Complying with Richmond’s Rent Control Law
On November 8, 2016, Richmond voters adopted the Richmond Fair Rent, Just Cause for Eviction, and Homeowner Protection Ordinance, known as Measure L. This law enacts a system of both rent control and eviction control on rental properties in Richmond. While many elements of Measure L will likely be subjected to legal challenges, it is important that Richmond landlords, managers, and operators understand the sweeping changes that the voters approved.
This document is intended to provide general guidance to Richmond’s rental housing providers on Measure L, which is scheduled to go into effect on December 30, 2016.
RENT ROLLBACK
Measure L is retroactive. It requires that, for tenancies that commenced on or before July 21, 2015, rents be rolled back to the rent that was being charged to the tenant on July 21 2015. For any tenancy that was established between July 21, 2015 and December 30, 2016 (the effective date of Measure L), it requires that the rent be rolled back to the amount the tenant paid at the start of the tenancy. The authors of Measure L have stated they did not intend for landlords to refund rents but simply to “reset” rents to the level charged on July 21, 2015. This rent decrease is effective December 30, 2016, which means that rent due on and after January 1, 2017 will be the rolled-back amount.
RENT CONTROL REGULATIONS
Measure L limits rent increases on rental properties in buildings of two or more units that first received a Certificate of Occupancy before February 1, 1995.
Under Measure L, an annual rent increase, or “Annual General Adjustment” (AGA), is limited to the annual change to the amount of the Consumer Price Index (CPI), but never lower than 0%. In other words, a decrease in the CPI does not require a decrease in rent.
By June 30 of each year, the Richmond Rent Board will announce the amount of the AGA which can then be effective for rent increases on September 1 of that year; the AGA will generally remain in effect until August 30 of the following year.
The first time the Rent Board will announce the AGA is June 30, 2017, so the first rent increase under Measure L will not be able to take effect until September 1, 2017. Since the AGA will not have been established until June 30, 2017 for a September 1, 2017 effective date, no rent increases may be issued for properties built before February 1, 1995 until the 2017-18 AGA is effective.
Only one rent increase is allowed per year, and a landlord must provide a 30-day written notice of an increase.
A tenant may petition the Rent Board, and the rent increase will NOT be permitted if the landlord:
- Has failed to comply with any provisions of Measure L or any rules or regulations created by the commission, subsequent to its creation;
- Has failed to keep the property in compliance with California’s Civil Code and Health & Safety Code;
- Has failed to make repairs ordered by a hearing officer of the commission, the commission itself, or the city
A landlord may not increase rent based upon cost increases incurred prior to the existing tenancy, servicing of debt (except for certain necessary capital improvements in Richmond), or capital improvements that are not necessary to keep the property in compliance with the state’s Civil Code and Health & Safety Code.
RESTRICTIONS ON INITIAL RENT FOR NEW TENANCIES
While state law generally prohibits the city from setting rents on new tenancies (i.e., vacant units), the Rent Board will issue rules and regulations to restrict rent on vacant units, where the Costa-Hawkins Rental Housing Act permits. Under the following circumstances, the rent charged to a new tenant may be regulated or established by the commission:
- The previous tenant had their tenancy terminated through no-fault of their own
- The vacancy followed a rent increase not permitted by the law
- A serious code violation exists in the unit or on the property
- The tenancy was terminated pursuant to the requirements of the Ellis Act
JUST CAUSE FOR EVICTION
Measure L contains sweeping “just cause” for eviction provisions which require a landlord to have a permissible reason to terminate a tenancy and evidence to support the reasons for terminating the tenancy. Under Measure L, ALL rental units are subject to the eviction restrictions.
In brief, the permissible reasons for eviction are listed below. Please consult with your attorney to determine whether your circumstances qualify. The descriptions below are simplifications of the actual requirements of the ordinance. Generally, the tenant must be given an opportunity to cure the violation prior to eviction.
- Non-payment of rent
- Substantial violation of a material term of the lease. Generally, a violation of a prohibition against subletting does not qualify if a tenant is replacing an outgoing roommate. Family members are also entitled to move into a unit as long as the number of occupants does not exceed the standards of the Uniform Housing Code.
- Nuisance
- Criminal activity
- Failure to provide access as required by law
- Necessary and substantial repairs requiring temporary vacancy of 30 days or longer: tenant has right to reoccupy/comparable unit/relocation assistance.
- Owner (or relative) move-in: Very specific conditions must be met including having at least a 50% ownership share in the property. The only relatives that qualify are the landlord’s spouse, children, parents or grandparents. Tenants who have lived in the unit for at least five years and who are disabled, seniors, or terminally ill may not be evicted unless the incoming owner or relative is disabled, a senior or terminally ill. Failure to comply with all the specified conditions can result in the owner having to allow the tenant to move back in and payment of all moving costs.
- Removal of the unit permanently from the rental market: 120-day notice is required (one year notice for senior or disabled tenants).
- Demolition of the unit and permanent removal from rental housing use.
Relocation payments, as defined, must be paid to each tenant if their tenancy is terminated for f through i as outlined above.
