Annual City Apartment Inspections And Inspection Fees Are Upheld

Residential landlords can be required to submit their rental properties for annual city inspections, and can be required to pay a city inspection fee, under a recent court of appeal ruling.  (Griffith v. City of Santa Cruz (--- Cal.Rptr.3d ----, Cal.App. 6 Dist., July 16, 2012).

Facts

In 2010 the City of Santa Cruz (“City”) adopted an ordinance requiring annual City inspections of rented residential dwelling units.  The purpose of the ordinance is to identify substandard and unsafe residential buildings and dwelling units, which would then be repaired or demolished.  The City imposed the inspection requirement only on rental units, and not on owner-occupied homes, because as a general rule “the most egregious violations of health and safety codes and negative impacts as a result of overcrowding are experienced in rental housing.”

The inspection ordinance requires owners to allow City inspectors onto their property upon the City’s request for inspection.  The owner must also ask the tenant to allow the inspection, but the owner will not be in violation of the ordinance if the tenant refuses permission.  If the tenant or landlord will not consent to an inspection, the inspector can seek an inspection warrant.  If the inspector believes a dwelling is so unsafe or dangerous that immediate inspection is required for public health or safety reasons, the inspector may use “any reasonable means” to gain entry and conduct an inspection.  Properties which are well-maintained may avoid inspection by qualifying for self-certification. 

After the inspection, owners are informed of code violations and told how to remedy the violations.  An owner who fails to correct a violation is subject to City’s code enforcement provisions.  Owners are charged an annual per unit registration fee and a per unit inspection fee.

One owner, Harold Griffith, filed a lawsuit challenging the inspection ordinance on the grounds that it is preempted by state law, violates constitutional equal protection clauses, and violates an owner’s or occupant’s right to privacy.  He also alleged the fees associated with the inspection program constitute an illegal tax.  The superior court rejected Griffith’s contentions and ruled in favor of the City.

Decision

The court of appeal affirmed the decision and upheld the City’s inspection ordinance.  The court rejected Griffith’s assertion that the ordinance is preempted by State Housing Law, finding that the ordinance did not establish any new or conflicting building or housing code standards, but only provided a method to determine whether properties are in compliance with existing standards.  And while state law generally requires consent of the tenant before a landlord may enter the rented premises, the ordinance does not conflict with this law because it does not require a landlord to allow entry of a rental unit absent the tenant’s consent.  The ordinance does not conflict with the state law that allows a court to issue a warrant for a building inspection, as the inspector may seek an inspection warrant under state law if a tenant and landlord do not consent to an inspection.

The court found that Griffith has no standing to assert a Fourth Amendment claim of an unreasonable search on behalf of his tenants because he has no interest in the privacy of his tenants’ homes.  Even if Griffith had standing to raise the issue of privacy, the court ruled that his privacy claim would not succeed, because an inspector may only perform an inspection without the consent of the landlord and tenant if the inspector has reasonable cause to believe that the housing unit is so dangerous that inspection is required to safeguard public health or safety.  The court stated that such warrantless inspections in exigent circumstances are acceptable under the Fourth Amendment. 

The court also rejected Griffith’s argument that his right to equal protection was violated because the Ordinance only applies to rental properties.  The court concluded there was a rational basis for treating rental and owner-occupied properties differently “because City could plausibly have concluded that regularly inspecting every residence would be overly burdensome . . .  and that the more efficient way to promptly detect dangerous and unsanitary conditions would be to routinely inspect only the type of residence where the most egregious violations have previously been detected.”

The court ruled that the City’s inspection fees are not an unlawful tax under Proposition 218 and Proposition 26, because they are imposed to cover the City’s cost of performing inspections, and City presented evidence that the fees do not exceed its approximate cost of performing the inspections.

Questions

If you have any questions concerning the content of this Legal Alert, please contact the following from our office, or the attorney with whom you normally consult.

Jeffrey L. Massey | 916.321.4500

Jon E. Goetz | 805.786.4302