Below are questions asked by rental property owners regarding California rent control laws followed by answers provided by Attorney Richard Beckman.
Question 1: Are there any new state or local laws we should know about as we enter 2023?
Answer 1: This should have been the subject of a question in the January edition, but coming even in February, not much was missed. Somewhat surprisingly, 2022 was a fairly uneventful legislative session as to landlord/tenant legislation, other than the various pandemic related measures regarding tenants who failed to pay the rent. Those issues have been dealt with in other articles and will not be discussed here.
Taking effect in 2023, state law AB 2559 – the Reusable Screening Report law – allows tenants to submit an existing credit report as part of other rental applications, thereby avoiding paying the credit report fee the prospective landlord would otherwise be entitled to charge for running that report as part of the application process. The report submitted by the applicant has to meet certain conditions, most importantly that it was prepared within the previous 30 days by a consumer reporting agency at the request and expense of an applicant, is made directly available to the landlord for use in the rental application process or is provided through a third-party website that regularly engages in the business of providing reusable tenant screening reports that are available to landlords and complies with all state and federal laws pertaining to use and disclosure of information contained in a consumer report by a consumer reporting agency, and is available to the landlord at no cost to access or use. The bill would require a reusable tenant screening report to include specified information, including the results of an eviction history check, as prescribed.
The landlord may, but is not required to, accept the reusable tenant screening reports and may require an applicant to state that there has not been a material change to the information in the reusable tenant screening report. But if the landlord accepts the report, the tenant may not be charged any fee by the prospective landlord.
There were several other measures that take effect January 1 affecting landlord and tenant issues, but unless you have a floating home marina (which is now subject to expanded rent and eviction control as a result of AB 252), operate low income housing funded by certain government programs (in which case tenants can no longer be prohibited from having a household pet under SB 971), or operate a mobile home park (which can now be subject to rent and eviction controls for units that are at least 15 years old, rather than those built before 1990, courtesy of SB 940), that is about it.
As for local laws, Oakland voters passed Measure V, which made several significant changes to existing rent and eviction control laws in Oakland.
- It eliminated the ‘new construction’ exemption from the ‘just cause’ eviction protection, which had applied to units built after December 31, 1995. It added a new exemption for “Detached accessory dwelling units, as defined by California Government Code Section 65852.2, constructed on or after January 1, 2012. This exemption shall only apply for ten years after such unit is first offered for rent to any tenant or first receives a certificate of occupancy, whichever comes first.”
- It removed a just cause ground that allowed the owner to require the tenant to renew an existing lease for the same term (usually one year), meaning tenants can no longer be compelled to renew an expiring rental agreement or face being evicted.
- It added a new category of what are referred to as protected tenants, meaning tenants who cannot be evicted under the ‘owner move in’ or substantial repairs’ just cause provisions. Currently, the OMI category was limited to disabled and elderly tenants who have been in occupancy at least five years. The new category has now been added to include school age children or tenants who are identified as educators, which basically means anyone employed by the Oakland Unified School District who have been tenants for over 90 days. Specifically:
When a landlord seeks to evict a tenant under Subsection 6(A)(9) or (10) [8.22.360 A.9, 10], it shall be an affirmative defense if any child under the age of 18 or any educator resides in the unit, the child or educator is a tenant in the unit or has a custodial or family relationship with a tenant in the unit, the tenant has resided in the unit for at least 90 days, and the effective date of the notice of termination of tenancy falls during the regular school year of the Oakland Unified School District.
- Finally, it extended ‘just cause’ eviction protections to occupants of “Vehicular Residential Facilities, including RVs and tiny homes on wheels.”
Alameda’s “Fair Chance” Law
In addition to the Oakland changes, the County or Alameda, at its December 20 meeting, adopted a countywide rent and eviction control measure, that also includes a prohibition on seeking an applicant’s criminal history (“Fair Chance Law”), and also requires a rent registry for rental units. This measure only applies to unincorporated areas of the county. There has been some confusion about when these measures take effect, with one published report in the San Francisco Chronicle stating that “The new law takes effect after the county’s eviction moratorium, put in place during the COVID pandemic, expires on April 30.” That was news to me, as I have had no information on that, and my email to the article’s author has not been responded to. Her article can be found here:
https://www.sfchronicle.com/eastbay/article/Housing-rescued-her-from-years-of-jail-and-17666993.php
But this confusion will be clarified by the next issue. Obviously, a date for the end of the country moratorium would be a significant event.
Question 2: What is the latest on the lawsuits against the eviction moratoriums in Oakland and Alameda County?
Answer 2: In a conversation with AOA’s president Jeff Faller, he mentioned that he had trouble seeing the difference in the response to this question from one month to the next. Sensitive to that, and hoping to avoid repeating myself, there was a major development on this topic since last month’s article as to the challenges to the Oakland and Alameda County moratoriums. On November 23, days after this previous article was submitted, the federal district court judge issued an Order denying the motions for summary judgment filed by the plaintiff property owners who were seeking to have both moratoriums stricken as unconstitutional. In a lengthy opinion, the judge concluded that the issues required evidence to be presented at trial, and were not subject to the summary judgment process. However, by the time the case goes to trial, both moratoriums may already be lifted. Again, stand by for further developments.
