AB 1800 responds to rental scams!

We are nearing the end of summer, which legislatively means that bills are stacking up waiting for the Governor to sign them into law. For a list of the legislation that is currently waiting for the thumbs up or down from the Governor’s office, visit  Around the Capital at http://www.aroundthecapital.com/bills. Once a bill is passed by both Houses, the Governor may sign the bill into law, veto the bill, or allow the bill to become law without signing it, but by letting time pass. Generally the Governor must act within 10 or 30 days. 

Currently, there are a number of bills which have passed both the Senate and the Assembly which are of interest to landlords and tenants in California.  In this series, we will look at three of them. 

AB 1800 (Hagman-Ma)
The first of our three bills, AB 1800, is a response to the numerous scams that have arisen out of the on-line rental market and the increasing number of owners renting their own units through on-line listing services.

The scam
The scam is a simple one. A scam artist advertises a housing rental on the Internet, often on Craig’s List. Often they have lifted the information from another site on the Internet, replacing only one important piece of information - the contact telephone number or email address. The deal is often too good to be true and generates a significant amount of interest and often a sense of urgency to act on the part of unsuspecting prospective renter, so as to not miss out on the “great deal”.

The scam works for regular long-terms rentals, as well as shorter vacation rentals; and it works for regular long-terms leases, as well as sub-leases. In the end, it appears to be most successful in the case of vacation rentals, which means that the San Francisco market is particularly vulnerable.   The scammer convinces the interested party to place a deposit or to pre-pay rent on the unit and obtains the money up front from the prospective renter. Sadly the scammer has nothing to do with the rental and is accepting the money under false pretenses. In the end, the unsuspecting tenant loses their money and has no rights to the rental, if there was a rental. AB1800 (Hagman and Ma) is intended to enhance protections for the unsuspecting tenant from scams such as this by increasing the penalty.

Amending Penal Code 602.9
The legislation, if it becomes law, will amend Penal Code 602.9 and increase the penalty to a year in jail and/or a $2500 fine per offense. Unfortunately, merely increasing the penalty deals with the scam problem after the fact. This means that for the legislation to be effective, someone must have become a victim to the scammer.

How to avoid the scam?
To avoid the scam entirely, what can a prospective renter do?

• • First, conduct business with a recognized local real estate company or rental agency. By spending some time doing research on the Internet, you can locate legitimate local rental agencies, as well as get a sense of who has the better reputation in your area as a responsive and responsible landlord and manager. While not all reviews are legitimate, you can get a fairly accurate picture of the style and reputation of a company by reading the available reviews on the various review sites now available. Don’t make big decisions - pro or con - based on a single review.
• • If the unit is not represented by a leasing or real estate company, make sure you are dealing with the owner by looking up the owner of the property on the Internet. Verify that the individual you are dealing with is the owner or agent of the owner. If necessary, ask to see the driver’s license or some other form of photo ID.
• • Don’t place a deposit on or pay rent for an apartment unit which you have not been able to see. Scams often include stories about the unit being unavailable to view at the time of the meeting or the owner being “out of town” and unavailable to show the unit. If you can’t see the unit in person, don’t place a deposit on the unit.
• • Never agree to accept keys to the unit through the mail. Legitimate owners have local representatives who provide keys, do walk-through inspections and are available to you in the event of an emergency during your occupancy. There should never be a reason you have to do business through the mail.
• • Red Flag: You have a difficult time obtaining the address of the rental unit.
• • Red Flag: Watch out in doing business with people who say they are out of town or out of the country. Even if they are legitimate, who wants an out of town landlord?
• • Don’t give anyone cash. A legitimate rental agent or landlord will not require that you pay them in cash.
• • If there is urgency and a rental deal too good to be true, be suspicious.

In response to the increasing number of scams on the Internet, the site http://www.lookstoogoodtobetrue.com/ has evolved and is now a resource to those suspicious of Internet deals or offers.  If you are suspicious about an offer you find advertised on the Internet, check it out on Looks Too Good to be True.

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LEGISLATIVE COUNSEL’S DIGEST
AB 1800, as amended, Ma. Unlawful rental of residential dwelling:
penalties.
Existing law makes it a misdemeanor, punishable as specified, for
any person to claim ownership or claim or take possession of, or
cause another to enter or remain in, a residential dwelling for the
purpose of renting or leasing the dwelling to another without the
consent of the owner or the owner’s lawful agent.
This bill would increase the misdemeanor penalties for this
offense, as specified. Because this bill would change the penalty for
a crime, it would create a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: 
SECTION 1. Section 602.9 of the Penal Code is amended to read: 
602.9. (a) Except as provided in subdivision (c), any person who, 
without the owner’s or owner’s agent’s consent, claims ownership or 
claims or takes possession of a residential dwelling for the purpose 
of renting that dwelling to another is guilty of a misdemeanor 
punishable by imprisonment in a county jail not exceeding one year, 
or by a fine not exceeding two thousand five hundred dollars 
($2,500), or by both that imprisonment and fine. Each violation is a 
separate offense. 
(b) Except as provided in subdivision (c), any person who, without 
the owner’s or owner’s agent’s consent, causes another person to 
enter or remain in any residential dwelling for the purpose of 
renting that dwelling to another, is guilty of a misdemeanor 
punishable by imprisonment in a county jail not exceeding one year, 
or by a fine not exceeding two thousand five hundred dollars 
($2,500), or by both that imprisonment and fine. Each violation is a 
separate offense. 
(c) This section does not apply to any tenant, subtenant, lessee, 
sublessee, or assignee, nor to any other hirer having a lawful 
occupancy interest in the residential dwelling. 
(d) Nothing in this section shall preclude the prosecution of a 
person under any other applicable provision of law. 
(e) It is the intent of the Legislature that this section shall 
not preclude the prosecution of a person on grand theft or fraud 
charges. The Legislature finds that this section has never precluded 
prosecution of a person on grand theft or fraud charges. 
SEC. 2. No reimbursement is required by this act pursuant to 
Section 6 of Article XIII B of the California Constitution because 
the only costs that may be incurred by a local agency or school 
district will be incurred because this act creates a new crime or 
infraction, eliminates a crime or infraction, or changes the penalty 
for a crime or infraction, within the meaning of Section 17556 of the 
Government Code, or changes the definition of a crime within the 
meaning of Section 6 of Article XIII B of the California 
Constitution.