By: Trevor A. Grimm, AAGLA General Counsel

enal Code Section (PC) 409.40 (a), a form provided by the California Department of Justice (DOJ), may be used by a member of the public to find out if anyone named on the form is required to register with the D0.1 as a convicted sex offender. The form has space for up to six names that may be checked.

Under the PC 408.40 (d) (1), the information disclosed only may be used to protect a person at risk, but "person at risk" is not defined in the law. (When you talk of sexual predators and murderers isn't everyone "at risk?")

PC 409.40 (d) (2) (E) and (G) say that use of any of the information disclosed relating to "Employment... Housing or accommodations...is prohibited."

Under PC 409.40 (d) (4) (A), any use of prohibited information may subject the user to a $25,000 penalty, plus damages.

Given the restrictions on criminal background checking, what is an owner to do?

According to a front page story in the January 19, 2008, issue of the Daily News, the family of a raped and murdered tenant was awarded $10.8 million in damages against an apartment owner and manager of a building where the deceased had lived.

The claim was that the act, not as yet subject to any criminal prosecution, was committed by a convicted felon, a sex offender, who was hired by the owner and management company as a handyman.

The article does not mention whether or not the killer's name was on the DOJ list, disclosing California registered sex offenders, but the claim of the victim's family was that the owner/management company should have known of the past record of the person to whom they entrusted the keys to all of the units in the building. The jury bought the claim...big time.

What the source of the information was that should have put the owner/management company on notice of the potential threat posed by the handyman is not mentioned. Under the law, a refusal to rent to or employ a sex offender on the DOJ list puts a property owner at risk of a judge or jury imposing severe penalties and damages for that.

What is the purpose of the DOJ list? Is it to make obtaining rental housing easier for sex offenders? Is it to make owners pay if they use prohibited information to decide whether rent or hire to someone?

The DOJ web site is intended to give people (including rental property owners) notice of the identity of the sex offenders so they can protect "persons at risk," vulnerable women and children, from the threat posed by sex offenders. But how do you offer protection when you cannot use the DOJ information?

AAGLA just got its first call from an owner with a resident manager who made the DOJ list and was discovered by a neighbor. The list notation was that the manager had violated California Penal Code Section 288 (a).

"Any person who willfully and lewdly commits and lewd or lascivious act... upon or with the body, or any part or member thereof, of a child who is under the age of 14 years, with the intent of arousing, appealing to, or gratifying the lust, passions or sexual desires of that person or the child, is guilty of a felony and shall be punished by imprisonment in the state prison for three, six, or eight years."

The complainant has minor children, but can the owner fire the manger or evict him? Is firing or evicting the equivalent of a prohibited denial of housing accommodations or employment?

And, what is the owner's obligation to disclose this known fact to other tenants or applicants? There is no disclosure mandated in the law, but, assuming a future tenant molestation by the manger, would the owner be able to convince anyone that he or she exercised reasonable care for the safety of a molested tenant if no disclosure had been made?

One amusing sidelight to the story of the "listed" manager is that the owner gave the complainant the option to move without penalty. The complainant said that he checked the DOJ website in the owner's zip code where he wanted to reside and there were DOJ registrants everywhere! (Maybe, that is the ultimate answer. There is nowhere completely safe to go to.)

Solutions & Questions?

1. Perhaps, we could craft an "Assumption of Risk" clause for our Rental Agreements that would require tenants and applicants to check the DOJ web site for registrants and then decide whether to rent or remain in occupancy.

For example, "To All Signatories: If you do not check the DOJ web site for the existence of tenants who are DOJ registrants, or if you do check DOJ web site and find one or more neighbors on the list and continue in occupancy, you, and anyone living with you, are barred from any recovery against the owner and/or manager for injuries or damages from any act by such a DOJ registrant. Since, by law, the owner may not deny housing accommodations or employment to a sex offender registered on the DOJ web site, your are obligated to protect yourself and your family from any injury or damage caused by such DOJ registrant and, by this Rental Agreement, you voluntarily accept such obligation. You may move without penalty."

Of course, a weakness with the Assumption of Risk approach is that minor children who get attacked cannot be bound by any such agreement.

2. Perhaps, we can achieve passage of a law prohibiting insurance carriers from excluding or limiting coverage of an owner or property manager for acts committed by tenants or employees known to be sex offenders by virtue of the DOJ list.

3. What if disclosure results in the registered offender getting physically attacked? Assume a situation where there is no dispute by the attacker about his motivation. "Yes, I learned he was a registered sex offender from the owner and I went after him because I don't want him going after my kids." 4. What if tenants start posting Prop. 65‑type "toxic tenant" notices to let the world know the names and addresses of all DOJ registered co‑tenant sex offenders in the building? Would that cause a riot?

