- 90-Day Notice Required for Rent Increases Exceeding 10% Per Year
- Summary of AB 1482 (the California Tenant Protection Act of 2019)
- Rent Board Amends the Rules and Regulations re O&M Petitions
- New Ordinance Amendments re General Obligation Bond Passthroughs
- Annual Rent Increase for 3/1/20-2/28/21 Announced
- Rent Board to Hold Public Hearing on December 10, 2019 on Amendment to its Rules and Regulations re Operating & Maintenance Petitions
- New Ordinance Amendment re Temporary Evictions for Capital Improvements
- CORRECTION: Security Deposit Interest Rate for 3/1/19-2/29/20 is 2.2%
- Public Outreach Events 2019
- New Ordinance Amendments re Circumvention of Eviction Controls Through Rent Increases
- Return
Sections
- 90-Day Notice Required for Rent Increases Exceeding 10% Per Year
- Summary of AB 1482 (the California Tenant Protection Act of 2019)
- Rent Board Amends the Rules and Regulations re O&M Petitions
- New Ordinance Amendments re General Obligation Bond Passthroughs
- Annual Rent Increase for 3/1/20-2/28/21 Announced
- Rent Board to Hold Public Hearing on December 10, 2019 on Amendment to its Rules and Regulations re Operating & Maintenance Petitions
- New Ordinance Amendment re Temporary Evictions for Capital Improvements
- CORRECTION: Security Deposit Interest Rate for 3/1/19-2/29/20 is 2.2%
- Public Outreach Events 2019
- New Ordinance Amendments re Circumvention of Eviction Controls Through Rent Increases
- Return
90-Day Notice Required for Rent Increases Exceeding 10% Per Year
Effective January 1, 2020, California Civil Code Section 827 was amended to require the service of a written 90-day notice (instead of a 60-day notice) if the rent increase, either by itself or combined with any other rent increase in the 12 months prior to the effective date of the increase, is more than 10%. The required notice period for an increase of 10% or less (combining all prior increases within the 12 month period before the increase goes into effect) remains 30-days. If a rent increase notice is served by mail, the required notice period must be extended by an additional five days (i.e. If the increase exceeds 10% of the tenant’s rent and is served by mail, it cannot be effective less than 95 days after the date of mailing).
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Summary of AB 1482 (the California Tenant Protection Act of 2019)
Updated: August 4, 2022
General info: What does AB 1482 (“the California Tenant Protection Act of 2019”) do?
- Statewide law that goes into effect on January 1, 2020 and expires on January 1, 2030.
- Requires a landlord to have a “just cause” in order to terminate a tenancy.
- Limits annual rent increases to no more than 5% + local CPI (CPI = inflation rate), or 10% whichever is lower.
- A tenant may not waive their rights to these protections and any agreement to do so by the tenant is void as contrary to public policy.
- If a unit is already covered by San Francisco’s local eviction and/or rent increase regulations, the unit remains subject to those local regulations and the statewide law does not remove or replace those tenant protections.
What types of housing are covered?
All housing located in the state of California is covered by AB 1482 unless it falls into one of the following categories of exemptions:
Units exempt from both the “just cause” regulations and the rent cap limitations
- Units that were constructed within the last 15 years (this applies on a rolling basis - i.e.. a unit constructed on January 1, 2006 is not covered as of January, 1 2020, but is covered on and after January 1, 2021).
- Units restricted by a deed, regulatory restrictions, or other recorded document limiting the affordability to low or moderate-income households.
- Certain dormitories.
- A two-unit property, provided the second unit was occupied by an owner of the property for the entire period of the tenancy.
- Single-family homes and condominiums are only exempt if both (A) and (B) apply:
(A) the property is not owned by one of the following:
(i) a real estate trust, or
(ii) a corporation, or
(iii) an LLC with at least one corporate member.
-----AND----
(B) The landlord notified the tenant in writing that the tenancy is not subject to the “just cause” and rent increase limitations as specifically described in Civil Code Sections 1946.2(e)(8)(B)(i) and 1947.12(d)(5)(B)(i). See below for more information.
- The limited exemption for single-family homes does not apply where there is more than one dwelling unit on the same lot, or any second residential unit in the building that cannot be sold separately from the subject unit (such as an in-law unit).
Units exempt from the rent cap limitations
- Units that are already subject to a local rent control ordinance that restricts annual rent increases to an amount less than 5% + CPI.
Units exempt from the “just cause” regulations
- Units that are already subject to a local ordinance that requires “just cause” to terminate a tenancy and is more protective than state law (such as the eviction protections of the San Francisco Rent Ordinance).
