LA Rent Control Made Simple
Ordinance: in Acrobat pdf in HTML [like this page]
Regulations : in Acrobat pdf [Approx 1.1 Meg] [As used herein, abbreviated to "Reg." such as Reg. 340.11]
What is Rent Control?
Rent control, or rent stabilization, is much more than the 4% maximum increase to which people refer. It is a collection of laws that regulate how much a landlord can raise (or must reduce) the rent, limit the reasons for eviction, and more. Rent control and eviction protections work together, so that the landlord doesn't get around a rent limit by evicting the tenant, instead, or vice versa. Rent control is part of the Los Angeles Municipal Code, the ordinances which specially regulate things within the city. The rights you have living in Los Angeles depend on whether your rental unit is under rent control.
For those under rent restrictions, the legal maximum increase had been 3% for the past several years, as of July, 2006, the maximum base increase is now 4%. This "base" amount is subject to 3 different types of surcharges. (1) If an additional person (not replacement) moves in (other than the first minor child) and resides there more than 30 days (not visiting friend who maintains other residence), the rent may be increased by up to 10% during that occupancy. [Reg 310.07] (2) The SCEP fee [Systematic Code Enforcement Program] to pay for the building inspectors to check all of the rental units for defects, even if you don't request it; this amount varies and is currently $35.52 per year, or the landlord can tack on $2.96 per month to your rent. The landlord MUST give you a written 30-day notice of this increase or he CANNOT charge it. (3) The tenant's half of the rent registration fee is $9.35 per year, assessable once in June of each year. The landlord MUST give you a written 30-day notice of this increase or he CANNOT charge it. When your rent is increased, the SCEP and registration fees are not increased by that percentage, but the higher rent for the additional occupant IS included in the 4% base increase thereafter.
The Rent Stabilization Board of Los Angeles [RSB] is part of the city Housing Department, which also sends out Code Enforcement building inspectors to cite the landlords for substandard buildings, and require the landlord to make repairs. Rent Stabilization Board makes its own Regulations to clarify the rent control law, and help in applying it.
Are you under Los Angeles' Rent Control?
It's a simple question with a complex answer. The answer is YES, UNLESS your unit comes within one of the exceptions. These exceptions are listed under the definition of "Rental Unit" in LAMC 151.02. If you are under rent control, you have at least eviction protections, relocation assistance, and security deposit interest. The landlord is supposed to send you an annual Rent Registration Certificate, but usually they only post it at the building office, bulletin board, or similar area. If your rent increases have been about 3% per year, that is due to rent control. You can also call the Housing Department and ask if your place is "registered," so if it is registered, you ARE under rent control, but if it is not registered, it could still be an unregistered unit, that actually IS under rent control.
Are you in Los Angeles?
First, you have to know whether you live in City of Los Angeles. What we commonly call "LA" is a collection of cities, but the City of Los Angeles itself is a huge area covering neighborhoods we know by name, which are so large that we think of them as cities: Westchester, San Pedro, Hollywood, Northridge, Encino, Woodland Hills, Van Nuys, Sunland, Canoga Park, Eagle Rock, etc. [See the Map] There are other cites in the area that have rent control, like Beverly Hills, Santa Monica, and West Hollywood. Los Angeles City Council passed rent control in 1978 and has maintained it ever since. If you are NOT in the City of Los Angeles, this page does not apply to you. If you are in one of the many communities within Los Angeles, you MAY have rent control.
Is your unit exempt?
Next, you need to know if your unit is under rent control. Rent control covers all residential units EXCEPT those fitting specified categories. The two biggest exemptions are (1) single family dwellings and (2) units built after 1978. Rented condos are now exempted from rent limits [by the State law, known as the Costa-Hawkins Act], but not from eviction protections or otherwise. Other exemptions are some government funded and government operated units, dormitories, and luxury units.
