Changing the Terms of a Tenancy
Under California Law, if you are increasing rent 10% or less, a 30-Day Change of Terms of Tenancy is required to be served on your tenant. If you are increasing the rent 10% or more, a 90-day notice is required.
In California, there exists an “Anti-Gouging” statute, Penal Code 396. During a state of emergency, as declared by the President of the United States or the Governor of California, if you exceed charge over 10% for goods or services you could be in violation of this statute. This is based on the state of emergency for the county in which the emergency is declared. Currently, there are 20 counties in California in which a state of emergency has been declared. These include: Alameda, Amador, Calaveras, El Dorado, Humboldt, Lake, Los Angeles, Marin, Monterey, Napa, Nevada, Orange, Placer, Sacramento, San Bernardino, San Luis Obispo, San Mateo, Santa Cruz, Sierra and Yuba.
If you own rental property in these counties, you need to be concerned if you increase rent more than 10%. That does not mean you are automatically in violation of the statute if you exceed 10%.
The statute states “… However, a greater price increase is not unlawful if that person can prove that the increase in price was directly attributable to additional costs imposed on it by the supplier of the goods, or directly attributable to additional costs for labor or materials used to provide the services …”
Landlords in all counties should endeavor to increase their rents to market level, to avoid this situation. As we know, rents have been substantially increasing. If your property is not subject to any rent control, you should immediately raise your rents to market level. To determine market level check different leasing sources to compare. One source I recommend is www.rentometer.com.
If your property is subject to a local rent control statute, you should always raise the rent to the maximum that the law allows for every year.
Lastly, if your property is subject to Statewide Rent Control (AB 1482), you should also raise your rents in accordance with the statute. The statute provides for a yearly 5% increase plus the percentage amount of the Consumer Price Index (CPI) as published for April of each year. The CPI for April 2022 has just been published.
Raise your rents to market level, to avoid being crushed if your local jurisdiction institutes rent control. The drum is beating and local rent control is on its way to your location.
Dennis Block, of Dennis P. Block & Associates can be reached for information on landlord/tenant law or evictions at any of the following offices: Los Angeles: 323.938.2868, Encino: 818.986.3147, Inglewood: 310.673.2996, Long Beach: 310.434.5000, Ventura: 805.653.7264, Pasadena: 626.798.1014, Orange: 714.634.8232, San Diego: 619.481.5423 or by visiting www.evict123.com. Now, you can also read Dennis Block on Twitter, www.twitter.com/dennisblock or text him at (818) 570-1557. “Landlord Tenant Radio Weekly Podcasts can be heard at any time at www.EVICT123.com or download the app “EVICT123”.