California Court of Appeal Feb 14, 2017 No. JAD17-1Published
Filed 1/4/17
CERTIFIED FOR PUBLICATION
IN THE APPELLATE DIVISION OF THE SUPERIOR COURT
STATE OF CALIFORNIA, COUNTY OF FRESNO
CANDY SCOTT, ) Sup. Ct. Appeal No. 2574 ) Defendant and Appellant, ) Sup. Ct. No. 15CECL09273 ) v. ) ) SHEIKH KAIUUM, ) ) Plaintiff and Respondent. ) ) ) ) APPEAL from a judgment of the Superior Court of Fresno
County, Lisa Gamoian, Judge. Reversed.1
Attorneys and Law Firms
Central California Legal Services, Inc., Marcos Seguro, for
Defendant and Appellant.
Law Offices of Daniel A. Bruce, Daniel A. Bruce, for
Plaintiff and Respondent.
Opinion
GARY D. HOFF, J.
1 This opinion was originally issued by the court on December 7, 2016. It was certified for publication on January ___, 2017, which is within the time that the appellate division retained jurisdiction. This opinion has been certified for publication in the Official Reports. It is being sent to the Fifth District Court of Appeal to assist the Court of Appeal in deciding whether to order the case transferred to the court on the court‟s own motion under Rules 8-1000 – 8.1018.
I.
Introduction
In this appeal from an unlawful detainer judgment, appellant
Candy Scott (hereinafter “appellant”) contends that the trial
court erroneously granted judgment in favor of respondent Sheikh
Kaiuum (hereinafter “respondent”). She argues that the respondent
was not allowed to evict her for failure to pay the full amount
due under her rental contract because she was the beneficiary of
subsidized rental payments under 42 U.S.C.A. 1937f, Section 8.
She contends that the Fresno County Housing Authority had ceased
making Section 8 payments on her behalf due to the respondent‟s
failure to maintain the property in a habitable condition, and
thus respondent should not have been allowed to declare her in
breach of the rental agreement.
We agree that it was respondent‟s conduct, not appellant‟s,
that caused the Housing Authority to cease making Section 8
payments, and that respondent was not permitted by law to recover
the unpaid amounts from appellant, or to declare her to be in breach of the lease when she failed to make the full payments.
Therefore, we will reverse the trial court‟s judgment.
II.
Facts
On January 14, 2015, appellant and respondent entered into a
one-year residential rental agreement with rent set at the market
rate of $700 per month. However, a portion of appellant‟s rent was subsidized through the Federal Section 8 program. In
accordance with Section 8 regulations, respondent and the Fresno
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County Housing Authority entered into a Housing Assistance
Payment Contract (“HAP contract”), which required the Housing
Authority to pay respondent $684 of appellant‟s $700 per month
rent each month starting on September 1, 2015. The HAP contract
prohibited respondent from charging appellant more than $16 per
month. On October 27, 2015, the Housing Authority sent respondent and appellant a letter stating that the property had failed a recent inspection, and listing multiple violations of the federal habitability standards, all but one of which were deemed to be caused by the owner. The letter warned that there would be another inspection on November 17, 2015, and that, if the defects were not cured by the time of that inspection, the Housing Authority would abate all further Section 8 payments effective December 1, 2015, and the HAP contract would be canceled effective December 17, 2015. On November 18, 2015, the Housing Authority sent respondent another letter, stating that the property had failed the second inspection, that the Housing Authority would abate Section 8 payments to respondent effective December 1, 2015, and that the HAP contract would be canceled on December 17, 2015 unless repairs were made before the cancelation date. There was an inspection report attached to the letter that listed multiple separate violations in appellant‟s unit and the common areas of the complex, all of which were all determined to be the responsibility of respondent owner. The letter also informed the respondent that it was “not permitted to recover monies from the resident.” Nevertheless, when rent came due on December 1, 2015,
respondent demanded that appellant pay the entirety of the $700
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rent under the rental agreement. When rent became past due on
December 4, 2015, respondent served appellant with a three-day
notice to pay or quit, again demanding the full $700 rental
payment.
When appellant did not pay rent or leave the premises,
respondent filed his complaint for unlawful detainer on December
16, 2015. Appellant filed her answer on December 21, 2015,
raising defenses based on lack of habitability and violation of
the agreement with the Housing Authority. Trial was set for
January 12, 2016.
At the trial, Judge Lisa Gamoian found that respondent had
failed inspections due to substandard conditions at the unit, and
that the Housing Authority had given notice that Section 8 rent
would not be paid to respondent if the violations were not cured.
