Question 1: Is there a form to use for properties that are not exempt from the new California rent control law that begins 1/1/20? Is there a form to use for properties that the rent will be rolled back on 1/1/20 to 5% plus CPI? And what website do you recommend when determining the CPI for a specific area?
Answer 1: I am not aware of any form to use for properties that are exempt from AB 1482, other than to simply state the language of the statute to notify a tenant why the unit is exempt. I am also not aware of any form to use for properties that the rent will be rolled back on 1/1/20 to 5% plus CPI, and would again simply refer to the language of the statute to notify affected tenants.
As for the website determining the CPI for a specific area, AOA has been trying to establish a confident response to that question. For example, as the law is written, CPI or inflation for the purposes of this legislation is calculated by region, not area. However, based on AOA’s research, the author of the legislation, Assemblyman David Chiu, indicates that he intends to seek to amend the bill so that the CPI will match specific “areas” and not the Western Region. According to one AOA Member, who contacted the office of AB 1482’s Author, Assemblyman David Chiu: “I wasn’t able to speak with Jen today at David Chiu’s office to verify what she told me, regarding the 4% CPI. However, I did speak with the San Mateo City Attorney, Sean Mason, and it is his understanding, that the regional CPI for the Bay Area is 4%. Which is what Jen originally told me. However, he did also say that there may be differences between areas that were incorporated and those that were not.”
Question 2: If we keep our security deposits in an account that earns interest, do we have to distribute that interest to our tenants?
Answer 2: Unless your rental agreement or the Santa Rosa ordinance has such a requirement, no. There is no overall statewide requirement that the tenant receive interest on his or her security deposit.
Question 3: We have a property located in Guerneville that has six of the 11 units designated as affordable housing and under affordable housing rent control by the county. Are those six units exempt from AB 1482? If they are, are we allowed to increase the rent in accordance to the county’s affordable housing limitations if they exceed the AB 1482 percentages?
Answer 3: Without knowing more about the terms of the affordable housing law that covers them, it is difficult to know if your six affordable units are subject to AB 1482. But if the units are covered by an affordable housing county law, then that provision would likely apply, and in that event, would likely limit an increase below what AB 1482 allows. In other words, AB 1482 is likely to be more generous. You should check with your county rent control board for its opinion.
Question 4: As property managers, we are wondering if there is a formal letter to send to owners explaining the need to notify tenants of AB 1482.
Answer 4: You can create your own form letter to your clients that alerts them to the provisions of the new law. AB 1482 itself does not require any particular form of notice (other than that it be in 12-point type size) to be provided to the tenants under 1482 by August 2020, as long as it includes the text as follows: Notice to the Tenant of the New Laws. An owner of residential real property subject to this section shall provide notice to the tenant as follows: The notification or lease provision shall be in no less than 12-point type, and shall include the following: “California law limits the amount your rent can be increased. See Section 1947.12 of the Civil Code for more information. California law also provides that after all of the tenants have continuously and lawfully occupied the property for 12 months or more or at least one of the tenants has continuously and lawfully occupied the property for 24 months or more, a landlord must provide a statement of cause in any notice to terminate a tenancy. See Section 1946.2 of the Civil Code for more information.”
Question 5: I have a tenant requesting to take off three adults from her lease and add her mom. Apparently, there was an issue with police involved and the boyfriend being arrested. She wants him and his parents removed from the lease and I need to know what I need from her or them to make a new lease besides the application and credit check from the mom.
Answer 5: Removing existing tenants, whether to replace them with new tenants or simply to have them no longer part of the rental, can be tricky, as it requires analysis of the laws that apply to that effort, the terms of the rental agreement, and the specific facts. For example, if the lease is for a period of time (e.g. one year lease with a period of time remaining), and all the tenants are ‘on the lease’, they are co-tenants with equal rights, and one tenant is not allowed to unilaterally ‘remove’ other tenants.