The single family dwelling exception means one occupancy unit alone on the entire land piece containing it. It does not include many common situations in LA that involve a house. A house in front with an illegally converted garage functioning as a second unit IS NOT exempted, because it is a two-on-a-lot. A house in front with an apartment over the garage in back IS NOT exempted. A house split into two separate units [i.e. two kitchen areas, separate bathrooms] IS NOT exempted, because it is a duplex, whether upstairs-downstairs, front-back, side by side, or a bachelor unit converted from a large bedroom or patio of the house. A tenant who has lived at least 30 days in a rooming house [large house where rooms are rented out separately] IS NOT exempted. Houses on adjacent lots joined by a "lot tie" ARE NOT exempted, because the lot tie makes them legally one lot; a house straddling two lots or shared utilities are the usual clues, but a parcel map would show the small diagonal slash along the property lie which is the lot tie.
Are you overpaying the legal rent?
You signed an agreement or otherwise started paying rent for your rent controlled unit at a rate which was advertised and you agreed to pay. However, that may be an illegal rent, and your remedies are powerful, including getting a drastic rent reduction and recovering triple the amount of any overcharge from the correct rate. It's like being paid less than minimum wage for work you do -you might agree to it, but the employer is breaking the law and deserves to be punished. The landlord is required [LAMC 151.05(C)] to tell you as the current or prospective tenant if you are being charged more than legally permitted rent, but they never do, and the job is up to you to find out if they are, and use their failure to disclose as a ground for fraud. (Not disclosing what he is required to disclose is legally the same as lying, and therefore the basis for a fraud lawsuit, including severe punitive damages.)
There are several reasons from which the rent you agreed to pay may still be higher than is legal under rent control, and here are only those that rent control provides.
Prior tenant's moving circumstances affect your rent
The continued skyrocketing of "market" rents has encouraged many landlords to buy a rent controlled building, evict the tenants for ridiculous reasons, raise the new rents to market levels, and then sell the property at double the purchase price, making obscene profits in the process. The process is called "flipping," and truly exploits the shortage of housing in the cities and tenants' lack of knowledge. These landlords believe that they can raise the rent to any amount in all circumstances where the prior tenant was evicted or moved "voluntarily." That's where your knowledge here uses the landlord's own greed and dishonesty against him.
Not all situations where the landlord has evicted the tenant permit that landlord to raise the rent to whatever they want for the next tenant In fact, the landlord is entitled to raise the rent for the new tenant ONLY if his eviction of the prior tenant was for (1) nonpayment of rent, (2) violating a term of the lease, or (3) refusing to temporarily relocate for major rehabilitation [but even then, only where the landlord has complied with the law in every respect, including all relocation assistance and notices]. If the prior tenant was evicted for any other reason [such as: most nuisances (Reg. 151.06(C)(9)), physical damage, termination of Section 8 assistance, illegal subletting, illegal use, to move in a manager or relative [Reg. 151.06(C)(4)], refusing to let the landlord in to make repairs, or to comply with a government order], the rent CANNOT be increased for the new tenant - you - beyond the legal maximum. If the former tenant was paying $500 a month, but was evicted for nuisance [or one of these other reasons], then YOUR rent should not be more than $504, even if you signed a rental agreement to pay $1500 per month. You would be entitled to reduce your current rent to that lower level and recover TRIPLE the amounts over that lower amount which you actually have been charged, under Section 151.10.
As to the "voluntary" moving by a tenant, it is not "voluntary" if the landlord drives the tenant out by creating "an unreasonable interference with the tenant’s comfort, safety, or enjoyment of the rental unit" [LAMC 151.06(C)(2)]. This can be loud and obnoxious construction, trespassing into the tenant's unit without proper notice, permission, or emergency, failure to attend to uninhabitable conditions, bullying the tenant, or any number of common acts. If you see this is how your landlord operates, that may be the reason that your predecessor tenant in your unit left, and if so, you are probably paying far too much rent.
Unregistered Unit
The landlord is required to register each unit. If there are 7 legal units and one illegal unit, the landlord still has to register all eight units. The enforcement device in the rent control law is that if the landlord does not register, he can't collect rents and you legally have the right to refuse payment [LAMC 151.09(F)]. Once the unit is re-registered, you must pay the rent demanded. If you are being evicted for nonpayment of rent, and you just don't have the money, this may be your only valid defense.