- Single-family, owner-occupied residences where the owner rents no more than two bedrooms or units, including accessory dwelling units and junior accessory dwelling units.
- Housing accommodations in which the tenant shares bathroom or kitchen facilities with the owner, if the owner lives at the property as their principal residence.
- Housing provided by a nonprofit hospital, church, extended care facility, licensed extended care facility for the elderly, or an adult residential facility.
- Transient and tourist hotel occupancy as defined by Civil Code Section 1940(b).
Eviction Provisions under AB 1482
- The eviction provisions only apply after all tenants have lived in the unit for 12 months or more, or where at least one tenant has occupied the unit for 24 months.
- A tenancy may not be terminated unless the landlord has one of the allowable “just cause” reasons, which must be stated in the notice terminating tenancy.
- “Just cause” reasons are categorized as either “at-fault” reasons or “no-fault” reasons. Relocation assistance is required for “no-fault” evictions.
- The mere expiration of a lease or rental agreement is not a “just cause” to terminate a tenancy.
Rent Increase Limits under AB 1482
- For covered units, annual rent increases are limited to no more than 5% plus the percentage change in the cost of living for the region in which the property is located, or 10% whichever is lower. "Percentage change in the cost of living" means the percentage change in the Consumer Price Index (CPI) for All Urban Consumers for All Items for the metropolitan area in which the property is located, as published by the United States Bureau of Labor Statistics. If a regional index is not available, the CPI Index for All Urban Consumers for all items, as determined by the Department of Industrial Relations, shall apply (www.dir.ca.gov/OPRL/CAPriceIndex.htm).
- For rent increases that take effect before August 1 of any calendar year, the percentage change is calculated using the amount published for April (or March, if no amount is published for April) of the immediately preceding calendar year and April (or March) of the year before that.
- For rent increases that take effect on or after August 1 of any calendar year, the percentage change is calculated using the amount published for April (or March, if no amount is published for April) of that calendar year and April (or March) of the immediately preceding calendar year.
- The percentage change must be rounded to the nearest one-tenth of one percent.
- No more than two increases in a 12-month period, and the combined amount cannot exceed the 5% + CPI cap.
- The current applicable CPI increase for San Francisco (that is, from August 1, 2022 to July 31, 2023), is 5%. Thus, the maximum annual increase for units subject to AB 1482 is currently 10% (5% + 5%). If the increase is effective on or after August 1, 2023, a different CPI increase will apply.
- If the rent was increased by more than 5% + CPI between March 15, 2019 and January 1, 2020, then on January 1, 2020 the rent will revert to the rent on March 15, 2019, plus the allowable increase of 5% + CPI. Landlords do not have to return overpayments of rent made between March 15, 2019 and January 1, 2020.
- The total rent paid by subtenants to a master tenant cannot exceed the rent charged by the landlord.
- There is no limit on the initial rent charged for a vacant unit.
What kind of notices are tenants required to receive under AB 1482?
All tenants in units covered by the state law must receive a notice explaining the “just cause” and rent cap protections. For a tenancy existing prior to July 1, 2020, the notice must be provided in writing to the tenant no later than August 1, 2020, or as an addendum to the lease or rental agreement. For any tenancy commenced or renewed on or after July 1, 2020, the notice must be provided as an addendum to the lease or rental agreement, or as a written notice signed by the tenant with a copy provided to the tenant. The notice language must read:
“California law limits the amount your rent can be increased. See Section 1947.12 of the Civil Code for more information. California law also provides that after all of the tenants have continuously and lawfully occupied the property for 12 months or more or at least one of the tenants has continuously and lawfully occupied the property for 24 months or more, a landlord must provide a statement of cause in any notice to terminate a tenancy. See Section 1946.2 of the Civil Code for more information.”
In addition, an owner claiming an exemption from the law because the property is a single-family home or condominium must provide a written notice to the tenant. For a tenancy existing before July 1, 2020, this notice may, but is not required to, be provided in the rental agreement. For any tenancy commenced or renewed on or after July 1, 2020, this notice must be provided in the rental agreement. If the owner does not provide the required notice, then a single-family home or condominium is NOT exempt from the “just cause” or rent cap regulations. The notice language must read:
“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.”
What can a tenant do if they think the landlord has increased the rent in violation of AB 1482?
- A tenant can obtain information about their rights by contacting the Rent Board’s counseling line at 415-252-4600. If a tenant believes a rent increase violates state law, the tenant may also file a Report of Excessive Rent Increase Under the Tenant Protection Act with the Rent Board - the Board will then send a notice to the landlord acknowledging receipt of the tenant's Report and advising the landlord of the applicable law. However, the Rent Board does not provide legal advice and cannot enforce state law or conduct hearings on disputes concerning AB 1482.
