The Berkeley Rent Board Mailbag
Q: I don't understand why I am paying $350 more in rent than my neighbor, when our apartments are virtually identical. (November 2002, updated November 2006)
No law states that a landlord must charge comparable rents for comparable apartments, even for tenancies beginning at the same time, except that a landlord may not charge a tenant a higher rent for discriminatory reasons. The discrepancy probably results from the Costa-Hawkins Rental Housing Act, which implemented full vacancy decontrol beginning in 1999, allowing landlords to charge a "market" rent (whatever rent they can get) when a new tenancy begins. For three years before that, rents for new tenancies were tied to the amount the previous tenants paid. Thus, if your tenancy began in or after 1999, and your neighbor moved in before 1999, the disparity in rents is not surprising.
Nevertheless, if you believe you are paying more than the landlord would otherwise be able to get for your rental unit, you might try renegotiating your rent with the landlord. If less expensive rentals are available, your landlord might be willing to lower your rent, especially if you've been a good tenant. Having you stay at a lower rent would be preferable to losing you, because she may not find a new tenant for what you're now paying, and she may not want the hassle of finding a new tenant for a lower rent.
Q: I rented a unit to three tenants, John, Mark, and Mike, all of who are named on the lease. John told me that he plans to move out and has found a replacement, Andrew. Should I put Andrew on the lease, make out a new lease, or treat him as a subtenant? (May 2005)
While any of those is a viable option, you should be advised that there are different legal consequences to each course. Once your three original tenants vacate the apartment, the Costa-Hawkins law will allow you to set a new market-rate initial rent on any "lawful sublessees or assignees" that remain in the unit. If Andrew has a direct landlord-tenant relationship with you, he will be considered an original tenant, not a sublessee or assignee. Having the replacement roommate sign either the original or a new lease will create a direct landlord-tenant relationship. This means that the two remaining original tenants and the replacement roommate will have to move before you can set a new initial rent.
However, if you do not name Andrew on the lease but treat him and any other replacement as a sublessee of the original tenants, you can re-set the rent after the two remaining original tenants, Mark and Mike move. In this case, the sublessee will not have a direct relationship with you but will be responsible to the master tenants to perform the lease obligations. This would include payment of the rent. You should be aware that accepting rent directly from Andrew might implicate a direct relationship with him. To avoid this, Mark and Mike should be responsible for collecting Andrew's portion, and then paying the entire rent to you.
Q: I'm considering buying a six-unit building, and I am trying to determine a realistic income stream for the property. One of the units is occupied by an elderly tenant and his adult son. The father, who has been living there since 1985, is the only tenant on the lease. His son moved into the unit in 1995. If the father leaves or moves to a nursing home, may I increase the rent to "market" for the son? What if the son remains in the unit and then takes a new roommate (who is not related) -- may I increase the rents or bring them to market at that time? (September 2004)
A simple change in ownership, alone, does not provide a basis for increasing the lawful rent ceilings. As long as the son lived in the unit before January 1, 1996 with the landlord's knowledge, he is considered an original occupant of the unit. You would not be allowed to increase his rent even if his father vacated and he acquired a new roommate. Once the son vacates, however, you would be able to increase the rent for any remaining subtenant. (See Board Regulation 1013(O)(1).) You should refrain from having the roommate sign a lease directly with you prior to the son's moving out.
As tenants leave voluntarily, or are evicted for non-payment of rent (for example), an owner may establish a new rent at whatever the market will bear. You should log on to the Rent Board's (Board's) website if you need specific information or wish to review the Rent Ordinance, Regulations or other pertinent State law. In addition, read the Board's Guide to Rent Control before deciding whether to purchase this building.
Q: I have a tenant who has been subletting for about 4 years now. I still receive a check from her every month, but she hasn't lived there for some time and I do not believe she plans to reoccupy the unit. Do I have to accept the subtenant as my new tenant? Can I raise her rent? (August 2004)
If the original tenant no longer permanently resides in the unit, California law (Costa-Hawkins) allows you to raise the rent on any remaining subtenants (Civil Code section 1954.53(d)(2)). The original tenant has not relinquished her right to return to the unit, however, so you should serve a notice of rent increase on the original tenant, with a copy to the subtenant. You should then file a Vacancy Registration (VR) form informing the Board of the new initial rent. Be aware that the original tenant has the right to challenge your assertion that the unit is no longer her principal residence through a formal process at the Rent Board.
