DRUNKEN SAILORS ON SHORE LEAVE

Well as time goes by, it becomes more and more evident that our city is in deep financial trouble. The reaction of the City Council however, is something like drunken sailors on shore leave. They spend without notice. The most recent event is the City's decision to go forward with a $52 million renovation/ rebuild of the downtown public library. Now, one asks, do we really need a new and improved library? One commentator has stated that its just an upgraded resting place for the homeless. A study of the new proposed structure shows that there is not much else being added to the old library, and clearly nothing to justify the $52 million price tag. The library decision comes on the wake of the $62 million fire and police office building and $52 million on the Rand land purchase. The City administration is reporting a deep recession in our City with corresponding lower revenue. The administration is thinking about raising taxes to make up the short fall. They are suggesting increased taxes on hotels and motels. Just what that industry needs in their times of economic woes. No one at City Hall gets it.


LOW-INCOME HOUSING LESSONS:
MENORAH AND THE 4TH STREET PARKING LOT
Readers with long memories will remember the 4th Street and Wilshire public parking lot fiasco of three years ago. At that time the City Council decided that it wanted to "give" to a non profit housing company called "the Menorah Group" the surface parking lot at 4th Street, just above Wilshire. That parking lot served many of the residents and shoppers who lived and visited the Promenade area. The parking was already very scarce, and so when the city made it determination that it was going to give up this valuable parking resource so that Menorah could build 65 low income housing units (renting at $150.00 per month) a series of lawsuits were filed. In response to the lawsuits alleging loss of valuable parking, the city responded with the line that this project would provide housing to many Santa Monica low income minorities, who would not have housing anywhere else. Well, the lawsuits were settled as best they could be, by requiring the City to build a extra level of parking below the low income housing structure.

And then what happened after the housing was opened? Almost no Santa Monica residents obtained any housing there. Most went to white residents who were living in West Hollywood. The City administration was at a loss for words. Menorah's CEO stated: "I'm not sure I have an answer" and blamed Santa Monica for not getting more of its residents to apply for the lottery. 2,854 of the 3,683 applicants were white and 416 were Asian. 58 of the new tenants were white and seven Asian. Only eight Santa Monica seniors— none of them black or latino— made it, although many likely qualified under the income requirements of less than $19,300 for one person or $22,050 for two. What a great way for our City to provide for our low income and needy long term residents. Hopefully, the City will wake up and stop giving away our valuable resources so that residents of West Hollywood can relocate closer to the beach.

MORTGAGE RATES AND GOOD ECONOMIC NEWS
Mortgage rates have taken a bit of a roller coaster ride from March to May 2002. Up and now down. In fact, based on Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 6.76 percent for the week ending May 31, 2002, slip-ping from 6.81 percent last week. Last year at this time, the 30-year FRM averaged 7.24 percent. The 30-year FRM has not been this low since the week ending November 23, 2001, when it averaged 6.75 percent. The average for the 15-year FRM this week is 6.22 percent dropping from last week's average of 6.28 percent. A year ago, the 15-year FRM averaged 6.78 percent. The 15-year FRM has not been this low since the week ending November 16, 2001, when it averaged 5.98 percent. All things considered, it is better to obtain a 15-year loan than a 30-year loan, because of the great savings in interest rate afforded by the shorter term loan. "Slower economic growth this quarter and little or no inflation worries allowed rates to drift downward these last few weeks to the benefit of home buyers. As a matter of fact, low mortgage rates induced an unexpectedly high level of new and existing home sales last month," said Frank Nothaft, Freddie Mac's chief economist.

BUILDERS CONFIDENT OF NEW SALES

The National Association of Home Builders' Housing Market Index remained at 61 in May, according to the National Association of Home Builders."With interest rates on long-term mortgages hovering below 7 percent in recent weeks and the spring home buying season off to a good start, home builders have every reason for continued optimism about their sales prospects," said Gary Garczynski, NAHB president and a builder/ developer from Woodbridge, VA.

Multifamily (apartment building) starts declined 18.1 percent to 285,000 units. The decline occurred primarily in the Northeast and Midwest, where extraordinarily good weather spurred big gains earlier in the year. Those regions registered declines of 24 percent and 19.5 percent, respectively, while the West showed a 5.8 percent decline and the South posted a 5.6 percent increase. Housing permits (permits pulled) which can be an indicator of future building activity, were virtually unchanged in April at a rate of 1.63 million units. Single-family permits were up 1.6 percent to a 1.27 million-unit rate, while multifamily permits were down almost 4 percent to a rate of 366,000. Three out of four regions posted gains in housing permits in April, with the South's 3.1 percent decline being the only exception to the rule. Permits rose 11.2 percent in the Northeast, 2.5 percent in the Midwest and 1.2 percent in the West.

