On November 28, 2017, the San Jose City Council voted to replace the City’s nearly forty-year-old rent control law with a new rent control ordinance. The new Apartment Rent Ordinance (ARO) took effect on December 29, 2017. The new ARO retained the 5% annual rent increase previously permitted, but also adopted many new requirements, including a new registry of rent-controlled units.
This document is intended to provide general guidance to San Jose’s rental housing providers on the requirements of the new ARO.
I. APPLICABILITY OF THE ORDINANCE
Unless subject to one of the exceptions discussed below, all rental units in the City of San Jose that either: (1) have a certificate of occupancy issued on or before September 7, 1979, or (2) were offered or available for rent on or before September 7, 1979, are subject to the requirements of the new ARO.
The following categories of rental units are exempt from the ARO:
- “New” Construction – Units with a certificate of occupancy issued after September 7, 1979.
- Single Family Homes – A building containing only one dwelling unit.
- Duplexes – A building with only two dwelling units.
- Affordable Rental Units – A building in which the rental units are owned and operated by any government agency, or a public or privately owned rental unit for which the rent is limited to no more than “affordable rent” (as defined by California Health and Safety Code Section 50053) and is reserved for lower income households pursuant to legally binding restrictions recorded for the benefit of a government agency. The exemption only applies to the specific units in any building which meet the criteria, for so long as those units meet the criteria. Absent some other form of qualifying subsidy, this exemption does not include units in which the tenant is the recipient of a Section 8 Housing Choice Voucher. However, see Section IV(E) below, regarding rent increase for Rental Voucher Units.
- Transient Occupancy Units – Rooms or accommodations in hotels, motels, or guesthouses (as defined by San Jose Municipal Code Sections 20.22.470 and 20.200.480) which are legally rented to transient guests for a period of less than thirty (30) days. This exemption does not apply to “incidental transient occupancy” as otherwise permitted by the San Jose Zoning Code (i.e., short term rentals through platforms such as AirBnb and VRBO are not exempt unless another exemption applies).
- Hospitals, Religious Institutions, and Dormitories – Accommodations in any hospital, convent, monastery, extended care facility, emergency residential shelter, residential care facility, residential service facility, nonprofit home for senior citizens, fraternity or sorority house, or dormitories owned and operated by an institution of higher education, high school, or elementary school.
Note that some of the categories of units exempt from the ARO (including units in buildings with 3 or more units built after September 7, 1979), are still subject to the City’s just cause eviction law, known as the Tenant Protection Ordinance (TPO). For information about the TPO, see CAA’s Industry Insight – San Jose’s Just Cause Eviction Ordinance Overview.
II. NOTIFICATION AND POSTING REQUIREMENTS
The new ARO requires the landlord to notify the tenant of the applicability of the ARO to the property in two ways: (1) in the rental/lease agreement, and (2) in a posting on the property.
A. Notification in Rental/Lease Agreement
Landlords are required to notify each tenant household of the applicability of the ARO prior to entering into a rental or lease agreement for a rent-controlled unit. To comply with this requirement, the landlord must provide written notice with the rental/lease agreement that the unit is subject to the ARO and provide a copy of the City’s informational notice or handbook for tenants, if such notice is available from the City. The City’s informational notice is available here, and has also been included with CAA’s updated Notification of San Jose Rent Control Ordinance (Form SJ-001).
B. Posting Requirement
In addition to providing the notification with the rental/lease agreement, the new ARO also requires landlords of rent-controlled properties (defined as any building with one or more rent-controlled units) to post and maintain on the property a written notice from the City regarding the ARO. The required posting is available on the City’s website, it can be found here. Landlords have two options for where to place the posting: (1) in compliance with Civil Code Section 1962.5, or (2) immediately adjacent to the posting of the residential occupancy permit required by San Jose Municipal Code Section 17.20.630. Each of these methods is discussed in more detail below.
If following the posting method authorized by Civil Code Section 1962.5, the following rules apply: (1) in each dwelling structure containing an elevator the posting shall be placed in every elevator and in one other conspicuous place, and (2) in each structure not containing an elevator the posting shall be placed in at least two conspicuous places.
If placing the posting immediately adjacent to the posting of the residential occupancy permit required by San Jose Municipal Code Section 17.20.630, the landlord must ensure that the occupancy permit is displayed in a conspicuous place in the building to which it pertains so that it may readily be seen by the residents of the building and any representative of the city with authority to enforce the San Jose Housing Code.