Substandard Housing or REAP
Where the landlord has been cited by LA Code Enforcement inspectors for uninhabitable conditions and those conditions remain uncorrected, the City can file a "notice of non-compliance" with the California Franchise Tax Board [RTC 17299], which not only affects the deductibility of expenses for State income tax purposes, but also prevents the landlord from raising rents until the conditions are corrected. [Reg. 940.07]
For the really bad landlords, the City uses the REAP program, which is a sort of receivership, where the City temporarily becomes your landlord, cuts your monthly rent in half, and uses the other half to make the repairs which the landlord refused to make. During that time, the landlord cannot demand any money from you, because he is not entitled to it. [LAMC 155.05(A)] Rent increases are also not permitted for property taken into the REAP program [LAMC 151.06(C)(7)]. Rent increases are also not permitted for the landlord who has been convicted of slumlording upon prosecution by the City, until those repairs are completed. [LAMC 151.06(C)(8)]
Continued Surcharges
The landlord may have illegally continued to increase your rent, and not reduced it, based upon temporary surcharges, long after they should have been removed.
(1) The cost of installation of smoke detectors was a charge that the landlord could pass through to his tenants at $3 per month for hard-wired and 50 cents per month for battery operated detectors. However, that cost had to be removed from the monthly charge once the landlord's costs were recovered [Reg 340.11]; most landlord used the surcharge-enhanced monthly rent as their basis for making the next increase, year after year.
(2) Similarly, the landlord might have increased the monthly rent by 10% due to an additional tenant who joined you years ago for a few months, and never dropped the rent back down after that additional tenant left, as he was required to do. [Reg 310.08]
(3) Water Conservation Penalty Surcharges imposed during the 90's enabled the landlord to pass through 50% of any penalty imposed for excessive water use to the tenants, but only temporarily, to recover that 50% portion, and then to remove the surcharge. [LAMC 151.06.2]
(4) Capital Improvements to the unit, building, or common areas may have resulted in permitted temporary rent increases to reimburse the landlord for the construction expenses, which were instead illegally kept on as permanent increases. They may have been done in the 80's or 90's, and were supposed to terminate in 5 years, with the costs extended in monthly payments, but then end with the rent be reduced by that surcharge. [Reg. 212.08]
(5) Major Rehabilitation to the unit, building, or common areas similarly may have resulted in permitted temporary rent increases to reimburse the landlord for the construction expenses, which were instead illegally kept on as permanent increases. The Rehabilitation work cost was divided into 60 monthly payments, and then the payment increases were to stop. [Reg. 252.01]. If the tenant vacated and the unit was re-rented at market rates after that rehabilitation work, no increase is thereafter permitted on that unit. [Reg 252.04]
What can you do?
You can file a complaint with the Rent Board for a rent reduction as well as sue the landlord to recover triple the amount of these illegal surcharges, including the associated rent increase portion [LAMC 151.10], in addition to having your current rent reduced. If you are being evicted for nonpayment of rent, here is yet another defense you may have. If you have one or more of these situations, you probably should discuss it with a lawyer, as well.
How am I protected from Evictions?
Under the Los Angeles rent control law you cannot be evicted except for one of 12 listed reasons. Unlike cities without rent control where tenants can be evicted for nearly any reason or no reason at all, in Los Angeles, the landlord must identify the reasons, circumstances, and witnesses for such reasons in the eviction notice, and then prove the reason for the eviction in court, under special procedures. Reasons fall into two categories: (1) where the tenant did something wrong, and (2) where the tenant is not at fault.
In the first category, tenants may be evicted for nonpayment of (legal) rent, breaking a term of the lease, causing a nuisance [including drugs and gangs], using the unit for an illegal purpose [eg, a machine shop in an apartment], refusal to renew the lease on similar terms, refusal to permit the landlord reasonable entry to inspect or repair, or there is a different person in possession of the unit than who rented it. In the second category, the landlord has to get and serve special papers with the city Housing Department after proving the reason is valid: the owner's family member or a new manager is moving into that unit, the house is no longer going to be a rental, the property is condemned, or HUD is selling the property. In this second category, the landlord must pay the tenant $3,450 relocation assistance [or $8,550 if the tenant has minor children, a legal disability, or is over 62 years old]; new amounts effective 7/1/06 Evictions for major rehabilitation are no longer allowed. See the special section on rehabilitation, below. Evictions for Condo Conversion require relocation assistance, even if rent control doesn't apply -see below.
