Even the most well-intentioned Oakland landlords and property managers sometimes find themselves squaring off with residents before the RAP Board, the authority that oversees the City of Oakland’s Rent Adjustment Program. There is no need to panic. The RAP Board is intended to mitigate landlord-tenant disputes fairly, efficiently and in accordance with the RAP guidelines. In fact, landlords and Oakland property management companies who carefully follow RAP regulations will find the process relatively straightforward.Below is a primer for Oakland landlords and Oakland property managers regarding the RAP petition process, including what to expect if a resident files a petition with the RAP Board.
Anyone living in a rent-controlled unit may file a petition with the RAP for any of the following five reasons:
Understandably, the majority of tenant petitions are filed under the first category.In order to contest a rent increase, the tenant must be filed within 90 days from the date the owner serves notice of the rent increase provided the owner also gave notice to the RAP as required by law. If the owner did not give notice to the RAP, the tenant has 120 days to file a petition.Petitions claiming decreased housing services must be filed within 90 days of the tenant becoming aware of the decreased housing service (). If the decreased housing is ongoing (), the tenant may file a petition at any point but is limited in restitution for 90 days before the petition is filed and to the period of time when the Oakland rental property owner knew or should have known about the decreased housing service.
Once a tenant has filed a petition with the RAP, someone from the Rent Adjustment staff will notify the landlord and/or Oakland property management company of the complaint. A copy of the original petition will be included with that notice.Oakland landlords have 30 days from the date of the notice to file a response with the RAP. The RAP will send a copy of that response to the tenant.Tenants and landlords are both asked whether they’d be willing to pursue mediation in lieu of appearing before a RAP Hearing Officer. If both parties agree, the RAP will assign a mediator to the case. The parties can choose to use an outside mediator but they will be responsible for covering those costs. If a resolution can be agreed to through mediation, both parties sign a binding agreement and the case is closed.If a resolution is not reached, or if one of the parties is unwilling to pursue mediation, the petition will be heard by a RAP Hearing Officer. Both the tenant and Oakland property owner can submit documents supporting their case to the RAP up until seven calendar days before the scheduled hearing date. Documents can be submitted either online or in person.
On the day of the hearing, both parties are expected to report to the Rent Adjustment Office at 250 Frank Ogawa Plaza, Suite 5313 to present their case before a RAP Hearing Officer. Most hearings begin promptly at 10am.The Hearing Officer will review the rules and process of the hearing, followed by a roll call to account for everyone in attendance. Both parties will then be given time to present their documents to the Hearing Officer to prove their side of the dispute. After each side has presented its case, the opposing party will have an opportunity to ask questions (). Just like the court cases shown on TV, each party will be given the chance to recite a closing statement.After closing statements, the hearing is adjourned. The Hearing Officer does not make a decision that day. It usually takes 30 days for a written decision to be made, which is then mailed to the tenant and landlord or Oakland property manager.
There is an appeal process for anyone who disagrees with the RAP’s verdict. The appeal must be filed within 20 calendar days from when the written decision was mailed. The application must cite all of the reasons for the appeal. Evidence is capped at 25 pages. The appeal and all attachments must be filed with the RAP and a copy must be sent with proof of service to the opposing party.During the appeal process, the decision by the RAP Hearing Officer is suspended until the appeal process is complete.Both parties have until the 9th calendar day before the appeal hearing date to submit documents or evidence for the RAP Board’s consideration.A RAP Program Analyst, Program Manager and Hearing Officer will review all documents submitted by either party. Only information contained in the appeal and the records from the original hearing will be considered. An appeal hearing is then scheduled with the City of Oakland’s Housing Residential Rent and Relocation Board.On the day of the appeal hearing, the Board will listen to arguments from both parties. The Board will then deliberate publically, vote, and will announce their decision at the meeting. A written decision will follow, confirming the facts of the case and the Board’s decision. The appeal decision becomes the final decision of the RAP and by extension, the final decision by the City of Oakland.Any residents, landlords or Oakland property management companies wishing to appeal the decision further will have to seek relief through the Superior Court.The City of Oakland has put together this handy infographic to help guide Oakland rental property owners through every step of the petition process.As always, this is just intended to be an overview. If you have additional questions, contact the Oakland RAP or consult with your real estate attorney for specific advice.
The Fair Chance Housing Ordinance is a new law in Oakland that affects tenant selection and criminal background checks. Steve Rosenberg, VP of Investor Education at Mynd Property Management and Giles Imrie, VP of Corporate Counsel at Mynd are discussing what this means for local landlords and Oakland real estate investors.The Mynd team recently released a video and a blog that explained what the Oakland Fair Chance Housing Ordinance is, and what it means for landlords and real estate investors in Oakland. While it only pertains to the city of Oakland right now, we expect that it will lead to other cities adopting similar legislation.The new Oakland law essentially prevents landlords and property managers from running criminal background checks on applicants during the screening process. There are a few very specific reasons that you or your property may be exempt, but most rental homes in Oakland will require landlords to make placement decisions without running a criminal background check during the screening process.Our focus on today’s blog is the ramifications of this law, and the potential legal consequences Oakland rental property owners can face if they violate this law or suggest that they will only rent to people without a criminal history.