III. RENT REGISTRY & RENTAL HOUSING FEE
A. Annual Registration and Fee
The new ARO calls for the City to create a registry of rent-controlled units. As part of this, landlords are required to register their units annually. The infrastructure for the rent registry is still being created by the City. Currently, there are only minimal details available about the rent registry and registration process. More details about the registration process will be available once the registry infrastructure is created.
The new ARO states that landlords will be required to register their units annually in a manner specified by the City, unless some other registration interval is specified by the City in regulations for the ARO. The current regulations state that the City will mail an annual registration form and fee statement to each landlord, which must then be completed and returned to the City by the date specified on the statement. Landlords of units that would otherwise be rent-controlled, but are exempt because they are owner-occupied, legally used for transient occupancy, affordable rental units, government owned, or units in hospitals, religious institutions, or educational institutions, may request an exemption from the fee requirement. The amount of the rental housing fee is set by the City Council, and is to be calculated based on the costs necessary to administer the ARO.
B. Supplement to Notice of Termination of Tenancy Filing (Temporary Requirement)
Unless the unit has already been registered in the rent registry, the copy of the notice of termination of tenancy (excepting 3-Day Notices to Pay Rent or Quit) filed with the City must be accompanied by a filing statement which sets forth: (1) the current rent, (2) the date of the most recent increase, (3) the address of the unit, (4) the names of the tenants, and (5) any other information reasonably requested by the City. The filing statement must be a on a form approved by the City. As of February 6, 2018, the City has not posted any such form on their website. CAA previously offered a filing statement form which could be used to comply with the now-repealed Rental Housing Dispute Resolution Program. Because the new ARO requires the filing statement to be on a form approved by the City, CAA has discontinued its filing statement form. CAA members should contact the City and/or an attorney about compliance with this requirement.
For information about the requirement to file a copy of tenancy termination notices with the City, see CAA’s Industry Insight – San Jose’s Just Cause Eviction Ordinance Overview.
C. Notice of Re-Rental Upon Vacancy
In addition to the requirement to register the unit in the registry, the ARO also requires landlords to file a “Notice of Re-Rental” with the City following a vacancy of a rent-controlled unit. The Notice of Re-Rental must include the amount of rent that the new tenant is actually paying, the physical address of the unit, the name of each new tenant, a copy of the rental agreement with the new tenant, the reason the prior tenant vacated, and any other information that may be requested by the City. Though the ARO states that this information is to be filed on a form approved by the City, the City has yet to provide a form to be used by landlords. CAA recommends contacting the City and/or an attorney regarding compliance with this requirement until such time that the City makes a form available. In the event the City adopts regulations requiring re-registration of a unit in the rent registry upon a vacancy or re-rental, the requirement to file a Notice of Re-Rental can be fulfilled by the re-registration of the unit in the rent registry.
D. Rent Increases Prohibited When Not in Compliance
The ARO states that a landlord who has substantially failed to comply with the City’s request to register or re-register a unit may not increase the rent on the unit.
E. Copy of Registration to Tenant
If requested by the City, the landlord must provide a true and correct copy of the completed registration form for the unit to an adult member of the tenant household within ten (10) days of submission of the form to the City. Any information that does not pertain to the particular unit may be redacted on the copy provided to the tenant, except the name and address of the landlord.
IV. GENERAL RENT RESTRICTIONS AND PROVISIONS
A. Initial Rent
The ARO only limits the rent which can be charged at initial occupancy in certain limited circumstances. This is policy, known as “vacancy de-control,” is in place because of a state law known as the Costa-Hawkins Rental Housing Act. The Costa-Hawkins Rental Housing Act limits local governments’ ability to impose the strictest forms of rent control. More information can be found in CAA’s Industry Insight – Costa-Hawkins Rental Housing Act.
So long as the prior tenancy ended because either: (1) the tenants voluntarily vacated, or (2) the tenancy was legally terminated as a result of the tenant’s actions (such as non-payment of rent, breach of the lease, or nuisance), the landlord may set the initial rent at an amount of their choosing. A provision under the previous ARO which stated that if any one tenant vacated, even if one or more other tenants remained, that created a voluntary vacancy (thus allowing the landlord to raise the rent to market) is not included in the new ARO. However, see section V(A)(i) below regarding the joint petition process for an additional increase when an additional tenant is added.
If the prior tenancy was terminated without cause or through unlawful landlord activity, the landlord is not permitted to raise the rent to market for the new tenants. Instead, the landlord must continue to comply with the provisions of the ARO regulating rent increases.
