Sacramento Report — My Lessor, Not My Lord

By ron kingston

The Apartment Association of Orange County (AAOC) is proud to sponsor AB 2503, by Assemblymember Cristina Garcia, who represents the cities of Downey, Bellflower, Norwalk, Cerritos, Commerce, and Montebello in the 58th Assembly District.

AB 2503 was introduced upon the principal of equitability with emphasis on purging an outdated and in the opinion of many, offensive terminology for rental housing providers — “landlord.” In our neck of the woods, “landlord” is often used as a tool to legitimize changes in law that we have to unfortunately oppose.

We believe the term “landlord” started 1066, when the Normans of France conquered England, and William the Conqueror pronounced himself as King William. The King used a feudal framework of land control to retain political power in lands far away. Under this framework, land was owned by the King; the King gave portions of that land to lords, who then permitted a vassal (tenant) to use smaller portions of the lord’s land — so long as the vassal pledged his allegiance to the lord.1

1 https://www.encyclopedia.com/law/encyclopedias-almanacs-transcripts-and-maps/landlord-and-tenant#:~:text=The%20landlord%20and%20 tenant%20relationship,the%20tenth%20and%20thirteenth%20centuries.&text=Feudalism%20as%20a%20means%20of,land%20use%20and%20 ownership%20remained.

Feudalism, however, stopped in the 14th century and whilst the lords and their manors had long been forsaken, the idea behind land use continued to mimic an owner/tenant relationship. As time passed, allegiance was replaced by coin and free will in terms of housing because human beings recognized that housing is vital to human existence.

In 2022, nearly a millennium after King William’s proclamation, the most progressive state in the United States of America continues to use the terms “landlord” and “tenant” to describe the legal parties of a rental agreement. The time is now that these archaic and medieval terms are put back where they belong — in the very distant past.

We use the term “landlord” in contracts, regulation, our system of laws. But we also use other terms as we have struggled to find an alternative term that is neutral, modern, easily recognized, not offensive, and does not require massive work for anyone to adjust, modify, or interpret existing contracts or decisional law.

Let’s look at where the law needs to be changed that would improve everyone’s approach and viewpoint.

A rental agreement is a contract for tenancy where one person provides a service to another person. In the case of rental housing, a person who owns and/or operates property provides a service to a person who requires property by renting it. Like all other service agreements that reference the parties of a contract as “lessor” and “lessee,” so too should the parties of rental housing be referred.

Additionally, Civil Code section 1940, et seq., (in addition to Civil Code section 51, et seq., Code of Civil Procedure section 1161, et seq., and Government Code section 12955, et seq.) are chapters frequented by attorneys and layman, alike, because it is the state’s rental housing handbook. Yet, while it’s words of guidance must be strictly followed, some are superfluous and burden the creation of a rental agreement because there are several instances of ambiguity due to the number of different terms using the same definition, and several sections defining terms already defined. We have found that these laws refer to rental property owners as “landlord,“ “housing provider,” “owner,” etc. We cannot think of another area of law relating to real property where there are several words struggling to mean the same thing.

AB 2503 therefore proposes to do the following: 1. Remove “landlord, “property owner,” “owner,” “rental property owner,” and replace with “lessor.” 2. Remove “tenant” and add “lessee.”

3. Remove “agreement” with the term

“rental agreement,” when referencing a contract for tenancy. 4. Remove “his,” “he,” “himself,” “his or her,” or “he or she,” and replace

Sacramento — continued on page 8

with the following words, as appropriate: “lessee,” “lessee’s,” “the lessee’s,”

“the senior citizen’s,” “their,” “an,”

“the person’s,” “the lessor or lessor’s agent,” “the party’s,” “lessor’s,” “the lease or rental agreement.” 5. Remove “dwelling,” “unit,” “rental property,” “rental dwelling,” “residential dwelling unit,” “apartment,” and replace with “dwelling unit.” 6. Make other related non-substantive changes for the purposes of clarity, uniformity, and reduction of redundancy. For example: (A) the term “property” is used to describe both a “dwelling unit” in multifamily rental housing and single-family rental housing. “Property” also is used to describe the multifamily rental housing complex including the land, common areas, etc. When a lessee rents a multifamily dwelling unit, the lessee does not have a right to possess or access the entire

“property.” When a lessee rents a single-family rental housing, the lessee does have a right to possess and access the entire “property.”