If those tenants wish to leave (or do leave), you have legal rights to hold them responsible for the rest of the lease term, regardless of whether they vacate without being replaced by subtenants or assignees of their particular part of the premises.
But, if everyone agrees to terminate the existing rental agreement and enter into a new one with different tenants, that can be done simply by agreeing in writing that the existing lease is considered terminated by mutual agreement, and the departing tenants will have no further rights or obligations under the terminated lease. You can then enter into the new lease with the remaining and new tenant(s) just as you would if originating a new tenancy.
Question 6: I have never increased the rent for a tenant in my property (a house in Oakland) since 2013. I did present him with the notice to tenants of the residential rent adjustment program and informed him in January 2019 that I would be increasing his rent. I was told that I could increase the rent by tallying several years of the percentage limits. How many years can I tally together (for a percentage total) to use as his rental rate increase? Please inform me of the years I can tally together?
Answer 6: In general, if an owner does not increase the rent, or increases it less than the allowable CPI, the owner is entitled to “bank” the unused rent increase for the future. However, in Oakland (unlike other rent control cities, such as San Francisco) the total rent increase that can be imposed in any one rent increase is limited, and may not exceed the total of three times the then allowable CPI increase and may not be greater than 10%. Any banked amounts that are over the allowed limit can be imposed in subsequent years until each annual amount has been imposed. However, no rent increase may be implemented more than ten (10) years after it accrues. (In San Francisco, by contrast, banked rent increases never expire and may be imposed all at one time). A banked increase may be imposed without approval from the Rent Board.
The annual CPI rate for rent increases effective July 1, 2019 through June 30, 2020, is 3.5%. For the complete list of annual increases, please visit the website at:
You might contact the Oakland Rent Board for assistance in calculating a banked rent increase, as they have resources to assist in that effort. The website may be reached here: https://www.oaklandca.gov/documents/rent-levels-and-rent-regulation.
Question 7: My neighbor just tore down an old fence that existed when I purchased the property in 2003 and built a new one. It’s their fence but it runs along my driveway and separates their backyard from my property. The new fence was moved about a foot in my direction and now my tenant can’t fit his car in the driveway. The lease states he gets the parking space. Neighbor claims the new fence is on their property line. They did not consult with us before moving the fence so we discovered this situation after the fact. Please advise.
Answer 7: There are both party fence and property border issues involved, but the border property line is the most important given your situation. It is too bad the neighbor did not consult with you before moving the fence, or that the change in location was not detected while the fence was being built. But at this point, you will likely need specific legal assistance if the goal is to get the neighbor to undo the relocated fence and move it to the prior line. Without knowing the specifics, it is impossible to say if that would be a successful effort, but certainly on the face of it (moving the property line 16 years, at least, after it was established, without consulting the affected neighbor) your case should be reviewed.
As for the impact on your tenant, if his parking can’t be restored somehow (for example, by widening the other side of the driveway), he will likely be entitled to a reduction in rent, reflecting the value of the parking space. If the lease is month to month, and not in a rent controlled city like San Francisco (which considers such rights to be housing services which may not be removed without compensation such as a rent reduction), you can probably just serve a Notice of Change of Terms of Tenancy and remove parking from the rental agreement.
Question 8: Your article on AB 1482 was extremely helpful, but I have one question – I have one lot that has a single family residence (SFR) and one accessory dwelling unit (ADU) on it. I understand that the SFR will be subject to the new law and as per your article the ADU is exempt. Do I still have to notice my tenant in the ADU that it is exempt or is it just exempt without notice.
Answer 8: A review of the article indicates that the ADU is exempt but ONLY if the SFR itself is exempt as owner occupied. The exact language of the section is:
“Single-family owner-occupied residences, including a residence in which the owner-occupant rents or leases no more than two units or bedrooms, including, but not limited to, an accessory dwelling unit or a junior accessory dwelling unit.”