B. Annual General Increase
The ARO limits rental increases on rent-controlled rental properties to five percent (5%) of the monthly rent charged for the previous twelve months.
C. One Rent Increase Per Year
Rent may only be increased once in any twelve-month period. This includes the five percent annual general increase as well as any increases that may be approved via petition. There is a limited exception to this rule when the rent is increased pursuant to an approved joint petition. For more information about increases via petition, see section V below.
D. Notice of Increase
The new ARO does not have any specific requirements related to the contents of a rent increase notice for an annual general increase (i.e. the annual increase of not more than five-percent). CAA’s Thirty-Day Notice of Change of Monthly Rent (Form CA-157) can be used for such increases. If the rent is being increased following the approval of a petition by the City, CAA recommends having an attorney prepare or review the rent increase notice, as the decision approving the petition may have additional requirements related to the notice of rent increase.
E. Rental Voucher Units
Rental Voucher Units are not exempt from the ARO, but are the subject of a limited exception from the five percent annual general rent increase cap. The exception states that the rent for Rental Voucher Units may be adjusted annually consistent with the published rules of the applicable government agency in lieu of the rent controls under the ARO.
It appears that this term was intended to include units in which a tenant with a Section 8 Housing Choice Voucher resides. However, the rules of the Section 8 Housing Choice Voucher program do not exactly conform with the City’s definition of a Rental Voucher Units.
The ARO defines a Rental Voucher Unit as a unit which: (1) is restricted to occupancy by lower income households by a contract under which the tenant pays no more than thirty-five percent (35%) of their income towards rent, (2) the remainder of the rent is paid by a government agency, and (3) rent is not increased on an annual basis, but only where allowed under the rules of the government agency. By contrast, under the Section 8 Housing Choice Voucher program, tenants may pay up to forty-percent (40%) of their income towards rent if they choose to rent a unit which has a rent that exceeds the maximum rent amount authorized by the housing authority which issued the voucher. In addition, the Section 8 Housing Choice Voucher program does not prohibit annual increases in the rent, though before any rent increase can take it effect it must be approved by the housing authority in accordance with “reasonableness” standards under program regulations. These ambiguities could be interpreted to mean that a unit in which a tenant with a Section 8 Housing Choice Voucher resides is not a “Rental Voucher Unit.”
Accordingly, CAA recommends consulting with an attorney before increasing the rent for any Section 8 Housing Choice Voucher tenants in an amount that exceeds the five-percent annual general increased allowed under the ARO. To learn more about the Section 8 Housing Choice Voucher program, see CAA’s Industry Insight – Overview of the Section 8 Housing Choice Voucher Program.
V. PETITIONS FOR CERTAIN INCREASES
A. Joint Petitions
The new ARO allows for additional rent increases, fees, or security deposit increases when the tenant has requested an additional occupant, parking spot, or other new housing service (such as a pet). In these situations, the rent increase, fee, or security deposit increase must be approved by the City, but can be approved through a simplified joint-petition process. Though the petition is agreed to by both the landlord and tenant, only the tenant can file the petition with the City. Rent increases approved pursuant to a joint petition are not subject to the one-increase-per year-rule if the decision approving the increase specifically states that the increase is exempt. The City has created a Joint Landlord/Tenant Petition form, available here.
The rules governing the amounts which can be charged and under what circumstances are very strict, therefore it is very important that landlords familiarize themselves with these provisions before agreeing to any new or additional terms with tenants that would result in a rent increase, fee, or security deposit increase.
i. Rent Increase for Additional Occupants
A joint petition for a rent increase of up to five-percent (5%) may be filed if the tenant adds an additional occupant to the unit other than the tenant’s spouse, parent, dependent or foster child, or a minor in the tenant’s care. The five-percent increase only stays in effect for so long as the additional occupant continues to reside in the unit. The sections of the ARO and regulations related to this type of joint petition do not address the circumstances, if any, under which the City may deny the requested increase.
