A Guide to Rent Control in Oakland

June 6, 2018

 

 

PART I

 

Overview

 

Oakland’s Rent Adjustment Ordinance regulates the amount of rent that landlords can charge residential tenants. This guide is intended to provide owners, landlords, and managers with information regarding rent control (not eviction control) in Oakland and to answer several frequently asked questions on the subject.

 

This is not a comprehensive summary of Oakland’s Rent Adjustment Ordinance and should not be used in lieu of the complete text of any and all ordinances related to rent control in Oakland. At the end of this guide, we have compiled a list of FAQs (Frequently Asked Questions) concerning Oakland’s rent control laws.

 

Applicability

 

Oakland’s Rent Adjustment Ordinance limits the amount of rent that can be charged to tenants of residential units except:

  • Units whose rents are controlled, regulated or subsidized by the government including Section 8 Housing.

  • Units newly constructed after January 1, 1983 and received a certificate of occupancy on or after January 1, 1983.

  • Substantially rehabilitated units.

  • Rental units that are separately alienable from the title of any other dwelling (e.g., single family residences, condominium units, etc.).

  • Units in a property divided into two or three units, one of which is owner occupied.

Certificates of exemption:

  • In order for property owners to claim an exemption on a qualifying dwelling unit or units they must do so in response to a tenant petition or by petitioning the Rent Adjustment Program (RAP) for an exemption. Exemption certificates may only be granted for dwelling units that are permanently exempt from the Rent Adjustment Ordinance due to substantial rehabilitation, new construction, or by state law.

  • A note on certificates of exemption for substantial rehabilitation: Buildings that have been “substantially rehabilitated” can become exempt from rent controls if they receive certification from the Rent Adjustment Program. Previously, there was no limit to how long a landlord could wait to claim this exemption after the rehabilitation was complete. Now, all buildings that were rehabilitated before September 20, 2016 must claim their certificate of exemption by June 30, 2017.

 

PART II

 

Rental Agreement

 

When forming a rental agreement with a new, previous, or existing tenant, landlords are required to provide certain documents in order to be in compliance with Oakland’s Rent Adjustment Ordinance.

 

Notice at commencement of tenancy:

 

For new tenants, landlords are required to give a notice to the tenant of the Rent Adjustment Ordinance (RAO) in English, Spanish, and Chinese on or before the date of commencement of tenancy. This RAP notice is also given with every notice of rent increase or any other notice of change in terms of tenancy. This explains the existence of the RAP and tenants’ rights under the Rent Adjustment Ordinance. A notice to tenants of the Tenant Protection Ordinance must also be posted in a common area of the building in English, Spanish, and Chinese.

 

Keep in mind that when petitioning the Rent Adjustment Program for non-CPI rent increases you will need evidence that you gave these notices to your tenant(s) at the commencement of tenancy. We suggest keeping a detailed record of your delivery of these written notices.

 

PART III

 

Rent Increases

 

CPI Rent Adjustment:

 

Property owners may only increase their tenant’s rent according to the annual CPI Rent Adjustment and/or Banking. Any amount in excess of the CPI allotted adjustment must be done by filing a petition with Oakland’s Rent Adjustment Program. Otherwise, the rent increase is void. Also, the cap on rent increases is 10% in any 12-month period and 30% in any 5-year period.

 

Rent increases following vacancies:

 

The Costa-Hawkins Rental Housing Act (a state law) permits a landlord to set initial rents for new tenants without restriction, except where the previous tenant vacates under the following circumstances:

  • The previous tenant was served with a 30 or 60-day notice to terminate the tenancy pursuant to California Civil Code § 1946.

  • The previous tenant was evicted due to a rent increase not permitted under the Rent Adjustment Ordinance.

  • The owner fails to renew their government contract that limits rent increases (e.g. Section 8). In these cases, an owner must wait 3-years after their government contract is terminated, or not renewed, before they can increase the rent.

  • The owner agrees to rent increase restrictions in exchange for public financial support.

  • The dwelling unit or units were cited for serious health, safety, fire, or building code violations within 60-days of vacancy and were not fixed by the time the unit was vacated.

Keep in mind that once the initial rent is set, the dwelling unit or units will be subject to rent control for all subsequent rent increases (aside from exempt units).

 

Only one rent increase may be given within a 12-month period.

 

PART IV

 

Tenant and Owner Petitions Regarding Rent Increases

 

Owners and tenants alike can file petitions and responses regarding rent increases with the RAP. When filing these petitions and/or responses there are certain rules and regulations that must be followed.

 

Tenant regulations for filing, or responding to, a petition:

 

Tenants must follow these regulations when filing a tenant petition or response form with the RAP:

  • Complete a RAP prescribed form.