Additionally, some codes use the term “premises” to describe a

“dwelling unit” in multifamily rental housing. Therefore, the term

“property” should be removed and replaced with “premises,” when referencing a rented dwelling unit in multifamily rental housing. (B) Remove the terms: “owner or owner’s agent,” “landlord or authorized agent,” “landlord,” “landlord, or his or her agent,” “owner or his or her authorized agent,” “landlord or the landlord’s agent,” “landlord or a landlord’s agent,” “owner or landlord,” “landlord or property owner,”

“owner,” “owner or an owner’s agent,” “landlord or owner,” “landlord or landlord’s agent,” “lessor,” and replace with “lessor or lessor’s agent.” (C) The term “knowledge” used (located in the second line) in

Civil Code section 1940.7, subdivision (b) is misspelled as “knowledcge;” the term should be spelled correctly. 7. Make a comprehensive overhaul of the offensive terms that are vastly outdated by replacing those terms with acceptable and neutral terms that are customarily used in commercial real property and other service contracts.

The legislature, and tenant groups alike, have a general distaste for the term “landlord” and more often than not create a narrative that all residential rental property owners and managers have capital in droves, enough so to throw “chump change” at attorneys to hustle tenants. The reality, however, is painted in a different light, captured from an angle that many forget when the view is clouded in bureaucracy. The reality is this — without “tenants” there are no property owners or managers — full stop.

Lessors desire lessees at full capacity because lessees are an integral part of a “well-oiled machine.”

And while it is known that some property owners cater to the likes of Robin Leach’s “Rich and Famous,” these few are not representative of those who house the public. The average fee to retain a California “landlord/tenant” attorney is $250.00 per hour; not including the fees, costs, or rent loss associated with an appeal; or a judge’s discretion to limit, or grant, fees to a prevailing party due to lease provision language.

In the current climate, lessors are just trying to make sense of the onslaught of increased legislative burdens being placed on lessors due to California’s housing crisis. And to keep up, lessors have increased their attorney fee consumption since the passing of AB 1482 (statutes of 2019) just to maintain legal compliance.

It’s time now, for lessors and lessees to begin reaching across the table to shake hands in compromise for the greater good — housing Californians; otherwise, like a family court judge, the legislature will decide how the residential rental housing industry operates, and it isn’t likely lessors or lessees will appreciate the government’s “handholding,” especially when both parties are required to release private information to governmental departments in order to find/provide housing. Yes, you got that right — these types of bills are being proposed by some legislators this legislative session.

AB 2503 could be a new era in residential rental housing because the genesis offers neutral and equitable titles to parties entered into a contract for rental housing; and uniformity and clarity of the law that can be deciphered by either party for a clearer understanding of the law and legal consequences as they pertain to both parties of rental “contract.”

Giving both lessors and lessees the ability to understand the law empowers either party to feel confident when protecting their housing and contractual interests without a fear of financial burden based on additional and sometimes exorbitant legal costs and fees.

Pagter PPIand Perry Isaacson

A PROFESSIONAL LAW CORPORATION r. gIbson Pagter, Jr. MIsty Perry Isaacson

BANKRUPTCY ATTORNEY

CERTIFIED SPECIALIST BANKRUPTCY LAW THE STATE BAR OF CALIFORNIA BOARD OF LEGAL SPECIALIZATION

525 N. Cabrillo Park Drive, Suite 104 Santa Ana, California 92701 Phone: (714) 541-6072 | Fax: (714) 541-6897 gibson@ppilawyers.com | misty@ppilawyers.com Ron Kingston is President of California Strategic Advisors and Legislative Advocate for the Apartment Association of Orange County. For questions regarding this article, please call AAOC at (714) 245-9500.