The ARO does not address whether the landlord can condition their acceptance of the additional occupant to be added to the rental/lease agreement on the tenant agreeing to the up to five-percent increase. There is also a potential fair housing issue caused by a policy of requiring the tenant to agree to a five-percent increase as a condition of approval for the additional occupant. Because the ARO does not allow a rent increase when a spouse of a tenant is added to the unit, a policy of requiring tenants to consent to a rent increase for other additional occupants does not apply equally to married and unmarried persons. Due to these issues, CAA highly recommends consulting with an experienced fair housing attorney to develop your operational policies related to the handling of the addition of new occupants to the unit.
ii. Rent Increase for Additional Parking Spot
A joint petition may also be filed for a rent increase of up to $50 for a second parking space. If the property contains or is required to contain enough parking spaces for each unit to have one space, one parking space must be provided to each unit for no additional charge. The second parking space that is the subject of the joint petition cannot be the parking space allocated for another unit or a space required for guest parking pursuant to the property’s permit. The sections of the ARO and regulations related to this type of joint petition do not address the circumstances, if any, under which the City may deny the requested increase, nor do they address whether a petition would be permitted for additional spaces beyond a second space.
iii. One-Time Fee or Security Deposit Increase for New Housing Services
In addition to the provisions specifically applicable to additional occupants and parking spots, the new ARO allows landlords and tenants to agree that new or additional Housing Services will be provided upon the payment of a one-time fee, or an increase in the security deposit. If the parties agree to a one-time fee, it must not exceed five-percent (5%) of the monthly rent. If the security deposit is increased, is must not exceed the limits under California law (see CAA’s Industry Insight Security Deposits: Collection and Return).
A new or additional housing service may include a pet (where pets are prohibited under the rental agreement), or other privileges or services that are expressly excluded under the rental agreement. The joint petition for the one-time fee or security deposit increase must be approved by the City but may only be denied upon a finding that either the landlord or the tenant have not freely consented to the request (i.e., there is proof of duress, misrepresentation, or other acts of misconduct).
B. Landlord Petitions
i. Fair Return Petition
Landlords are authorized to file a petition for an increase that exceeds the annual general increase if such an increase is necessary for the landlord to obtain a “fair return.” A “fair return” is defined as the net operating income for the property in the “base year” adjusted by the percentage increase in the Consumer Price Index. In most cases, the base year is set at 2014, but if the landlord was previously granted a fair return increase, the base year for the purposes of determining the fair return increase is the year of the previous fair return petition. Adjustments to the base year net operating income are permitted if operating expenses or income were unusually high or low that year. Petitioning for a fair return increase is a complicated process and is not something that should be done without the assistance of an attorney experienced in handling such petitions.
ii. Capital Improvement Petitions
Landlords are also authorized to file petitions for capital improvement pass-through charges. A capital improvement is a physical change made to a property that provides new or enhanced housing services or that increases safety, sustainability, or seismic readiness. Replacement of an existing physical feature with a physical feature of similar kind and quality, or which maintains a similar level of functionality, is not a capital improvement for which a petition may be filed.
The amount of the capital improvement charge is based on the amortized cost of the improvement and may not exceed three-percent (3%) of the monthly rent charged to a tenant on the date the capital improvement petition is filed. The capital improvement charge is not rent, may not be increased, and is not considered part of the rent for the purpose of determining the amount of the annual general increase. The capital improvement charge must be separately stated on the rent invoice, if any. A capital improvement charge is not permitted when the rent has been increased due to a valid vacancy decontrol (i.e., if rent is raised to market due to a voluntary vacancy or for-cause eviction, the capital improvement charge cannot be charged to the new tenant).
Petitioning for a capital improvement pass-through is a complicated process and should be done with the assistance of an attorney experienced in handling such petitions.
iii. One-Time Utility Offset Petition
Between April and June 2018, the City Council approved several amendments to the ARO to prohibit the pass through of utility charges to tenants of rent controlled units. As part of these amendments, the City Council authorized a special one-time petition process which allows landlords who previously charged utilities separately from the rent to have their base rents increased to offset the loss of the utility pass-throughs. This special petition process is only available until October 31, 2018. CAA highly recommends beginning the petition as soon as possible, as a large amount of documentation must be complied and submitted to the City. Details about the petition process can be found in CAA’s Industry Insight – San Jose Rent Control Utility Offset Petition Process.
C. Tenant Petitions
Tenants are authorized to file a petition for a rent decrease if they claim that they are being charged an improper rent or pass-through, or if they claim to have had a reduction in service (i.e., they are not receiving the same level of services as initially provided). Tenants can also file a petition to have their rent reduced if they claim their unit does not meet housing code standards.
VI. RESTRICTIONS ON OTHER FEES AND CHARGES
A. Security Deposit
Except when approved in the petition process (discussed in Section V(A)(iii), above), the ARO prohibits any increases in the security deposit for so long as any one of the original tenants continues to occupy the unit. This section of the ARO implies that in the event all of the original tenants have vacated and been replaced by one or more new tenants, the landlord could require an increased security deposit. However, this is not explicitly stated in the ARO. Thus, CAA recommends consulting with an attorney prior to increasing the deposit in the event all original tenants have vacated the unit.
