Question 1: Is there any limitation on how far back I can serve banked rent increases on my Oakland and San Francisco apartments? Does the rent increase moratorium have any effect on banking?
Answer 1: “Banking” refers to allowed annual rent increases that were not imposed on the tenant. Annual rent increases that were not applied can be applied in future years. In Oakland, property owners may defer applying annual rent increases up to 10 years. Rent increases that were not imposed within 10 years expire.
In San Francisco, there is no limit to the amount of rent increases that can be banked since April 1, 1982 and there is no time limit for imposition of these banked amounts. New owners may impose banked increases that were accumulated by prior owners, but banked increases from a prior tenancy may not be imposed on a new tenancy. In other words, once a tenancy is terminated, all prior banking expires.
Berkeley allows an owner to bank annual increases, by not raising the rent on January 1st even though authorized to do so, and then increase the rent at a later time. As long as the rental unit is in compliance, the rent ceiling will be automatically adjusted in the Board’s database. An owner can raise the rent to the rent ceiling at any time provided the tenants are given written, 30-day notice of a rent increase.
Note that if the amount of the increase is greater than 10% of the lowest rent during the previous 12 months, California Civil Code Section 827(b)(3) requires you to give your tenants a 90-day written notice. However, while San Francisco and Berkeley do not ( in non-pandemic times) limit the amount of banked rent increase that may be imposed on the tenant, Oakland limits such increases to no more than 3 times the current year’s CPI. Thus, if your banked increase exceeds that amount, further banked amounts must wait for the next year’s anniversary date, until all remaining allowed increases have been imposed.
An interesting question is posed by the current Rent increase moratorium in Oakland. In other words, Oakland is not allowing bank rent increases, during the state of emergency, and so at some point some owner will risk losing the last of a 10 year bank rent increase because it will expire while the pandemic has been in place. It remains to be seen whether open will adjust its regulations to allow such expired increases to be imposed once the pandemic restrictions are lifted.
Question 2: Are house guests or tenants at-will protected from eviction by the CDC eviction moratorium? Background: My father allowed somebody to stay at his house in an effort to help a person out. This person has been living there for a few years as an at-will tenant. They were not asked to pay any rent, utility bills or any other expenses for the house. My father paid the mortgage and all the expenses for the house. Unfortunately, my father passed away recently. Now we need to rent or sell the house to cover expenses and the guest is no being cooperative and refuses to move out.
Answer 2: Effective September 4, 2020, the CDC (Centers for Disease Control) issued an Order, prohibiting a “landlord, owner of a residential property, or other person with a legal right to pursue eviction” from evicting “any covered person from any residential property in any jurisdiction to which this Order applies during the effective period of the Order.” A review of the CDC order does not conclusively confirm whether it applies in your situation or not. The primary argument you would make is that the individual is not a “covered person” under the ordinance because the house was never rented or leased to them. However, the occupant would likely argue that in fact they did exchange some consideration for the right of occupancy, such as helping take care of your father etc. so the facts may result in the order actually applying, which would then require you to go through the procedures of the order.
Also, another uncertainty is whether the order actually applies in California because of the recent passage of AB 3088. However, while Governor Newsom indicated his belief that the CDC order does not apply, that is going to be up to a judge in any given situation to decide, until an appellate level court makes a binding decision that applies at all local trial court levels. However, in a similar situation in Solano County, the court approved the unlawful detainer, and we are about to serve it on the occupant, who is a former family member allowed to live in the property without any rent or other payment. It remains to be seen if the tenant will be permitted to raise the CDC order as a defense.
Question 3: What is the rent increase percentage for 2021? My property is in Fortuna.
Answer 3: There is no local rent control in Fortuna or Humboldt County which means that area and rental properties in it would be covered by the 2019 statewide rent and eviction control law passed as AB 1482. The permissible increase is 5% plus a percentage based on the local CPI index. For covered units, annual rent increases are limited to no more than 5% plus the percentage change in the cost of living for the region in which the property is located, or 10% whichever is lower. “Percentage change in the cost of living” means “the percentage change in the Consumer Price Index for All Urban Consumers for All Items for the metropolitan area in which the property is located, as published by the United States Bureau of Labor Statistics.” According to the April 2020 Consumer Price Index, West Region, the annual increase from April 2019 to April 2020 was 1.3%
However, there may be local COVID-19 related rent increase restrictions in your area that you also need to be aware of, as those local restrictions may reduce the increase below that otherwise allowed by AB 1482.
Question 4: How long can a tenant stay away from her apartment without being in the unit and not paying rent or answering emails before I can enter the unit and remove personal belongings and rent out the unit? I do not have a physical address for where she is. I have her phone number and email. She does not answer either.