SINGLE FAMILY HOME PRICES STILL RISING

The median price of an existing, single-family detached home in California hit a new record during the first quarter of 2002, rising 19.1 percent to $295,130, according to a C.A.R. (California Association of Realtors) report released late May 2002. Closed escrow sales of existing, single-family detached homes in California amounted to 593,620 for the first quarter of 2002 at a seasonally adjusted annualized rate, an 18.1 percent increase from 502,530 in the first quarter of 2001. The median number of days it took to sell a single-family home was 35 days in the first quarter of 2002, compared to 29 days for the same period a year ago. Calif. median home price -- March. 02: $305,940 Calif. affordability index March 02: 29 percent (Source:C.A.R.) Calif. highest median home price by C.A.R. region -- March 02: Santa Barbara South Coast $577,430 (Source: C.A.R.) Calif. lowest median home price by C.A.R. region -- March. 02: High Desert $117,920 (Source: C.A.R.)

INSURANCE RATES GOING UP FOR RENTAL PROPERTY

Insurance rate hikes for single family homes are as much as 20 percent. The homeowner's insurance market is experiencing major changes right now: to cover higher repair costs, poor stock market performance by insurers, and mold claims. Those issues, among others, have increased homeowner's insurance rates as much as 20 percent after having stayed steady for the past several years. Some insurance carriers have decided not to renew cli-ents who have filed claims. The question is this, with homeowner insurance rates going up will apartment insurance policies be following suit. If so, there are some ways to keep the rates lower. First, increase your deductible. Higher deductible can save as much as 15% of the policy premium. Think of your insurance as protection against major disaster, more than as a payment plan for normal wear and tear. Deductibles of $1,000 to $2,500 will help you lower your rates. Also, as we have seen, filing small claims only gets your carrier to cancel your policy when renewal comes around. Don't forget to shop around as well. The California Department of Insurance website (www.insurance.ca.gov), has a place where you can compare rates. Also, some companies offer discounts if you carry all your insurance policies with them. There are deductible for new electrical and plumbing installations, fire sprinklers, and other building upgrades. Many property owners may want to investigate the value of upgrading their buildings, obtaining the discount in insurance premiums, and at the same time applying for a rent increase from the Rent Control Board.

ON THE LEGAL FRONT

When is Midnight?

It is clear, that many people have never thought of this question in any serious way. However, it does become important when writing a deadline or start date for a contract. Or, we should say it might become important. So do it correctly. How do you write the time for midnight July 1, 2002? Is it 12:00 am or is it 12:00 pm? Well believe it or not, the law does not have any answer to that question. It could be either.

Say you wanted a lease to start on that date. The first question to ask is when is midnight July 1, 2002? Is it the second after June 30, 2002 at 11:59pm? Or is it the second after July 1, 2002 11:59pm? Well, Midnight is from the Aryan. Contrary to what most of us believe "day" first meant [limited to] the hours of sunlight; the entire period of twenty four hours was night and the period separating one day from the other was midnight. [Word Origins/ Shipley/ Philosophical Library/ NY] . Most references to the passing of time was on the Anglo - Saxon [the Greek nykt] or the [Sanskirt nakta].

In ancient times contracts expired or went into effect at high twelve rather than low twelve [midnight] as to avoid the confusion of which day the starting/ending element effected. As the day did not change during the daylight hours and high twelve could be easily determined as the sum was at meridian Later contracts began using first light, sundown, sunup, etc. then as we got more educated and invented the clock we stated using the time refer-ences and somewhere along the line we forgot our education and stated using midnight and adding confusion to where we once had order.

So it deciding when to start your contract be sure to make this point clear. The second issue is how to write it. Is midnight written July 1, 12:00am or July 1, 12:00 pm? Many peo-ple believe (without any support) that midnight is written "12:00 pm" although there is no legal support for that proposition. Thus if you want to be clear, and avoid unnecessary litigation, you should not reference midnight at all, but rather one minute before or after. Thus you could write your leases or other documents to refer to the start or end date as follows: Say you wanted a lease to begin on the first second of the new day of July 1, 2002. The best way to write that would be July 1, 2002 at 00:01 am. I.e. one second after the start of the new day. If you wrote instead July 1, 2002, 12:00 am there would be confusion as to whether you meant the time noon or midnight.

