Q&A Regarding Rent Increase Notices
Q. I gave 60 days notice for a lawful rent increase by mail and email to my tenants. The tenants seemed to have ignored the increase, as they’re continuing to pay the previous rent amount. How can I get them to pay?
A. I need to make a few assumptions. The first assumption is that the lease is currently a month-to-month lease. The reason the lease needs to be month-to-month is because you cannot increase the rent until the lease term has expired.
With rent-controlled units, a property owner may increase a tenant’s base rent once every 12 months by the allowable annual rent increase (or CPI). The San Francisco Rent Board publishes this amount each year, effective the following March 1st.
The property owner must give at least 30 days written notice of the proposed annual rent increase for rent increases below 10%. A 60-day written notice needs to be given for any rent increases that are 10% or more.
San Francisco requires that the notice state the portion of the rent increase that reflects the annual increase, and/or banked amount, if any, the portion of the rent increase that reflects the costs of capital improvements, rehabilitation, and/or energy conservation work, the portion that reflects the pass-through for charges for PG&E, and/or the portion that reflects the amortization of a RAP loan. All tenants and persons claiming a right to possession must be named in the rent increase notice.
If the required information is not provided, the rent increase is null and void. Assuming there are no issues with the rent increase notice itself, the next step is properly serving the notice.
A rent increase notice can be served by 1) delivering a copy to the tenant personally, or 2) sending a copy by regular mail addressed to the tenant. If the notice is being served by regular mail, you need to add five days to the expiration of the notice. Typically, we recommend that an unsigned certificate of mailing be attached with the rent increase notice. After the notice is mailed, then sign the certificate of mailing and keep it for your records. This is a written document showing how and when the notice was served on the tenant. [if !supportLineBreakNewLine] [endif]
Assuming there are no issues with your rent increase notice and service of the notice, 1) you should notify your tenants by letter that they have not paid the complete rent and request that they pay the complete amount or you will initiate an eviction proceeding against them, or 2) issue a 3-day notice to pay rent or quit. The amount stated in the 3-day notice should be the difference between the previous amount and the current amount of rent.
If your tenants do not pay the rent owed or do not vacate within the 3 days, then you may have grounds to file an eviction lawsuit in court. You should consult an attorney to ensure compliance with state and local laws.
This Q&A was featured in SFAA's March 2019 Magazine.
© 2019 by Fried & Williams LLP. All Rights Reserved. The information contained in this article 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.