Q: I own a rental property in San Diego where there is currently no rent control and my tenant’s rent is $1,200. I want to raise the rent to $1,500. Can I raise my tenant’s rent by 25%?
A: No, under the new Tenant Protection Act of 2019 (the “Act”) an annual rent increase is limited to 5 percent, plus the percentage change in the local cost of living but not to exceed 10%. Under the Act the “Percentage change in the local cost living” or inflation is defined as the percentage change from April 1 of the prior year to April 1 of the current year in the regional Consumer Price Index (CPI) for the region where the residential rental property is located. This data is published by the United States Bureau of Labor Statistics.
The San Diego Metropolitan Area’s annual inflation rate was 1.4%, so you can raise your tenant’s rent by 6.4%. If the tenant’s rent was $1,200 as of March 15, 2019, you could raise monthly rent by as much as $76.80.
All buildings constructed in the last 15 years are exempt from this rent cap provision. However, this exemption is also a rolling exemption which means that the rental cap will apply to buildings 15 years after the date of construction.
Q: My tenants are on a month-to-month agreement and they have lived at my property under one-year. Do I have to give my tenant just cause?
A: No, just cause requirements under the Act apply to tenants who have continuously and lawfully occupied a property for 12 months.
Q: I have a tenant that has been renting my property for 15 months. I have been having some issues with the tenants and I want them to terminate their tenancy. Do I have to give my tenant just cause to terminate their tenancy?
A: Yes, once a tenant has continuously and lawfully occupied a rental property for at least 12 months you can only terminate the tenancy with just cause. Which means you will be required to provide a 60-day notice with just cause. However, if your issues with the tenant deal with a curable lease violation then, you must first give the tenant notice of the violation and allow them an opportunity to cure it. If the tenant fails to cure the violation within the time period set forth in your notice, you may terminate the tenancy by serving a three-day notice to quit without an opportunity to cure.
Q: I am a homeowner that rents one of my rooms out to a tenant. I want to terminate their tenancy. Do I have to give just cause? Are there any types of tenancies that are exempt from giving just cause?
A: No, you do not have to give just cause. The just cause requirements do not apply to single-family owner-occupied residences where the owner rents or leases no more than two bedrooms.
Q: I gave my tenant a 60 day notice with just cause and the tenant is telling me that I must pay them relocation benefits. What are relocation benefits and when does a landlord have to pay them?
A: A landlord is only required to pay relocation benefits if they terminate the tenancy based on a no-fault just cause reason such as intention to have the owner or owner’s relative occupy the unit, withdrawal from the rental market, a government order, or intent to demolish or substantially remodel the unit. Regardless of tenant’s income, a landlord who terminates a tenancy for no-fault just case, must provide relocation benefits to the tenant. The relocation benefit can be in the form of either a direct payment equal to one month’s rent, or a waiver of the last month’s rental payment, prior to the rent becoming due.
Q: I own a rental property in the City of San Diego and I know that I am already required to give tenants that have lived in the property over two years just cause pursuant to the Tenant’s Right to Know Ordinance. How does the new Act affect me?
A: In general, this new rent cap/just cause Act does not apply to properties that are subject to local just cause ordinances that are more protective than the Act. The Tenant’s Right to Know Ordinance protects tenants that have lived in a property for 2 or more years. Since the Act applies to tenants that have lived in a property for 1 or more years, the Act is more protective and will apply to your property.
Q: A tenant just moved out of a unit in my apartment building. How much rent can I charge a new tenant for the unit?
A: If no tenants from the prior tenancy remain, you can establish an initial rent rate not subject to the 5% + CPI restriction under the Act. Any subsequent rental increases for the new tenancy will, however, be subject to rent cap provisions of the Act.
Q: If I have more questions about the new Act what should I do?
A: Review the Tenant Protection Act of 2019 (the “Act”) and contact your attorney if you are unsure how to proceed.