A landlord may pass through to tenants 100% of the increase in the landlord's property tax bill resulting from the repayment of general obligation bonds approved by the voters between November 1, 1996 and November 30, 1998. The landlord may pass through to tenants only 50% of the increase due to bonds approved after November 14, 2002.
In order to impose the passthrough, the landlord must give the tenant a written notice of rent increase as well as a completed Bond Measure Passthrough Worksheet. The landlord is not required to file a petition to seek approval of a Bond Measure Passthrough. However, if a tenant believes that the passthrough is improper, the tenant may file a petition for arbitration to challenge the passthrough within one year of its effective date. A Bond Measure Passthrough may be improper for one or more of the following reasons:
- The landlord has not properly calculated the passthrough;
- The passthrough is calculated using an incorrect unit count;
- The passthrough was not imposed on the tenant's anniversary date;
- The tenant was not in residence as of November 1st of the applicable tax year;
- The landlord failed to discontinue the passthrough after 12 months.
Tenants may seek relief from payment of some general obligation bond passthrough amounts by filing a Tenant Financial Hardship Application. However, hardship relief is only available for that portion of a general obligation bond passthrough that is attributable to general obligation bonds approved by the voters on or after November 5, 2019. Since bonds approved by the voters on or after November 5, 2019 were not included in bond passthrough amounts prior to the 2020-2021 tax year, hardship relief is only available for bond passthroughs imposed on or after November 1, 2020, based on tax year 2020-2021 and later.
To obtain a copy of the Tenant Petition form, click here or visit the Forms Center on our website. The form is also available at our office.
June 2006
Tags: Topic 357