Also, there is no requirement to provide notice to a tenant in an exempt unit, unless the exemption is based on the non-owner occupied SDR or condo exemption, in which case the tenant must be informed that “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.”
Question 9: With Gov. Newsom extending the price gouging protection until 12/31/20, does that mean that our rent increases are limited to 10% TOTAL over the prices before the fires in 2017 or is it 10% per year since the fires happened in 2017? Also, does the price gouging rule apply to vacant units? I realize we are limited by the new law going into effect on Jan 1, 2020 with the 5% plus CPI.
Answer 9: California law generally prohibits charging a price that exceeds, by more than 10 percent, the price of an item before a state or local declaration of emergency. Exceptions to this prohibition exist if, for example, the price of labor, goods, or materials has increased for the business.
As with all other covered goods and services, following a declaration of emergency, the statute generally prohibits landlords from increasing the price of rental housing by more than 10% of the previously charged or advertised price. It does not allow for combining ‘missed’ rent increases if doing so would exceed the 10% limit.
For rental housing that was not rented or advertised for rent prior to a declaration of emergency, the price cannot exceed 160% of the fair market value of the rental housing as established by the U.S. Department of Housing and Urban Development.
Question 10: The property is a 4-plex in Oakland, and the tenant has been living there for five years. Now they are asking the owner to do a chimney sweep (wood burning fireplace) inspection and cleaning. They only asked this because they just had a new baby. Is this an expense that the owner is required to pay and mandatory to do? Is this a responsibility of the tenant?
Answer 10: The owner has a duty to insure the safety of the structure, and so keeping the fireplace safe for use would be the owner’s responsibility. The city of Oakland may have a mandatory chimney inspection schedule, so you might check with the building department there for that. Otherwise, a chimney sweep company could properly advise on routine maintenance of the chimney and firebox/flue etc. If there has been chimney use and no maintenance for the last five years, I would think it’s a good time to have that done.
Question 11: I have a question about renting to people with support animals. I have read that since my property is four units with one unit owner-occupied, I can refuse to rent. However, I am not sure if this is applicable to a rent-controlled building in San Francisco.
Answer 11: Refusing to rent to a tenant or applicant on the basis of his or her need for an emotional support animal could result in significant penalties based on the laws of disability discrimination. Such action requires strict compliance with the laws that apply to that issue, which includes both state, federal and local laws, and which are affected by the specific facts. Your reference to an owner occupied 4-unit building relates to one of the federal statutes, which, while it may not apply, is supplemented by other federal and state laws that do. Thus, I believe you will need a specific legal opinion on your specific situation.
Question 12: Question on the new rent control law and just cause eviction. Can we continue to use our regular 3-day notice to pay rent or quit when a rent is late. Or do we have to use some different form? My bigger question is can we still serve just a 3-day notice for non-payment of rent or do we have to now first serve a 3-day notice to cure first and then a 3 day notice to pay or quit? There is still great confusion there.
Answer 12: Your confusion is shared. As the new law states: (c) Before an owner of residential real property issues a notice to terminate a tenancy for just cause that is a curable lease violation, the owner shall first give notice of the violation to the tenant with an opportunity to cure the violation pursuant to paragraph (3) of Section 1161 of the Code of Civil Procedure. If the violation is not cured within the time period set forth in the notice, a three-day notice to quit without an opportunity to cure may thereafter be served to terminate the tenancy.
As written, and considering that non-payment of rent is a ‘curable lease violation,’ it is a valid argument that the ‘pre-notice’ notice does apply to non-payment lease violations. However, I don’t believe that is the case, as AB 1482 refers to CCP Section 1161(3), which is the ‘curable lease breach’ section, whereas the right to bring a three day notice for non-payment of rent is set out in 1161(1). This is an issue that a court will need to rule on, but I believe the argument that a non-payment three day notice is exempt from the ‘pre notice’ notice requirement is sound.
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 415-871-0070; email [email protected] or by visiting the website www.bfc-legal.com.