5. Most all rental or employment applications now include a question to the effect of: "Have you ever been convicted of a felony?" (Because we do not rent to or hire felons?)

6. We need a public outcry about this problem and a clear public policy to the effect that sex offender registration may be grounds for a refusal to hire or rent. What else is registration for? Almost all California tenants and landlords should be in favor of such a policy.

7. We submit that the state either should indemnify rental property owners for any liability incurred by virtue of obedience to a law that subjects them to an ongoing threat of liability, a law prohibiting them from denying housing or employment to known sex offenders, or statutorily absolve rental property owners from any such liability.

8. We received one good suggestion on how to handle this situation. An owner might well sit down with any tenant or employee who is disclosed on the DOJ list and advise that registrant that he or she probably would be much better off if relocating somewhere else.

CPRP Challenges Rent Control

By: Trevor A. Grimm, AAGLA General Counsel

AGLA is sponsoring a statewide ballot initiative to prevent government from taking private property through eminent domain (condemnation) proceedings to turn over to private users (developers) for the purpose of collecting higher taxes.

Do you know of, or have any information about, any abuse of eminent domain by government? If so, please send us your horror story today.

Write to Californians for Property Rights Protection (CPRP, address below). The committee is set up to get the initiative qualified for the ballot, and passed, so CPRP might use your information in the election campaign to come. Thank you in advance for your anticipated cooperation.

CPRP

621 S. Westmoreland Ave.

Suite #202

Los Angeles, CA 90005

Telephone 213-384-9656.

The Committee for Property Rights Protection (CPRP) anti-KELO (eminent domain)/anti-rent control initiative, would phase out rent control over time. The initiative is not designed to send the old and the infirm into the streets waving 30-day notices of rent increases (to whatever the fair rental value should be), or 30‑day notices to quit.

It calls for a gradual phase-out of rent controls. Rent controls end permanently when there is a voluntary vacancy or a "just cause" eviction. With the help of property owners like you, CPRP is within striking distance of qualifying its initiative for the June 2008, ballot.

The "help" you have given includes dollar-donating and signature-gathering, and CPRP thanks you for it! To get an initiative on the statewide ballot, some 700,000 valid signatures must be gathered on petitions bearing the full initiative and filed with the Secretary of State.

In order to ensure that enough valid signatures are gathered, election consultants urge collection of about one‑third more signatures to make up for any invalid ones collected. For example, we already have some "celebrities" like Mickey Mouse signing petitions.

As a result, CPRP is faced with filing about one million signatures to guarantee the initiative gets on the ballot. The only way to achieve the signature goal is to form a partnership between volunteer signature gatherers and paid professionals (at a cost of between $1.50 and $2 per signature). On two occasions in the-1960s, Howard Jarvis tried to qualify Prop. 13 by using volunteers only and failed. As we all know, by forming a partnership with professional signature gatherers in 1978, Howard's third effort was the charm.

Why is this attack on rent control joined with an attack on government's power to take property from one private owner and give it to another? Isn't it the same thing by a different name (eminent domain vs. rent control)? Either way the rightful owner of real property is denied its "VALUE," whether that be economic value is in the form of lost rent and/or lost expectation of appreciation in the future, or subjective value as with Mrs. Kelo who said, "Voluntarily, I wouldn't sell my property for any amount, period."

In law school we learn that ownership of real property actually is ownership of a bundle or rights, like a bundle of twigs. Among other things, unless prevented by some use or zoning ordinance, an owner can: occupy property, permit others to occupy it, defend property against trespassers, sell property for what the market dictates, rent property on the same basis, improve property to the extent desired, encumber property in the amount obtainable, reconfigure property, market property, mine property, farm property with any legal crop, convey property, transfer an interest in property, will property to his or her beneficiaries, and/or just sit on the property, protected by Prop. 13, until civilization catches up with it and it appreciates out-of-sight.

Now, to the extent that any of these rights exist on Day One and do not exist on Day Two, absent some gift or sale by the owner, someone has taken that right as sure as Mrs. Kelo's home was taken when the eminent domain private developer bulldozers came to drive her away.

A "taking" is a taking, pure and simple, and a prohibition on the taking of a private property right to benefit another private person is the subject of the CPRP Initiative. One day you have something and, without any action on your part, the next day you don't. If that case does not involve a taking, how did the first owner involuntarily lose the right?

It is true that the type of taking involved in Mrs. Kelo's eminent domain case is slightly different. Such a taking must be accompanied by the payment to the property owner of "just compensation" for the property right taken, meaning some amount fixed by negotiation, jury verdict or judicial decision.

Now, compare an eminent domain/just compensation taking with a rent control taking (a taking of the right to rent or lease property for fair rental value). Rent control is not dependent on the payment to the property owner of just compensation by the beneficiary of the taking. In fact, it is not dependent on the payment of any compensation to the owner at all, just or otherwise!

