Bay Area cities, on November 8, considered ballot initiatives related to rent and eviction controls. Significant measures passed in four of them—Oakland, Alameda, Richmond and Mountain View. In this installment of our mini-series breaking down the ballot initiatives, we’ll examine the impact of those new laws on property owners in Richmond.
Rent control on Election Day was a slam dunk.
Some 64% of voters supported the new rules. The new law will set a maximum allowable annual increase at 100% of the San Francisco area Consumer Price Index (about 2.5%). Also, the so-called base rent will be set at the rent tenants paid in October 2015, so many owners will have to roll rents back to that level before new increases.
(Good for landlords: keep in mind that state laws exempt all single-family homes and condos, as well as all multifamily apartments built after Feb 1, 1995, from limits on annual rent increases. State laws also allow landlords to charge new tenants whatever they want when a unit is voluntarily vacated, after which the new tenant can be rent controlled by local laws.)
The new ordinance would also establish a Rent Control Board, to be appointed by the city council. Both landlords and tenants will be able to petition the new body for an increase - or decrease - in the rent cap based on factors such as insufficient maintenance of the property or adjustments necessary to provide the owner with a fair return on investment.
Under another provision of the new law, an eviction is allowed only if one of the following conditions are met:
- The tenant fails to pay rent; breaches the lease; commits or permits a nuisance; or fails to give the landlord access to the premises in certain situations
- The landlord needs to undertake substantial repairs to the unit; seeks to use the unit as a primary residence by the landlord, or the landlord’s spouse, children, parents or grandparents; or the landlord seeks to withdraw all units of an entire property from the rental market
ADVICE: Always keep meticulous records especially when communicating with tenants.
In addition, the owner/landlord must make relocation payments to evicted tenants made under certain circumstances in an amount to be determined by the City Council through a Relocation Ordinance to be adopted by the Council.
Landlord Bottom Line
Before beginning an eviction or rent increase, make sure you consult the law (or better yet, an actual lawyer) and re-evaluate lease with each of your tenants. Again, good record keeping is a must - something a tech-savvy property manager can help provide for you.
For more information visit the City of Richmond here.