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Raising Rent on Rent Controlled Properties

Under California law a landlord cannot raise your rent during your initial lease term, absent a lease provision to the contrary. If you do not have a lease, or if you are on a month-to-month, then the landlord can increase the rent so long as s/he provides the tenant proper written notice. Under California law, the landlord must provide a tenant with at least 30 days’ advance written notice of a rent increase if the rent increase is 10 percent (or less) of the rent charged at any time during the 12 months before the rent increase takes effect. (35 days if the notice is served by mail). If the landlord is increasing the rent more than 10% in a 12-month period, then pursuant to California Civil Code §827, the landlord must give the tenant at least 60 days prior written notice (65 days if the notice is mailed). In rent controlled cities, like Los Angeles, Beverly Hills, Santa Monica, and West Hollywood additional rules apply.

Pursuant to the newly enacted California Tenant Protections and Relief Act – Sept 2019, annual rental increases for all multi-unit dwellings built more than 15 years ago (presently before Sept 2005) are capped at 5% plus the rate of inflation (presently 3% for 2019). The Act further prohibits an owner of residential multi-unit dwelling built before 2005 from increasing the rent more than 2 times in any 12-month period. For more information, please click here.

Allowable Rent Increases Under the Los Angeles RSO for Rent Controlled Units

The Los Angeles RSO addresses allowable rent increases which can range from 3% to 8%, the registration of rental units, legal reasons for eviction, and the causes for eviction requiring relocation assistance payment to the tenant. Under the Los Angeles Rent Stabilization Ordinance (RSO ), the landlord is allowed to make the following annual increases in the rent:

Raise the rent once every 12 months by the annual allowable increase (4% for July 1, 2019 through June 30, 2020).
If the landlord pays for all of the costs of gas and/or electricity supplied to a tenant’s unit, the landlord may raise the rent by an additional one percent (1%) for each of the two utilities supplied.
At the same time the landlord raises the rent, if the written lease so provides, the landlord may also raise the security deposit (and last month’s rent if applicable) once every 12 months by the annual allowable percentage increase (presently 4% for 7/1/2019-6/30/2020).
Four Special Circumstances Which Allow the Landlord to Raise the Rent Substantially.

Additional Tenant. The Landlord can raise the rent by ten percent (10%) for each additional tenant / occupant of a rental unit exceeding the number of initial occupants allowed in the original rental agreement, EXCEPT THAT If the landlord had actual or constructive knowledge of the additional tenant’s occupancy for more than 60 days and failed to notify the tenant of the rent increase, then the landlord forfeits the right to increase the rent per Ordinance No. 181744, effective July 1, 2011. A corresponding reduction in rent is required when the additional tenant vacates the unit. Security deposits may be raised for additional tenants by the same dollar amount as the rent is raised.

There Has Been No Rental Increase Since May 1976. The Landlord can raise the rent nineteen percent (19%), plus 2% if the landlord provides the gas and electricity, If a landlord has not increased the rent since May 31, 1976.

There Has Been No Rental Increase Since May 1977. The Landlord can raise the rent thirteen percent (13%), plus 2% if the landlord provides the gas and electricity, If a landlord has not increased the rent since May 31, 1977.

Landlord Makes Capital Improvements. A landlord who is planning to improve his rental, may apply for special rent increases based on an application for Primary Renovation, Capital Improvements, Rehabilitation, or a “Just and Reasonable” rent adjustment which must be submitted to and approved by the Rental Board.

Notice Required Under the RSO.

To raise the rent, the landlord must serve the tenant(s) with a written 30-day notice for rent increases that are 10% or less of the tenant’s rent (35 days if the notice is mailed), or a 60-day notice (65 days if mailed) for rent increases that exceed 10% of the tenant’s lowest rent within the preceding 12-month period.

Additional Costs a Landlord is Allowed to Pass Through to a Tenant:

  1. In the month of August only, the landlord may collect $12.25 from each tenant (50% of the annual $24.51 registration fee paid to the Rent Stabilization Division). To collect the $12.25, the landlord must serve the tenant in the month of May or June with a written thirty (30) Day Written Notice and provide the tenant a copy of the Registration Certificate.
  2. The landlord may also collect the annual $43.32 Systematic Code Enforcement Program (SCEP) fee if paid in full by the landlord by increasing the rent $3.61 per month. To collect this monthly fee from the tenant, the owner must similarly give the tenant a written thirty (30) Day Notice of Rent Increase prior to the collection of this fee once a year and provide the tenant a copy of the Registration Certificate.

After a Vacancy

The allowable rent level after a vacancy depends on the reason for the vacancy. The RSO provides that the rent may be raised to any amount upon re-rental if the vacancy resulted because the tenant: (1) voluntarily vacated the unit; (2) was evicted for non-payment of legal rent; or (3) was evicted for violating the terms of the rental agreement and failing to cure the violation. If the vacancy occurs for any other reason, the Los Angeles RSO requires the rent to a new tenant to remain the same as that for the prior tenant. Examples include: (1) an eviction to recover the unit for the use of the landlord, his immediate family. or a resident manager; (2) an eviction based on the prior tenant’s illegal acts; (2) an eviction based on the tenant’s refusal to sign a new lease with the same terms as are in the RSO; and (3) an eviction based on the tenant’s refusal to allow the landlord reasonable access to the unit.

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    • I have been in business for 17 years. I moved into the Saravita Properties, Inc. building on National and Westwood in February 2019. I had just moved out of a building that I had spent 9 years in. Previously, I was in a building for 6 years on Bundy and Olympic. From the very first day that I was introduced to the property manager Sasha Rahban, I was impressed. He even shared interior design ideas for the space my broker was showing me. I told him that I have a company with many food clients and that I need a kitchen. "Not a problem," he said. So he built me one. He installed beautiful counters, lovely cabinets and of course, a sink with full plumbing. He made suggestions about how to set up the suite, building a "pony wall" to create a separate reception area. New tenants, especially me, tend to have many questions, send lots of emails and make demands. Sasha's team even painted my office my signature red and it came out great. He is a manager that always has a smile. At the beginning, I wondered when the other shoe would drop. It never did. My landlords in the past were never so kind and accommodating. The office is perfect for my company. It is two blocks from the 10 freeway and about a mile from the 405. Clients love that they can park for free on the street or in the building for a low price. The office is spotless and well maintained. There is an executive suite for companies just starting out and the prices are very reasonable. Sasha is so entrepreneurial and having these small spaces is a great way to help nurture new businesses who can grow into larger spaces on the premises. I am very grateful that I found this office. My views are beautiful, I feel safe in my space and any request I make is cheerfully accommodated.

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