What is the effect of rent control? According to Walter Block, writing in The Concise Encyclopedia of Economics, "[E]conornists are virtually unanimous in the conclusion that rent controls are destructive." He continues: "In a...poll of 211 economists... slightly more than 98 percent... agree that a 'ceiling on rents reduces the quantity and quality of the housing available."

To the extent that rent control dissuades builders from building apartments for fear of being subjected to rent controls at some point in the future, it produces exactly the opposite result from what it is billed as doing, i.e. providing affordable housing for renters.

We know from experience with gas prices that when there is a less of something and more demand the prices goes up. Well, for every unbuilt unit and every rent‑controlled unit there is a cost increase for tenants in the uncontrolled rental market. Along with rental property owners, they are losers too.

Probably the best line in the Block article, an article which squashes any semblance of sanity in the rent control corner, is the following: "Swedish economist (and socialist) Assar Lindbeck, asserted, 'In many cases rent control appears to be the most efficient technique presently known to destroy a city — except bombing.’”

Well CPRP is here to stop the bombing and the rent control bomb-throwers. Please do what you can to support its efforts... there will be a long and heated campaign by the controllers to defeat the CPRP initiative and to keep their power of control.

City of Burbank Passes Second-hand Smoke Control Ordinance

The City of Burbank has published information about the city's new secondhand smoke control law, which became effective on May 12, 2007. The publication makes it appear that in apartment buildings only areas "open to the public" are covered. It says, "Smoking is prohibited... in any outdoor dining area, any outdoor service line or waiting area, any outdoor shopping area or shopping center, within 20 feet of any entrance or open window of any building open to the public, and on any sidewalk in the Downtown area." At first glance, it looks like apartment buildings, which are not "open to the public," are excluded from these prohibitions. Wrong!  Apartment buildings are covered by the ordinance as follows: "Smoking is prohibited in all enclosed common areas and within five (5) feet of entrances, exits, walkways and hallways in residential development projects, including apartments... except within smoking areas designated pursuant to Section 17-705. Common areas are those areas that are accessible to all residents living in the development, including but not limited to hallways, stairways, elevators, lobbies, laundry rooms, trash rooms, recreation rooms and gyms." The ordinance does allow some smoking: "Common area does not include swimming pools, decks, patios, yard areas, play areas, driveways, parking lots and garages, or private balconies or patios tha•t are not generally accessible to other residents," unless the owner or operator has declared such areas to be "non‑smoking" areas. Also, tenants may smoke in their own units, unless the owner designates them units as no smoking units. For a copy of the explanatory material, go to www.burbankca.org/planningsmokingfaq3shtml. 

L.A. Passes Smoking Prohibitions, Too 

On August 3, 2007, the Mayor of Los Angeles signed an ordinance extending the no‑smoking ban in certain locations in public parks and beaches to prohibit smoking and the disposal of all tobacco products in all L.A. city parks. There still are certain designated smoking areas by the Autry National Center, the Greek Theater, and the Los Angeles Zoo, including some golf courses. Given the growth of "no smoking' laws, here is a proposal for a new ad campaign by the California Association of Realtors: "If you want to smoke, buy a house!"

Explaining the California Property Owners and Farmland Protection Act
(CPOFPA)

By: Trevor A. Grimm, AAGLA General Counsel

The following statement is from "Californians for Property Rights Protection" (CPRP), a committee formed to qualify and pass CPOFPA on the June 2008, California ballot.

By the time this article is published, CPOFPA, a new proposed Constitutional Initiative measure, should be through the administrative process (reviewed by the Attorney General and issued a Title and Summary) and ready to "hit the streets" for signature-gathering purposes.

Over one million signatures are required to ensure that the measure obtains the required 763,789 valid signatures necessary to qualify it for the June 2008, ballot.

If passed by the voters, the CPOFPA will permanently phase out rent control laws in the State of California. The CPOFPA wipes out "taking" of private property for the purpose of conferring economic benefits on another private individual.

The only "takings" allowed are for stated public purposes like the building of roads, hospitals, levees, etc., and on payment of just compensation in an amount set by a court or jury.

As you know, the most egregious example of private property "taking" for the purpose of conferring economic benefits on other private individuals is rent control... and, that taking omits "just compensation." It is, in fact, without any compensation whatsoever!

How can limiting the price for which you can rent your property be legal?

Good question.

And, if it is legal to limit the price for which you can rent your property, how can you stop government from limiting the price for which you can sell your home or other property? (Reportedly, one such sale‑price‑limiting law was passed in Denver, Colorado, but repealed. In another state, a City Council passed a law, also repealed, which prohibited owners from occupying their own rental units.)