RENT BOARD STAFF SUGGESTS
$11.00 PER MONTH FLAT INCREASE

As discussed in the staff report entitled 2002 General Adjustment Study, staff recommends a general adjustment of $11 per unit for the September, 2002 general adjustment.þ What this means is that the more rent one is receiving for their unit the lower the percentage increase will be. In the past the Board has given annual general adjustment increases in percentage amounts, i.e. 3% across the board. However, this year they wish to be cute and worse, vindictive to those owners who have obtained market rate increases. Thus if an owner is getting 1100 per month for a unit, this AGA is 1%. But if an owner is receiving 2,200 per month, then the increase is only 1/2%. And so on. Now, what the Board doesn't understand is that an owner receiving $2,200 month rent is spending more on his/her building (upkeep and maintenance) than the owner who is receiving 1,100 or even 600 per month rents. The flat increase does not take this into consideration. It is a whole new way of hurting housing providers who wish to upgrade their properties.

DROUET STILL UNDECIDED

Drouet is the last of the California Supreme Court cases which has yet to be decided. Drouet discusses what defenses, if any, tenants can raise if they are being evicted under Ellis withdrawals. The court of appeal decided that only procedural defects could be raised, but tenants wanted the court to sanction "retaliatory eviction" defenses as well. If the tenants' position is adopted by the court, it will create great set back.

MOLD AND MOISTURE

Here is some words on mold. Remember, mold is only the symptom. Moisture is the prob-lem. It is much easier to find mold where moisture is or is likely to have been than it is to find moisture by investigating for mold. So, to control mold you need to control moisture, including rainwater, groundwater, water supply lines and water vapor in the form of outside humidity produced by the weather and indoor humidity produced by the day-to-day living activities of the residents. So when inspecting, be sure to get under the building to check for standing water there, or anywhere on the property. Roof leaks can cause mold damage even at ground level areas. Look for leaky windows and doors.

SERVICE OF NOTICES

With all the legislature's attention paid to housing providers recently, it is becoming difficult to keep up with it all. What about serving notices on tenants. Well different notices need different services.

Service of notices of RENT increase is covered by civil code 827 (a) and (b) as follows:
" (A) By delivering a copy to the tenant personally. (B) By serving a copy by mail under the procedures prescribed in Section 1013 of the Code of Civil Procedure. CCP 1013 states: one deposits the notice in the mail box, postage pre-paid, but that notice must be accompanied by a proof of service attached. Weird? CCP 1013 is really for service of legal documents dealing with litigation from one attorney to another. CCP 1013 also states that the 30 days time period is extended by 5 days if notice is sent by mail. But there is no case which states that the 5-day extension of CCP 1013 applies to rent increase notices. The time extensions are not the "procedures" part of the CCP 1013 statute, and may not be applicable.
For service of Notice of Change of Tenancy (other than rent) it is controlled by Civil Code 827 (a) which states in part: in the manner prescribed by Section 1162 of the Code of Civil Procedure. Now, 1162 states how to serve: (this is usually referred to as Post and Mail). Civil Code Section 1162: The notices . . . may be served, either: 1. By delivering a copy to the tenant personally; or, 2. If he be absent from his place of residence, and from his usual place of business, by leaving a copy with some person of suitable age and discretion at either place, and sending a copy through the mail addressed to the tenant at his place of residence; or,3. If . . . a person of suitable age or discretion there can not be found, then by affixing a copy in a conspicuous place on the property, . . . and also sending a copy through the mail addressed to the tenant at the place where the property is situated.

Finally, for a Notice to Terminate Tenancy you can use certified mail alone: 1946. The notice herein required shall be given in the manner prescribed in Section 1162 of the Code of Civil Procedure or by sending a copy by certified or registered mail addressed to the other party.

DON'T HIRE A NON CONTRACTOR TO TRIM YOUR TREES

Fernandez v. Lawson (Second District-- Los Angeles). This is a disaster case for homeowners and housing providers. This case holds that under Bus.& Profession Code Section 7026.1(c) a state contractors' license is required to trim a tree higher than 15 feet. Next, under Labor Code 2750.5, if a person (including a property owner) hires someone to do a job for which a contractors' license is required, and that person does not have a license, then that person is presumed to be the employee of the property owner (and not a independent contractor). As an employee the property owner is required to carry insurance for that worker. Worse, the employee's workers are also considered the property owner's employees. Finally, the court held that the homeowner is subject to federal OSHA regulations. Any negligence of the original unlicensed contractor towards his employees, will be the responsibility of the property owner. In many instances, the homeowner does not have insurance to cover this one time work job. In Fernandez, the homeowner was shown a card by the tree trimmer which stated "Licensed Contractor" but this was not enough to absolve the property owner from a duty to inquire and check to see that the contractor was currently licensed by the state. Remember, in the future never hire anyone to do any work without a current state license.