San Francisco's Rent Ordinance does not regulate the initial rent for a new tenancy, so landlords are permitted to set rents for new tenancies at market rate. The landlord may also be entitled to increase the rent to market rate in certain roommate situations when the original tenants no longer live in the unit. Rules and Regulations Section 6.14 or Civil Code Section 1954.53(d) of the Costa-Hawkins Rental Housing Act are the provisions that may apply in this situation.
Section 6.14 and Costa-Hawkins can be very complicated. For that reason, landlords and tenants are strongly encouraged to seek legal advice concerning whether a "6.14 rent increase" and/or a "Costa-Hawkins rent increase" is available in particular situations. The following description gives only a very general overview of the scope of the two provisions.
Rules and Regulations Section 6.14 provides for an unlimited rent increase on remaining occupants when the last original occupant vacates the unit, as long as the landlord timely served all remaining occupants with a written "6.14 notice." A proper 6.14 notice must inform each subsequent occupant that the landlord can impose a rent increase without limitation when the last original tenant vacates the unit. The 6.14 notice must be served on each subsequent occupant within a reasonable time after the landlord knows or should have known of the occupancy. Generally, sixty days is considered reasonable. A 6.14 notice can be served on any subsequent occupant, whether the subsequent occupant is a subtenant or a co-tenant.
Costa-Hawkins provides that when the last original occupant no longer permanently resides in the unit, the landlord may increase the rent by any amount to a lawful subtenant or assignee who did not reside in the unit prior to January 1, 1996. Thus, a subtenant who resided in the unit before January 1, 1996 is not subject to such a rent increase. In addition, any co-tenant who moved in after the original occupant is not subject to such a rent increase, regardless of when the co-tenant moved in. A co-tenant is someone who has an oral or written agreement with the landlord, or who the landlord has treated as a tenant by the acceptance of rent or other conduct.
There are several clear distinctions between Section 6.14 and Costa-Hawkins. For example, Section 6.14 provides that an unlimited rent increase may be imposed on subsequent occupants who are co-tenants or sublessees or assignees, regardless of when they moved in. Costa-Hawkins rent increases are limited to sublessees or assignees who moved in after January 1, 1996. In addition, Section 6.14 requires the service of a written notice upon the subsequent occupant when he or she first moves into the unit. Such notices are not a prerequisite to a Costa-Hawkins rent increase. Finally, Section 6.14 requires the last original occupant to "vacate" the unit, while Costa-Hawkins only requires the last original occupant to no longer "permanently reside" in the unit.
A landlord is not required to file a petition with the Rent Board for approval of a rent increase pursuant to Section 6.14 or Costa-Hawkins Section 1954.53(d). However, if a landlord is unsure whether a rent increase is justified, the landlord may file a petition at the Rent Board to seek a determination that either or both sections authorize a rent increase. A tenant may also file a petition alleging an unlawful rent increase if he or she believes that a rent increase pursuant to Section 6.14 or Costa-Hawkins Section 1954.53(d) is not warranted.
A landlord petition for a determination pursuant to Section 6.14 and/or Costa-Hawkins must be filed on a form supplied by the Rent Board, and must be accompanied by a statement explaining why the landlord believes a rent increase is justified. Similarly, a tenant petition must be filed on a form supplied by the Rent Board. To obtain a copy of either petition form, click here (landlord form) or here (tenant form) or visit the Forms Center on our website. The forms are also available at our office.
June 2006
Tags: Topic 329