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California Landowners & Managers: 7 New Laws in Effect January 1st

Corporate Litigation Lawyer Los AngelesCommercial Real Estate Litigation  


Paul C. Bauducco


Whether you own private or commercial rental property, serve as a member of a housing association, are a California realtor, or just have an interest in buying, selling or leasing property, take note:

With the New Year come new rules regarding your real estate.

Hopefully you are already in compliance with the new laws Governor Jerry Brown signed this past legislative season. If not, there are some important property ownership and management laws you should be ready for on January 1st.


2013 Common Interest Development & HOA Laws


Assembly Bill 1838 amends the Davis-Stirling Common Interest Development Act,  which regulates common interest developments like apartments, condos, townhouse developments and stock cooperatives.

1.  Cancellation Fees: HOAs won't be able to collect cancellation fees for HOA sales disclosure documents under AB 1838 if the cancellation is requested in writing, and if the work on the order has not yet been fulfilled, or if the HOA has already been compensated for that work.

2.  Davis-Stirling Simplified: The Act has also been reorganized. Assembly Bill 805 (the bill relocates the Act to a different part of CA Civil Code) doesn’t go into effect until January 1, 2014, so HOAs won't have to change governing documents to reflect the move until the end of 2013.


New Laws for Landlords & Property Managers


If you own or manage apartments, townhouses or space in an RV park, these new California landlord tenant laws apply to you:

3.  Notice of Default: Landlords must disclose written notice of default under any mortgages or deeds of trust on rental properties to any prospective tenants, if renting properties containing one to four residential units, before signing a lease agreement. Under Senate Bill 1191, the tenant may void the lease and recover either one month's rent or twice the amount of damages and all prepaid rent should a landlord fail to provide notice.

4.  Foreclosure Notice: Month-to-month tenants must be given a written 90 Day Notice to Terminate a rental unit when a property is foreclosed. If a tenant still has a fixed-term lease, generally the tenant can remain until the end of the term, under Assembly Bill 2610

5.  Mobile Home Owner Rights: Per Assembly Bill 2150, managers or owners of mobile home parks must provide a specified notice in the rental agreement for space, before February 1st of each year, starting in 2013. The notice sets forth rights and responsibilities of the mobile home owner, including a 90 day notice of a rent increase.

6.  Abandoned Property: When a tenant quits the premises and leaves behind personal property, the landlord must sell the abandoned property at public auction if it is worth $700 (formerly $300) or more, per Assembly Bill 2521.

7.  Animal Control: Landlords who allow tenants to keep pets cannot require tenants to have their pets declawed or devocalized as a condition of occupancy, per SB 1229.

These are just some of the California real estate laws affecting landlord-tenant relations and home owner associations in 2013. Please feel free to contact me if you have any questions regarding real estate or construction law.  A better understanding of the law can prevent problems and litigation.

Paul C. Bauducco is the Chair of our Business Litigation Practice Group. You may reach him via email:


This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Employers: Methods for Computing Commissions Must be Put in Writing

Employment Defense Attorney Los Angeles


by Sue M. Bendavid


Beginning January 1st, all companies employing commissioned workers in California must provide written agreements describing the method by which commissions are computed and paid, per Assembly Bill 1396

The new requirement comes from recent legislation which amends the California Labor Code. Formerly, it applied only to out-of-state employers who employ California-based workers. 

Employee CommissionsThe Labor Code defines a commission as compensation paid to any person for services rendered in the sale of such employer's property or services and based proportionately upon the amount or value thereof. 

Since commissions are actually wages, it's important for you as an employer to make sure you pay them correctly and on time, to prevent wage and hour claims. 


Avoiding Employee Claims for Unpaid Wages 


It is not enough to merely outline how commissions are computed and earned.  As someone who hires commissioned employees, you must describe the calculation methods into a written contract, sign it, and then obtain a signed receipt for the contract from the commissioned employee. 

You should clearly define when a commission is “earned.”  Will your employee earn commission when a sales agreement is signed, when products are shipped, or when the company receives payment from the client for the products or services? 