The eviction notice itself has to give details on the eviction, such as what was done, the dates, times, and witnesses, so that the landlord cannot make something up in Court and catch the tenant unprepared. [State law now also requires a Pay-or-Quit notice to specify how and to whom the money is to be paid.] There are thousands of ways that evictions can happen and thousands of combinations of defenses you may have, both under rent control and under State law. The Eviction Defense Kit available from this site will help you identify what your defenses are. Here are two which commonly arise under LA rent control which are not addressed in that Kit, because they are unique to LA rent control:
(1) The landlord cannot change any term of your tenant without your voluntary, written agreement. [Voluntary means without coercion or threats] The landlord cannot make changes in your rental agreement, such as to : prohibit pets, take away parking spaces, swimming pool privileges, change the "rules," or manner of payment, for example, without your written consent. Further complications may arise where the former manager or landlord permitted something which had been prohibited in the rental agreement, or waived its application by not enforcing it, and now the new landlord or manager wants to enforce the original agreement. Landlords may approach you with a new rental agreement to sign -don't sign it, unless you plan to give up the rights you had before -you can negotiate and new agreement, getting things you want, as a trade-off. . This is a significant change in the law. Eviction for violation of a new term of tenancy that the landlord imposed on you may look legitimate, but it's not!
(2) The landlord cannot necessarily evict for having additional occupants. Given the extraordinary rents these days even under rent control, many tenants are doubling up or finding temporary housing with a friend until they find another place, and this reason for eviction is growing. The "additional" tenant is not a replacement for a former roommate, nor a guest who resides elsewhere or has lived there exclusively less than 30 days. This is not the tenant's additional child, either by birth or custody change, but this exemption only applies to TWO additional children. This is not the sole additional adult, either, which permits an adult caretaker, parent, friend, lover, or other person to join the tenancy. The landlord still has the right to reasonably disapprove of the new tenants [except the children] and to charge the additional 10% for each new tenant [except the first additional child] who stays beyond 30 days, by a 30-day written notice changing terms of tenancy. The disapproval is limited to the new tenant's rental history, ability to pay the extra 10% rent [Reg. 310.10] or exceeding overcrowding limits [about 50' per person -Reg 952.01]. It seems that the 30-day notice can't be given until after the 30 day stay, so that it wouldn't take effect until the third month of such occupancy.
In court, the tenant has even greater protections. In a normal eviction, the landlord generally only has to prove that he gave the notice and that you're still there. Under rent control, the landlord has to convince the judge of his real reason for the eviction, show that it is a legal reason, and prove every part of it with stronger evidence than you have. If the evidence is 50-50, you win. If the landlord missed one technicality of the rent control law, you win. It is much harder to evict a tenant than non-controlled cites.
Interest on Security Deposits
You are entitled to interest on your security deposit, if you have stayed there at least a year. The posted rate is set by the LA Housing Department. The interest is 5% for November, 1990 through December, 2000, 2% for 2001, 0% for 2002, and beginning 2003, the landlord can either calculate that by (1) the actual interest earned, by his deposit in the bank and giving you the bank statement showing that annual interest earned [hardly ever used by landlords], or (2) the posted rate , which has been 1% for 2003, 0.26% {i.e., ¼ %, not 26%} for 2004, 1.21% in 2005, and 1.74% in 2006. This interest MUST be paid to you at least yearly, OR it is credited against your rent. For the final year of your tenancy, any accrued interest has to be returned to you with the deposit itself.
If you are being evicted for nonpayment of rent, the interest which has accrued but not been paid constitutes a credit against your rent, which makes the eviction notice overstate the amount of rent which is due by that amount, and you could win on that technicality.
