Dear Jeff:
What an inspiration writing in this month’s AOA “From the President” – [August issue]. I appreciated the story of Jerry as well as the “try this” 1-9.
My Mom and business partner, (age 100), says her secret to living so long is to “love people” and trust in God. Again, thank you. Arlene K.
Dear AOA:
As your members are aware, Los Angeles rental units enjoy an automatic rental adjustment/increase based upon the Consumer Price Index (CPI), determined each September. This year, the CPI is 4.6%.
As AOA is aware, the increase for 2019 through June 30, 2020 was established at 4%; thereafter, during the Coronavirus pandemic, the increase was limited to 3% – and now, for 2021 through 2022, the increase should be 4.6%.
In March 2020, the L.A. City Council (and thereafter approved by the mayor), installed an “illegal rent freeze.” Again, each of the tenants was entitled to receive notification of their lawful increase; however, the collection of the rental increase was deferred or otherwise postponed. We call this rent banking.
You do not lose your increases for 2020, 2021 and of course, 2022.
Although it has not been litigated, LAHD takes the position that the aggregate amount accruing each month may not be collected, but when the “emergency” declaration is lifted, then at that point, you may start collecting the lawful rent as established by the CPI formula discussed above.
There are some modest modifications. If you’re paying for all the utilities on a unit, then you’re entitled to an automatic 2% increase.
If you approve a lawful houseguest, or perhaps an additional tenant, your base rent may be increased by 10%.
This rental increase has not been “articulated” or discussed by our friends at LAHD; however, an examination of the original “emergency” rent freeze will reveal that it did not eliminate the basic RSO formula. The increases are merely in the aggregate and banked.
The community and the rental industry are disappointed that leadership at LAHD has not produced and published their annual “Rent Stabilization Update” which is generally found within the registration packet distributed toward the end of December or early January each year.
AB 1482 – STATE RENT CONTROL: As your members are aware, this is the statewide, comprehensive rent control law that took effect on January 1, 2020. For those rental units that were heretofore under some form of exemption from rent control, their annual adjustment is a different formula – a base of 5% plus the differential for the CPI in April of each year. The CPI in April 2021 was 3.8%. Accordingly, the rental units that have now been incorporated by the RSO, heretofore exempt (new construction), should issue a notification to the tenant that their rent increase is approximately 8.3% – there’s a cap of 10%. (Consult your land use attorneys for more details.)
Additionally, under the state law, an owner occupying a duplex is completely exempt from rent control. The unit must be registered and there are exemption forms required. If the owner took occupancy of the unit before the existing tenant, then that existing tenant may be subject to rental increases without restriction or limitation. The unit is exempt from rent control and to that extent, the “just cause” provisions of AB 1482 may not apply.
In conclusion, owners can now assert, and the Los Angeles City Council should accept the reality that all of the “lockdown” or quarantine conditions during the Coronavirus pandemic no longer exist. The emergency declaration should be lifted. Los Angeles City is open. During the baseball playoffs, there were approximately 60,000 citizens enjoying the baseball games at Dodger Stadium. Every week at the Inglewood football stadium, there are over 70,000 people. Hospitals, churches, synagogues, shopping centers, gymnasia, libraries, legitimate theater, motion picture theaters, bars, saloons and restaurants are all completely open. Yes, you probably have to maintain a social distance and wear a mask. There is no evidence to suggest that the city still has a quarantine – the pandemic conditions no longer persist. The City Council should lift the declaration of emergency. Apparently, after the declaration of emergency has been lifted, an owner may increase the rents as discussed above – after the expiration of one year. The one-year provision should be revisited and removed.
Essentially, it’s very important that AOA members continue to review and read the AOA magazine and from time to time, participate in the webinars produced by AOA and others who explain these issues.
[You should have] received your registration package which provided information concerning the registration fees per unit along with the code inspection fees. Those should [have been] timely paid. Years ago, a certificate was issued. Perhaps that same certificate is available online?
Some owners take the position that the amount of rent, if any, associated with each rental unit is a “privilege-protected” privacy issue and need not be identified and disclosed. Again, consult your own attorney.
However, the fees MUST BE PAID. The litigation in this area supports the proposition that, if needed, you receive an invoice from LAHD and it is not timely paid, then you’re not authorized to collect rent. There is a requirement that your tenants receive notification that you are current on your fees. This is a condition precedent to collecting rent.
Consult your attorney and continue to support your local Apartment Owners Association. Michael Millman, Attorney – Mar Vista