News

President Hotel owner warned about lease law

With eviction deadline approaching for tenants, Palo Alto notifies AJ Capital about requirement for one-year leases

Preparing for a potential eviction of tenants from President Hotel, Palo Alto formally notified the building's new owner Tuesday about the city's requirement that tenants be offered a one-year lease agreement — a rule that has not been followed or enforced at the historic apartment building.

City Manager Ed Shikada on Tuesday notified the building's owner, Adventurous Journeys Capital Partners, the company's attorney David Lanferman and Santa Clara County Sheriff Laurie Smith about the applicable code provision, which states: "If a tenant or prospective tenant wishes to rent a rental unit from a landlord and if said landlord wishes to rent said rental unit to said tenant or prospective tenant, the landlord must offer to the tenant or prospective tenant a written lease which has a minimum term of one year."

Shikada wrote that the letter is being submitted "in potential tenant eviction actions that may be under consideration by their offices in the near future." AJ Capital, a Chicago-based company that bought the building at 488 University Ave. last summer, had given the tenants a deadline of this Thursday to vacate the building.

It is planning to convert the six-story building at 488 University Ave. into a hotel, a project that would violate two zoning code provisions: the downtown cap on non-residential development and a "grandfathered facilities" provision that bans old downtown buildings undergoing conversions to change uses.

But while the City Council is scheduled to discuss and possibly scrap the zoning provisions in the coming weeks (the Planning and Transportation Commission is scheduled to make a recommendation on the "grandfathered facility" clause Wednesday night), the new letter focuses on the section of the code that pertains to "rental housing stabilization."

"Our City Attorney has informed the tenants' legal counsel of the requirements of the Rental Housing Stabilization Ordinance," Shikada wrote. "We are communicating directly to you to ensure that, prior to any eviction action, you are similarly aware of the Ordinance and responsibilities of landlords as prescribed."

The city's one-year lease requirement does not apply to owner-occupied units, subleases from one tenant to another and situations where a tenancy is a work-related condition. While the city has not actively enforced the provision, it does give the building's few remaining tenants some leverage in a potential legal battle against the landlord.

The city's municipal code specifies that "failure of a landlord to comply with any of the provisions of this chapter shall provide the tenant with a defense in any legal action brought by the landlord to recover possession of the rental unit."

While tenants have been calling for months for the city to step in and request, in a non-binding manner, a lease extension, Palo Alto officials have been reluctant to do so. Earlier this month, Shikada told the Weekly that the city has effectively done what it can and that the issue is between the landlord and the tenants.

"If the City were to weigh in on tenancy, that could be misinterpreted as setting some expectations for future actions," Shikada said.

City Attorney Molly Stump told the Weekly that the one-year lease rule "provides for enforcement in an eviction proceeding in court."

"I'm not aware that the City has ever attempted to take an enforcement role, and doing so here would require careful evaluation of legal issues," Stump said in an email.

While the city's letter does not explicitly request that AJ Capital delay the eviction proceedings, it highlights one of several legal hurdles that AJ Capital will have to overcome as it moves ahead with its hotel plan. In addition to the city's letter, the nonprofit Project Sentinel, which provides services relating to fair-housing laws, sent a letter to AJ Capital last Friday on behalf of two tenants with disabilities.

The Project Sentinel letter requests that AJ Capital provide "reasonable accommodation" to the two tenants, an exception to the landlord's general policy that may be necessary to "afford a person with a disability an equal opportunity to use and enjoy her home," according to the nonprofit.

AJ Capital did not respond to a request for comment about the city's and Project Sentinel's letters. Tenants, meanwhile, have been expressing frustration about the city's inaction. Several had publicly testified in the past about the landlord's failure to comply with the one-year-lease requirement (tenants have been renting on a month-to-month basis).

Karen Kao, a physical therapist who remains a tenant, told the City Council on Monday that she and her fellow tenants are considering litigation against the city for not enforcing its laws and enabling AJ Capital to move ahead with its hotel project.

"We are thinking about a class-action lawsuit against the city of Palo Alto," Kao said. "We feel you have really failed us."

Related content

• VIDEO: Dennis Backlund talks about eviction from the President Hotel

Documents reveal secret dealings over President Hotel

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Comments

3 people like this
Posted by Marc
a resident of Midtown
on Jan 30, 2019 at 9:03 pm

I'm confused

"If a tenant or prospective tenant wishes to rent a rental unit from a landlord and if said landlord wishes to rent said rental unit to said tenant or prospective tenant, the landlord must offer to the tenant or prospective tenant a written lease which has a minimum term of one year."