Rent Reduction Hearing
The RSB has the authority to reduce your rent if your unit is uninhabitable or there is an overcharge. You file a complaint, and the landlord has to come to a hearing where the reduction is determined. [Reg. 410, 410.05, and 410.06]. This is probably the most underused provision of rent control. Tenants have the ability to actually have their rent reduced, due to the uninhabitable conditions they have suffered, and get a rebate for the past rent. You pay for the Code Enforcement and Rent Control Board, who are there to serve you, not the landlord. The landlord can't bully them, and they can back up their orders with jail time for the landlord, if necessary.
Major Rehabilitation Relocation
Where the landlord has to perform major rehabilitation on a unit or portions of the entire building, the tenants can be temporarily relocated [NOT EVICTED], and the 50% cost of the work can be applied to rent increases of up to 10%, as permitted by the Housing Department. Due to the age of many units in Los Angeles, and landlords attempting to remove protected tenants under false pretenses, this problem is increasingly common.
Major rehabilitation is that which involves opening the walls, replacing or adding water, gas or sewage lines, electrical circuits or service panel, heating, ventilation, air conditioning, abatement of hazardous materials such as lead paint, asbestos, and mold, alterations to the structure such as the roof, walls, foundation, or compromises weather protection, such as the insulation, walls, windows and doors, or fire protection, or security. When the landlord applies for a permit to do the repairs, the building department tells him whether he needs to file a Tenant Habitability Plan ["Plan"]. The Plan has to identify whether the unit will be uninhabitable outside of Mon-Fri. 8-5, and if the tenants will be exposed to toxic materials or other be endangered. The landlord has to give the tenant a 60-day notice of the intended work, the impact upon the tenant, and the measures the landlord intends to take to minimize the impact. Impact includes noise, utility interruption, exposure to hazardous materials, interruption of fire safety systems, inaccessibility of all or portions of each affected rental unit, and disruption of other tenant services. You have only 15 days from receipt of the Plan to notify the Housing Department that you contest the landlord's assessment of the impact of the work on you, the need for you to vacate, and the mitigation measures provided [(866) 577-7368]. See the Housing Department Bulletin for details.
The landlord must pay all temporary housing accommodations, even if they exceed the monthly rent, but the tenant must continue to pay the rent as usual [LAMC 152.06(D)&(F)]. The costs include hotel expenses, compensation for restaurant dining expenses (if cooking facilities are not included in the lodging arrangement), pet accommodations, laundry, day care, moving costs, and phone transfers. [See Bulletin] You and the landlord can AGREE to your getting a daily compensation instead of replacement housing, and you may also AGREE for the landlord to pay you a lump sum for the temporary moving and storage of your personal property during the work. If the work will take longer than 30 days, the temporary housing must be comparable in size, rooms, accessibility, and proximity to services and institutions [schools, hospitals, etc], such as another unit in the complex or a different apartment building entirely. If less than 30 days, it can be a hotel or motel within 2 miles, suitable for the tenants' needs, with standard amenities. The landlord has to give at least 7 days' notice to return to the apartment, afterwards.
The tenant must cooperate, or be evicted on that ground. However, the landlord cannot evict without following every procedure, including paying for all accommodations, presenting the plan, and giving the required notices, and you can defend an eviction on grounds that the landlord failed to comply with any of the requirements for this type of eviction, including not paying for your full relocation expenses [LAMC 152.07(B)]. The tenant must also continue to pay rent for the unit. If the repairs are minor, the landlord can perform the work during 8 AM to 5 PM Monday through Friday, without relocating the tenant at all, so long as the tenant is not exposed to toxic substances, such as asbestos, lead paint, or mold. The relocation Plan will be given to the affected tenants and the Housing Department, and the tenants will have 15 days to object to any portion of it. In the alternative, any tenant can make a separate agreement for a daily payment and live with a friend or relative. For any work that takes over 30 days, the tenant has the option to cancel their rental agreement, move out, and receive their security deposit plus either the $3,300 or $8,200 relocation assistance [as it applies to them]. On the other hand, the penalties are severe against landlords who try to cheat, including paying up to 3 times the amount of any expenses incurred by the tenant if they don't pay for lodgings, food, etc, plus attorney fees and costs. The landlord can be prosecuted for misdemeanors for attempts to circumvent these laws, denied rent increases to reimburse the work costs for failure to comply with these tenant protections, and special penalties for individual technical compliance.
