Frequently Asked Questions [download]
The
state vacancy decontrol law that took effect January 1, 1996 mandated changes
to local rent control laws. It did not end rent control or eviction
protections, and it does not permit rent increases on existing tenants.
- As of January
1, 1999, the property owner has been able to
set the rent for a new tenant at an amount negotiated between the owner and the
tenant. The new rent is re-controlled
and future rent increases during the tenancy are determined by the Rent Control
Board.
- Between October 1, 1995 and
December 31, 1998, rent increases of up to 15% were permitted for new
tenants following a voluntary vacancy or “just cause” eviction of a prior tenant. An owner was permitted this increase a
maximum of two times.
- Once the new tenant moved in, the new rent was again controlled.
- All other rent control protections,
such as eviction protections, continue to apply to the new tenancy.
The
legal rent for a controlled unit is the Maximum Allowable Rent (MAR) plus a
registration fee and the tenant’s share of certain property tax-related
surcharges.
For
tenants who moved in before October 1995, the MAR is based on the rent
in effect (and all amenities included with the rent) on April 10, 1978. The current MAR for these tenants equals the
base rent from 1978 plus all increases approved by the Board since that date. As a phase-in to market rate rentals, the MAR
for tenants who moved in between October
1995 and the end of December 1998 could have been adjusted upward as much
as 15% above the existing MAR.
As of January 1, 1999, property owners have been able to rent units to new tenants for
market rates in most cases. In addition
to negotiating the initial rent for an apartment, amenities are also negotiated
between an owner and a tenant without regard to the amenities that previously
came with the apartment. The amenities
provided when the apartment is rented will be considered the unit's minimum
amenities for the duration of the tenancy.
Rent levels and parking information for all new tenancies after January
1, 1999 must be registered with the Rent Control Board on a Vacancy Unit
Registration form.
Call
or stop by the Rent Control office to learn the current MAR in the Board’s
records for a unit. You may also look up
MAR levels on the Rent Control website:
www.smgov.net/rentcontrol
California
law allows an owner to collect up to two
months’ rent for an unfurnished
unit or three months’ rent
for a furnished unit. This deposit may be collected in addition to the
first month's rent. Santa Monica Rent Control regulations generally do not
permit an owner to increase the amount of the security deposit during a
tenancy. As of June 13, 2002, the Board
suspended its regulations requiring owners to pay interest on security
deposits. No interest payments on
security deposits are required at this time. For additional information on security
deposits and refunds please see the Security Deposits information
sheet.
A tenant who believes that the rental unit needs repairs should notify the owner. It's best to do so in writing and to keep a copy of the signed and dated letter after giving the original to the owner or manager. If the owner does not make the requested repairs, tenants have several remedies depending on the seriousness of the problems.
California law requires owners to maintain their units in habitable condition. The property must also comply with building and housing codes that protect a tenant's health and safety.
Under the Santa Monica Rent Control Law, a tenant may file a rent decrease petition if the owner does not make repairs or restore housing services after receiving written notice from the tenant. A decrease petition may be filed 30 to 180 days after the written notice to the owner. The purpose of the decrease process is to encourage owners to make necessary repairs. Many of the issues raised in decrease petitions are resolved through mediation. Any unresolved issues are forwarded to the Rent Control Hearings Department for a hearing and written decision.
In addition to filing a decrease petition, tenants who believe their unit or building is unsafe or unhealthy may call one of the following local government agencies and ask them to investigate the problem:
- Santa Monica Code Compliance (310) 458-4984
- Los Angeles County Health Dept. (213) 351-7892
For detailed information, please review information sheet, Maintenance of Rental Property.
It depends. For tenants whose tenancies began before January 1, 1999, housing services and amenities, such as parking, which were provided with the unit at no extra charge on April 10, 1978, are considered "base amenities." These amenities should still be provided at no extra cost. To learn which amenities are registered with a particular unit, contact the Rent Board office. If an amenity provided to the unit is discontinued or reduced, the tenant should ask the owner in writing to restore the amenity. Keep a copy of the letter. If the issues are not resolved, the tenant may apply for a rent decrease.