Answer 4: For your situation, there is a form, entitled Notice of Belief of Abandonment, which you can serve on the tenant, and if the tenant fails to respond, and has been in default on the rent for over 14 days, and you reasonably believe the tenant has abandoned the unit, you would be legally entitled to recover possession. It is form 145 in the AOA forms list. This would be your simplest and most effective way to confirm whether your tenant intends to keep possession or not. If the tenant is truly gone, as you suspect, using this form properly will provide you legal authority to retake possession without going through the unlawful detainer process, which, yes, is an incredibly difficult process at the moment. The form provides you with perhaps your best opportunity to regain possession of that unit. If the tenant responds, of course, it’s back to square one.
Question 5: My question concerns California’s requirement for a landlord to accept Section 8 vouchers. I have no problem including housing assistance programs in a prospective tenant’s application, and accepting the housing assistance as partial rent payment; however, it is my understanding that a landlord must sign an agreement with HUD. I would only like to use my rental agreement and not be forced to sign some other agreement. As a landlord, am I required to sign the agreement even though I don’t want to? If so, wouldn’t that be considered an invalid contract since I didn’t sign it under my own free will?
Answer 5: First, landlords are not required to accept a Section 8 applicant. Under AB 329, passed in 2019, however, landlords may not reject a Section 8 applicant solely because of the applicant’s reliance on Section 8 rent payment assistance.
Prior to the passage of AB 329, it was unclear whether a landlord could reject Section 8 applicants categorically. Court cases and existing legislation combined to create the uncertainty, but the general consensus among practitioners was that a landlord was permitted to reject Section 8 applicants solely on that basis. However, AB 329 made it clear that this was no longer the case, by specifically including Section 8 income under the definition of “source of income”. Existing law prohibited discriminating against a tenant applicant based on their source of income. But the new law does not require landlords to accept Section 8 applicants, only to consider an applicant as any other applicant.
However, if the owner accepts a Section 8 applicant, the owner will be required to sign the housing authority’s separate contract (the housing assistance program HAP contract), in addition to the owner’s preferred lease.
Question 6: During a recent walk-through of my Lodi tenant’s unit, we discovered the place has trash stacked up everywhere. You cannot see the kitchen; they removed the stove and are cooking with a propane camp stove in the living room. I have told them to get it cleaned up and I am working to have them do it. Can I give them a 3-day notice? My understanding is that I cannot evict. They are paying their rent. In today’s world, what can I do?
Answer 6: As Lodi is not subject to a local eviction control law, or a strict COVID-19 eviction moratorium, the recently passed state law known as AB 3088 and the prior AB 1482 statewide eviction control law both allow for the termination of tenancy based on violations of the lease or law, including the creation of a nuisance. Using a camp stove to cook inside a residential unit would likely qualify, based on the inherent hazard of that particular activity. Also, removal of the stove would likely be a lease violation, and the ‘hoarding’ conduct can also constitute a nuisance. Thus, a 3-day notice to cure or quit these various breaches would be appropriate.
Question 7: Our tenant hasn’t paid rent for three months. Her boyfriend, who is not on the month-to-month rental agreement, advised my manager that he has not received his paycheck because of the COVID virus. We are serving a 3-day notice. Can we evict her, or do we have to wait until next February?
Answer 7: Generally, any demand to a tenant to pay rent during the period from March of 2020 through January of 2021 requires a 15 day notice, along with a required declaration form to the tenant, and some additional language in the 15 day notice, all of which is required by the recently passed AB 3088. So, your 3-Day Notice to pay or quit would be not only ineffective, but likely as violation of AB 3088, which carries potential penalties. Even the 15-day notice provides the tenant with a defense to eviction for non-payment of the rent, though under different provisions depending on when the rent accrued. It’s become quite a complicated process, so you may need specific legal guidance to achieve the goal of either forcing the tenants to pay rent or recovering possession of the unit.
Question 8: I have a multi-unit building in Berkeley. I am changing the windows for the apartments that pay a fair market value rent, and not changing the windows on the apartments that pay low rent. Can I do that, or could this be considered discrimination against the low rent paying tenants?
Answer 8: That is a very interesting question. As long as the windows in the lower paying units conform to habitability requirements, I don’t think it would constitute discrimination to replace the windows in the units for the tenants who pay higher rent, as long as that is the only basis for the differing treatment. I can’t think of a basis for which a discrimination claim would be made, as no tenant is entitled to extra-special amenities, and you’re not favoring one tenant over another based on a protected category like race, nationality etc. Even in Berkeley!
Richard Beckman, of Beckman Feller & Chang P.C., has been practicing landlord-tenant law for over 26 years, primarily in rent-controlled jurisdictions such as San Francisco, Oakland and Berkeley. He represents clients in a broad range of real estate-related disputes, including partition of co-ownership interests, purchase contract disputes, insurance coverage analysis and land use. Mr. Beckman also specializes in all aspects of landlord-tenant issues, representing landlords and tenants in residential and commercial matters. He can be reached at 510-548-7474; email [email protected] or by visiting the website www.bfc-legal.com.