The Best Defense is a Good Offense

 A tenant was served a Notice to Pay Rent or to Quit for non-payment of rent “plus late fees.” While the Notice was defective because it included “late fees,” the Landlord could have separately served a “Notice to Cure or to Quit” for violation of a lease clause that related to late fees. If the issue of non-payment of rent + late fees escalated to an unlawful detainer proceeding (e.g., an eviction), the tenants attorney could challenge the Notice to Pay Rent or to Quit as being defective.

Moreover, how much “rent” and late fees were included in the Notice was not disclosed; only a total dollar figure owed was stated. A Notice to Pay Rent or to Quit can only be for the most recent 12-months of non-payment of rent -  the time period for which rent was owed was also not recorded. 

 But the question remained – “How much rent and late fees did the Notice include?”

 To answer that question, and to effectively challenge a Notice in court, the tenant should have a record of rent payments even when landlord-tenant relations are good. Sometimes the landlord-tenant relationship can go “south” and a tenant ledger can be helpful. The ledger can be a simple, handwritten record of payments made to the landlord, with the date and check number recorded. If rent payments are made by mail, then it is also a good idea to send rent payments with delivery tracking and to keep a copy of the postal receipt and the delivery tracking number.[1] If payments are made electronically, then bank statements will record when and how much each rent payment was deducted from the tenant’s bank account. In addition to the ledger, a copy of the voided check or the bank statement for electronic payments should be kept with the ledger. If things do go awry or if there are questions about a “short rent” payment, the tenant can produce the evidence to their attorney.

Landlords or their property managers usually also keep a ledger for each tenant of any payments made or incurred such as rent, late fees, utilities, rent registration city fees, etc. And this ledger may be submitted as evidence in a court proceeding along with the lease agreement and the Notice.

Tenants should also keep the original or a scanned copy of any and all Notices and letters received by the landlord or their property manager as well as all emails and texts. All written communications can be considered evidence for or against the tenant in a court proceeding whether the proceeding relates to issues with rent or security deposits or any other issue that may be hammered out in court.

 Sample Rent Ledger 

Date	Check No.	Rent Owed	Late Fees	Rent Paid	Balance
5/1/22	403	$1555.00	$0	$1555.00	$0.0
6/1/22	410	$1555.00	$0	$1555.00	$0.0
7/1/22	450	$1555.00	$55.00	$1000.00	$610.00

 [1] https://www.jdsupra.com/legalnews/when-the-check-is-in-the-mail-31240/

COVID-19 RELATED RENTAL DEBT AND SMALL CLAIMS COURT

Pre-pandemic, lawsuits for damages of $10,000 or less would be heard in Small Claims Court while lawsuits for monies greater than $10,000 would be heard in Superior Civil Court. But, post-pandemic, the state allowed landlords to sue for unpaid COVID-19 rental debt in Small Claims Court for any dollar amount. This is true only for the "covered time" dating from March 1, 2020 to Sept. 30, 2021. Landlords have up until October 1, 2025 to bring a small claims suit for unpaid COVID-19 rent incurred during the covered period. For tenants protected by county or city eviction moratoriums that extended beyond the "covered period," the maxium rent that landlords can demand in small claims court is $10,000. (See statute related to tolling.)

Public Advocates has an excellent summary of COVID-19 Renter Protections under state law. 

State law, or the COVID-19 Tenant Relief Act concerns Cal. Code of Civ. Proc. sections 1179.01 through 1179.07.

The advantage to small claims court is that both the landlord and the tenant must represent themselves in court at the hearing; attorneys are not allowed to speak for the parties, thus there are no attorneys' fees. Small claims suits are heard more quickly than Superior Court cases, and court filing fees are lower. The downside is that the judicial officer may only allocate 10 to 15 minutes to hear each person’s side of the story before making an order (a decision) on the matter or take the matter “under submission.”[1] If the landlord wins the case against the tenant, the tenant can appeal the case within 30-days, and involve an attorney to argue the appeal. But, if the landlord loses the case, the landlord cannot appeal the decision. Although attorneys are not allowed to represent a party in small claims court unless there is an appeal, tenants can consult an attorney to help prepare their defense.

NOTE: Tenants cannot be evicted in Small Claims Court. Evictions – also known as Unlawful Detainers – are brought in Superior Civil Court in the Unlawful Detainer division.

DEMAND FOR PAYMENT:

To begin a lawsuit in Small Claims Court, your landlord must first make a demand for payment.

If you were protected by the State, City or County Eviction Moratorium and owed rent during the relevant time periods, your landlord must make a DEMAND for COVID-19 related unpaid rent. The demand for payment must include unpaid rent and can also include unpaid utilities and parking fees if these were included in the lease agreement but the landlord cannot include late fees or interest in his/her demand. Generally, a demand may demand payment within a certain number of days (10 to 15) and threaten a lawsuit if the demanded payment is not timely made. The demand may be made verbally or in writing.