Since AB 1482 can only be enforced in state court, tenants may also want to consider contacting an attorney or a local tenant advocacy organization for assistance with exercising their rights in court. Additionally, ACCE, a tenants’ rights organization that was involved in passing AB 1482 has set up a Tenant Hotline (1-888-428-7615) for more information.
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Rent Board Amends the Rules and Regulations re O&M Petitions
After a public hearing on December 10, 2019, the Rent Board Commissioners approved a proposed amendment to Rules and Regulations Section 6.10 regarding Operating and Maintenance Expense petitions (an “O&M" petition).
The amendment to Rules and Regulations Section 6.10 was in response to the recent Board of Supervisors’ amendment to Rent Ordinance Section 37.8(e)(4), which prohibits landlords from imposing O&M rent increases on tenants due to increases in debt service and/or property tax that resulted from a change in ownership. However, for O&M petitions filed on or after December 11, 2017, where the landlord purchased the property on or before April 3, 2018, increased debt service and/or property taxes must still be considered if the landlord can demonstrate that it had “reasonably relied” on its ability to pass through those costs to the tenants at the time of the purchase. The Rent Board Commissioners’ amendment to Rules and Regulations Section 6.10 is intended to clarify the standard for determining whether the landlord met its burden of proving it had “reasonably relied” on the ability to pass through increased debt service and/or property tax costs to the tenants at the time of the purchase.
The full text of amended Rules and Regulations Section 6.10 is available here.
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New Ordinance Amendments re General Obligation Bond Passthroughs
The Board of Supervisors recently passed amendments to Rent Ordinance Section 37.3(a)(6) regarding general obligation bond passthroughs. While the legislation is effective on December 7, 2019, the most significant changes caused by the amendments won’t take effect until November 1, 2020 and later. A summary of the amendments is provided below.
Determining Net Taxable Value: Ordinance Section 37.3(a)(6)(B) – clarifies that for the purpose of calculating a general obligation bond passthrough, the landlord must use the net taxable value of the property as of November 1 of the applicable tax year.
Length of Passthrough: Ordinance Section 37.3(a)(6)(D)(i) – states that for general obligation bond passthroughs imposed on or after January 1, 2021, the time period for tenants to pay the passthrough is extended to the same number of months covered by the property tax bills used in the passthrough calculation. In other words, if the passthrough is based on property tax bills for the prior three tax years, the passthrough will be paid in 36 monthly installments over a period of three years. For general obligation bond passthroughs imposed prior to January 1, 2021, the total passthrough is paid by the tenant over a period of 12-months, regardless of the number of property tax bills used in the passthrough calculation (i.e. even if the passthrough is based on multiple tax years, the entire passthrough amount would be paid in 12 monthly installments).
Banking: Ordinance Section 37.3(a)(6)(D)(i) – effective January 1, 2021, the landlord can no longer "bank" a general obligation bond passthrough that was not imposed for an unlimited period of time. Instead, general obligation bond passthroughs will be limited to only those tax bills issued within the three year period prior to the year in which the passthrough is imposed. For example, if the landlord imposes a passthrough on June 1, 2021, it may include general obligation bond costs for tax bills issued between January 1, 2018 and June 1, 2021, but cannot include any tax bills issued prior to January 1, 2018.
Hardship: Ordinance Section 37.3(a)(6)(E) – allows tenants to 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. The existing rule that no hardship relief is available for general obligation bond passthroughs continues to apply for all other passthrough amounts. Since bonds approved by the voters on or after November 5, 2019 are not included in bond passthrough amounts prior to the 2020-2021 tax year, hardship relief (if any) is only available for bond passthroughs imposed on or after November 1, 2020, based on tax year 2020-2021 and later. Beginning with the General Obligation Bond Passthrough Worksheet for tax year 2020-2021, the Rent Board will publish the bond measure passthrough factor divided into amounts attributable to bond costs approved by the voters on or after November 5, 2019 (which can be deferred due to financial hardship), and the amount attributable to bond costs that were approved by the voters prior to that date (which cannot be deferred due to financial hardship). The standards for determining whether or not a tenant qualifies for deferral of a general obligation bond passthrough due to financial hardship is set forth in Section 37.7(i) of the Rent Ordinance.
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Annual Rent Increase for 3/1/20-2/28/21 Announced
Effective March 1, 2020 through February 28, 2021, the allowable annual increase amount is 1.8%. In accordance with Rules and Regulations Section 1.12, this amount is based on 60% of the percentage increase in the Consumer Price Index (CPI) for All Urban Consumers in the San Francisco-Oakland-San Jose region for the 12-month period ending October 31, which was 3.0% as posted in November 2019 by the Bureau of Labor Statistics.