As to the City of Alameda case against Alameda County – City of Alameda v. The Superior Court of Alameda County A165610, (which seeks to have the moratorium stricken as to incorporated areas like the City of Alameda), the city filed its final papers on December 9, and we are awaiting the appellate court’s opinion as to whether to remove the county moratorium from applying within city limits. If the court agrees with the City of Alameda, that decision will likely apply to every other city in the county, meaning areas such as Fremont, Hayward, etc. will not be subject to the county moratorium, and unless the various cities have their own moratorium like Oakland or Berkeley, owners will be permitted to proceed on any unlawful detainer ground, such as non payment of rent, owner move-in and breach of lease cases. That will provide tremendous relief to property owners in those jurisdictions. A decision is anticipated from the court within 90 days. Continue to stay tuned!
Question 3: In one of your prior articles, you answered a question about the current amount a landlord could charge the tenant for a screening fee. However, the amounts you provided did not quite add up. Can you clarify?
Answer 3: You are referring to Q&A Question 7 from the November issue, in which, in response to the question ‘What is the maximum allowable amount to charge for background, credit, Unlawful Detainer and criminal checks for applicants in San Joaquin County, Stockton, CA jurisdiction?’, the Answer was ‘As of December 2021, the CPI adjusted increase to the screening fee is $23.33 and the total maximum fee you can charge is $55.58, regardless of the property location or credit report type.’ The confusion was based on the $23.33 amount, which should have been $25.58, which represents the total CPI increase from the original amount of $30.00 set when the legislation was first introduced. And a new rate should be forthcoming and could be included in next month’s article.
Question 4: For those members who did not tune into the recent streaming seminar on the “five most important landlord-tenant questions”, two of those questions involved new rental laws, and the status of the cases seeking to invalidate the moratoriums, both of which are covered above. The other questions were:
- How much can I raise the rent under AB 1482? Under AB 1482, a landlord cannot increase rent on a covered unit by more than 5% + local CPI (CPI = inflation rate), or 10%, whichever is lower. Currently, the increase is the maximum amount of 10% based on the recent inflation rate, for rent increases that take effect on or after August 1, 2022.
- What notices do I need to serve to be in compliance with state law? Subject to local rent ordinances, the proposed rent increase notice for a tenant that is 10 percent or less of the rental amount charged to that tenant at any time during the 12 months before the effective date of the increase, either in and of itself or when combined with any other rent increases for the 12 months before the effective date of the increase, shall be delivered at least 30 days before the effective date of the increase. If the notice is mailed, add five days to the effective date of the increase. If the notice imposes an increase in excess of 10%, the notice period is extended to 90 days, with the extra five days if mailed. AOA’s form notice should be fully compliant with any statewide notice requirement, though notices that affect tenancies subject to local rent control, including rent moratoriums such as that in Oakland, need to be specific to those jurisdictions
- What are the current rent increase limits for rent-controlled cities of Oakland, Berkeley, Alameda and San Francisco?
Oakland: Rent increases during the Local Emergency cannot exceed the CPI. Effective August 1, 2022, the new annual CPI rent increase is 3%. This means banked rent increases otherwise available are on hold during that local emergency period.
Berkeley: The Annual General Adjustment (AGA) for 2023 is 4.4%. According to Berkeley rent board staff, however, banked increases, up to the ‘lawful rent ceiling,’ may also be imposed.
Alameda: The rent may only increase by the Annual General Adjustment (AGA) 2022 AGA: 3.5% – Effective September 1, 2022 – August 31, 2023
San Francisco: The current applicable CPI increase for San Francisco (that is, from August 1, 2022 to July 31, 2023), is 5%. Thus, the maximum annual increase for units subject to AB 1482 is currently 10% (5% + 5%). If the increase is effective on or after August 1, 2023, a different CPI increase will apply.
Question 5: If the furnace goes out during the winter and a repair can occur within 3 to 4 days – (increase response time due to high repair demand) – would this be considered reasonable time for the repair vs. habitable accommodations? Also, I provide my tenants a portable heater to assist with the chill factor (more than one heater can overload circuits). Is there a time period which is too long without an operable heater? Thank you.
Answer 5: I could have written this question myself, just having experienced an identical situation. Having a heater repair completed in three or four days from being notified should be considered reasonable, assuming you made reasonable efforts to have it done sooner, and that’s the soonest response available. The tenants may be entitled to a slight rent reduction for the days without heat, and you can offer that to them as a goodwill gesture, which I am sure they would appreciate. That is what I did for my tenants, who expressed their appreciation. I think making such efforts, even if not legally required, (though, in this case, it would be erring on the side of caution) for good tenants, goes a long way to maintaining a healthy landlord-tenant relationship.
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.