PROVISION OF NOTICES OF TERMINATION TO THE CITY
The landlord must specify, in writing, the basis for terminating the tenancy and must file, with the Rent Board, a copy of any notice terminating tenancy within three days after serving the notice on the tenant.
RELOCATION PAYMENTS
Under certain circumstances, when a tenancy is terminated, relocation payments must be paid to each tenant. The relocation payment must be paid if the reason for termination is not a violation by the tenant (i.e., it is reasons f through i noted above) The amount of relocation assistance required shall be determined by the City Council through a Relocation Ordinance. This ordinance is currently under review by the City Council. This paper will be updated when the ordinance is final.
Landlords are advised to check with the city and their legal counsel before entering into any agreements to pay relocation assistance to ensure they are paying the proper amount and in the manner governed by the city’s relocation ordinance.
PRE-EXISTING NOTICES
The ordinance states that the landlord/owner cannot be granted recovery of possession of a rental unit unless a “just cause” exists. Accordingly, any pre-existing notices of termination without cause that were served prior to, but take effect after the ordinance, may not be enforceable. If you have already served such notices, provided notice of non-renewal of leases, or are in the midst of eviction proceedings based on any such terminations without a “just cause,” CAA recommends that you consult with your attorney before taking further action.
EXEMPTIONS
Fully exempt from Measure L are hotel rooms rented for less than 14 days, hospitals, dormitories, government units, temporary tenancies of an owner-occupied home, and any permitted small, second housing unit built in compliance with the Small Second Unit Ordinance of the City of Richmond. Single family homes and condominiums are exempt from the rent control provision, but not the just cause or relocation requirements.
The chart below illustrates which properties are subject to Measure L and certain provisions:
| Certificate of Occupancy Date | Applicable Provisions |
| Before February 1, 1995
|
Rent Control Regulations
Just Cause Eviction Provisions
Relocation Assistance |
| All rental units | Just Cause Eviction Provisions
Relocation Assistance |
RENT BOARD & RESOLVING LANDLORD-TENANT DISPUTES
Measure L create a Rent Board, composed of five board members. There are to be no more than two members who own or manage rental property or are Realtors. The City Council is responsible for appointing members to the Rent Board.
The Rent Board has broad powers and duties including establishing the annual allowable rent increase, holding hearings on landlord-tenant disputes, establishing regulations to administer and interpret Measure L, and determine the “reasonableness” of rent increases that exceed the annual allowable amount. Specifically, the Rent Board has the power to:
- Set rents and rental rates in accordance with state law
- Establish its own rules and regulations regarding rental units
- Determine and publicize the Annual General Adjustment (AGA) – the amount rental providers may increase rent in a specific year
- Appoint hearing officers to conduct hearings for rent adjustments
- Adjudicate petitions
- Administer oaths and subpoena witnesses and relevant documents
- Establish its own budget — including without limitation the hiring of staff and charging of fees to landlords
- Administer the withdrawal process for the removal of rental units from the market
- Hold public hearings
- Conduct studies, surveys, investigations, and hearings and obtain information
- Establish a schedule of penalties that may be imposed for noncompliance with Measure L
- Pursue civil remedies in courts of appropriate jurisdiction
- Intervene as an interested party in any litigation brought before a court with respect to rental units
- Conduct any other duties necessary to administer and enforce Measure L
Financing of the Rent Board – The Rent Board has the power to finance any expenses necessary, to hire any staff necessary, and to charge landlords any fee necessary. The Rent Board is also empowered to receive funding whenever it deems appropriate from any available source, including the city and taxpayer money. While the Rent Board and the programs and departments to implement and enforce Measure L are being set up, the City Council is responsible for funding the Rent Board and the administration of the rent control programs established under Measure L.
Measure L says that the Rent Board will be an “integral part of the government of the City,” but the city will have no authority over the Rent Board or ability to prevent it from making unwise financial decisions with taxpayer money. The Rent Board is completely independent from the City Council, the city manager, and the city attorney, but may request the services of the city attorney, “who shall provide them pursuant to the lawful duties of the office.”
Rental Housing Fee – All landlords will pay a rental housing fee on an annual basis. The Rent Board has the power to adjust the rental housing fee whenever it deems appropriate.
Petitions for Rent Decreases and Increases
A tenant may petition the Rent Board for a decrease in rent, and a landlord may petition the Rent Board for an increase in rent. A decrease in maintenance or a deterioration of a rental unit without a corresponding reduction in rent is considered a rent increase. A tenant can file a petition to adjust the rent downward based on a “loss in rental value” as a result of a decrease in maintenance.
Once a tenant files a petition with the Rent Board, that tenant may request that the hearing officer order an inspection of the rental building prior to the hearing.
Violations: Enforcement and Defense to Eviction
A tenant may sue a landlord for not following any provision of Measure L, including those rules and regulations that will be written by the Rent Board itself. In a civil suit, a landlord found to violate any provision of Measure L or the Rent Board’s regulations will be liable for all damages, including attorneys’ fees and costs. If the landlord is found to have violated any provisions or regulations willfully, he will be responsible for all parties’ attorneys’ fees.
A violation of any provision of the initiative — even a minor technical violation — will constitute a complete defense in any eviction proceeding, even where the requirements of the just cause-for-eviction provisions are met.