However, the court found that, because the deficiencies were not
cured by the deadline, the Section 8 contract had terminated and
thus appellant was required to pay the full amount of rent under
the rental agreement. Therefore, the court granted the unlawful detainer judgment in favor of respondent and against appellant.
The court also ordered appellant to pay past due rent and
holdover damages of $1,242.96. Appellant then filed the present
timely appeal.
III.
Discussion
Standard of Review: There are no disputed issues of fact,
so we apply the de novo standard of review to the trial court‟s construction of the relevant statutes and ordinances, as well as
to the court‟s determination that the complaint states a cause of
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action. (Naylor v. Superior Court (2015) 236 Cal.App.4th Supp.
1, 6.)
Principles of Unlawful Detainer and Section 8 Law: Under
Code of Civil Procedure section 1161, “A tenant for a term less
than life is guilty of unlawful detainer by continuing in
possession without the landlord's permission after default in the
payment of rent pursuant to the lease or rental agreement, and
after a three-days' written notice stating the amount due and
requiring the payment or possession of the property, has been
served on the tenant and subtenant, if any. (Code Civ. Proc., §
Also, “Section 1161 of the Code of Civil Procedure requires
that the three-day notice must state „the amount which is due.‟
It is settled law that this section incorporates the common law
view that in order to work a forfeiture of a lease for nonpayment
of rent the landlord must demand the precise sum due, and that a
demand in excess of the judgment will not support the judgment.” (Werner v. Sargeant (1953) 121 Cal.App.2d 833, 837.)
In addition, since appellant was renting the unit under the
federal Section 8 program, the respondent had to comply with
federal statutes and regulations related to Section 8 before it
could evict appellant. “[T]ermination proceedings under Section
8's existing housing program are left by Congress and HUD to
state law” and “the landlord can institute unlawful detainer
proceedings in state court.” (Gallman v. Pierce, 639 F.Supp. 472, 478 (N.D.Cal.1986).) The regulations regarding termination
of a Section 8 lease agreement provide that tenancy may be
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terminated for serious violation of the terms of the lease,
“including but not limited to failure to pay rent.” (24 C.F.R. §
982.310(a).) However, under the HUD regulations, “The owner must maintain the unit in accordance with HQS [Housing Quality Standards].” (24 C.F.R. § 982.404, subd. (a)(1).) “If the owner fails to maintain the dwelling unit in accordance with HQS, the PHA [Public Housing Authority] must take prompt and vigorous action to enforce the owner obligations. PHA remedies for such breach of the HQS include termination, suspension or reduction of housing assistance payments and termination of the HAP contract.” (24 C.F.R. § 982.404, subd. (a)(2); see also 24 C.F.R. § 982.453, subd. (b).) “The PHA must not make any housing assistance payments for a dwelling unit that fails to meet the HQS, unless the owner corrects the defect within the period specified by the PHA and the PHA verifies the correction.” (24 C.F.R. § 982.404, subd. (a)(3).) Also, “Any of the following actions by the owner... is a breach of the HAP contract by the owner: (1) If the owner has violated any obligation under the HAP contract for the dwelling unit, including the owner's obligation to maintain the unit in accordance with the HQS.” (24 C.F.R. § 982.453, subd. (a)(1).) Moreover, “The family is not responsible for payment of the portion of the rent to owner covered by the housing assistance payment under the HAP contract between the owner and the PHA.” (24 C.F.R. § 982.310, subd. (b)(1), emphasis added.) Furthermore, “The PHA[„s] failure to pay the housing
assistance payment to the owner is not a violation of the lease
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between the tenant and the owner. During the term of the lease
the owner may not terminate the tenancy of the family for
nonpayment of the PHA housing assistance payment.” (24 C.F.R. §
982.310, subd. (b)(2), emphasis added.)
Application: We find that the trial court‟s decision to
grant judgment in favor of respondent and evict appellant was in
error. First of all, under the HAP contract and HUD regulations,
appellant was only obligated to pay $16 per month of rent, not
the full $700 market rate rent pursuant to the rental agreement.
Thus, to the extent that the three-day notice sought to recover
the full $700 in rent from appellant, the notice greatly
overstated the amount of rent due. As a result, the three-day
notice was inaccurate and could not form the basis of a valid
unlawful detainer claim, nor could it properly support any
subsequent unlawful detainer judgment. (Werner v. Sargeant,
supra, 121 Cal.App.2d at p. 837.)
Also, the judgment was in violation of the HUD regulations
that prohibit the owner from collecting the unpaid rental subsidy from the resident when the Housing Authority abates the subsidy
payment due to habitability standard violations by the owner.
