Palo Alto Residential Leasing: The Mandatory Mediation Ordinance (Part II)

By July 16, 2010 Blog, Real Estate Law

In a recent blog, we discussed Chapter 9.72 of the Palo Alto Municipal Code (Mandatory Response to Request for Discussion of Disputes between Landlords and Tenants, or “Mandatory Mediation Ordinance” for short), which gives Palo Alto, California, landlords and tenants the right to initiate a compulsory mediation process for resolution of residential lease disputes.  That blog highlighted procedural aspects of the required meditation, but the Ordinance covers considerably more ground than mediation itself:

1.    Notice Requirement.  Under section 9.72.070 of the Ordinance, landlords of rental units covered under the Ordinance must include a prescribed notice in every written lease or lease-amending document.  (In essence, a covered unit is (i) any residential rental the owner of which has at least one other residential rental in the City or (ii) any other residential rental that is not a single-family house or a duplex shared by the owner; see §9.72.030.)  The notice must be capitalized, in 14-point type, and written in English, Spanish, Chinese and Russian.  Consequences of failing to provide the can be significant, including:  (a) automatic extension of the deadline by which a tenant must initiate mediation after a triggering event, (b) rental increase notices are rendered invalid, and (c) a defense is provided to the non-noticed tenant in any rent collection or unlawful detainer action based all or in part on such a rental increase notice.

2.    Registration Requirement.  Section 9.72.050 requires landlords of all Palo Alto residential rental units to register those units with the City, even if the unit isn’t covered by the Ordinance for other purposes.  A registration form is provided on-line.  (A registration fee is authorized by the Ordinance, although a recent check found no fee to be currently imposed.)
3.    City Attorney Review.  Section 9.72.060 provides that any notice of eviction given, or unlawful detainer action brought, within 6 months of a mediation can be reviewed and referred to the City Attorney for retaliatory motives.
4.    Code Infraction.  In addition to the foregoing consequences, section 9.72.090 of the Ordinance provides that any violation of the Ordinance is punishable as an infraction under section 1.08.010 of the Municipal Code.  Section 1.08.010 provides that an infraction is punishable by a fine not to exceed $250, and also states that there is committed “a separate offense for each and every day during any portion of which any violation of any provision of this code is committed, continued or permitted …”
It’s not difficult to imagine how an uninformed landlord can be dogged by these rules.  All Palo Alto residential landlords should take careful note of Chapter 9.72 of the Municipal Code.
Scott M. Toussaint, Real Estate Group