Rent control in Los Angeles: what landlords need to know
By Barbara Craig, Attorney at Law
Rent control — also called rent stabilization – is a collection of local laws passed by cities, usually in response to a tight housing market where vacancy rates are very low and high demand drives up rental costs. Concerns about high rent costs and tenants’ difficulties finding and paying for affordable, safe, and sanitary housing led to the Los Angeles City Council’s passage of the Rent Stabilization Ordinance (RSO).
The City of Los Angeles RSO, as detailed in Chapter XV of the Municipal Code, regulates allowable rent increases, rental unit registration, and various aspects of eviction — particularly situations in which tenant relocation assistance is necessary. Tenants of RSO properties are also entitled to interest on their returned security deposits when they move out.
Properties covered by the RSO
The RSO applies to all residential rentals within Los Angeles city limits that were constructed prior to October 1, 1978, including:
- Multi-family housing such as apartments, town homes, and duplexes. Some condominiums are subject to rent control, but there are notable exceptions.
- Multiple single-family homes on the same land parcel.
- Motel, hotel, and boarding or rooming house rooms occupied by the same person for at least 30 days.
- Residential units connected to a commercial building.
- Mobile homes and recreational vehicles, as well as mobile home pads.
Some replacement rental units built after July 16, 2007 are also subject to RSO oversight as per Los Angeles Municipal Code, Chapter XV, section 151.28 (also known as the Ellis Act). Otherwise, dwellings built after 1978, single-family properties on one lot, luxury units, and government-owned units are exempt from the RSO.
At the current time, nearly 85% of rentals in Los Angeles — or about 118,000 units – are covered by rent control. The Los Angeles Department of Planning and Zoning (http://zimas.lacity.org/) offers an online tool to check if a property falls under RSO oversight.
All rental units covered by the RSO are required to be registered with the Housing + Community Investment Department (HCIDLA) each year. New property owners must comply with this requirement within 45 days of purchasing a property subject to RSO protection. Under the RSO, a landlord cannot legally collect any tenant rent unless the annual registration fee is paid and a copy of the RSO is given to the tenant. Additionally, all properties subject to RSO requirements must post notifications on the premises.
Rent increases for rent-controlled properties
Under the RSO, landlords are legally permitted to raise the rent by a maximum of 3% every 12 months, by another 1% if the landlord pays the utilities, and to cover necessary repairs or upgrades with prior approval from HCIDLA. The landlord must give the tenant at least 30 days of notice before an increase takes place.
If a tenant voluntarily leaves the rental unit or is evicted in certain circumstances, the landlord can legally raise the rent more than 3% for a new tenant. But all future rent increases for the new tenant must comply with RSO requirements.
Evictions under the RSO where the tenant is at fault
As with any rental unit, a tenant residing in a rent-controlled property may be legally evicted for a number of reasons, including:
- Violating a lease term.
- Creating a nuisance.
- Unlawful use of the rental unit.
- Refusal to renew the lease with similar terms.
- Failure to permit the landlord or their agent entry for reasonable repairs or inspections upon adequate notice.
- A person who is not named on the lease is in possession of the unit.
However, eviction for non-payment of rent is only permitted when the past due rent amount complies with RSO restrictions on rent increases. If the landlord has implemented a prohibited rent increase, it is not lawful to evict the tenant for nonpayment of rent.
In some circumstances, a landlord may desire to evict a tenant in good standing from a rent controlled property. The RSO closely regulates such evictions to prevent abuse. Potentially valid reasons to evict a tenant under the no-fault provisions of the RSO include, but are not limited to:
- The owner’s family member or a new manager will be moving into the rental unit.
- The property will no longer be offered as a rental unit.
- The property has been condemned.
It is important to note that evicting the tenant to facilitate the sale of the property — e.g. a prospective buyer has made an offer which is contingent upon delivering the property in vacant condition — is not permissible under the RSO.
If the tenant has lived in the unit less than one year, the landlord must provide 30 days of advance notice of the eviction. Otherwise, the notification requirement is 60 days.
Tenant relocation assistance
In no-fault evictions, the landlord generally must pay tenant relocation assistance. The amount of relocation assistance varies based on several factors, including how long the tenant has lived in the unit, their age, and disability status. Relocation assistance is paid per unit, not per tenant.
As of this writing, relocation assistance amounts range from $7,750 to $20,050. Although HCIDLA periodically publishes a bulletin that outlines the relocation assistance amounts, the agency makes the final determination of the amount a landlord will be required to pay in a given circumstance.
Recent changes to the RSO
There are two noteworthy recent changes to the RSO. First, landlords may not change the lease terms without the tenant’s mutual agreement — except in cases of legal rent increases and government-mandated requirements.
Second, as per Los Angeles city ordinance 174501, landlords may not raise the tenant’s portion of the rent following termination of an existing rental assistance program such as Section 8. In other words, if the property owner chooses to exit the rental assistance program, the owner gives up the assistance funding they formerly received, and the tenant cannot be required to make up the difference.