On May 9, 2017, the San Jose City Council enacted an urgency ordinance, entitled the Tenant Protection Ordinance (TPO), which imposed “just cause” requirements on evictions to take effect immediately. “Just cause” requirements take away a landlord’s ability to use a “no cause” notice to terminate a month-to-month tenancy under state law. The landlord is also prohibited from terminating a tenancy due to the expiration of a lease, unless a “just cause” exists. The City has created an online form for submitting copies of notices of a termination to the City and other compliance documents – available at the link below. CAA recommends that its members consult with their attorneys prior to taking any action to terminate a tenancy in a unit covered by the ordinance. CAA’s standard 3, 30, 60, and 90 day termination notices should not be used.
City of San Jose Tenant Protection Ordinance Website: https://www.sanjoseca.gov/your-government/departments/housing/renters-apartment-owners/apartment-rent-ordinance/tenant-protection-ordinance
City of San Jose Tenant Protection Ordinance Factsheet: https://www.sanjoseca.gov/home/showdocument?id=13811
I. APPLICABILITY OF THE ORDINANCE
The ordinance applies to:
- Rent-Stabilized Units – In general, this includes all apartments with three or more units, built and occupied prior to September 7, 1979. For information about the San Jose rent control ordinance, see CAA’s Industry Insight – Overview of San Jose’s Revised Rent Control Law.
- Buildings With 3 or More Units – Rental units in a “multiple dwelling,” defined as “a building or portion thereof used or designed as a residence for three or more families living independently of each other and doing their own cooking in said building.”
- Guestrooms in Any Guesthouse – as defined in San Jose Municipal Code sections 20.200.460 and 20.200.470.
- Unpermitted Units
The ordinance does not apply to duplexes, single family homes, condos and legal second units. The ordinance also does not apply to affordable rental units, defined as rental units that 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 affordable rental unit exemption only applies to the specific units in any building which meet the criteria, for so long as those units meet the criteria. The affordable rental unit exemption does not include units occupied by a tenant with a Section 8 Housing Choice Voucher (i.e., Section 8 tenants are covered by the ordinance unless the unit is otherwise exempt).
II. ALLOWED REASONS FOR EVICTION
The TPO prohibits a landlord from terminating a tenancy unless one of the following twelve reasons apply.
A. Non-Payment of Rent
Generally, this means non-compliance with a three-day notice to pay rent or quit. However, the ordinance contains unclear provisions requiring that the notice include a mailing address for the landlord. Many leases do not allow rent payment by mail. State law creates a presumption that rent is deemed received on the date mailed if the three-day notice to pay rent or quit requires payment by mail. If you do not allow payment by mail, please consult with an attorney prior to serving a notice for non-payment of rent.
B. Material or Habitual Violation of the Tenancy
Tenants may have their tenancies terminated if they fail to comply with the terms of their rental/lease agreement. However, before a tenancy may be terminated for material violations, this provision requires the owner to provide “a reasonable time” for the tenant to cure the violation. No notice period is described for habitual violations. It is unclear whether a three-day notice to perform covenants or quit would be sufficient to comply with the “reasonable time” to cure requirement, or whether longer notice is required. The ordinance does not define “habitual.”
The ability to terminate the tenancy for violations of the rental/lease agreement is limited when the term being enforced was added to the rental agreement after the beginning of the tenancy, unless the tenant agreed to the term after being informed that they were not required to agree. In effect this means that a landlord cannot materially change the terms of tenancy after the tenancy begins, unless the tenant agrees. For example, the landlord could not prohibit pets if they were previously allowed. This language may be particularly problematic if terms were added to the rental agreement prior to the passage of the TPO.
In addition to the limitation of enforcement of terms added after the beginning of the tenancy, the TPO also prohibits the landlord from terminating the tenancy for certain types of violations. The TPO provides that the following violations are never “material or habitual violations of the tenancy” (and thus cannot support an eviction):
- “Any obligation to surrender possession on proper notice as required by law.” This provision prohibits the landlord from relying on a term which requires the tenant to vacate due to the service of a 30 or 60 day “no cause” termination notice. It also prohibits the landlord from requiring the tenant to move out simply because their lease expired.
- Many violations related to occupancy may not be enforced. The TPO prohibits the landlord from evicting a tenant who allows specified family members to move into the unit, even though the tenant did not obtain the landlord’s permission. The TPO allows a tenant to move in:
- Any number of dependent or foster children, or other minors that are in the care of the tenant. These occupants cannot be disapproved on any grounds and the number is not limited based on the Uniform Housing Code.
- Adults who are the spouse, domestic partner, or parent of any tenant, so long as the total number of adults in the unit does not exceed the greater of either: (1) the maximum number of individuals permitted under the rental agreement, or (2) two adults per bedroom. These occupants cannot be disapproved on any grounds.
- Other additional tenants can be added if approved by the landlord. However, approval cannot be “unreasonably withheld.” The TPO does not define what is considered “unreasonable.”
C. Substantial Damage to the Rental Unit
In order to terminate the tenancy for damage to the unit, the tenant must: (1) cause “substantial” damage to the unit or common area, (2) after receiving a “written notice to cease and reasonable time to cure,” and (3) “refuse” to stop damaging the unit and to pay the reasonable costs of repair.