AJ Capital does NOT "...wishes to rent said rental unit to said tenant or prospective tenant..."

So how does this appy? Is the city claiming that they can force a landlord to rent to a tenant against the landlord's wishes? This theory would imply that a landlord never gets to choose what they get to do with their property. the city will force landlords to rent property forever.


18 people like this
Posted by to Marc
a resident of College Terrace
on Jan 30, 2019 at 10:05 pm

I believe AJ rented to the tenants a a month-to-month basis for ~6 months. They apparently should have offered the tenants the option of a 1-year lease.


9 people like this
Posted by What A Mess
a resident of Leland Manor/Garland Drive
on Jan 31, 2019 at 8:30 am

What a mess and a field day for landlord/tenant rights attorneys.

Palo Alto's 1-year rental/lease mandate conflicts with CA state law as rental term length is to be mutually agreed upon by both the landlord & tenant.

Evictions & Civil Standby measures are handled by the Santa Clara County Sheriff's Department and not the PAPD.

AJ has signed documents from the majority of the tenants who vacated and received relocation bonuses/assistance for doing so. Only two tenants remain claiming a personal inconvenience?

Remaining President Hotel tenants now wish to sue the City of Palo Alto for not enabling them to remain at the hotel?

Is this an actual violation of civil rights? In otherwords, the right to lifetime rental options or a basic landlord/tenant dispute that has gotten totally blown out of proportion?

Speaking from experience, I have been forced to move several times when the landlord sold the property to another buyer. I don't recall it being such a major catastrophe or conflict other than an inconvenience.

Moral of the story...had I been a home owner rather than a renter, I would only be answering to the bank and not a landlord.










10 people like this
Posted by Two revolving doors
a resident of Downtown North
on Jan 31, 2019 at 12:28 pm

Must not forget that AJ Capital hired TWO former City manager's staff members, Steve Emslie and Richard Hackmann. TWO!

[Portion removed.]


8 people like this
Posted by Incredible
a resident of University South
on Jan 31, 2019 at 2:50 pm

from the PA Weekly...
> "Karen Kao, a physical therapist who remains a tenant, told the City Council on Monday that she and her fellow tenants are considering litigation against the city for not enforcing its laws and enabling AJ Capital to move ahead with its hotel project."

No. You have failed to source an alternative place to reside. You cannot blame the developer AJ or City of Palo Alto for one's own shortcomings or failure to make other arrangements.

also from the PA Weekly...
>"The Project Sentinel letter requests that AJ Capital provide "reasonable accommodation" to the two tenants,"

As in subsidized rent or possible accomodations at the hotel? Didn't the tenants receive relocation assistance already?

Incredible...and only in PA.


6 people like this
Posted by Ellis act
a resident of Duveneck/St. Francis
on Jan 31, 2019 at 4:13 pm

Is the city aware of the Ellis Act or does Palo Alto think that the can selectively choose which laws to obey.
Web Link

I would suggest getting legal advise from someone else besides you know who.


1 person likes this
Posted by Curmudgeon
a resident of Downtown North
on Jan 31, 2019 at 5:39 pm

"Is the city claiming that they can force a landlord to rent to a tenant against the landlord's wishes? This theory would imply that a landlord never gets to choose what they get to do with their property. the city will force landlords to rent property forever."

If a landlord wishes to be a landlord then aforesaid landlord must rent at least a fraction of aforesaid landlord's property to tenants. Else aforesaid landlord is not considered to be a landlord under the provisions of commonly accepted logic.


"I'm confused"

I agree.


14 people like this
Posted by RBG
a resident of Another Palo Alto neighborhood
on Jan 31, 2019 at 5:56 pm

The landlord (AJ) demonstrated that they wished to rent the property by offering tenants 30 day leases. Palo Alto law requires landlords who wish to rent property to offer one year leases.


3 people like this
Posted by Null and void
a resident of Charleston Meadows
on Jan 31, 2019 at 6:24 pm

RBG- the is ni such thing as a 30 day lease. That is known as month to month. Regardless, as someone pointed out there is the Ellis act which allows landlords who want to get out of the renting business to evict all the tenants. AJ obviously wants to do that so the city law does not matter


12 people like this
Posted by Ellis is complicated
a resident of College Terrace
on Jan 31, 2019 at 8:37 pm

Ellis evictions require a one year notice for senior and disabled tenants, 120 days for all others.


Sorry, but further commenting on this topic has been closed.

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