It is a complicated set of laws, with some exceptions and special rules, but it basically prevents the landlord from permanently evicting a tenant under the pretense of fixing the building, only to jack up rents and circumvent rent control. Instead, it provides for the temporary relocation of tenants where necessary, until the work is complete, preventing the landlord from unduly delaying any repairs until the tenants give up hope.
Condo Conversion Evictions and Relocation Assistance
With the upsurge in all housing prices returns the inevitable condo conversion. Condo conversion is where a landlord is permitted to call his apartment building a "condominium", and sell off the individual units. Apartments are build under much lower standards than new condominiums, as to the sound muffling of the walls, ceilings and floors, the thickness of the walls, and the quality of overall construction. By converting the cheap structure to a condominium, the landlord is able to double his money on the value of the property by doing no more than kicking you out, putting on a fresh coat of paint, and fixing a few things that he should have fixed during your tenancy. Condo conversion rules apply even where rent control doesn't.
The unsuspecting buyer thinks they're getting a high quality home for the high price they're paying, but they get no more than the cheap apartment you once occupied. By the time they realize they've been taken, the landlord is counting his money in the Caymans. The law permits this and even gives you the "chance" to buy your unit, so that you don't have to move [and he doesn't have to fix up your place]. Each City and County has their own rules as to what you get, or don't get, as a tenant in such a building.
Also, whether the landlord has to really fix everything, or can get away with superficial cosmetics, depends on the quality of local code enforcement. The most you can do to get things fixed, and to stall the inevitable conversion, is to have everyone in the building go through their unit with the Habitability Checklist on this website, and send the combined lists to the Housing Department and the landlord; when the units come up for sale, another copy should be given to the broker who is selling the unit, because then he will have to tell all of the buyers about all of the defects you have listed, even in the other tenants' units. This is because a condo owner owns the entire building complex plus the air space within their particular unit. If unit 5 is falling apart, every condo owner has to pay to repair it. This prospect makes the landlord obligated to fix everything before he starts selling the units, and he may not be able to afford to do that, and give up. At least, it gets you your money's worth for the last few months of your tenancy.
In Los Angeles, you get a lot more than in most other cities. In addition to the notice of the condo conversion public hearing and a chance to oppose it, required by State Law, you get: (1) relocation assistance of $3300 or $8000 (described above), (2) a list of available vacancies, and (3) special help with transportation for those without cars or needing medical transportation. Instead of those 3 items, the landlord can move you to a comparable unit in another building at his own expense [up to $8,000 worth, including the movers, transportation, etc.]. This all starts about 8 months [240 days] before the actual conversion. You have to be given the list of available vacancies and transportation assistance first, which can last for the whole time. You don't have to pick the ones they try to encourage you to choose. It is your choice, although you can't be unreasonable about it.
During this time, the landlord has to give you certain notices required by state law: that you have the right to purchase the unit at no more than the initial offering price to the public, that you have a right to attend and protect the conversion at a local public hearing on the subject, and to specified notices regarding the progress of the condo conversion process. If the landlord fails to give you those notices, he doesn't get to convert the building, and he has to start over again. Once the condo conversion process is completed, and if you are still there, then he has to give you the 30 day eviction notice and either pay you the relocation money within 15 days of the eviction notice [Notice of Termination] or put that money into an escrow and give you a copy of those escrow instructions within that 15 days. If the landlord fails to do those things or give you the required relocation assistance described above, he can't evict you. Elderly and disabled tenants get longer notice, up to a year [LAMC 151.09(C)(4)(b)].
The ordinance and statutes are rather complicated. You can review them yourself here.
Article posted originally on http://www.caltenantlaw.com/LARSO.htm