The Fair Chance Housing Ordinance was unanimously approved by Oakland’s city council and is expected to go into effect early in February. Generally, it means you can no longer perform criminal background checks on potential tenants when you’re conducting your screening process. As we stated in our last blog, you can still check the federal lifetime sex offender registry, but you can only do so after you’ve conditionally approved a tenant.Landlords have six months to comply with the new law. If you make an unintentional mistake or you purposely break this law by conducting a background check, you will face some pretty expensive penalties. You can be held accountable for advertising that isn’t compliant as well as a screening process or application that doesn’t meet the requirements of this law.The city of Oakland will impose a $1,000 penalty for each violation.In addition to that, the law affords any applicant the right to a private civil action. Monetary damages can be awarded based on whatever is more: three times the actual damage including emotional distress or three times the market rent of the property you’re leasing.Emotional distress is a big one. Tenants can claim emotional harm if you denied their application based on criminal history or they had to worry that they were going to be subject to a background check.The equivalent of a month’s rent with also add up when it’s applied in triplicate. If you’re renting out a property for $2,000 or $3,000 a month and an applicant brings this complaint against you successfully, you’ll be paying $6,000 to $9,000 in statutory damages on top of the $1,000 imposed by the city.You’ll also be accountable for attorney’s fees and costs.This will attract a lot of landlord/tenant attorneys who will be looking to sniff out any minor violation in your process. You’ll get a demand letter asking for damages and attorney fees just to make the claim go away. We expect to see a lot of landlords and property owners receiving shakedown letters from attorneys who sense an opportunity to make a case.Note that civil damages will require payment that meets the greater of the two – emotional distress or three times the rent. So, if you’re found to have violated this law, you’ll pay the city’s penalty and then you’ll pay three times of either the actual damages including emotional distress, which could be a pretty loose number, or three times of the listed rent. If you happen to have a low-ball rent, you’ll be paying three times the amount of HUD’s fair market rent.
If you own a rental property in Oakland and it’s about to be vacant, you’ll want to make sure you’re prepared for what this new law means.First, make sure your advertising material is free from any indication that you’ll be screening for criminal backgrounds. Your application portal needs to be updated, or the form you use if you’re collecting paper applications.Not only should you remove any reference to criminal backgrounds being a factor, you should include a disclosure that you WILL NOT make this a factor.On the top of every application, write something that says you will no longer require or conduct criminal background checks for properties in the city of Oakland in accordance with the Fair Chance Housing Ordinance. Disclosing you’re not going to do it can protect you and your process.Make sure no one can look at your website and think you’re going to make criminal backgrounds a factor.Then, make sure the process is compliant. You may be renting out properties in other jurisdictions. It’s critical that you keep your screening of Oakland tenants separate from the screening of other tenants. You may still be doing background checks for properties you’re renting out in other cities. That’s fine if they’re outside of Oakland. But in Oakland, you won’t run those checks, so set up your process to be compliant.This is relevant to Oakland right now, but we’ll be surprised if it remains the only city in California to have such a law on the books. The Bay area will likely begin to adopt similar laws. There’s a housing challenge in our region, and certain agencies are proposing dramatic things to resolve it.You don’t want to set yourself up for a lawsuit or a claim. It’s an excellent time to work with an Oakland property management company. Then, you won’t have to worry about the risk and the liability that comes with new housing laws like this.Contact us at Mynd Property Management if you need a resource. We’ll be following this closely, and we’ll deliver more information as it becomes available.
There are a lot of new laws in California and specifically in Oakland that affect landlords and tenants, and today we’re focused on Section 8. Steve Rosenberg, VP of Investor Education at Mynd Property Management and Giles Imrie, VP of Corporate Counsel at Mynd are talking about what rental property owners can and cannot do when they’re advertising properties and screening residents who have Section 8 housing vouchers.
Effective January 1, 2020, California implemented two bills which essentially require landlords to accept Section 8 or housing vouchers as an income source from applicants. Rental property owners cannot discriminate against an applicant or deny the application just because they have a housing voucher. This existed in certain California cities prior to January 1, but now it is a statewide requirement.
Previously, it was common for property owners to advertise that they did not participate in Section 8, and wouldn’t consider any residents who had that housing voucher. This was common because participating in the Section 8 program was an administrative burden. There’s a lot of hurdles to cross, including a home inspection, verified habitability, and an approved residency. The delay in getting approved and prepared could cost a lot of money.
