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Legal • August 1, 2004

Landlord/Tenant Law 101: Berkeley Rent Control Exceptions

By David Wilson

 

Over the past few months, this series has summarized California landlord tenant law through the lens of Berkeley’s idiosyncratic laws and regulations.  We have covered the following subjects:

  • -Lease Agreements
  • -Security Deposits
  • -Permissible Rents
  • -Eviction Procedures

 All of the above are available at the BPOA website.

 

We now turn to the most common kind of question posed by our members: when is a unit exempt from rent control?  When it is sold?  When it is a single family home?  When it is no more than an extra room in my own house? 

 

As in other areas these questions are controlled by a combination of California and Berkeley laws. In Berkeley you must also remember that even though a unit may be exempt from rent control it may not be immune from registration and fees, business license requirements, and just cause eviction rules of the Rent Board.  You ignore these other items at your peril.

 

There are several exemptions from the rent control parts of the Berkeley ordinance.  Some of these are unlikely to affect our members: hotels, rooming houses, fraternities, health care facilities and the like.  See Section 13.76.050 of the Ordinance, accessible at the City’s website.

 

The key exemptions from our standpoint are those relating to (a) single family homes, (b) owner occupied premises, (c) and new construction.    As may be expected in our town, the exemptions are hard to qualify for, with all doubtful cases called in favor of regulation.

 

Single Family Residences:

 

This one comes from state law which says that rent registration and ceiling requirements do not apply to rentals of  single family residences when the tenancy began after January 1, 1999.  A “single family residence” is a rental unit which is separately alienable, and therefore includes condominia and  tenancies in common as well as conventional  separate houses on separate lots.  Unhappily for landlords, tenants who rented single family homes prior to 1999 enjoy locked in rent ceilings and as the years pass or more and more motivated to stay put.

 

Editorial comment:  The exemption of condominia and TICs explains the hostility of Berkeley policy toward any attempt to convert conventional rental properties into owner occupied housing. Put simply, the radical majority resists any diminution of rent board powers, and opposes any increase in the percentage of voters who own their own dwellings and who, with a long term stake in the city, take a different view of  the radical agenda.

 

Though exempt from rent ceilings, single family homes occupied by tenants are subject to registration and just cause eviction requirements.  Nonetheless the landlord in such a situation may increase the rent at the expiration of an initial lease term.  If the tenant refuses to pay the increased amount, and proper procedures are followed, eviction may follow.

  

Owner Occupied Premises:

 

Originally, an owner occupied building with up to four units was exempt from  rent control.  This is no longer the case.  While rentals of  individual rooms in the landlord’s house continue to be exempt (the key here is that kitchen and toilet facilities are shared with the landlord), multi unit dwellings are now subject to all aspects of rent control, with the single exception of so-called “golden duplexes”.  The latter are duplexes where one unit is currently occupied by the landlord and where it can be shown that there was owner occupancy on January 1, 1979.

 

Where a “golden duplex” ceases to be exempt there has been a question of whether the landlord could be back-charged for “excessive” rents collected over what would have been the controlled rent but for the exemption.  The November ballot will contain a proposition which would declare the ;awful rate to be whatever the tenant has freely negotiated with the landlord---a rare example of common sense on the part of the Board.

 

New Construction:

 

When the rent control law was originally being sold to Berkeley voters in the late ‘70’s, its sponsors had to answer the argument that few if any investors would add to Berkeley’s rental housing stock if  they could not charge market rates to new tenants. The answer took the form of a singularly stingy exemption where it could be shown both that construction of the unit in question was completed after January 1, 1979, and that the tenancy began after the same date.  Conversions of existing non-rental construction to rental housing do not qualify for the exemption.   The result was predictable:  there was little if any genuinely new rental stock generated in Berkeley until the California legislature passed the Costa Hawkins reform in the mid-90’s allowed for vacancy decontrol.

 

Secondary Housing:

 

A tenant qualifies for the protections of rent control only where the unit is his/her “primary residence”.  Vacation homes and apartments used as business offices do not qualify..  While this may seem straightforward, the rule is often violated in the breach, as where a named lessee with below market rents sublets  (or shares space) to others who pay market rates, the difference being pocketed (of course) by the named tenant.

 

Final Remarks:  As is always the case where a law runs counter to common sense, Berkeley’s rent control laws are often observed in the breach.  New units created after Costa Hawkins may go unregistered. Similarly a homeowner may go on sabbatical, and may rent his/her home out to a visiting professor without even thinking that he must register and pay fees to the Rent Board.  This sort of maneuver works fine so long as the landlord and tenant are on good terms.  When disputes arise, the landlord may be sure that all questions will be called against him or her.

 

The BPOA Monthly does not give legal advice.  Individual cases should be referred for analysis to an attorney. 

 

 

 

 

 

 

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