Make sure you follow the terms of your agreement with your employee. 


AB 1396: Other Considerations 


The new law affects employers who routinely compensate employees through commissioned pay structures, as well as those who use this method on an occasional or even rare basis. 

Also per AB 1396: 

  • If your commission agreement expires, the terms of your signed agreement will remain in effect until you supersede it, or until the agreement is terminated in writing. 
  • You won't have to include short-term productivity bonuses (i.e. for retail clerks) or bonuses and profit sharing plans as commissions, unless you offer to pay a fixed percentage of sales or profits as compensation for work to be performed. 

This may seem like extra paperwork, but there is some good news for employers, as AB 1396 repeals a Labor Code provision making an employer who violates this section liable for “triple damages.”  Still…to prevent employee claims in the first place, get your agreements in order now, before the New Year. 

Sue M. Bendavid is the Chair of the Employment Practice Group, which defends employers from wage and hour and other employee claims. Email her for more information:


This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Rumble in the Employment Law Jungle: Campaign 2012

by Robert A. Hull

It’s a grudge match – a political campaign versus a law whose consequences could tilt the election. Who wins?  A fascinating battle ensued this past week between President Obama’s presidential campaign and the Worker Adjustment and Retraining Notification (WARN) Act.

In this corner, the WARN Act mandates that businesses of a certain size must give notice of a possible mass layoff or plant closing 60 days before such a layoff/closing (even if those businesses are not certain such layoffs will occur).

The reason?  To give workers a chance to look for new employment and prepare themselves for probable job losses.

In that corner, a lean, mean presidential campaign on guard against any dramatic events which could tip the election.


Background to the WARN Act Showdown


Certain dramatic across-the-board budget cuts (i.e., ‘sequestration’), including very deep defense cuts, are set to take place January 2nd, as the result of the failure of Congress to find a solution to the budget impasse. No solution is forthcoming.

Thus, many federal contractors are facing the likelihood that they will need to lay off many thousands of employees on January 2nd. Under the WARN Act, they would need to give notice to those employees by November 2nd, right before the general election.

To make matters worse, many of these employees are located in the battleground state of Virginia. Needless to say, workers receiving layoff notices immediately prior to an election would tend not to favor the incumbent.


Political Punch, Corporate Counter-punch


The bell rings. The President’s campaign looks confident, strong. Lockheed Martin plans to issue WARN Notices before the election, in Virginia.

A sharp uppercut: The Obama campaign is stunned, just for a moment. The White House requested that Lockheed hold off on the notices. In July, the Labor Department issued guidelines saying the contractors do not have to provide WARN notices before making layoffs January 2. They anticipated this bout.

The need for layoffs is “uncertain” because Congress can come to an agreement before then. Nice combination – jab, jab, straight right. But Lockheed responds that, if they don’t give WARN notices, they’ll face liability for failure to warn or else be forced to delay layoffs, a devastating counterpunch.

The Obama campaign struggles to keep its feet. But, wait – it's up and throws a haymaker!

The Office of Management and Budget issues a memo on September 28th saying that the government will pay for any employee compensation costs as determined by a court, as well as the litigation costs and attorney’s fees (irrespective of outcome), owed by the federal contractors for failure to give the WARN notices. WARN is down! Lockheed and other contractors agree not to issue layoff notices before the election. The campaign is victorious.

Lessons?  A presidential political campaign can be a force to be reckoned with, for certain. But, if you’re a business with a possible mass layoff or plant closure and are thinking about not providing WARN notices, be forewarned. Unless you face sequestration on January 2nd, you will have to pay for all of your compensation costs, litigation costs and attorneys' fees as a result of your failure to give such notice.

Final Word:  Lockheed and all others should TAKE heed. The September 28th memo appears to only cover liabilities associated with the failure to give notice under the FEDERAL WARN Act. (Read the full White House Memo.)

Many states, such as California (but not Virginia), also have certain STATE WARN-type provisions. If mass layoffs or plant closures occur in those states, and state laws are not complied with, companies like Lockheed may still be on the hook.


This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

November Propositions |California Ballot Initiatives' Pros & Cons Part 2

Los Angeles Environmental AttorneyLos Angeles Business Litigation LawyerStephen T. Holzer
September 21, 2012

Los Angeles Environmental Attorney


Last week we took a look at Propositions 30 through 35 – the first six of the 11 new ballot measures Californians will see when they head to the voting booths in November. In this blog, we'll review the remaining five, Propositions 36 through 40.

If you want to read the Official Title and Summary for each measure prepared by the Attorney General, click on the blue text of each proposition and you'll be hyperlinked to the Secretary of State website where those documents are hosted.

We've also included hyperlinks to the main opposition and support sites for each proposition.


Proposition 36  – Three Strikes Law. Repeat Felony Offenders. Penalties. Initiative Statute.


If enacted, this measure would revise the “three-strikes” law, requiring a third-strike life sentence only in cases where the third-strike conviction is for a serious or violent felony. 

If the third offense is for a non-violent crime like shoplifting, repeat offenders would be punished by receiving twice the normal sentence for the crime instead of life imprisonment. However, rapists, murderers and child molesters would be exceptions—if convicted of even a minor third-strike crime, these persons would receive life sentences. 

Prop 36 Opposition:

Current and former District Attorneys and law enforcement seem to be divided on this one. But key opposition members to the measure include the California GOP. The "Save Three Strikes" movement says:

1. The 1994 Three Strikes law cut crime rates in half when it passed in 1994.

2. Prop 36 would allow nearly half of the state's current 3-strike inmates to be re-sentenced and then released.

3. Low-level criminals released under AB109 are already causing enough crime – worse criminals with two or more convictions could be released under this new ballot measure.

Prop 36 Support:

Again, law enforcement and DAs fall on both sides of this argument. Drafters of the measure include legal eagles from Stanford Law School, the Legal Defense Fund, and the NAACP. Proponents say:

1. Prop 36 will make room in California prisons for more dangerous prisoners, as non-violent third-strikers will have their life sentences reduced.

2. The Legislative Analyst's Office estimates Prop 36 potentially saves the state $100 million each year – funds that would help schools, prevent crime and decrease the need for tax increases.

3. The current law is too harsh in awarding 25 years to life sentences for repeat, non-violent felons, for such crimes as possession of small amounts of marijuana, writing bad checks, or theft of inexpensive items.


Proposition 37  – Genetically Engineered Foods. Labeling. Initiative Statute.


This Proposition would prohibit claims that food is “natural” where such engineering has taken place and, additionally, would require labeling indicating such engineering had occurred.  There would be a number of exemptions offered, including exemptions for food that has been certified as organic, food that is made from animals fed with genetically–engineered materials and food containing minimally-engineered materials.

Prop 37 Opposition:

Various California farm bureaus and agricultural associations, the California Republican Party and quite a few heavy hitters of the food industry are opposed to this one, arguing that 37 is deceptive and flawed, and will:

1. Ban perfectly safe foods only in California, unless they're specially relabeled and/or remade with higher cost ingredients.

2. Result in higher food costs for consumers, as manufacturers will be forced to use more organics and implement new record-keeping and other operations. Billions of dollars in costs will be passed on to families.

3. Institute more costly bureaucracy as government agencies will need to monitor food, growers, packagers, retailers, etc.

Prop 37 Support:

The "Right to Know" movement is supported by the California Public Interest Research Group (CALPIRG), the California Nurses Association and other health groups, United Farm Workers and such companies as Amy's Kitchen and Whole Foods. They claim:

1. Genetically Modified Organisms (GMOs) are genetically engineered foods and other products that have not been subjected to long-term health studies and are not proven safe.

2. A growing body of studies links GMOs to allergies, organ toxicity and other health problems, as well as environmental concerns such as a loss in biodiversity, increase in pesticide use and the emergence of "super weeds".

3. Companies revise their labeling all the time so there shouldn't be a cost increase in food as the Prop 37 opposition claims. A study shows there was no increase in food costs in Europe when their countries switched to GMO labeling.


Proposition 38  – Tax to Fund Education and Early Childhood Programs. Initiative Statute.


This measure offers an alternative to Governor Brown’s proposal (Proposition 30) to increase the income tax on individuals earning over $250,000/year and to increase the sales tax.  Proposition 38 would, for a 12-year period, increase income taxes on virtually everyone, from a .4 percent increase on very low earners ($7,316/year) to a 2.2 percent increase on individuals earning over $2.5 million annually.  The monies raised would be devoted exclusively to schools, early childhood education programs and repayment of State debt.

Prop 38 Opposition:

The primary opposition comes from the supporters of Governor Brown's Proposition 30, and the California Democratic Party, as well as the California Teachers Association. The No on 38 crowd says the measure will:

1. Kill jobs in small and family businesses and imposes a significant tax hike on most Californians.

2. Not allow for change – this law if enacted, will continue for 12 years.

3. Force schools through complex red tape to receive basic funding and creates new programs even though necessary school functions have been cut back.

Prop 38 Support:

Supporters of this ballot include the California State PTA and various school districts and school boards around the state. They claim Prop 38:

1. Restores budget cuts to schools, allowing teachers to be re-hired and programs to be restored.

2. Ensures that funds raised will go straight to the schools – state politicians won't be able to touch it.

3. Guarantees local control: parents and teachers decide how to spend the money.


Proposition 39  – Tax Treatment for Multistate Businesses. Clean Energy and Energy Efficiency Funding. Initiative Statute.


This Prop would require businesses with multistate sales to pay State income taxes according to the businesses’ percentage of total sales being made in California.  Presently, multistate businesses can base their California tax liability on a formula that gives weight to payroll and property outside the State, usually resulting in more favorable tax treatment than would exist if Prop 39 becomes law.


Prop 39 Opposition:

The opposition to Prop 39 is primarily lead by the California Manufacturers & Technology Association (CMTA), who says that, the measure:

1. Makes California's hostile business climate and uncertain regulatory environment worse, by raising taxes on job creators.

2. The three factor formula for determining tax liability has been in place since 1966, including through California's "boom" years in the 1980s and 1990s.

3. Is a job-killer because it's a $1 billion tax increase on job-creating, multi-state companies.

Prop 39 Support:

The "Close the Loophole" faction is supported by California's National Organization for Women (NOW), The American Lung Association/California, the American Federation of State, County and Municipal Employees (AFSCME) and various environmental and conservation groups. Supporters say Prop 39:

1. Closes loophole created in 2009 costs the state $1 billion per year and tens of thousands of jobs.

2. Creates 20k – 30k construction-related jobs because of the direct investment in energy efficiency and clean energy projects.

3. Will help reduce the state budget deficit by generating an additional $500 million in annual General Fund revenue starting next year, and $1 billion after five years.


Proposition 40  –  Redistricting. State Senate Districts. Referendum.


If enacted, this measure would have held the 2010 realignment of State Senate Districts by the “Citizens Redistricting Commission” in abeyance, and would have had the judiciary set interim districts until the 2010 realignment could be voted upon in a future State-wide election.  

This one gets a little confusing. If you vote "yes," you're voting to maintain the State Senate maps drawn by the Citizens Redistricting Commission. A "no" vote indicates you want the State Senate maps redrawn. 

To further cloud the issue, the original backers of Prop 40 – the ones who wanted a "no" vote, mostly the GOP – have withdrawn, though the measure will remain on the ballot. And now the original "No" movement wants you to vote "Yes." The OC Register has something of an explanation in this editorial:  Prop. 40 (redistricting): Yes.

Prop 40 Opposition:

The Yes on 40 coalitions is the initial ballot writers' opposition, and consists of the California Chamber of Commerce, League of Women Voters/California, California Forward, and other groups. Yes on 40 says the prop will:

1. Uphold the will of the California voters, who passed Proposition 11 in 2008 which created the Independent Citizens Redistricting Commission.

2. Hold politicians accountable by ending "backroom deals" and ensuring transparency.

3. Uphold a unanimous California Supreme Court decision to protect the Citizens Redistricting Commission.

Prop 40 Support:

Remember, the initial supporters of this measure wanted a "no" vote, but have now backed out and cannot get the Prop 40 removed from the ballot. The GOP could get the vote they initially campaigned for and now no longer want, just because most voters will be confused. 

Read California Ballot Initiatives Pros & Cons Part I, posted last week. Or continue with a look at ballot measures that will affect Angelenos: Los Angeles County Measure by Measure.

Stephen T. Holzer is a Business Litigation Attorney and Chair of our Environmental Law Practice Group. You may reach him at 818.990.2120.

This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Employment Defense | Governor Brown Expands Religious Accommodation Requirements

Lawyer for EmployerWage and Hour Defense


by Nicole Kamm


Late last week, Governor Jerry Brown signed AB 1964 into law, clarifying the responsibilities of California employers with respect to religious accommodation in the workplace.

Also known as the Workplace Religious Freedom Act, AB 1964 was introduced by Assemblywoman Mariko Yamada and supported by a variety of faith groups – including Catholics, Muslims, Jews and Sikhs.

Several years ago, one of Assemblywoman Yamada’s Sikh friends was accosted by guards with guns drawn when he reported for jury duty. Around that time, another incident occurred during which two elderly Sikh men were shot and killed in what was believed to be a hate crime. And last year, a Sikh man settled an employment discrimination lawsuit against the California Department of Corrections and Rehabilitation (DOCR) after the DOCR refused to hire him unless he shaved his beard.

In the wake of these incidents, Assemblywoman Yamada proposed AB 1964 to address what she found to be workplace discrimination faced by Sikhs and other religious minorities. The bill, whose number commemorates the federal Civil Rights Act of 1964, is considered to be landmark legislation in protecting the civil rights of citizens of all religious backgrounds.


Religious Discrimination Claims by Employees & the New Law


California’s Fair Employment and Housing Act (FEHA) has long prohibited discrimination against applicants and employees based on their religious beliefs, and required reasonable accommodation of religious beliefs and observances.

Assembly Bill 1964 clarifies that “religious beliefs” under FEHA include religious dress and grooming practices – and that employers cannot discriminate against applicants or employees based on those practices. The bill further clarifies what it means for an employer to reasonably accommodate such practices in the workplace.

According to the new law:

the term 'religious dress practice' shall be construed broadly to include the wearing of jewelry, artifacts, and any other item that is part of the observance by an individual of his or her religious creed. 'Religious grooming practice' shall be construed broadly to include all forms of head, facial, and body hair that are part of the observance by an individual of his or her religious creed.

The legislation states it is an unlawful employment practice for an employer to:

refuse to hire or employ a person...or to discriminate against a person in compensation or in terms, conditions, or privileges of employment because of a conflict between the person’s religious belief or observance and any employment requirement, unless the employer…demonstrates that it has explored any available reasonable alternative means of accommodating the religious belief or observance or permitting those duties to be performed at another time or by another person, but is unable to reasonably accommodate the religious belief or observance without undue hardship [on the company]….

The new law further explains, “An accommodation of an individual’s religious dress practice or religious grooming practice is not reasonable if the accommodation requires segregation of the individual from other employees or the public.”

Though intended to merely clarify existing law, the impact of AB 1964 could affect workplaces across California and bring increased focus on employer obligations to accommodate religious beliefs. Already on the rise, the new law could also bring an increase in religious discrimination lawsuits and claims.

In view of the above, employers are advised to review and update their anti-discrimination and equal employment opportunity policies and consult employment counsel if and when questions about religious accommodation arise.

Nicole Kamm is a Management-side Employment Attorney who works with employers in all aspects of defense and claim prevention.


This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
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