Q: I own a six unit apartment building in San Diego County that was built in the 1980s and I would like to remodel the units next year. Am I allowed to ask my tenants to vacate under the new Tenant Protection Act of 2019?
A: Yes, under the new Tenant Protection Act of 2019 (the “Act”) you may give notice to your tenants to vacate if you intend to demolish or substantially remodel the units. However, if you do so you will be required to pay your tenants relocation benefits of one month’s rent. You can do this by either waiving the tenant’s last month’s rent in writing or pay the tenant one month rent within 15 days of the service of the notice terminating their tenancy. If the apartment building is located in the City of San Diego, then you must also comply with the Tenant’s Right to Know Ordinance and obtain all necessary permits prior to terminating the tenancy.
Q: I am going to remodel my 10-unit apartment building since the units have not been remodeled since the 1960s. I plan on giving notice to my tenants at the beginning of 2020. What happens if I waive my tenants’ last month’s rent as their relocation benefits and they refuse to move out?
A: If a tenant fails to vacate after you give a proper notice, you can file an eviction against them based on your notice. Further, you can recover the waived rent/relocation benefits as damages in your eviction lawsuit.
Q: I own a condo in my trust, and I want to remodel it. Do I have to pay relocation benefits to my tenant if I ask him to leave?
A: No, you do not have to pay relocation benefits to a tenant that resides in your condo, so long as you own the condo in your name, or the name of your trust, and you provide your tenant with written notice as described in the Act. If you fail to provide the proper notice under the Act, then you will not qualify for the exclusion and have to pay relocation benefits. For any tenancy entered into before July 1, 2020, you can provide the written notice in a separate notice from the rental agreement/lease. After July 1, 2020, the written notice must be included in the rental agreement/lease for the exclusion to apply. The notice must state the following: “This property is not subject to the rent limits imposed by Section 1947.12 of the Civil Code and is not subject to the just cause requirements of Section 1946.2 of the Civil Code. This property meets the requirements of Sections 1947.12 (d)(5) and 1946.2 (e)(8) of the Civil Code and the owner is not any of the following: (1) a real estate investment trust, as defined by Section 856 of the Internal Revenue Code; (2) a corporation; or (3) a limited liability company in which at least one member is a corporation”.
Q: I own 20 houses under a corporation for the past 20 years. These homes are not located in a rent control city. Do I have to pay relocation benefits to the tenants if I want to remodel all the homes?
A: Yes, homes are not excluded from paying relocation benefits if they are owned by a corporation, a REIT or an LLC with a corporation as a member.
Q: I built a home in 2010 and rented it out. I want to move back into the home. Do I have to pay relocation benefits if the home is currently not in a city that has rent control?
A: No, relocation benefits under the Act do not apply to properties that are less than 15 years old as long as you provide your tenant with proper written notice that your property is excluded under the Act.
Correction: In last month’s column, the annual inflation rate for the purpose of the Tenant Protection Act of 2019 was improperly stated as 1.4%. There is some confusion as to what the proper figure is and we will update you in the next issue. We regret the error.
Attorney Franco Simone, of Simone & Associates and The Landlords’ Legal Center, has been doing evictions for over 20 years. He is also an adjunct law professor at the University of San Diego. Mr. Simone’s office is open Monday – Friday from 9:00 AM to 5:00 PM. Tel: 619-235-6180, website: www.landlordslegalcenter.com or email [email protected].