Scott v. Kaiuum ( 2017 )


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  • 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., §
    1161,     subd.    (2).)”         (Smith-Chavez,      Stratton    &    Trembath,     Cal.
    Practice Real Property Litigation (2016) § 18:9.)
    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
    _____________________________________
    Hon. Rosemary McGuire, Judge
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Document Info

Docket Number: JAD17-1

Filed Date: 2/14/2017

Precedential Status: Precedential

Modified Date: 2/14/2017