If you (the tenant) still live in the unit, your landlord may not apply the security deposit to rental debt without your written agreement.

In response to the demand, the tenant has some of the following options:

• You can fail to respond and wait to be served with a Small Claims Complaint;
• You can contact the landlord and ask if you can work out a written payment plan; or
• You can offer to mediate with the landlord through a third party and settle on an amount owed and develop a written settlement/mediation agreement.

Some lease agreements have a mediation clause; most lease agreements have an attorneys’ fees clause. Check to see if mediation before bringing a lawsuit is mandatory; it mediation is mandatory, you can point out this clause to the Small Claims judge or commissioner and the judge may send the parties to mediate and continue the small claims case to a later date. 

See: https://attorneyforme.blogspot.com/2016/11/examining-your-lease-attorneys-fee_81.html

Since, generally, under Eviction Moratoriums unpaid COVID-19 rent is treated as “consumer debt,” you may also consider filing a Chapter 7 or Chapter 13 bankruptcy petition in federal court. To file a bankruptcy petition, consult an attorney who is experienced in this area and expect to pay the attorney an up-front fee for preparing and filing the petition. A bankruptcy filing will affect your credit record.

LANDLORD CLAIM AND ORDER TO GO TO SMALL CLAIMS COURT:

If you cannot pay the rent demanded and are unable to work out a payment plan, your landlord may file a lawsuit against you by filing form SC-500 with the Court.

The landlord is known as the PLAINTIFF and the tenant is known as the DEFENDANT.

The landlord will need to show the Court that they made a good faith effort to help you obtain governmental rental assistance before filing a Small Claims Case.

The landlord must detail all amounts owed (e.g., rent, and utilities and/or parking fees if detailed in the lease agreement) and may submit a ledger of monies owed to the Court.

The Court will seal the Small Claims case for unpaid COVID-19 rent brought for the covered period. SEALING means that the case will be hidden from public view but the parties to the lawsuit (landlord and tenant(s) will have on-line access to the case file.

SERVICE OF THE SMALL CLAIMS COMPLAINT ON YOU, THE TENANT:

Once the case has been filed with the court, the landlord must “serve” each Defendant (e.g., the tenant(s)) with a COURT-STAMPED copy of SC-500 and all attachments. SC-500-INFO helps describe the small claims process and how the tenant can respond to the lawsuit. 

A person aged 18 or over[2] can serve the forms on you 1) personally, 2) by “substituted service,” to someone age 18 or over at the tenant’s home or work, or 3) the Court Clerk can serve SC-500 on you by certified mail.

The SC-500 filed form will inform you about the date and time of the hearing and must be served at least 15 days before the Court hearing date if you are in the same County, or 20 days in advance of the hearing if you are in a different County in California.

RESPONDING TO THE SMALL CLAIMS LAWSUIT:

You should bring your evidence to Court and argue your position at the hearing. 

State Law Eviction Moratorium:

First, there were two relevant time periods during which the tenant was protected from eviction under state law.

·I   If your rent was unpaid from 3/1/2020 to 8/31/2020, you can submit a COVID-19 declaration retroactively if you have not done so before under state law.

·       If your rent was unpaid from 9/1/2020 to 9/30/2021, a declaration related to COVID-19 hardship must have been submitted monthly to protect the tenant from eviction under state law and tenants must have paid 25% of the monthly rent.

Mandatory state law declarations are available here.

Public Advocates has an excellent summary of COVID-19 Renter Protections under state law.

City or County Eviction Moratoriums:

Local Eviction Moratoriums may be more protective than state law. There are links to the right of this article listing many eviction moratoriums, but they may be outdated. Check with your City or County for the most recent version of your local Eviction Moratorium.

You may want to bring the most recent copy of your City or County Eviction Moratorium or Moratorium “handouts.” For instance, in Oakland, tenants cannot be evicted for COVID-19 rent owed between March 9, 2020 and July 14, 2023 and the moratorium lists some of the COVID-19 reasons that resulted in a tenant’s inability to pay the rent during these periods. During the hearing, you can explain to the Court that you were unable to pay the rent during the relevant time periods due to the pandemic, but this does not relieve you from the obligation to pay back-rent owed.

Lease Agreement:

If the landlord has not submitted a copy of the lease agreement with their Small Claims Complaint, you should bring a copy of the lease agreement to Court. Be sure to identify the lease clauses relating to late fees, utilities, parking, and other expenses as well as a medition clause, if one is included in the lease.

Tenant Ledger:

You should bring to court a written tenant ledger detailing your payments, if any, made during the relevant eviction moratorium time periods. A sample ledger is discussed here. Be sure to note partial payments made and bring copies of bank statements to court to substantiate payments that you made during the relevant time periods and images of cashed rental checks.

