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Legal Q & A By-Franco Simone

Posted on 01. Apr, 2020 by in all

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Q: Another landlord I know told me that my rental property is exempt from California rent control known as the Tenant Protection Act of 2019. What types of rental properties are exempt from rent control?

A: Several types of rental properties are exempt from the Tenants Protection Act of 2019 (the “Act”).

  1. Housing built within the last 15 years;
  2. A duplex in which the owner occupies one of the units at the commencement of and throughout the tenancy;
  3. A single-family residential property (which includes condos) IF the owner is an individual, partnership, individual co-owners, trusts, and LLCs with no corporate owners.  (Properties owned by a corporation or a real estate investment trust (REIT) must adhere to the Act.)  

Finally, the above exemption ONLY applies if the owner gives the tenant a legally required notice of exemption.  

Q: I own a condominium that is owned by my revocable trust and I have determined my rental property is exempt from the Tenant Protection Act of 2019. What information do I need to give my tenant to be able to claim the exemption?

A: Once you have determined that your rental property is exempt from the Tenant Protection Act of 2019 you must provide written notice for all current tenants by July 1, 2020. All new tenancies or tenancies that are renewed on or after July 1, 2020 must have the exemption notice in the rental agreement or lease. If you fail to give notice of the exemption, your single-family house or condominium will not be exempt from the Tenant Protection Act of 2019. The exemption notice must read as follows: “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.”

Q: I have a tenant that is on a month-to-month agreement and rents one of my condominiums. I gave my tenant notice in writing that the condominium is exempt from the Tenant Protection Act of 2019. I would like to increase the tenant’s rent 12%. Can I increase the rent more then 10% and what type of notice do I need to give?

A: Yes, if your property is exempt from the Tenant Protection Act of 2019 there is no current cap on rent increases for your rental property. However, effective January 1, 2020, the notice requirements for rent increases of more than 10% changed. Landlords must provide tenants with 90 days’ notice if the rent increase is more than 10% in a 12-month period.  This applies if the rent increase is more than 10% by itself or when combined with any other rent increases during the preceding 12-month period.  Please note, this only applies to those exempt from the rent cap created by the Tenant Protection Act of 2019.  Rent increases of less than 10% remain subject to a 30 days’ notice. For example if you give your tenant a 5% increase, you would be required to give the tenant a 30 days’ notice.  If you decide to increase the rent again within the 12-month period by another 6%, then the second increase will need to be a 90 days’ notice.

Q:  I plan on increasing my tenant’s rent by less than 10% with a 30-day notice. Am I required to serve this notice personally or can I just serve him by standard U.S. mail? 

A: Assuming your property is exempt from the Tenant Protection Act of 2019, a notice to increase rent can be served personally or by first class mail. If you decide to serve your tenant personally, it must be done 30 days before the increase becomes effective. If you mail the notice to your tenant, an additional 5 days must be added before the notice is effective. For instance, if you choose to mail the notice to your tenant, you must put it in the mail at least 35 days prior to the rent increase. Remember that if the increase is greater than 10%, then you are required to mail the notice 95 days prior to the effective date. 

Q: I own an apartment building and I must comply with the Tenant Protection Act of 2019. I would like to increase my tenant’s rent. What type of notice do I need to give my tenants?

A: After tenants have lived in the unit for more than 12 months, landlords may increase the rent up to two times within that period, but the increase CANNOT exceed the rent cap. Since the rent increase pursuant to the rent cap cannot be more then 10% you will only be required to give your tenants 30-day notices of the rent increase. 

Q:  I spoke with my tenant last week and told her that the rent will be increased by $50 beginning on the first of the month. Is an oral notice of rent increase sufficient? 

A: No.  A rent increase notice must be in writing.   

[Editor’s Note:  AOA members can now download the required Statewide Rent Control forms for FREE by visiting www.aoausa.com.]

Attorney Franco Simone, of Simone & Associates and The Landlords’ Legal Center, has been doing evictions for over 20 years.  He is also an adjunct law professor at the University of San Diego.  Mr. Simone’s office is open Monday – Friday from 9:00 AM to 5:00 PM.  Tel: 619-235-6180, website: www.landlordslegalcenter.com or email info@simonelawfirm.com.

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