“The family is not responsible for payment of the portion of the
rent to owner covered by the housing assistance payment under the
HAP contract between the owner and the PHA.” (24 C.F.R. §
982.310, subd. (b)(1), emphasis added.) “The PHA failure to pay
the housing assistance payment to the owner is not a violation of
the lease between the tenant and the owner. During the term of the lease the owner may not terminate the tenancy of the family
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for nonpayment of the PHA housing assistance payment.” (24
C.F.R. § 982.310, subd. (b)(2), emphasis added.)
Yet here, the owner served a three-day notice to pay rent or
quit after the Housing Authority abated Section 8 subsidy
payments to the owner due to the owner‟s violation of the
habitability standards under Section 8. There is no dispute that
the abatement was due to multiple violations of the habitability
standards, or that the violations were solely caused by the
owner, rather than the tenant. Under these circumstances, the
owner was not allowed to recover the unpaid amount of rent from
the resident, and the Housing Authority‟s letter clearly stated
as much. Thus, the trial court should not have found the tenant
to be in violation of the lease terms or granted judgment in
favor of the owner. Nor should the trial court have found the
tenant liable for the unpaid rental amounts, which were based on
the full market rate rather than the remaining balance of $16
that was the tenant‟s responsibility.
It appears that the trial court believed that it was the responsibility of both the owner and the tenant to cure the
defects in the unit, and that, since the HAP contract was
terminated for failure to cure the defects, therefore the tenant
was liable for the full amount of rent under the rental
agreement. However, as discussed above, the Housing Authority
found that the violations were solely caused by the owner, not
the tenant. As such, the owner had no right to seek the balance
of the unpaid subsidy payment from the tenant. In addition, the November 18, 2015 letter from the Housing
Authority made it clear that, while the Section 8 payments would
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be abated effective December 1, 2015, the HAP contract would not
be canceled until December 17, 2015. Thus, the HAP contract had
not yet been canceled at the time the three-day notice was served
on December 4, 2015, or even when the unlawful detainer complaint
was filed on December 16, 2015. As a result, even assuming that
the owner could have properly recovered the full market rate rent
from the tenant after the HAP contract was canceled, which it
could not, here the three-day notice and complaint were filed
before the contract had been canceled. Consequently, the owner
was not entitled to recover the full market rate rent of $700 per
month from the tenant, and the court should not have granted
judgment based on the failure to pay the full rental amount.
Allowing the owner to recover the unpaid balance of the
Section 8 subsidy from the tenant when the Housing Authority had
canceled the payments due to the owner‟s failure to cure the
habitability violations would also be inconsistent with the
intent of Section 8, which is to make it possible for low-income
tenants to obtain affordable, safe, and decent housing. (See 42 U.S.C. 1937f, subd. (a).) Permitting a landlord to evict a
tenant for failure to pay the full market amount of rent because
the landlord failed to remedy basic violations of the
habitability standards of Section 8 would reward the landlord for
its bad behavior, and perhaps even create an incentive for
landlords to refuse to correct defects with their properties.
There is a dearth of California authorities addressing this
issue, but we note that other states have consistently held that an owner who refuses to correct violations of habitability
standards are not allowed to then either collect the full amount
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of rent from their tenants, or evict them if they fail to pay
full market rate rents. For example, in 1212 Grand Concourse LLC
v. Ynguil, 2010 WL 183762, 894 N.Y.S.2d 713, 27 Misc. 3d 205, a
New York court found that the landlords could not evict their
Section 8 tenants when it was the landlords‟ failure to cure the
defective conditions of the premises that had caused the HAP
contracts to be terminated. (1212 Grand Concourse, supra, 27
Misc. 3d at pp. 212 – 213; see also Sunflower Park Apartments v.
Denise Johnson (1997) 23 Kan. App. 2d 862; Soliman v. Cepeda
(1993) 269 N.J. Super. 151, 636 A.2d 1057.)
While this court is not bound by the decisions of courts in
other jurisdictions, we agree with their reasoning that it would
defeat the intent of Section 8 and the HUD regulations to allow
the respondent landlord to demand full rent payments from the
appellant when it was the respondent who allowed the property to
fall into such disrepair that it fell below minimum standards of
habitability under federal law. It would give the landlord no
incentive to correct such unsafe and unsanitary conditions if the landlord could simply demand full rental payments from the tenant
when the Housing Authority cuts off the Section 8 subsidy
payments. In fact, it would reward the landlord for its own bad
conduct to allow unlawful detainer actions to proceed in such
circumstances.
