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Real Estate Today

Pretrial Deposit Hasn't Attained Its Noble Goal

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10-Aug-1997 Sunday
(Page H-10 )

Robert Griswold | Steven R. Kellman | Ted Smith
This column on issues confronting renters and landlords is written by Certified Property Manager Robert Griswold, host of KSDO Radio's "Real Estate Today!" (Saturdays, 2-3 p.m., AM 1130) and by attorneys Steven R. Kellman, director of the Tenants' Legal Center, and Ted Smith, principal in a law firm representing landlords.

Q: I am a property manager and have rental units in various parts of San Diego County. The eviction procedures in El Cajon court are different than in other jurisdictions as I can require a pretrial rent deposit to be deposited with the court. I find that there is less abuse by eviction-delay services under this program. I believe that this is just a test. Are they going to continue or expand this program?

A: Griswold: In 1994, the California Legislature passed a law that established an experimental program in El Cajon Municipal Court and a municipal court in the Los Angeles area.

The noble goal was to reduce significant delays and abuses of the unlawful detainer process by tenants and firms that specialized in assisting tenants in filing frivolous answers and other eviction-delaying tactics in exchange for a fee.

Under this pilot program, the landlord can require that the defaulting tenant deposit with the court 15 days prospective rent unless the tenant has already paid the rent through the month the eviction is filed.

The rent must be deposited before the tenant can request a trial. The thought is that this will be effective in eliminating the frivolous delays while being fair to the tenant since the court can return the tenant's rent if the court rules in favor of the tenant.

Of course, the vast majority of trials in jurisdictions without the pretrial rent deposit program result in a default for the landlord as the tenants typically file an answer just to buy an extra two to three weeks until the date of the trial.

The California Code of Civil Procedure section 1167.2 contains the details and even the very specific and lofty goals for this pilot program to be continued. Despite my personal findings -- which are similar to Mr. Kellman's -- that the program has done little good in reaching the stated goals, the Legislature apparently believes that the program is working.

In 1996, the Legislature voted to continue and expand the pilot program an additional year through Dec. 31, 1998.

At this time, the El Cajon Municipal Court remains the only jurisdiction in San Diego County with the pretrial rent deposit pilot program.

Kellman: I share in achieving the goal of reducing frivolous tactics employed solely for the purpose of eviction delay with no intention of defending legitimate rights of tenants or resolving disputes with landlords.

However noble the intention behind this pilot project may be, it simply does not work.

It can actually cause more harm than good. It can unfairly punish a tenant who may have a legitimate case but can not afford to post the "pretrial" rent in court.

This may occur, for example, when the tenant has already paid the rent but the landlord refuses to admit to it or the tenant may receive a notice to pay illegal charges that are not actually owed. The tenant would have to pay up to $500 to have the right to go to court to say he/she does not owe the claimed rent debt -- a hefty entrance fee for a ticket to the courthouse.

Even landlords are hurt by this law. There can be two hearings in this type of case. Tenants, by properly defending their rights through both hearings, will legitimately cause a delay that can make the case take longer than under the old law. Such tactics by the tenant can be warranted since there are several defenses to the requirement to post rent. This law can hurt both landlord and tenant alike, since if the matter is fought at all stages, legal fees and court costs go up for all concerned. This is especially troublesome for landlords since they can not get a money judgment, only possession of the rental unit. Many great defense strategies in these evictions go unused since the major law firms representing landlords in San Diego have apparently chosen not to file cases under this new law.

Q: I live in a small apartment building near the beach. When I signed my 12-month lease and moved in last November I was given one parking space and told that my other vehicle will have to be parked on the street. There was never any problem, but now that it is summer I can't find any parking within six blocks. Besides being a real hassle, I am concerned about my safety as I work late most nights. What are my rights and can I break my lease? Any other suggestions?

A: Griswold: Unless there is specific language in your lease, the landlord is under no legal obligation to provide parking. Thus, I do not believe that the sudden lack of parking close to your rental unit is grounds for breaking your lease.

However, I would suggest that you contact the landlord and explain your situation. Possibly the landlord knows of another tenant who is not using his or her space or who would be willing to rent the rights to that parking space to you at least for the summer.

Also, while not legally obligated, there is always the outside chance that the landlord may be willing to let you out of your lease particularly due to the safety concerns.

Of course, this is the prime rental time for beach communities and they may be able to re-rent your unit and you would only be legally obligated for the rent incurred until the new tenant moves in.

Q: We own a condo and a house that are rental properties. What amount of insurance should we have to protect ourselves if a tenant were to be injured on our property while renting from us?

A: Kellman: It is very wise to have adequate insurance when owning rental property.

A tenant, his guests, even a stranger just visiting the property to make a sales call may become injured on the property and sue for thousands of dollars. There are even situations where a trespasser may sue for such damages. Even if there are no "personal injuries," there may be a suit for losses to personal property (due to some defect in the property, lack of security etc.). The amount depends on how much protection you need to safeguard your assets and also to genuinely cover a legitimate loss for which you may be legally responsible.

In the rental market, $1 million of liability is recommended as a basic policy amount (which, amazingly is not much more costly than a policy with significantly lower coverage). You may even wish a higher limit, although this is generally not necessary. As you go lower than $1 million, however, you enter into the world of increased risk where one severe claim can put you out of business.

Smith: It is imperative for owners of rental property to maintain a sufficient amount of insurance. An owner who is not adequately protected can face catastrophic financial problems.

The main categories of insurance are:

  • Fire and extended coverage. Lenders will require owners to maintain an adequate amount of this coverage.
  • Liability insurance. With the trend toward higher awards against property owners for liability, owners need to take special care to have sufficient insurance protection. So, the more the better.
  • Workers compensation. An injured employee is entitled to benefits without regard to negligence of the employer. The owner is required by law to have workers compensation for all employees. This is not so only if the worker is a true independent contractor with his or her own coverage. Many tenants have the mistaken impression that the rental owner's insurance provides coverage for the tenant's negligence and personal belongings. Generally, except under special circumstances, the rental owner is not legally responsible for loss to the tenant's personal property, possessions, or personal liability.

Tenants should be reminded up front to get their own renters insurance to cover tenant liability and other losses.

If you're a tenant or landlord, the authors stand ready to answer your questions in this column, although letters cannot be answered individually. Write them at: Rental Roundtable, Homes Section, San Diego Union-Tribune, P.O. Box 191, San Diego, CA 92112. Or you may e-mail them at rgriswold@retodayradio.com

Copyright Union-Tribune Publishing Co.

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Robert Griswold and the Real Estate Today! radio show strongly support the intent and the letter of all federal and state fair housing laws.  As a reminder to all owners and managers of real estate, note that all real estate advertised is subject to the Federal Fair Housing Act, which makes it illegal to advertise "any preference, limitation, discrimination because of race, color, national origin or ancestry, religion, sex, physical disability, or familial status, or  intention to make any such preference, limitation or discrimination." Additional state and/or local fair housing laws may also apply.  Be sure to inform all persons that all dwellings offered or advertised are on an equal opportunity basis.

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Revised and Updated - Wednesday, April 26, 2006

Robert S. Griswold, CRE, CPM, CCIM, PCAM, GRI, ARM
Griswold Corporate Center
Griswold Real Estate Management, Inc.
5703 Oberlin Drive, Suite 300
San Diego, CA 92121-1743
Phone: (858) 597-6100
Fax: (858) 597-6161

Email: rgriswold.ret@retodayradio.com

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