  CFRA, however, simply requires that the employee have worked at least 12 months for the employer.  Both CFRA and FMLA require that the employee worked at least 1,250 hours during that previous 12 months to the leave. Once it is established that an employee has satisfied those requirements, it must be determined whether the employee is entitled to FMLA or CFRA.

What is a serious health condition?

An employee, under FMLA, may only take a leave for a serious health condition. A serious health condition is defined as an illness, injury, impairment or physical or mental condition that involves inpatient care (defined as an overnight stay in a hospital, hospice or residential medical care facility; any overnight admission to such facilities is an automatic trigger for FMLA eligibility) or continuing treatment by a health care provider. Some of the examples of a serious health condition include:

• Incapacity For Three or More Days Plus Continuing Treatment: Continuing treatment by a health care provider that results in either: 
  • An incapacity of more than three consecutive calendar days with either two or more in-person visits to the health care provider within 30 days of the date of incapacity; or 
  • One in-person visit to the health care provider with a regimen of continuing treatment. 
  • Both scenarios require that the first visit to the health care provider must occur within seven days of the first date of incapacity.
• Incapacity Due to Chronic Serious Health Conditions: Chronic conditions that require periodic visits to a health care provider, continue over an extended period of time and may cause episodic rather than continuing periods of incapacity of more than three days. Examples of chronic conditions include asthma, diabetes and epilepsy.
• Incapacity for pregnancy or prenatal care: Can include morning sickness and routine prenatal care doctor's visits.
• Permanent or Long Term Incapacity: Examples are Alzheimer’s, severe stroke or terminal disease.
• Conditions requiring multiple treatments and recovery from treatments: Examples include cancer, severe arthritis and kidney disease.
• Inpatient Services: Wherever treatment requires an overnight stay at a hospital, hospice or residential care facility. This can include treatment for substance abuse by a health care provider or by a provider of health care services on referral by a health care provider.

  Another distinction between FMLA and CFRA is that pregnancy is not covered by CFRA. Pregnancy is considered a serious health condition under FMLA. California does however offer Pregnancy Disability Leave (a topic we will explore in a future post) which offers up to 3 months of leave for pregnancy. Leave due to the birth, adoption or placement for foster care of a child does not require medical necessity or any period of incapacity. FMLA and CFRA leave is available for bonding with the baby/child.

Who is covered for a serious health condition?

FMLA and CFRA cover the a serious health condition for an employee or the employee's spouse, parent, or child. CFRA also covered, registered domestic partners.

How much leave can an employee get? 

FMLA and CFRA allow an employee up to 12 weeks of unpaid leave.

Notice

The notice requirements discussed last week, apply to both CFRA and FMLA. Check them out 

Be sure to check back next week as we explore Reasonable Accommodations and the Interactive Process.

If you have any questions contact The Rad Firm to discuss your situation.

Hottest LA neighborhood for Millennials

The LA Weekly explores the newest hot spot for millennials to live in LA.