AAOC Legislative Committee Vs. Bad Legislation

AAOC Legislative Committee Vs. Bad Legislation

A Recap of Our Recent Lobbying Trip to Sacramento

By: Nicholas A. Dunlap

As Californians, we are burdened with overregulation in contrast to neighboring States.  As an industry, apartment owners and operators in the Golden State face even greater regulation in addition to constant threats from Legislators.  It is important for us to interact with our lawmakers and remind them who we are, what we do and how these issues impact and affect our business.  On April 25^th, AAOC visited our State’s Capitol in conjunction with the National Apartment Association, San Diego County Apartment Association, Apartment Association California Southern Cities, Apartment Association Greater Los Angeles, Santa Barbara Apartment Association, East Bay Rental Owners Association and Northern California Rental Property Association to discuss and advise on four bills currently pending in the Senate & Assembly.  In total, we had over 100 representatives of the aforementioned associations present.  Needless to say, we had our hands full. 

Apartment owners are constantly under attack and we effectively utilized our strength in numbers to represent & defend the property rights of apartment owners of all sizes.  AAOC Legislative Committee members Alan Dauger, Nicholas Dunlap, Ray Maggi, Rick Roshan and John Tomlinson had a busy day meeting with more than 12 elected officials.  Please read on to see some of the bills we worked to prevent from becoming laws.     

Legislators Want Free Rent For Your Tenants

 

Two of the more disturbing bills that we opposed actually wanted to give your tenants free rent.  SB 1191 put forth by State Senator Joe Simitian would require a defaulting property owner to notify prospective tenants of the default prior to renting to them.  The penalties for failing to notify prospective tenants of the impending default are equal to two months of rent for every month not notified.  So, your prospect rents an apartment, moves in for two months and then decides that he or she wasn’t notified and BAM! That’s four months of free rent you would owe your tenant.  We see this bill as a landlord’s worst nightmare.  Imagine you buy a building that had been foreclosed on and all of a sudden, you become liable for the months of free rent owed to tenants who had not been notified of the previous foreclosure.  Even if the tenant had been notified, by the time you go through two owners (the bank and current owner which is a six month process), a tenant could possibly forget.  In this case again, the burden of proof is on the landlord.    

The required disclosure would affect the unit’s marketability, ultimately resulting in higher vacancy, decreased income and would effectively expedite the foreclosure process.  The other free rent bill, AB 1953 carried by State Assemblyman Tom Ammiano would require tenants to be notified of any change in ownership or management within 15 days of the change.  Now logically, the first thing that you would do as a new owner or manager would be to notify residents of who and where to send their rent to.  Here, landlords are again put on the defensive as this required notification would open up the door for tenants to say “I wasn’t notified.”  The penalty for failing to notify a tenant of where to send their rent? You guessed it: free rent! This would cover any changes in vesting (perhaps from an individual to an LLC) or management company.  If anything, this requirement does exactly the opposite of what it is supposed to do.  That is, it would open up the door to frivolous or fraudulent scam tactics to steal rent from hardworking tenants and innocent landlords. 

Proposed Pool & Smoke Detector Bills Would Require You to Be a “Jack of All Trades”

Not bad enough that you have to arrange maintenance, do a rent survey and market your vacant apartment home for rent, SB 1394 brought by Senator Alan Lowenthal would require you to consult local building code each and every time a tenant vacates so as to ensure you are in compliance with smoke detector requirements at that point in time.  If not in compliance, you would be forced to renovate.  We argued that this is overly burdensome on landlords who have never been forced to upgrade buildings at the time of rent.  Smoke detector technology has not changed in 20 years and yet we are being forced to hold a rentable unit off market until building code can be checked.  This would keep your incoming tenants out of their new home longer and would result in an additional loss of income to you as you sort through the voluminous building code books to ensure your compliance.  Wait, it gets better.  

If you’re like me, you train your resident manager to market and lease apartment homes, keep residents happy and identify maintenance issues before they become problems.  State Assemblyman Michael Allen pushed for AB1726.  This is a bill that would require your on-site manager, leasing agent, maintenance tech or other set of eyes and ears to attend 14 hours of schooling every 5 years to certify them in such tasks as: chemical management, calibration of pool controllers, operation of surface skimmers, etc.  Perhaps the best part about this ridiculous piece of legislation is that the City of Los Angeles previously thought up this concept and then dropped it because it was such a waste of time. 

Now, follow me through some simple math as we review the records of 65,000 pools over a 10 year time period in the proposed legislation.  Described by the legislation, there are 65,000 pools X 3,650 days (that’s 10 years X 365 days in a year) and we arrive at 237,250,000 total pool days.  In that time, there have been just 186 recorded chemical accidents.  That is, there is one accident for every 1,275,537 pool days.  That is just one incident every 3,392 years.  And the new law would require us to attend a class every 5 years? Few would argue we could improve on the current ratio of incidents to pool days.  I certainly would not.  Further proof that our lawmakers just don’t get it. 

We have it pretty good in Orange County but our neighbors in Southern and Northern California manage to keep us busy.  Three of the four Senate and Assembly Bills that we opposed were carried by Northern California Legislators, further pleading the case for a split State.  Joking aside, this is a battle that we will continue to fight and hope to win.

Fortunately for us, we have the power to support and elect the candidates who make intelligent decisions on our behalf.  And fortunately for us, we belong to an Apartment Association that believes in property rights for owners of all sizes and constantly monitors Statewide legislative activity, challenging nuisance legislation on our behalf.