February 28, 2025
On Thursday, February 27th, Patti Widget, a seasoned expert in property management and landlord-tenant laws, presented an insightful and dynamic discussion on the latest legislative changes affecting housing providers. Her session covered crucial topics such as new legal requirements for tenant selection, the increasing risks associated with litigation, eviction strategies, and financial best practices for landlords. Throughout the presentation, she emphasized the importance of staying informed and proactive to navigate the evolving rental landscape.
Key Takeaways:
Evictions are a last resort—they are costly, time-consuming, and often unnecessary if negotiations are handled well. New laws demand strict compliance—especially regarding tenant applications, notices, and fair housing rules. Cash for Keys is often a better solution—offering tenants an incentive to leave saves money and time. Managing multiple LLCs won’t always protect you—tenant attorneys are aggressive in litigation. Transparency is critical—trying to "hide" property ownership or avoid regulations can lead to costly lawsuits. Stay involved with AACSC—without industry updates, landlords could unintentionally violate new laws.
Key Topics Discussed:
1. The Impact of Fires on Housing Providers & Bed Bug Concerns
Patti began her presentation by discussing the unintended consequences of the recent Los Angeles wildfires. With many displaced residents seeking housing, landlords may be inclined to provide assistance, including offering used furniture to those in need. However, she warned of a looming bed bug crisis, as donated furniture could introduce infestations into rental properties.
- Solution for Landlords:
- Bed Bug Addendums & Certifications: Patti strongly recommended including a bed bug disclosure addendum in all lease agreements, as required by law.
- Pre-Rental Bed Bug Inspections: Landlords should obtain certifications from professional exterminators to document the absence of bed bugs before move-in. This certification serves as legal protection in case tenants bring in bed bugs later.
- Education on Bed Bug Transmission: She highlighted that bed bugs can spread through walls, moving vans, and even air travel, making preventative measures critical.
2. Eviction Costs & Why They Should Be a Last Resort
Patti delivered a stark warning about the financial and legal risks of eviction, particularly in Los Angeles County.
The True Cost of Eviction in LA County:
- Estimated $60,000 - $80,000 per eviction, considering legal fees, lost rent, and court proceedings.
- Evictions take up to 8 months, during which landlords lose rental income and must navigate costly legal battles.
Alternative Strategies:
- Cash for Keys Agreements: Instead of waiting through an expensive eviction, landlords should consider negotiating a payout to encourage tenants to leave voluntarily.
- Legal Fees Clause: Patti explained that lease agreements often include an attorney’s fees clause, which can be a double-edged sword. While it may allow a landlord to recover legal costs if they win, it also incentivizes tenant attorneys to take cases against landlords.
- Fogging Techniques: She introduced the idea of "fogging" as a negotiation strategy—delaying responses and using neutral statements to prevent escalating conflicts.
3. First-Come, First-Served Rental Application Law
Patti emphasized the new first-come, first-served tenant application law and why landlords must follow it:
- New Legal Requirement: Landlords must now process applications in the order they are received.
- Why This Law Exists: The rule aims to eliminate discriminatory practices by preventing landlords from selecting tenants based on subjective preferences.
- Best Practice: Set clear pre-established criteria for tenant qualification. If an applicant meets the criteria, they must be accepted.
Patti’s Advice: "Let go of the illusion of control. Set your criteria, and if an applicant meets it, approve them. If they don’t, move to the next one. Overcomplicating the process increases your risk of lawsuits."
4. Prohibition on Charging Tenants for Notices
As of January 1, 2025, landlords can no longer charge tenants for serving legal notices, including:
- Three-Day Pay or Quit Notices
- Cure and Quit Notices
- Notices to Terminate Tenancy
Important: This rule also applies to commercial properties, marking one of the first instances where residential tenant protections have been extended to commercial tenants.
Patti’s Advice: If your lease agreements currently state that tenants will be charged for notices, stop enforcing this clause immediately—but there is no need to issue a formal lease amendment.
5. Hairstyles as a Protected Class
Patti expressed strong opinions about California’s new hairstyle discrimination law, which classifies certain hairstyles (e.g., braids, dreadlocks, textured hair) as protected under fair housing laws.
- Landlord Impact: Landlords cannot make leasing decisions based on a tenant’s hairstyle.
- Patti’s Take: While she found this law excessive, she emphasized that landlords must comply to avoid discrimination lawsuits.
6. Section 8, FICO Scores, and Rent Criteria
Patti covered crucial updates on Section 8 tenant applications, particularly credit screening rules:
- FICO Scores & Section 8: Landlords cannot require a minimum credit score for Section 8 tenants.
- Ability to Pay: Instead of looking at credit scores, landlords must evaluate whether the tenant can afford their portion of the rent.
- Example: If a tenant’s Section 8 voucher covers 90% of the rent, the tenant only needs to prove they can afford the remaining 10%.
Patti’s Advice: If your rental criteria includes a high credit score requirement, consider whether it aligns with the demographics of your rental market. A 750 FICO score requirement might work in Palos Verdes, but could leave your property vacant in Compton.
7. Managing Multiple LLCs & Legal Risks
Patti warned landlords about the hidden risks of managing multiple LLCs, especially in litigation.
- Tenant Attorneys & Asset Searches: Lawyers representing tenants often conduct asset searches to find additional properties owned by a landlord.
- Case Example: A landlord rented out a guest house for 20 years without a certificate of occupancy. When they attempted to evict the tenant, the tenant’s attorney sued them for $700,000 in back rent.
- Her Advice: Avoid trying to "hide" assets—it can backfire in court.
8. New Credit Reporting Requirements (AB 2747 & SB 924)
- Applies to properties with 16+ units.
- Landlords must offer tenants the option to report their rent payments to credit agencies.
- Existing tenants must be notified by April 1, 2025, and annually thereafter.
- Landlords can charge up to $10/month for this service.
Patti’s Take: While not a bad law, smaller property owners need to be aware of the requirement and ensure compliance.
Top Q&A:
Can landlords require a FICO score for Section 8 applicants?
No. Landlords must evaluate the tenant’s ability to pay their portion of rent.
Can landlords refuse Section 8 by requiring month-to-month leases? In some municipalities, yes. But certain cities (e.g., Santa Monica) require one-year leases.
Can landlords charge tenants for serving legal notices? No, as of January 1, 2025. This applies to residential AND commercial properties.
Final Thoughts:
Patti Widget’s presentation was eye-opening, direct, and filled with critical insights for housing providers. If you missed the meeting, we highly encourage you to stay engaged with AACSC to ensure you remain compliant and well-informed in this rapidly changing legislative landscape.