For units rented to new tenants after January 1, 1999, base rents and amenities are those provided on the initial rental date of the unit.
The Rent Control Law does not address the maximum number of people who may occupy a unit. Tenants are generally bound by whatever was agreed to in their rental agreement. Most standard rental agreements have language limiting occupancy to specified persons, prohibiting sub-tenancies, or requiring the owner's prior written consent.
However, if an owner refuses to allow a tenant to replace a roommate, the remaining tenant(s) may petition for a rent decrease for reduction of a housing service. A rent decrease is only available if the owner does not allow the same number of tenants as were allowed on the base rent date. If a rental agreement does not prohibit having roommates or subleasing, roommates are allowed.
Even if a rental agreement restricts who may reside in the unit, there are circumstances under which a tenant may be able to have additional occupants. The Santa Monica Municipal Code prohibits owners from evicting tenants for violating their rental agreements if the violation is due to an increase in occupancy because of the marriage of the tenant or the birth or adoption of a minor child. Another section of the Municipal Code provides similar protections for tenants who reside with a registered domestic partner. However, an "Affidavit of Domestic Partnership" must be on file with the City Clerk's office prior to the tenants’ being served with a 3-day notice by the owner.
Before purchasing controlled rental property, future owners may want to find out the current rent levels and review the Agency's file on the property. All documents related to a property are available to be viewed at the Board’s office.
Once new owners have purchased rental property they need to take the following steps with the Rent Control Agency:
- File a Change of Ownership Registration form within 30 days of closing escrow.
- Determine if the annual registration fees for the property have been paid and if any of the tenants have registration fee waivers. This information is available from the Board's office.
Annual registration fee bills are mailed to landlords at the beginning of July each year and must be paid by August 1 in order to pass the fees through to the tenants as a monthly surcharge. For more detailed information please review information sheet - Owning Rental Property in Santa Monica.
While the Rent Control Law provides many protections for tenants, it also guarantees property owners a fair return on their rental property. The annual General Adjustment compensates owners for general increases in operating expenses. Starting in 2013, the General Adjustment will no longer be based on a formula called
“component ratio to gross rent” but on a simple application of 75 percent of the change in the area Consumer Price Index (CPI). Increases can range from 0%
to 6%, and Rent Control Board Commissioners retain the discretion to impose a dollar-amount ceiling after holding a public hearing.
In June 2012, the Board approved a 2012 General Adjustment of 1.54% with a maximum increase of $26. The General Adjustment goes into effect on September 1 of each year.
Property owners may increase rents by the 2012 General Adjustment beginning September 1 if:
- all registration fees and accrued penalties are paid timely;
- the units are properly registered;
- there are no uncorrected citations or notices of violation of health, safety, or housing laws for the property;
- the owner is in compliance with all provisions of the Rent Control Law;
- the owner gives a 30-day written notice as required by California law; and
- the tenant moved into the unit before September 1, 2011.
Rent overcharges may be found in a variety of instances, including:
- A monthly rental charge greater than the legal rent;
- an extra charge for an amenity that is required to be provided without additional charge; or
- a "finder's fee" in order to rent a unit.
A tenant who believes he/she is paying more than the legal rent should contact an Information Coordinator to find out the legal rent for the unit.
Rent overcharges may be resolved in several ways. If the owner does not voluntarily refund overpayments once the tenant brings this to his/her attention, the tenant may:
- file an excess rent complaint with the Rent Control Board;
- file a lawsuit in Small Claims Court (no more than $10,000); or
- file a lawsuit in Superior Court.
If a tenant files in Small Claims or Superior Court, the tenant may be able to obtain a penalty of three times the amount of the excess rent. Each option has advantages and disadvantages that should be considered before making a decision.
