How Do YOU Spell Relief?

Following is a Press Release issued by Kamala Harris, U.S. Senator for California:

"Amid Rising Costs of Housing, Harris Introduces Bill to Provide Rent Relief

WASHINGTON, D.C. - With the cost of housing continuing to rise in California and across the country, U.S. Senator Kamala D. Harris today introduced legislation to provide rent relief for working families struggling to pay their bills. The Rent Relief Act would create a new, refundable tax credit to put more money in the pockets of families at a time when renters’ wages have remained stagnant and housing costs have increased rapidly. Harris was joined in the introduction by Senators Dianne Feinstein (D-CA), Richard Blumenthal (D-CT), and Maggie Hassan (D-NH).

“America’s affordable housing crisis has left too many families behind who struggle each month to keep a roof over their head,” said Senator Harris. “This bill will ensure no family is priced out of the basic security of a place to live. Bolstering the economic security of working families would strengthen our country and increase opportunity.”

“This bill would help more than 140,000 low-income Connecticut families struggling to pay rent each month, providing them much needed relief and flexibility to spend on other vital needs like health care and putting the American Dream within closer reach,” said Senator Blumenthal. “For far too many in Connecticut and across the country, rising rents and flat paychecks prevent them from enjoying the basic, fundamental human right to affordable housing.”

“As far too many families scramble to afford the cost of living, we must keep working to find solutions to our affordable housing crisis,” said Senator Hassan. “I’ve heard from businesses across our state that one of their most pressing challenges is a shortage of affordable housing for their prospective employees. This common-sense bill would create a refundable tax credit to help bring relief to families who struggle to afford their rent and expand economic opportunity for hard-working Granite Staters and Americans.”

“The lack of affordable housing is a national emergency,” said Matthew Desmond, Author of “Evicted: Poverty and Profit in the American City. “Senator Harris is bringing heightened awareness to a crisis that’s been ignored for far too long. The Rent Relief Act reflects a strong commitment to ensuring that all Americans have access to a safe and affordable home.”

A report by the National Low Income Housing Coalition illustrates that there is a shortage of 7.4 million affordable rental units for America’s 11.4 million extremely low-income families. According to California’s Department of Housing and Community Development, nearly 1/3 of California renters (3 million California households) are rent burdened, and California has the third highest rents in the country. More than 1.5 million households are severely rent burdened and more Americans than ever are renters. The share of US households that were renters climbed to 35 percent in 2012, up from 31 percent in 2004.

Under Harris’ Rent Relief Act, the refundable tax credit will be available to individuals who live in rental housing and pay more than 30% of their gross income for the taxable year on their rent including utilities. Eligible individuals would qualify for the tax benefit by determining the total amount spent yearly on rent, taking into account the family’s annual income, and a rate of the federal government’s established fair market rent controls.

Individuals who live in government-subsidized rental housing could claim the value of one month’s rent as a refundable tax credit. Subsidized rent is normally capped at 30% of a person’s income, making them eligible for the tax benefit for rent-burdened residents. The Rent Relief Act would give much-needed relief to lower income residents.

The Rent Relief Act is supported by: the National Low Income Housing Coalition, National Alliance to End Homelessness, Fair Housing of California, and the National Housing Law Project

"I applaud Senator Harris for her leadership in introducing this innovative, bold proposal, which would help struggling families who today face impossible choices between paying rent and meeting their other basic needs, including putting groceries on the table and taking care of their health,” said Diane Yentel, President and CEO of the National Low Income Housing Coalition. “A new tax credit for renters - like the one proposed by Senator Harris - could transform lives, providing millions of the lowest income people with the breadth of opportunities that start with an affordable home - opportunities to climb the economic ladder, improve their health, and allow children to do better in school."

“Home is not just where we keep a roof over our heads — it’s where we raise families, become part of a community, and create a lifetime of memories,” said Los Angeles Mayor Eric Garcetti. “It’s also where we want to stay, and Senator Harris’ legislation would help protect millions of families from losing their homes, by expanding benefits and opportunities for people who pay rent every month.”