Furthermore, the respondent was also not entitled to demand
payment of rent under California Law because the conditions of
the rental unit violated Civil Code section 1941.1. Under Civil Code section 1942.4,
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(a) A landlord of a dwelling may not demand rent, collect rent, issue a notice of a rent increase, or issue a three- day notice to pay rent or quit pursuant to subdivision (2) of Section 1161 of the Code of Civil Procedure, if all of the following conditions exist prior to the landlord's demand or notice:
(1) The dwelling substantially lacks any of the affirmative standard characteristics listed in Section 1941.1...
(2) A public officer or employee who is responsible for the enforcement of any housing law, after inspecting the premises, has notified the landlord or the landlord's agent in writing of his or her obligations to abate the nuisance or repair the substandard conditions.
(3) The conditions have existed and have not been abated 35 days beyond the date of service of the notice specified in paragraph (2) and the delay is without good cause...
(4) The conditions were not caused by an act or omission of the tenant or lessee in violation of Section 1929 or 1941.2.
(Civ. Code, § 1942.4.)
Also, under Civil Code section 1941.1,
(a) A dwelling shall be deemed untenantable for purposes of Section 1941 if it substantially lacks any of the following affirmative standard characteristics or is a residential unit described in Section 17920.3 or 17920.10 of the Health and Safety Code:
(1) Effective waterproofing and weather protection of roof and exterior walls, including unbroken windows and doors.
(2) Plumbing or gas facilities that conformed to applicable law in effect at the time of installation, maintained in good working order.
...
(6) Building, grounds, and appurtenances at the time of the commencement of the lease or rental agreement, and all areas under control of the landlord, kept in every part clean, sanitary, and free from all accumulations of debris, filth, rubbish, garbage, rodents, and vermin.
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...
(8) Floors, stairways, and railings maintained in good repair. (Civ. Code, § 1941.1.)
Here, the conditions of the unit as described in the notice
of abatement served on respondent showed that the unit fell below
the standards of section 1941.1. The abatement letter contains a
list of violations present in the unit that respondent failed to
rectify, including exterior doors with missing trim, loose shower
head, improperly installed water heater, roach infestation,
garbage and debris in the common areas, hanging barbed wire on
the carports, protruding nails on boarded up units, damaged
stairs, and various other health and safety violations. The
Housing Authority served respondent with notice of the violations
on October 27, 2015, and warned respondent to fix the violations
or Section 8 payments would be suspended and the HAP contract
terminated. Respondent refused to repair the conditions despite
having more than 35 days in which to do so. Finally, the letter
from the Housing Authority clearly states that the conditions
were caused by respondent, not the tenant.
Respondent did not deny any of these facts at trial, nor has
respondent filed any opposition to appellant‟s brief on appeal,
so respondent apparently concedes that the unsafe conditions
existed, that they were caused by respondent, that it had notice
of the violations, and that it failed to correct them.
Therefore, because respondent failed to remedy the unsafe conditions at the unit after receiving notice of the violations,
respondent had no right to collect any rent from appellant during
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the period in which the violations went uncorrected. (Civil Code
§ 1942.4.)
As a result, the trial court‟s order granting the unlawful
detainer judgment against appellant and awarding damages against
her based on unpaid rent was erroneous.
IV.
Disposition
Accordingly, the judgment is hereby reversed, and the matter
is remanded to the trial court with instructions to enter a new
judgment denying all relief to respondent. It is so ordered.
Dated this __ day of January, 2017
_____________________________________ Hon. Gary D. Hoff, Judge
WE CONCUR:
_____________________________________ Hon. Donald S. Black, Presiding Judge Appellate Division of Fresno Superior Court
Holding. A landlord cannot evict a Section 8 tenant for nonpayment of rent when the landlord's own failure to maintain habitability standards caused the housing authority to abate subsidy payments. Furthermore, a landlord is prohibited from demanding rent when they have failed to remedy substandard conditions after receiving notice, pursuant to California Civil Code section 1942.4.
Issues
Whether a landlord may evict a Section 8 tenant for failing to pay the full market rent after the housing authority abates subsidies due to the landlord's habitability violations.
Whether a three-day notice demanding full market rent is valid when the tenant is only responsible for a small portion of the rent under a HAP contract.
Whether a landlord is barred from collecting rent under California Civil Code section 1942.4 when they fail to correct substandard conditions after notice.
Disposition. reversed
Quotations verified verbatim against the opinion
“The family is not responsible for payment of the portion of the rent to owner covered by the housing assistance payment under the HAP contract between the owner and the PHA.”
“During the term of the lease the owner may not terminate the tenancy of the family for nonpayment of the PHA housing assistance payment.”