D. Refusal to Agree to a Like or New Rental Agreement
A tenancy can be terminated if a tenant refuses to enter into a new agreement that is substantially identical to the prior agreement. The terms of the lease must also comply with local, state, and federal laws.
E. Nuisance Behavior
The ordinance requires a “written notice to cease” to be given for the types of illegal activities and nuisances that generally warrant a three-day notice to quit (without an opportunity to cure) under state law. Though the term “written notice to cease” is not defined, just cause laws in other cities typically define written notice to cease as a notice that gives the tenant a reasonable time to cure their violation(s).
F. Refusing Access to the Unit
A landlord may terminate a tenancy where a tenant refuses to give the owner access to the rental unit only after giving a reasonable time to cure. The right to terminate a tenancy under this provision only applies “so long as the Landlord is not abusing the right of access under California Civil Code Section 1954.” It is unclear what is considered “abuse” of the right of access.
G. Unapproved Holdover Tenant
The ordinance does not specify who is considered a “subtenant who was not approved by the Landlord” that would qualify for eviction under this provision. The ordinance specifically allows the tenant to move in numerous relatives and children without approval. It is unclear whether these occupants are protected from eviction if they holdover after the tenant(s) on the rental agreement vacate the rental unit.
H. Substantial Rehabilitation of the Unit
An owner may only terminate a tenancy to rehabilitate the unit if (1) the work required costs at least 10 times the monthly rent for the number of rental units on which the work is to be performed, and (2) the units must be vacated for at least 30 days. All permits must be obtained from the City before notices of termination can be issued. Landlords who are planning substantial rehabilitation should consult with their attorneys at the earliest stages, since this ground for eviction is very narrow, requires the payment of relocation assistance, and requires specific procedures to be followed both before and after the work is completed (including allowing the tenant a first right of refusal to re-occupy the unit at the same rent).
I. Ellis Act Removal from the Rental Market
State law allows an owner to exit the rental housing business. The provision requires compliance with extended notice provisions and the payment of relocation assistance. Compliance with San Jose’s Ellis Act Ordinance is also required. Information about the San Jose Ellis Act Ordinance is available here. Ellis Act evictions should not be undertaken without the assistance of an attorney.
J. Owner Move-In
Owners who have at least a 50% interest in the property may recover possession for use as their own principal residence, or if the owner already lives in the building, for the use as the primary residence of specified relatives. The owner or qualified relative is required to live in the building for at least three years. The payment of relocation assistance is required.
K. Order to Vacate-Code Enforcement
The tenancy may be terminated when necessary to comply with a governmental order. Relocation assistance is required.
L. Vacation of an Unpermitted Unit
Where an unpermitted unit has been rented, the tenancy may be terminated for the purpose of ending the unpermitted use. The payment of relocation assistance is required.
III. PROCESS FOR TERMINATING A TENANCY
The ordinance requires the landlord to serve a notice of termination on the tenant that specifies the “just cause.” CAA recommends that its members consult with an attorney to evaluate whether the underlying circumstances warrant a notice under the law. In addition to determining what, if any, “just cause” exists, members will need to work with their attorneys to determine the necessity of relocation payments and to ensure that the form and content of the notice comply with the ordinance.
The ordinance requires that notices of termination be on a form approved by the City, however, as of February 6, 2018, no such forms have been made available by the City. The notice to the tenant must be served using the usual service methods under state law. If relocation assistance is required, the payment must be provided at the same time the notice is delivered.
A copy of the notice must be mailed, delivered or submitted online to the City within three days. Submissions can be made online at https://sjrentregistry.force.com/s/noticeofterminationpage?language=en_US
The landlord is also required to mail or deliver to the City a copy of the unlawful detainer Complaint and Summons within three days of service on the tenant. An attorney should be consulted for preparation of the complaint.
IV. RELOCATION ASSISTANCE
In addition to requiring a landlord to have one of the “just causes” specified under the ordinance, the landlord is also required to pay relocation assistance to tenants whose tenancies are terminated through no fault of their own (reasons (H)-(L) above). The amount of that assistance will be determined by the City Council. The current relocation assistance amounts can be found here. Note that additional assistance payments may be required under the San Jose Ellis Act Ordinance for qualified tenants.
V. EFFECT ON PRIOR NOTICES AND ORDINANCES
Prior to the enactment of this ordinance, certain termination notices were required to comply with the City’s Apartment Rental Dispute Mediation and Arbitration Ordinance, administered by the City’s Rental Rights and Referrals Program. This ordinance has been repealed.
“No cause” notices of termination served prior to May 9, 2017 are still subject to the mediation and arbitration process, if applicable. If the notice or unlawful detainer action was for cause, please consult with your attorney about the applicability of the ordinance. Any notice served on or after May 10, 2017 must comply with the just cause requirements. Any non-compliant notices should be rescinded.
The flyers previously published by the City about the mediation and arbitration programs available to tenants who have been served “no cause” notices of termination of tenancy for both rent-controlled and non-rent-controlled units are no longer available on the City’s website.