Though the ARO does not limit the amount of security deposit that can be required by the landlord, the limits applicable under state law – two-times the monthly rent for unfurnished units (one months’ rent for certain military service members) and three-times the monthly rent for furnished units (two-times the monthly rent for certain military service members) – still apply.
B. Late Fees
The ARO prohibits landlords from charging a late fee which exceeds five-percent (5%) of the monthly rent. In addition, the ARO prohibits a late fee from being charged unless the rent is three or more days late. If the rental agreement specifies that rent is due on the first day of each month, this means that a late fee could not be charged until the fifth day of the month.
The ARO’s prohibition on a late fee that exceeds five-percent (5%) of the monthly rent does not mean that a late fee of five-percent (5%) is necessarily reasonable or enforceable. Late fees should not be used as a method to induce on-time payment or to penalize late payment. Rather, the late fee should represent a reasonable endeavor to estimate fair compensation for the owner’s damages resulting from late payment. Also note that, though the ARO uses a percentage basis to cap the amount of the late fee, a one-time fixed dollar amount is less likely to be viewed as an illegal penalty than a per day or percentage-based fee. For more information about late fees, see CAA’s Industry Insight – Late Fees: Residential Rental Payment.
C. Insufficient Funds Fees (NSF)
The ARO prohibits an NSF fee that exceeds the amounts allowed under Civil Code Section 1719(a)(1) (i.e., $25 for the first incident and $35 for subsequent incidents). Like late fees, CAA recommends that the NSF fee represent a reasonable endeavor to estimate fair compensation for the owner’s damages resulting from the dishonored check.
D. Replacement Fees
The ARO prohibits landlords from charging a tenant a replacement fee for a key or security card that exceeds the actual replacement cost plus $10 (to account for the time incurred by the landlord in obtaining the replacement).
E. Utilities
The City Council has amended the ARO to prohibit the pass through of utility charges to tenants of rent controlled units. The amended ARO states that: “no charges for utility services (such as electricity, natural gas, telephone, water, waste water, sewer and refuse or waste management services) may be passed through to Tenants by Landlord.” While the intent of the amendment appears to have been aimed at eliminating the practice of Ratio Utility Billing (RUBS), the language of the amendment is much broader and appears to prohibit not only RUBS, but also billing for sub-metered utilities. CAA strongly encourages members who currently bill tenants for utilities based on a submetering system to immediately seek legal advice from their attorneys as to the effect of this amendment on their billing practices.
All new written utility passthrough agreements entered into on or after May 1, 2018 are void, effective July 5, 2018. Written renewal agreements entered into after January 1, 2018 are treated as existing agreements, provided that the initial passthrough agreement was entered into prior to January 1, 2018. New written utility passthrough agreements entered into between January 1, 2018 and April 30, 2018 are void (effective July 5, 2018) unless the landlord had a practice of passing through utilities to all tenants in the building on the same terms prior to July 1, 2017, in which case the passthrough agreement is treated as an existing passthrough agreement (discussed below). Verbal passthrough agreements are void effective July 5, 2018 regardless of when they were entered into.
As part of amendment to the ARO, the City Council authorized a special one-time petition process which allows landlords with existing written passthrough agreements to have their base rents increased to offset the loss of the utility pass-throughs. This special petition process is only available until October 31, 2018. CAA highly recommends beginning the petition as soon as possible, as a large amount of documentation must be complied and submitted to the City. Details about the petition process can be found in CAA’s Industry Insight – San Jose Rent Control Utility Offset Petition Process. If the landlord chooses to file an offset petition, the existing written utility pass-through agreements become void effective on the date the decision is issued on the petition. If the landlord does not file an offset petition, the existing written agreements become void on October 31, 2018.
F. Invoice Required
Any of the charges specified in subsections A through D above may not be passed through to the tenant unless: (1) the charge is clearly provided for in the rental/lease agreement, (2) the charge is listed as a separate line item on the rent invoice, if one is provided, and (3) a true and correct copy of the invoice or bill paid by the landlord for which the landlord seeks reimbursement is provided. The ARO does include a limited exception which states that landlords are not required to provide a third-party invoice for a NSF fee, though the fee must still be stated in the rental/lease agreement and on the rent invoice (if any). It is not clear how the requirement to provide an invoice justifying the charge applies to late fees and increased security deposits, CAA recommends consulting with an attorney regarding how this requirement may affect the landlord’s ability to charge a late fee and/or increased security deposit.