While you don't have to accept the subtenant as your new tenant, she has the right to occupy the unit, which means that if she does not vacate the unit voluntarily she can be evicted only for good cause. If, as frequently happens, the original tenant relinquishes the unit, you have to decide how to deal with the occupant. As a practical matter, the former subtenant will become your tenant unless you have a substantial reason to dispute that. A landlord who feels a need to terminate the subtenant too should seek legal advice early in the process.
Q: I am a new tenant in Berkeley and I recently visited the Rent Board website for some general information. I was surprised to learn that I could type in my address and find out what my rent ceiling is. I was also surprised that the rent ceiling is listed at $920, but my rent is $1000. Does that mean I'm being overcharged? (June 2003)
Not necessarily. If you are a new tenant, it's likely that your landlord has not reported your tenancy to us yet. A landlord is able to set a new initial rent, i.e., a new rent ceiling, whenever there's a new tenancy, provided the previous tenancy terminated voluntarily or the tenant was evicted as a result of his or her own actions. Most likely, whatever you agreed to pay for rent is the new rent ceiling. Once an initial rent is established between the parties, future changes are regulated by the Rent Stabilization Board. You can submit your information to the Rent Board on the website edit form so that staff can verify and enter the correct rent in the database.
Q: I'm new to Berkeley and am amazed at housing and rental prices here. What's even more amazing to me is that Berkeley supposedly has rent control. How can there be rent control in Berkeley if one-bedroom apartments rent for over $1000!!!? (April 2003)
Since the Costa-Hawkins Rental Housing Act went into full effect in California 1999, landlords have been able to establish initial rents for new tenancies at whatever price the market will bear. Although the initial rent, i.e., the rent established at the beginning of a tenancy, is no longer limited, Berkeley's Rent Control still serves four main purposes:
1) It provides stable rents. Rent increases during the tenancy are controlled, so that a tenant renting initially at $1000 will not have to worry about unwarranted or unreasonable increases for the duration of the tenancy.
2) It ensures stable services and habitable conditions. If a tenant initially rents an apartment that has off-street parking or laundry access, s/he can expect to continue to receive these services during their tenancy. If a service is discontinued, the tenant can petition for a rent reduction. Additionally, if a unit does not meet the "warranty of habitability" outlined in California Civil Code Section 1941.1, or in the local building code, e.g., if the heater is broken or the roof leaks, a tenant can petition for a rent reduction until the unit is repaired.
3) It protects tenants against unfair or unwarranted evictions. A tenant can be evicted (forced to move out) only for good cause. There are 12 good causes for eviction, including nonpayment of rent, violating a material term of the rental agreement after receiving a written request to stop the violation, disturbing the peace and quiet of other occupants after receiving notice to stop, etc.
4) It requires landlords to pay interest on tenants' security deposits. Landlords are required to place the deposit (which includes last month rent if collected at the beginning of the tenancy) in an interest bearing account and pay the interest accrued every December. If the tenant does not receive the interest by January 10th of the following year, s/he can deduct it from the rent at the rate of 10%.
Q: I moved into my apartment in November of 1999 and paid $1200 in rent. My landlord raised my rent by $6 in 2000, by another $10 in 2001, and for 2002 she wants to raise it by $30 more. I checked my rent ceiling on the Rent Board website, and it shows that the ceiling for this unit is $958. Am I being overcharged?
The $1200 rent that your landlord initially charged was probably legal. Beginning January 1, 1999, full vacancy decontrol went into effect, meaning that landlords could set a new rent for a new tenancy, unless the prior tenant's vacancy was not voluntary - in other words, resulted from harassment, threats to move in or take the unit off the market, reducing housing services, or failing to perform necessary repairs. Absent evidence that the tenancy before yours was terminated involuntarily (other than for non-payment of rent), $1200 was a legal rent that became the new rent ceiling.
But if a landlord doesn't file a Vacancy Registration (VR) form reporting a new tenancy to the Rent Board, the new ceiling won't be reflected in the Board's records. This could explain why the Board's records still show a $958 rent ceiling for your unit. If your landlord failed to file a VR form for your tenancy, she is considered out of compliance with the Board's registration requirements and therefore ineligible for annual general adjustments (AGA's), keeping your rent ceiling at $1200. (She cannot take the 2000 AGA in any case, because a landlord is not entitled to an AGA increase the year after a new rent is set).