To calculate the dollar amount of the 1.8% annual rent increase, multiply the tenant's base rent by .018. For example, if the tenant's base rent is $1,500.00, the annual increase would be calculated as follows: $1,500.00 x .018 = $27.00. The tenant's new base rent would be $1,527.00 ($1,500.00 + $27.00 = $1,527.00).
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Rent Board to Hold Public Hearing on December 10, 2019 on Amendment to its Rules and Regulations re Operating & Maintenance Petitions
Effective July 15, 2018, Rent Ordinance Section 37.8 was amended to limit consideration of increased debt service and/or property taxes following a change of ownership, as well as management expenses, when a landlord seeks to increase the tenants’ rents based on increased operating and maintenance expenses. The legislation states that for petitions filed on or after December 11, 2017, where the landlord purchased the property on or before April 3, 2018, the Rent Board can only consider increased debt service and/or property taxes if the landlord demonstrates that it had “reasonably relied” on its ability to pass through those costs to the tenants at the time of the purchase.
At their meetings on September 10, 2019, October 8, 2019, November 4, 2019, and November 12, 2019, the Rent Board Commissioners considered possible amendments to Rules and Regulations Sections 6.10 to clarify the standard for determining whether the landlord met its burden of proving it had “reasonably relied” on the ability to pass through increased debt service and/or property tax costs to the tenants at the time of the purchase.
At their November 12th meeting, the Commissioners voted to hold a public hearing on two proposed versions of the amendments to Rules and Regulations Section 6.10, identified as “Draft 1 - Version #3” and “Draft 1 - Version #4". The public hearing will be held on December 10th, 2019 at 25 Van Ness Avenue, Room 70 (Lower Level) in San Francisco and begins at 7:00 p.m.
Interested parties may attend the public hearing to comment on the proposed amendments to the regulation and/or submit written comments. Written comments should be received at the Rent Board’s office no later than noon on December 5th, 2019 so that the Commissioners have adequate time to review them prior to the public hearing (16 copies, please). Written comments may also be submitted at the hearing.
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New Ordinance Amendment re Temporary Evictions for Capital Improvements
Effective December 2, 2019, Rent Ordinance Section 37.9(a)(11) was amended to clarify that temporary evictions for capital improvements or rehabilitation work are only allowed where the work will make the unit hazardous, unhealthy, and/or uninhabitable, and are intended to last for the minimum amount of time required to complete the work; to modify the standards that the Rent Board must consider when reviewing a landlord’s Petition for Extension of Time to complete capital improvement work that will last more than three months; to establish procedures for the landlord to inform the displaced tenant of the tenant’s right to reoccupy the unit upon completion of the work; and establish that a landlord’s failure to timely allow the tenant to reoccupy the unit may create a rebuttable presumption that the tenancy has been terminated by the landlord rather than by the tenant. A copy of the legislation is available here [Ord. No. 245-19].
The amendments also require the landlord to provide the tenant with a form prepared by the Rent Board at the time the capital improvement eviction notice is served that the tenant can use to advise the landlord and the Rent Board of any change of address, and that also advises the tenant of the tenant’s right to return to the unit once the work is complete. The required form, Tenant Disclosure and Change of Address Form, is available on our Forms Center.
In order to implement the new legislation, the Rent Board Commissioners are considering possible amendments to Rules and Regulations Sections 12.15 and 12.16.
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CORRECTION: Security Deposit Interest Rate for 3/1/19-2/29/20 is 2.2%
On April 4th, 2019, the Rent Board made a correction to the security deposit interest rate from the previously published rate. The security deposit interest rate for March 1, 2019 - February 29, 2020 is 2.2% (not the previously published rate of 2.7%). The correction is now noted on our web site and on all applicable schedules. We apologize for any inconvenience this may have caused.
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Public Outreach Events 2019
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New Ordinance Amendments re Circumvention of Eviction Controls Through Rent Increases
Effective February 25, 2019, Rent Ordinance Sections 37.10A and 37.10B were amended to state that it shall be unlawful for a landlord to endeavor to recover possession of a rental unit that is not subject to the rent increase limitations of the Rent Ordinance pursuant to Section 37.2(r)(7) by means of a rent increase that is imposed in bad faith with an intent to defraud, intimidate, or coerce the tenant into vacating the rental unit in circumvention of local eviction controls. Evidence of bad faith may include but is not limited to the following: (1) the rent increase was substantially in excess of market rates for comparable units; (2) the rent increase was within six months after an attempt to recover possession of the unit: and (3) such other factors as a court or the Rent Board may deem relevant.
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