Most owners weren’t unwilling to accept Section 8 residents; it’s actually a program that many landlords appreciate because it’s a guaranteed source of income. You know the rent will come in every month because it’s coming from a government agency and not an individual. But for most owners, the Section 8 process simply wasn’t worth their time.
Throughout California, landlords, property managers, and investors have to stop advertising whether or not they accept Section 8 applicants. You cannot discriminate against anyone with a housing voucher, which means you cannot express that you’d prefer Section 8 applicants didn’t apply. Your printed marketing materials and your online advertising must be reviewed to ensure you are compliant with this new law.
You have to treat all applicants equally.
Many investors may be wondering why this is now required. The technical implication is that Section 8 housing vouchers or any of these vouchers that are described must be considered protected sources of income. If you require specific kinds of income from specific sources only, you’re discriminating against potential residents. So, you can no longer opt not to consider a housing voucher as part of an applicant’s income.
As you may have expected, there are some tenants advocacy groups out there that are already doing some testing by visiting websites and checking application portals. They are making phone calls trying to get property owners to fall into the trap and say they do not accept Section 8 or housing vouchers. So, we recommend that you be vigilant with your compliance. If you haven’t already removed language like this from your marketing and application materials, you must do so immediately.
There were a number of Oakland rental property owners that were choosing to not participate in Section 8 simply because of the administrative burden and the time constraints in getting the property occupied and rent coming in. Unfortunately, this legislation does not address or fix the underlying root problem with housing voucher programs. Each one is run by a different housing association with a separate set of administrative requirements. If they would fix the problem of consistency and efficiency, they’d’ find that the issue would take care of itself.
You are now required to allow Section 8 and housing voucher applicants to participate just like everybody else, but this does not mean any of your other screening criteria has to be changed in any way. You can still have the same credit criteria and require the same income verification.
The only change with the income criteria is that you can only look at the portion of the rent that the resident will be paying, not the entire rent itself. Here’s an example. If your rental criteria says that a resident must earn three times the amount of rent every month, you’ll have to consider three times the amount of what the Section 8 resident would be paying. So if they are responsible for only $300 of their rental payment and the voucher takes care of the rest, you need to look for income that meets or exceeds $900 from that resident.
There are two sister bills in place. The second bill does designate vouchers and it also adds military personnel and veterans as protected classes when it comes to source of income. So all three of those protected classes now have a heightened level of protection under existing and new discrimination laws.
It is hard to say if this will become a national requirement over time. It started with the cities, and quite a few California cities were already doing this. It may have started in Los Angeles, and then it moved out through the state from there. Any time one large city influences something, other cities begin to pick it up. And, there are some very powerful tenant rights organizations in California, and they’ve worked hard to pass this bill as well as the rent control laws. California and Washington are sort of the front runners and then Colorado is quick to follow as the new rental trends and patterns tend to move east.As an Oakland rental property owner, what you really need to know is that you have to be careful with your advertising and your screening process. You can no longer refuse an application from a potential resident who is part of the Section 8 program or has a housing voucher.
We know this can get complicated, and it’s a great time to consider working with an Oakland property management company if you’re not already. We can help, so contact us at Mynd Property Management. Keep an eye on this blog space, because we’ll be updating you frequently on how this law takes shape and what other things it may be leading to.
Statewide rent control arrived in California effective January 1, 2020, and today Steve Rosenberg, VP of Investor Education at Mynd Property Management and Giles Imrie, VP of Corporate Counsel at Mynd are talking about what this means for Oakland landlords and investors. There have been a lot of comments and concerns about the implementation of this new law, and it’s important to know what’s happening as we move forward with rent control.
This law provides a statewide cap on rental increases. Owners can increase rent five percent every year, plus the CPI for your particular region. You cannot go over 10 percent, even if the CPI is high. Right now, your rental increase won’t be able to go any higher than seven or eight percent. That’s the annual maximum that you can increase rent.
There are a couple of exemptions in place for individually owned single-family homes, condominiums and a few others that we have described in previous blogs.The second piece of this law is the just cause eviction ordinance, which says you can no longer terminate a lease at the end of the term unless the tenant has breached the lease or not paid rent or caused damage. It means the tenant now has the option, if they are otherwise in compliance with the lease, to renew their lease and stay as long as they want.
You can still remove the tenant and get possession back if you’re doing something like moving back into the property yourself. You can terminate the lease without cause under a few conditions and with a potential payment of relocation fees to your tenant.
Now that this law is in effect, there are a couple of things coming up that you’ll need to be aware of in order to stay compliant with it. You’ll need to start with three different disclosures that you need to build into your lease documentation if you want to take advantage of the various exemptions provided in this law.