You should check with a Rent Board counselor to determine whether a VR form was filed for your tenancy. If it was not, in addition to the $6 monthly overcharges in 2000, you were overcharged $16 per month in 2001, for a total of $264. You should inform your landlord that she must file a VR form before she is eligible for AGA's, and ask if she will agree to either reimburse you $264 or allow you to deduct if from your next month's rent. If she refuses, you will have to file a petition with the Rent Board claiming the landlord has charged illegally high rent, to receive an official decision that you are entitled to a refund of rent overcharges.
Once your landlord files a VR form reporting your tenancy, she will be eligible for the 2001 and 2002 AGA's. The rent ceiling in 2002 after she is in compliance will be $1240: the initial rent of $1200, plus the $10 AGA for 2001, and the $30 AGA for 2002.
Q: I'm considering buying a six unit building, and I am trying to determine a realistic income stream for the property. One of the units is occupied by an elderly tenant and his adult son. The father, who has been living there since 1985, is the only tenant on the lease. His son moved into the unit in 1995. If the father leaves or moves to a nursing home, may I increase the rent to "market" for the son? What if the son remains in the unit and then takes a new roommate (unrelated) -- may I increase the rents or bring them to market at that time?
A simple change in ownership, alone, does not provide a basis for increasing the lawful rent ceilings. As long as the son lived in the unit before January 1, 1996 with the landlord's knowledge, he is considered an original occupant of the unit. You would not be allowed to increase his rent even if his father vacated and he acquired a new roommate. (See Board Regulation 1013(O)(1).) Once the son vacated, however, you would be able to increase the rent for any remaining roommate.
As tenants leave voluntarily, or are evicted for non-payment of rent, an owner may establish a new rent at whatever the market will then bear. You should log on to the Rent Board's (Board's) website if you need specific information or wish to review the Rent Ordinance, Regulations or other pertinent State law. In addition, read the Board's Guide to Rent Control before deciding whether to purchase this building.
Q: I understand that the California law known as the Costa-Hawkins Rental Housing Act (Civil Code section 1954.50, et seq.) allows landlords to increase rents to market levels once the last original tenant in a unit has vacated, even when there are other occupants remaining in the unit. Rent Board Regulation 1013(O)(3), which adopts the Costa-Hawkins Rental Housing Act, seems to allow owners and remaining subtenants to agree to postpone a Costa-Hawkins increase for up to six months following the departure of the last original tenant. I own an apartment in Berkeley. I rented the apartment to two students, who sublet the unit to a third tenant several months later. The two original tenants graduated and are moving out. The third student wants to stay on until the end of the school year, but can't afford a market rent. I don't want to raise the rent to market, rather I would prefer to give only a modest rent increase now, just to cover my own increased costs, and raise it to market at the end of five months when he vacates. Clearly, the remaining tenant will need to find a new roommate, but my concern is that when he leaves, I won't be able to raise the rent to market for the new tenant. I'm afraid that if I don't raise the rent to market now, I will be unduly burdened with this below market rent. Can I raise the rent from $800 to $900, for the next five months, and then increase it to market?
The intent of Regulation 1013(O) is to allow the landlord and a sitting tenant who was not an original occupant to extend the time the landlord has to set a market-rate initial rent after the last original occupant has vacated. It is intended primarily to benefit the sitting tenant by permitting landlords to be generous to a holdover tenant without relinquishing the right that the Costa-Hawkins law bestows on them to set an initial rent when the last original occupant departs. Your proposed arrangement appears to be consistent with the language and the intent of the Regulation. The fact that you want to impose an interim less-than-market increase does not fall beyond the scope of Regulation 1013(O). As long as the arrangement is fully spelled out in a written agreement, you will retain the right to set an initial rent for six months after the last original occupant vacates the unit. You should also ensure that the new roommates occupy the unit with full knowledge that the rent will be increased at the end of the five-month period.
Q: I'm confused about something you wrote in your September newsletter: "The setting of an initial rent may be deferred for up to six months by mutual agreement; otherwise, if the landlord accepts the lower rent, he/she will be prohibited from setting an initial rent until the last of the new group of tenants moves." Does this mean I am obligated to enter into a "mutual written agreement" and delay my increase, or can I just give the remaining tenants a 30-day notice of the increase?
You may simply give the remaining tenants a 30-day written notice of the increase. The six-month agreement is an option that can be used if both parties agree to defer the increase. Landlords sometimes allow this type of deferral when the remaining tenants also have definite plans to move in the near future.