  • Provide evidence that their rent is current or that they are lawfully withholding rent.

  • A statement regarding reduced or eliminated services (if applicable).

  • A copy of the health, fire, safety or building code citation in cases where rent is being lawfully withheld (if applicable).

A tenant petition must be filed within 90 days of the service of the rent increase:

 

For all rent increases that exceed the annual CPI rent limit, the tenant has the right, without retaliation by the property owner, to file a petition challenging the increase within 90 days. As a property owner, it is of the utmost importance to make sure you provide written notice of the existence and scope of the Rent Adjustment Ordinance as described in the “rental agreement” section above. If a RAP notice is not served with the rent increase, the tenant has 120 days to file the rent increase petition. If a RAP notice was not served at the commencement of the tenancy, the tenant has 90 days from the time they are served a RAP notice to file a petition. Not serving the RAP notice could lead to lawfully delayed rent payments, or to your request for a rent increase being altogether denied.

 

Other reasons a tenant is entitled to file a petition:

 

Oakland’s Rent Adjustment Ordinance states the following as reasons a tenant can file a petition against a property owner:

  • The increase exceeds the CPI Rent Adjustment.

    • This includes, but is not limited to, failure to give notice, decrease in services, health, safety, fire, and/or building code violations, failure to reduce rent after an amortization period following capital improvements, and/or if the rent increase surpasses 10% within 1 year, or 30% within 5 years.

  • The tenant claims relocation restitution.

  • The petition is permitted by the Just Cause for Eviction Ordinance (Measure EE).

  • The petition is permitted by the Ellis Act Ordinance.

  • The tenant contests the unit’s exemption.

Owner regulations for filing, or responding to, a petition:

 

Owners must provide the following in order to file an owner petition or respond to a tenant petition.

  • Evidence that they possess a current city business license.

  • Evidence that they have paid the RAP service fee ($68 per unit as of May 2017).

  • Evidence that they served a written notice of the existence and scope of the RAP (in 3 languages) on the tenant in each affected covered unit prior to filing the petition.

  • A completed owner response or petition form prescribed by the RAP.

  • Supporting documentation that justifies the rent increase and/or claim of exemption.

Owners have 35 days from the time the tenant petition was served to respond.

 

Owners have 7 days before the hearing to submit supporting evidence.

.

Computation of time

 

Section 8.22.160 of the Rent Adjustment Ordinance states, “days are computed using calendar days unless otherwise specifically stated. Date of service of any matter under this chapter is the date the matter is placed in the mail (in which case the time for responding is extended by five days) or the date of receipt for a matter personally served. Timely filing requires receipt by the Rent Arbitration Program on or before 5:00 p.m. on the last day to file the document as prescribed in this chapter or the regulations. If the last day to file is a weekend or holiday the period of time to file the document is extended to the next business day. The Rent Arbitration Program may establish rules and procedures to accept electronic filing of certain documents.”

 

PART V

 

FAQs:

 

1. If my unit is exempt do I still have to comply with Oakland’s Rent Adjustment Ordinance?

 

No, but keep in mind that without a certificate of exemption you may forfeit your “exempt” status. Also, the Just Cause for Eviction Ordinance, Ellis Act Ordinance, Uniform Tenant Relocation Ordinance and Tenant Moveout Agreement Ordinance all carry different rules and regulations when it comes to exemptions.

 

2. I want to sell my property. Do I have to inform the buyers that the units are covered by rent control?

 

Yes. Such disclosure must be made prior to the close of escrow and be available to the city. Former owners must keep such disclosure for the future.

 

3. How do I make sure that I file the proper forms and where do I file those forms?

 

Owner petition and response forms, as well as other RAP notices and exemption forms, can be found on the RAP website. All documents must be filed with the Oakland RAP at 250 Frank Ogawa Plaza, #600.

 

4. How can I learn more about rent control in Oakland?

 

View the Rent Adjustment Ordinance and the Rent Adjustment Program’s website. There are many resources you can find within the RAP website and the RAO itself.

 

You can schedule an appointment with Fried & Williams LLP by calling us at 510-625-0100.

Fried & Williams LLP is a law firm with practical knowledge and years of experience to assist you with your real estate and probate needs.  We provide cost effective litigation and transactional representation for real property owners and professionals. Our aggressive attorneys work together as a team to represent you in trial, in an appeal, at the Rent Board, or with your purchase and sales transaction.  With offices in both San Francisco and Oakland, we are deeply dedicated to understanding our clients’ real estate and business needs on both sides of the Bay.

 

© 2018 by Fried & Williams LLP.  All Rights Reserved. The information contained in this brochure is general in nature. For advice on any particular matter, please consult with our attorneys because the facts of your situation may be unique and the law changes from time to time.

 

 

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