Disclosures need to be provided to your residents through the lease agreement as of July 1, 2020. Before July 1, you are required to provide information to your residents, but on July 1, you actually have to have the verbiage in your lease agreement.
The initial disclosure is if your property is subject to the rent cap. Your property is included if it’s not a single-family home and it’s not a condo or townhouse or owned by any kind of corporation. Then, you have to put in the specific statutory language advising the tenants of what the civil code sections are and how they allow the protections under the rent cap and just cause ordinance. The other two disclosures are really important.
For example, there is an owner move-in exception in the just cause ordinance, so if you or a family member want to move back into your home, then you are allowed to terminate the lease. The catch is, you have to add this language into your lease as of July 1. That specifically gives you the right to do that. Failing to update your lease documentation with the correct language will result in a loss of this exemption.
Basically, this means you have to re-write your lease as of July 1, 2020, especially if you want to take advantage of these exemptions. You must either include it in the body of the lease itself or include an addendum. You are required to have the disclosure language in there of “if your property is subject to rent control.”
This adds a level of complexity because you may be managing different kinds of property with different leases and different disclosure terminology. Some of the properties you own may be subject to rent control and others may be exempt. You will have to be able to identify which type of property it is and insert the correct documentation into the lease.
If your property is exempt and it is a single-family home or condo or townhome, then you need to add that disclosure information stating that the property is exempt. Failing to do so means it is no longer exempt. Every lease after July 1 you must maintain that same statutory language.
It’s early, and we’ll be learning more about how AB1482 is implemented and enforced as we move through the year. The main implications are certainly with the rent increase portions of the law. It was retro-acted to March of 2019. So, if you raised your rent beyond what is currently allowed between March of 2019 and now, you’ll have to go back and re-adjust that rent to get it in compliance with the rent cap.
These are the main issues that have popped up with Oakland rental property owners, and it’s possible that future issues will be decided in the courts. With all of the exemptions and the juggling of local rent control ordinances with the statewide rent control law, there’s a lot of confusion even among experienced property investors.
We’re also following what’s happening in other markets. In Seattle, there has been talk about a new law in which when investors buy a home with the intention to flip the property, they would be required to give the residents a certain amount of time before they would actually have to move out of the property. There are a lot of things in the works, and the tenant rights organizations are constantly pushing for new legislation on all fronts.
For those of you that want to know more about 1482, we have a lot of video and blog content that further explains the law and how they apply to you. It’s critically important that you are educated about rent control and just cause eviction. If you’re not already working with a professional Oakland property management company, you might want to check in and make sure you’re compliant. We’d be happy to help and we have tons of resources, so contact us at Mynd Property Management if you have any questions.
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With a diverse population, lively cultural scene, shady oak trees, beautiful green spaces and hip tourist attractions, Oakland is a place that offers many opportunities to real estate investors. Its Bay Area general location, proximity to the famous San Francisco, and its own unique urban identity are some of the main drivers of the area's real estate market. More and more potential renters and active home buyers are searching for a place that's affordable, offers top-notch healthcare access, leisure options, and education opportunities, thus Oakland is often the top choice.
With a 0.86% population rate growth in 2017 (higher than the national 0.7% average), Oakland is home to more than 420,000 people and the number is constantly growing. The economy is strong and steadily growing, supporting key industries like healthcare services, business services, food processing, transportation, light manufacturing, international trade, logistics, and retail. Therefore, the real estate market in the city is pretty heated up which makes Oakland a great option for real estate investors.
There are a number of factors to consider, including:
The top neighborhoods for real estate investing in Oakland are Montclair, Cleveland Heights, and Longfellow. Montclair boasts of single-family homes with a median property price of $695,000, Cash-on-cash (CoC) return of 2.7%, cap rate of 5.3%, vacation rental CoC return of 4.2%, and vacation rental cap rate of 6.9%. With a median property price of $195,000, Cleveland Heights' properties are considerably cheaper than other areas; plus, it has a great location, close to other parts of the city, yet enjoying some peaceful isolation. The CoC return in Cleveland Heights is 2.9%, cap rate is 5.8%, vacation CoC return is 3.7% and vacation cap rate is 6.6%. Longfellow is a nice choice for real estate investors interested in traditional renting. Plenty of people from San Francisco are considering this neighborhood thanks to its affordability. The median property price is $524,000, CoC return is 3.7% and cap rate is 6.5%.
Oakland is a fast-growing, renaissance city with an abundance of development and real estate investment opportunities. Continuously growing population, job market, and leisure options make real estate investment in Oakland a wise choice for property investment.
For more information, refer to our Knowledge Center and visit our Oakland property management page for local landlord tips and information. Our local team has vast knowledge and experience in local Oakland property management and can help you to have a better investment experience. We educate on topics in the Oakland area ranging from repairs and maintenance, leasing, fair housing and even dealing with emergencies! We look forward to furthering your rental property education.