Q: I moved into an apartment in February. Prior to moving in, I asked the realtor if the building was rent controlled. She said yes, and I signed a $900/mo. lease for a one-bedroom. Since then, I've received a copy of the Vacancy Registration form that my landlord filed with the Rent Board. On it, he states that the prior tenant was paying only $375. Is it legal for the landlord to increase the rent by that much in a rent controlled building?
Under the Costa-Hawkins vacancy decontrol law, it is legal for the landlord to charge a market rent for a new tenancy. Generally, as long as the previous tenancy ended either voluntarily or as the result of an eviction for non-payment of rent, the landlord is eligible to increase the rent by whatever amount a prospective tenant is willing to pay. Once a tenancy is established, any rent increases that go into effect during the tenancy must be pre-authorized by the Rent Board.
Q: I am confused about vacancy decontrol. Does this mean that my landlord can raise my rent?
For nearly all sitting tenants, rents in Berkeley will still be controlled after January 1, 1999. Other than the annual general adjustment (AGA) rent increase, which is always authorized at the beginning of the new year, most tenants will not receive unrestricted rent increases on or after January 1, 1999.
There is one important exception. Starting January 1, 1999, for a dwelling unit that can be sold separately from any other unit, such as a condominium or single family home alone on a lot, the landlord can can set the initial rent and all subsequent rents for tenants who moved into the unit after January 1, 1996. Even as to a post-January 1, 1996 tenant, however, the landlord cannot raise the rent more than is permitted in the lease.
Q: I have a unit which will be vacant for the first time since vacancy decontrol went into full effect on January 1, 1999. I know the law allows me to set the rent at "market rate," but how do I know what "market rate" is?
One way to determine the market rate for your rental unit would be to look at the listings in the newspaper for comparably sized units, preferably in your area. This will give you an idea of what tenants are willing to pay for rentals similar to yours. You could also list your unit with one of the local rental agencies. They may be able to advise you on the range of rents which comprise the market for your unit. It goes without saying that the market is higher for clean, freshly painted apartments with new or recently cleaned carpeting in well maintained buildings than for apartments, in dreary buildings, that require substantial cleaning before they may be occupied. Accordingly, if you haven't already, you may wish to spend a little time and effort "sprucing up" your unit and building before you test the new rental market waters.
Q: I'm a landlord and I have a few questions about people sharing an apartment. I rented a two bedroom apartment to two people and both signed to rental agreement. Each month, I receive one rent check from them. The tenant who sends me the check is about to move out, and I need to know who is responsible for looking for a replacement for him? Should I find a replacement, or should the remaining tenant do the looking?
Unless the lease states otherwise, the remaining tenant is the one who usually finds a new roommate, and is responsible for the full rent, whether or not he finds a replacement for his roommate. Many landlords still conduct reference checks and require the new tenant to sign the lease.
Q: My understanding of the new vacancy decontrol law is that a landlord can increase the rent when the apartment becomes completely vacant. What if only one tenant moves out, and the second tenant stays behind and brings in a new tenant, and then the new tenant brings in yet another tenant in the future, and on and on? The apartment will never be vacant as long as new tenants keep bringing in roommates. If this happens, will I ever be able to raise the rent?
Rent on a unit may be increased when a "qualifying vacancy" occurs. Under the Costa-Hawkins Rental Housing Act, a qualifying vacancy is deemed to occur when the original tenants to a lease agreement no longer reside in the unit. In your case, it appears two tenants, Tenants A and B, originally signed the lease. When Tenant A moves out, the original lease is still in effect as long as Tenant B resides in the unit. In the meantime, Tenant B may bring in successive roommates, first Tenant C, then Tenant D and finally Tenant E, and the rent will remain under the control of the Rent Board because Tenant B still lives in the unit. When Tenant B does finally decide to move, you will then be free to increase the rent on the remaining tenant, Tenant E, to market level. Tenant E and his new roommate, Tenant F, would then become the new "original tenants," and the cycle would begin again: the rent would be controlled until both Tenant E and Tenant F vacated.
As I sign new leases with Tenant B and his new roommates, is there a special clause I should put down on the new lease so I can prove that these are not original leases so it will be clear that I can raise the rent to market level when Tenant B leaves?
In any lease you sign with subsequent roommates, it would be wise to include a clause which identifies by name the original tenants and explains that a vacancy is deemed to occur when those named tenants no longer reside in the unit.
In addition, Tenant B has an obligation to inform you when he vacates the unit. Should he fail to do so and you subsequently collect rent from the remaining tenants without instituting an increase, you will not be considered to have waived your right to raise the rent when you discover that the last original tenant has vacated.
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