The
Rent Control registration fee finances the services required to administer the
Rent Control Law. The registration fee
is $156 per unit annually, which is $13 per month.
Property
owners initially pay the fee for each rental unit they own. Owners who pay all outstanding registration fees by August 1 may,
with proper written notice, recover the registration
fee from tenants at the rate of $13 per month beginning September 1st.
The Board will waive this fee for units occupied by very low income seniors (62 years or older) or very low income disabled tenants. The tenant's total yearly household income must be less than $27,216 for a person living alone or $31,104 for a two-person household.
Fee waivers are also available for the following circumstances:
- Units participating in the Section 8 housing program are eligible for a Section 8 fee waiver.
- Owners who reside in a unit on their property and who have at least a 25% ownership interest may qualify for an owner-occupied fee waiver.
- Single family homes and condominiums occupied by tenants who moved in after January 1, 1996 may qualify for a separately sold unit fee waiver.
Fee waiver applications must be submitted on forms provided by the Board and documentation is required for each type of waiver. Contact an Information Analyst to obtain an application or get further information.
The Rent Control law allows property owners to pass along certain property tax assessments to their tenants, in addition to the Maximum Allowable Rent (MAR) and registration fee. The allowable surcharges are:
- School District Special Tax (currently $358.91 per parcel)
- Unified School Bonds
- Community College Bonds
- Stormwater Management User Fee
- Clean Beaches & Ocean Parcel Tax
Surcharges may only be collected on a pro-rated monthly basis. To calculate the monthly amount per unit for each allowable assessment:
- use the current property tax bill
- divide each assessment by the total number of all units on the parcel
- divide again by 12 to get the monthly amount per unit
To collect the bonds, Stormwater and Clean Beaches surcharges, the owner must provide tenants with a copy of the property tax bill showing the assessed amounts. Portions of the tax bill may be “blacked out” for privacy, but the property address, tax amount and dates must be identifiable.
The Santa Monica Rent Control Law allows tenants and owners to file petitions to resolve disputes or adjust rent levels. The filing of a petition usually results in the matter being scheduled for a hearing.
There are several types of petitions heard by the Rent Control Board. Below is a list of these petitions and a brief description of why they are filed.
- Decrease Petition - filed by a tenant to encourage the owner to make necessary repairs or restore services and/or amenities. A decrease petition may be filed by an owner who wishes to remove a service in exchange for a decrease in rent.
- Increase Petition - filed by an owner who seeks to increase the rent levels at a property. Increase petitions are filed for all units on a property at the same time and are often based on unusually high expenses, including capital improvement.
- Tenant Not in Occupancy Petition - filed by an owner when a tenant does not live in the unit. If granted, the Rent Control Board will increase the rent to market level.
- Base Rent/Base Amenities Petition - filed by an owner or a tenant to determine the base rent and/or the base amenities for a unit. For tenancies beginning before January 1, 1999, the base rent or amenities date is April 10, 1978, or the first date the unit was rented after that time. For tenants who moved in on or after January 1, 1999, the base rent date is their initial date of tenancy.
- Complaint for Excess Rent/Non-Registration - filed by a tenant who believes he or she is being or has been charged rent in excess of the legal maximum rent. A complaint may also be filed by a tenant if the owner has failed to register the property in accordance with the regulations.
For more questions and answers on petitions, please read information sheet: How to Prepare for a Hearing.
It depends. Condominium units may or may not be covered by rent control depending on a variety of factors such as:
- whether they were built as condominiums or converted from apartments;
- if converted, whether the unit has been separately sold to an actual purchaser;
- if built as condominiums, the date their construction was completed;
- in some cases, when the first unit was sold is important; and
- whether the current tenants first rented before or after January 1, 1996.
Because the facts differ for each condominium, it is best to call the Rent Control Board to determine the facts for a particular address.