“Nearly every Oakland resident who pays rent will save money under this law,” said Oakland Mayor Libby Schaaf. “At a time when our city is fighting the displacement of long-time residents, The Rent Relief Act of 2018 will help working class families, artists, senior-aged tenants, and anyone else who struggles to make the rent each month. I’m proud to partner with Sen. Harris to fight California’s cost of living crisis and deliver more affordable housing to all Oaklanders.”

“Thank you to Senator Harris for acting with urgency, thoughtfulness and creativity to help address the housing crisis that is impacting cities throughout California,” said Sacramento Mayor Darrell Steinberg. “This bill would be an important tool to provide real relief for millions of people struggling through no fault of their own.”

“Mayors across the country should applaud Senator Harris’ proactive leadership in addressing the housing crisis impacting millions of renters,” said San Jose Mayor Sam Liccardo. “With the billions in tax subsidies allotted to billionaires through last year’s tax changes, this legislation provides a refreshing contrast for working families who struggle daily.”

“In Stockton, one in two residents will pay over 30% of their income to housing,” said Stockton Mayor Michael Tubbs. “We have seen some of the highest rent increases in the nation, making even finding a place to live a major challenge. It will take solutions from both State and Federal officials, as well as creative improvements locally, to help solve this housing crisis. I am incredibly thankful that Senator Harris is helping to lead the way with the Rent Relief Act.”

For a full list of supportive statements, click here.

Text of the legislation can be found here.

A fact sheet on the bill can be found here.

Bubble, Bubble, I Smell Trouble!

A young professional leased a house with two other professionals. After living together for well over a year, their relationship soured. One of the roommates drank to excess and an argument ensued resulting in a firearm being brandished against the young man. These three young men were all privileged; they came from wealthy homes, attended the best schools and were employed in professional jobs.

The next day, the young man packed up his belongings, rented a truck, and moved home. But, then his troubles with the property management company began.

The lease had two onerous clauses:

1)  A joint and several liability clause; and  

2)  A clause stating that the Lessee consisted of all three tenants.

Here’s how the lease read:

"Lessee acknowledges that this Agreement is between Lessor and each Lessee executing this Agreement jointly and severally, whether or not in actual possession of the Premises. In the event of default by any one, each and every remaining Lessee shall be responsible for full payment of rent and all other provisions of this Agreement."

"The parties to this Agreement are Property Owner, (hereinafter called "Lessor"), and Tenant 1, Tenant 2, and Tenant 3 (hereinafter called "Lessee")."

The lease was for one year and then reverted to a month-to-month term. The young man submitted a 30-day written notice to the Property Manager. But, they would only accept his lease termination after a “Roommate Change Addendum” was signed by all three roommates and, in that addendum, they required the young man to “relinquish” all rights to his security deposit. They further argued that unless and until the Addendum was signed, that they would hold all three men responsible for the rent and any charges and they did not conduct a property inspection after the young man moved out.

The existing roommates refused to sign the Addendum and argued that the young man was responsible for 1/3rd of all charges (rent, utilities, etc.) until they found a new roommate.

The young man’s problems were further compounded by confusion over what he actually paid as a security deposit and what rights his existing roommates had to his deposit. He was able to secure agreement to the actual deposit amount and he argued that his roommates rights to the deposit were controlled by state law (Cal. Civ. Code § 1950.5).

He also argued that a roommate not in possession of the property cannot be held liable in perpetuity for rent. See Schmitt v. Felix, 157 Cal.App.2d 642, 648. 

“Once a cotenant in a month to month tenancy gives notice to the landlord of his termination of the tenancy, he cannot be held liable for his cotenant's remaining in possession. Upon receipt of such notice the landlord is put to the choice of either accepting the cotenant as his tenant alone, or of terminating the tenancy. “[Emphasis added.]

The resolution cost the young man his security deposit less a small refund owed to him and attorneys’ fees.

Relationships between people are not predictable.  And, roommate disputes are common.

• It is always advisable to retain a lawyer to review the lease agreement and, if possible, to negotiate the clauses before signing;

• It is highly advisable to have a written roommate agreement outlining the rent share and share of housing expenses, overnight guests, cleaning responsibilities, and more before moving in together; and

• To always conduct financial transactions with a written paper trail. While Venmo is convenient, be sure that the transactions are clear and never, ever combine a security deposit transaction with a rent payment.

See Sidebar to this Blog concerning Security Deposits and Roommate Agreements.