If you received any rental assistance, be sure to detail the financial assistance received and deduct that amount from the total amount owed. 

Be sure to bring a copy of the letter detailing the rental assistance that you received or a letter denying rental assistance.

NOTE: Any evidence submitted that includes your Bank Account or Social Security Number must be REDACTED to protect you from identity theft. You can use a BLACK SHARPIE to redact all but the last 4 numbers of the bank account, etc. and then copy the redacted statements. Birthdate information should also be redacted.

If Your Rental Unit Was Covered by Local Rent Control or The TPA:

If the landlord raised the rent during the protected period, be sure to bring a copy of the Notice(s) of Rent Increase if the rent was raised more than the amount allowed under the local rent control ordinance OR if your rental unit was covered by the Tenant Protection Act of 2019 (the “TPA” or AB 1482), bring the Notice and a copy of the allowable rent increase under the ordinance or the TPA.

Other Possible Defenses:

Are listed on page 2 of SC-500-INFO.

EVIDENCE - HOW MANY COPIES TO BRING TO COURT:

Bring one copy of each document (tenant ledger, bank statements, lease agreement, etc.) for the landlord, the judge or commissioner, and each tenant defendant at the hearing. When arguing your case, you can ask the judge if you can submit, for example, the ledger as evidence. Each evidence submission will be labeled as an Exhibit (Exhibit 1, 2, 3, etc.).

MEDIATION:

Some small claims courts offer mediation services before hearing the case. A mediator is a third-party who does not represent you or the landlord but who attempts to work out a settlement of the matter. If the matter is settled, the mediator will develop a written agreement which both you and the landlord will sign.

For instance, say that you owe $10,000 in rent but that it is unlikely that with other debt you will be able to pay that amount. Say that the landlord agrees to accept $7,500 in payment instead, will “forgive” the other $2,500 in rent debt and allow you to pay the $7,500 in monthly installments. The mediation agreement will record this payment plan.

You and the landlord will return to court, inform the judge that you have reached an agreement, and provide the judge with a copy of the mediated agreement. If, however, you are unable to mediate the matter, the case will proceed to a Hearing.

ARGUING YOUR CASE:

If you believe that your landlord has included late fees or a rent increase that exceeded local or state law, or that there were housing repairs that were not addressed by the landlord or that the landlord did not make a good faith effort to seek COVID-19 rental assistance, you can orally present your defenses to the judge. You will have limited time to do this so write out your arguments beforehand and present each argument succinctly along with your evidence (e.g., exhibits). You may have as little as 10 to 15 minutes to present your case, or the judge may ask you questions instead, and you can present your evidence in response to these questions. You can always practice making your argument to a friend who can provide pointers and ask questions.

IN CLOSING:

The Judge will review the landlord’s documents and yours and make a decision at that time or s/he will take the matter “under submission.” This simply means that the judge will take additional time (no more than 30 days) to make a decision. Once the judge makes a decision, the judge will issue a JUDGMENT which will be recorded by the Court.

If you lose and are unable to pay the JUDGMENT, the JUDGMENT will stay on the Court’s records for 10 years and can be “renewed” by the landlord for another 10 years. If you are employed, the landlord can also go back to court and file a request to garnish your wages and, if granted, a portion of your income will be deducted by your employer to pay the amount owed out of each paycheck until the amount ordered by the Court is paid.

RESOURCES:

Check the resources to the right of this blog for more information. Although outdated, the state court guide to small claims is very good and is free. Or, you can purchase the NOLO guide or refer to a copy at your local library. Another great option is going to your local law library and speaking with the reference librarian who can direct you to resources that you can review at the library.

[1] Under Submission means that the judicial officer needs more time to make a decision. The decision should occur within 30-days and be mailed by the Clerk of Court to the landlord and the tenant.

[2] The person doing the service cannot be a party to the lawsuit.

Keeping It Simple - Arguing Your Case in Small Claims Court

If you have unpaid rent due which was related to COVID-19 and there is signficant difference between what the Landlord and you, the tenant, maintains is due, you can summarize the amounts you contend were paid and the amount that the Landlord contends are owed in a Tenant Ledger. You will have limited time to argue your case in Small Claims Court and showing these differences in an Excel file submitted as an Exhibit to the Judge or Commissioner and to your landlord can quickly get your point across. Be sure that your dollar amounts claimed are accurate and that you can back this up with evidence.

Redacted bank statements, images of cashed checks, or electronic statements from the property management company can be taken to court and submitted as evidence if the Landlord challenges the payments that you claim were made and if the Judge wants proof of payment. Don't forget to bring evidence of payment from any government assistance that you may have received from the state or city for unpaid COVID-19 related debt. 

The Judge or Commissioner may take your Tenant Ledger and evidence of payment under submission when deciding the amount that you owe.

A sample Tenant Ledger is shown below and can be accessed here: