Analysis of The City of Crescent City v. Sarvada Reddy. (2017) California Court of Appeal, First Appellate District.

Property owners are under a duty of care to maintain their properties for habitability and fitness for the properties ordinary purpose. It must supply functions that would normally be found in a home following the building codes. In California, the building codes are the California Building, or Residential Code and the California Green Code. In addition to building codes, the California legislature has outlined many of the baseline functions required of a home in California Civil Code sections 1940-1954. For example, running water and heating and cooling are required when the property is located in specified regions within the state. These code sections apply in particular for rental properties.

In addition to the codes specified above, there is the landmark decision from the California Supreme Court in Green v. Superior Court , which abandons the old view that the payment of rents is a duty separate from the right of possession. In Green the court found that the doctrine we know today as the warranty of habitability is a common law duty in addition to being codified by the legislature. In the opinion the court pointed out that there are many common law remedies available to a tenant that has taken possession of property that is in poor condition or becomes in poor condition through normal usage, including: repairing the condition and deducting rent, breaking his or her lease without penalty, and other remedies both in code and case law. In addition, an owner occupied home may fall into such disrepair that it is a danger to the public.

The issues decided in the recent case of Crescent City v. Sarvada Nand Hanumanthu Reddy, is whether it was wrongful to appoint a receivership to oversee the repair and improvement of a property to bring it in compliance with building and health and safety codes. On February 16, 2017, the opinion was certified for publication and points out many factual bases for why it is appropriate for a regulatory body to take control of a property until it is improved to minimum standards for the sake of the public welfare.


Background:

Reddy was lawfully inspected by the local building and health and safety agency in Crescent City and advised of the violations. The building in question was found to have 76 different building code or health and safety violations. Mind you, these were not violations that were de minimums in nature. These were items that the building official and the fire marshal found to ‘be a danger to life and limb’ and ‘the violations are so extensive and of such a nature that the health and safety of residents or the public is substantially endangered’.

The City gave Reddy more than 18 months to remedy the conditions after the initial Notice and Order to Cure Various Building Codes was given. The City then petitioned the court under the Code of Civil Procedure section 564, subdivision (b)(3) which authorizes the appointment of a receiver “after judgment, to carry the judgment into effect” and Health and Safety Code section 17980.7, subdivision (c) which authorizes a receiver if “a building owner fails to correct conditions in a substandard building following notice and a reasonable time for compliance”. The court granted the petition precipitating this appeal.


Discussion:

Here, the court, after deciding the main issues, pointed out that Reddy had the ability to repair and was given a reasonable amount of time to remedy the building code violations. The court found that 30 days was all that was statutorily required before petition for appointment of a receiver; the City had granted Reddy 18 months to remedy the situation. Given the time allowed to elapse the court found that the city had allowed a reasonable amount of time for Reddy to remedy the building code violations. In addition, the testimony given as to what the violations were was found credible. The court found that the building official and the fire marshal had given adequate reasoning and citation of the problems to show that the violations were of the type that would be considered a danger to the health of the public.

Reddy countered, arguing that the violations had been substantially repaired and introduced evidence and testimony from his property manager and the general contractor making the repairs. In addition, Reddy made an argument that oral testimony in support of his position should have been considered and the court wrongfully precluded it. The court of appeals did not find Reddy’s arguments compelling. Instead, the court reasoned that more than enough time had passed and that the repairs were not made to code, based on the re-inspection of the building of the inspector and fire marshal. The court also found against Reddy in that the oral testimony was not properly petitioned for during law and motion and instead was asserted as a restatement of the written evidence already submitted on appeal. Here, the court found that the testimony would be duplicative and was therefore not compelling, the applicable standard to be met in order for the testimony to be allowed on appeal or at the district court after written submission.

Additionally, the court found that reliance on the opinion of the building official and fire marshal was sufficient to decide that matter and the court would not be required to visit the building to view the repairs. Here, it was sufficient that the adequately qualified regulatory body and official offered evidence and that it as weighed against that of the defendant for a decision to be made.


Conclusion:

  • When a building is allowed to fall into such a condition that it would endanger ‘life or limb’ or ‘ be a danger to the general public as a whole’ the court can and may, under both the Code of Civil Procedure and the Health and Safety Code, appoint a receivership in order to carry out the rehabilitation and safety compliance of the structure after a judicial order.
  • A highly skilled expert witness is a must when defending an action of non-compliance with building code violations. An expert report that is capable of answering item by item the building violations and the remedial actions taken can prevent a receivership.
  • The expert report must be written in such a way that the court is able to understand the actions taken and see that substantial compliance has been met to avoid potential receiverships and heavy-handed actions by the courts and the municipalities that the structure is located in. In addition, it is clear from this case that once submitted in writing, oral testimony will not be allowed on the same issues unless it meets the high bar of being considered
  • Retain an expert witness who is able to give reports that give you and the court perspective on the matter. In addition, an expert witness can give you documentation that complies with the requirements of the Notice To Cure to protect your property and from having an adverse action recorded.

 

DISCLAIMER: Let me stop here to give you the boilerplate disclaimer. Every situation in law and building is different. Do not rely on this article to make decisions on your specific situation. Every matter is different and requires that you talk to a professional. If you want to talk to me about your matter see my contact below. Nothing in this article shall be construed to create an attorney client relationship or partnership.

 

Dan Knight is principle at Dan Knight Construction & Plumbing and The Law Office of Daniel J. Knight. He is a third generation building contractor, attorney, real estate broker, construction management lecturer at Cal Poly State University, and Lead Instructor at Cuesta Community College Construction Tech. Program in San Luis Obispo California and a former San Luis Obispo City Planning Commissioner.

His practice focuses on construction defect expert witness engagements, construction defect representation, land use and zoning, public interest real property matters, and private real property matters.

 

 

 Phone 805-316-1180 | Email: Dan.Knight@DanKnightLaw.com

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