G. Tenant Petitions to Dispute Charges
If a tenant disputes the validity of a charge, the tenant may file a petition with the City to have the validity of the charge determined.
F. Other Fees and Charges
Other fees and charges may only be assessed to tenants if the City Council has passed a resolution authorizing the charge and the landlord passes through the charge in accordance with the rules specified in the City Council’s resolution. In addition, where such a charge is approved by the City Council, the landlord must comply with the following conditions: (1) the total charge assessed to the tenant must not exceed fifty percent (50%) of the amount paid by the landlord, (2) a tenant cannot be required to pay any amount of any charge that was attributable to a period of time during which the tenant was not entitled to the use and occupancy of the unit, (3) a tenant cannot be required to pay any amount of any charge that is attributable to common areas or rental units other than their own, and (4) a tenant cannot be required to pay more than their share of a charge attributable to their unit.
The City Council may adopt rules related to the landlord’s ability to pass on part of the cost of the rental housing fee to the tenant.
VII. TENANT BUYOUT OFFERS AND AGREEMENT
The new ARO permits landlords to obtain a voluntary vacancy in a unit by entering into a tenant buyout agreement, subject to the terms of the ARO. Compliance with the tenant buyout provisions takes place in three stages: (1) the offer, (2) the agreement, and (3) the tenant’s right to rescind the agreement. The requirements applicable to each of these stages is discussed below. The provisions applicable to a tenant buyout agreement are not applicable to settlement agreements made as part of a pending unlawful detainer action.
Because of the strict rules applicable to the process of negotiating, preparing, and enforcing a buyout agreement, CAA recommends having an experienced attorney handle all buyout negotiations and agreement preparation.
A. The Buyout Offer
Immediately prior to making a buyout offer to a tenant, the landlord must provide the tenant with a disclosure form prepared by the City, that form is available here. The disclosure form informs the tenant about information such as the application of the ARO and Tenant Protection Ordinance, the tenant’s right to request a copy of any buyout agreement translated into their primary language, the tenant’s right to seek the assistance of an attorney, the tenant’s right to rescind the agreement within forty-five (45) days, and the tenant’s right to relocation assistance payments if they are evicted for specified reasons. Both the landlord and tenant should sign the City disclosure form, and the landlord should retain a copy of the signed form for their files. Failure to provide the disclosure form is a basis for the tenant to rescind the buyout agreement (discussed in more detail below).
B. The Buyout Agreement
The ARO does not regulate the material terms of the buyout agreement (i.e., the amount paid or time period for the tenant to move-out), but it does require that the buyout agreement meet certain requirements and include some specific provisions. The buyout agreement must be in writing and must be signed by the landlord and all tenants. The landlord must provide a copy of the buyout agreement translated into the tenant’s primary language, if requested by the tenant. The buyout agreement must also include the following statement in at least 12-point font:
- You have the right to not to enter into this Buyout Agreement
- You may choose to speak with an attorney before signing this agreement
- You may also contact the City Housing Department prior to signing this agreement.
- You have the right to cancel any Buyout Agreement within forty-five (45) days from the date of signing this Buyout Agreement without penalty. To cancel this agreement, you must send, via U.S. mail, the Landlord a signed and dated notice indicating that you are cancelling the agreement, or words to that effect. However, if you have already moved out, cancelling this Buyout agreement will not entitle you to move back in.
After the buyout agreement has been signed by all parties, the landlord must provide all tenants who signed the agreement with a copy of the signed agreement. In addition, the landlord is responsible for filing a copy of the agreement with the City within thirty (30) days of when the agreement is signed.
C. Tenant’s Right to Rescind the Buyout Agreement
The ARO allows the tenant to rescind (i.e., cancel) a signed buyout agreement without penalty within forty-five (45) days of when the agreement is signed. This right to rescind the agreement is only available to tenants and applies even though the landlord complied with all of the requirements for buyout agreements. In addition, the tenant also has the right to rescind the agreement after the forty-five (45) day period if any of the following apply: (1) the landlord failed to provide the buyout disclosure form before making the buyout offer, (2) the buyout agreement did not comply with the ARO’s requirements, or (3) there is a basis under state or federal law to rescind the contract (for example, if the agreement was the product of duress).
VIII. ADDITIONAL RESOURCES
The City provides extensive information about the ARO, as well as forms which can be sued for compliance, on their website https://www.sanjoseca.gov/your-government/departments/housing/homeowners.