The answer is simple: Except in the case of a limited number of stated public purposes, you can prevent the "taking" of the economic benefit of your private property by enacting this state constitutional amendment known as CPOFPA.

It prohibits any action by government that "limits the price a private owner may charge another person to purchase, occupy or use his or her property."

In other words, it cuts out government's right to take and bestow the benefit of your property on another private individual, developer or otherwise.

Single‑family homeowners, apartment owners, farmers and other property owning groups are uniting as this article is being published to stop government private‑property‑taking ventures. But qualification of CPOFPA for the ballot is expensive: $1.7 million worth of expensive.

How do we raise that kind of money? Is $50 per rent-controlled unit too much? I don't think so.

We raise it by obtaining checks and pledges from those concerned about the power of government to sop up the economic benefit of private property like yours for its own money‑making purposes. (Since the KELO decision, moneymaking, say from future increased taxation receipts, is the only justification government needs to condemn private property and sell it to a private developer.)

And, the cost of qualification and passage of CPOFPA is but a drop in the bucket as far as the money lost by apartment owners from rent control restrictions is concerned.

CPRP is looking for six-figure pledges from those who want to be on its Executive Committee. Otherwise, CPRP is looking for donations or pledges in any amount to qualify and pass CPOFPA. (Pledges become effective and irrevocable when the $1.7 million necessary qualification money is raised or pledged.)

The CPOFPA is the best chance to get rent control on the fair path to elimination. It does not prohibit or rescind rent control, but rationally phases in permanent decontrol for all units voluntarily vacated after the effective date of the Act.

It is an extension of the Costa-Hawkins Act, which gave us temporary decontrol after a voluntary vacancy followed by recontrol once the unit was rerented. This is the best, fairest way to get rid of rent control permanently without displacing any rent-controlled tenants. Please contribute or pledge money to this important and even‑handed effort and obtain contributions and pledges of as much qualification money as possible. This is your chance to change the law so that government cannot pick and choose who will benefit from your private property.

(The preceding article is proposed for publication by members of the California Housing Providers Coalition.) P.S.: Click here to download the pledge form, fill it in, and mail it back to CPRP. ASAP! Thank you.

Lawline: How to Compensate Resident Managers

By: Trevor A. Grimm, AAGLA General Counsel

Questions are posed regularly about wages and hours for apartment managers. Here is some general information that answers some frequently posed questions.

Q: My ex-resident manager claims to be owed wages for 24 hours per day given that she was available at the premises 24 hours per day to cover management duties. Do I owe for such "work?"

A: No. That "available" time, unless you agreed to pay for such time in your AAGLA management contract, does not qualify as "hours worked." (See Section 3 of the contract.) California Industrial Welfare Commission Order 5‑2001 regulating wages, hours and working conditions of the Public Housekeeping Industry (which includes apartment house operations), provides in Section 2(k):

"Hours worked means the time during which an employee is subject to the control of the employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so and in the case of an employee who is required to reside on the employment premises, that time spent carrying out assigned duties shall be counted as hours worked...(and no other time)."

Q: How often must my manager be paid?

A: At least twice monthly. Section 7 — Records of Order 52001 provides, in part.

"B. Every employer shall semimonthly or at the time of each payment of wages furnish each employee, either as a detachable part of the check, draft, or voucher paying the employee's wages, or separately, an itemized statement in writing showing: (1) all deductions; (2) the inclusive dates of the period for which the employee is paid; (3) the name of the employee or the employee's social security number; and (4) the name of the employer, provided all deductions made on written orders of the employee may be aggregated and shown as one item."

Q: What if I want to swap checks with the manager, paying full minimum wage for all hours worked and charge rent at two-thirds of the rental value of the apartment. Is that Ok?

A: Yes. Section 10 (c) "…lodging may not be credited against the minimum wage without a voluntary written agreement between the employer and the employee. When credit for... lodging is used to meet part of the employer's minimum wage obligation, the amounts so credited may not be more than the following: $423.51/$626.49, depending if there is one manager or a couple both employed."

In the event of check swapping, where the manager receives 100% of the minimum wage for all hours worked and pays rent for the apartment, the maximum rent that can be charged is: "Section 10 (e) If as a condition of employment, the employee must live at the place of employment…the employer may not charge rent in excess of the values stated herein." Although the section does use the term "ordinary rental value (not values"), it is our opinion that the rent is limited to the $423.51/$626.49 "values" listed (which change to $451.89/$668.46 in 2008).

Order 5‑2001, which must be posted on the premises and reasonably available for employee review, can be obtained from: Division of Labor Standards Enforcement, Department of Industrial Relations, State of California, 320 W. 4t 5t., #450, L.A., CA 90013, telephone 213­620‑6330, or Industrial Welfare Commission, P.O. Box 420603, San Francisco, CA 94142‑0603.