New Proposition 65 Regulation Intended to Assist Residential Rental Property Owners Offers a Mixed Bag

The California Office of Health Hazard Assessment (OEHHA), the agency charged with carrying out the Safe Drinking Water and Toxics Enforcement Act of 1986 (aka Proposition 65), recently finalized regulations which take effect on July 1, 2019, intended to help owners of residential rental properties (RRP) comply with any warning obligations to their tenants for any exposures to Proposition 65 listed chemicals. See 27 CCR sections 25607.34 and 25607.35. While the new regulations are intended to provide residential rental property owners with certainty and a "safe harbor" as to what they need to do, owners would be prudent to proceed with caution before availing themselves of these provisions.

The California Apartment Association (CAA) previously lobbied OEHHA to adopt streamlined warning provisions for RRP owners as part of OEHHA's overall update to its "Clear and Reasonable Warning" regulations. That update began in 2016 and ultimately took effect on August 30, 2018 (see our previous Legal Alert ). CAA had wanted guidance regulations for its members that would allow them to dispense completely with the need for posting warnings around the apartment rentals and simply allow its members to (i) provide an initial general notice to tenants and "known adult occupants" at the time of entering into the lease or rental agreement, and (ii) thereafter provide those individuals with notice either annually or by inserting the warning into the lease or rental agreement. OEHHA initially appeared receptive to the CAA-backed proposal but withdrew it from the final regulations before they took effect.

New Warning Requirements

The new regulations now provide that a warning meeting the requirements specified will be deemed "clear and reasonable" if it is provided to: "each known adult occupant of the property at the time of renting, leasing…etc." and "each year thereafter" in hardcopy or electronic format by any of following means:

1. A letter addressed to each known adult occupant or to "Tenants and Occupants" where the adult occupants' names are unknown;
2. An electronic message sent to each email address used to communicate information to the known adult occupants and to other tenants and occupants;
3. In the lease or rental agreement; however, such notice is only effective as to the adult occupants who signed or are named in the lease or rental agreement; and
4. In any year after the initial year of rental or leasing, (i) by either the first or second method noted above or (ii) by inserting it in any renewed lease or rental agreement, but again, the warning would only apply to the adult occupants who sign or are named in the renewed lease and only for the year in which the lease or rental agreement is being renewed.

Section 25607.35 sets out the form of the warning, including use of the required warning symbol , the word WARNING and the requirement to:

• Name one or more of the exposure sources (e.g. building materials, fireplaces, mini-blinds, pesticides) present on the RRP or within specific rental units;
• Specifically identify at least one of the Listed Chemicals in each risk category (i.e. carcinogen and/or reproductive toxicant) to which occupants are being exposed; and
• Identify P65Warnings.ca.gov/apartments as a source for additional information concerning the listed chemical and the exposure.

The new regulation emphasizes that RRP owners must also provide warnings for enclosed parking facilities and designated smoking areas and do so in the manner prescribed in the tailored rule makings adopted for those exposures which took effect last August 2018. See 27 CCR sections 25607.20 and 25607.21 and 25607.28 and 25607.29. In other words, signs will have to be posted in these areas that meet the regulatory requirements.

Conclusion

It remains to be seen whether and to what extent the new regulations will afford comfort and protection to RRP owners. They do not address, let alone satisfy, the need for exposure warnings to individuals such as service contractors, mail carriers, tenants' guests and invitees or anyone other than the tenant and known adult occupants. That leaves open the potential for future failure to warn claims brought by private enforcers where RRP owners have elected to provide tenants with warnings but have not posted signs with respect to environmental exposures that others may face. Given that reality, RRP owners would be prudent to consider whether they are doing themselves more harm than good in advising tenants and known adult occupants regarding exposures via the methods OEHHA has now approved without considering the need for similar warnings to be given to others who routinely access their property.