RSO & Relocation December 2008

What Does Rent Stabilization Do? Controls rents (Vacancy decontrol) Limits evictions (12 Legal Reasons) Requires relocation assistance for no-fault evictions

Subject Properties Basic Rule Housing accommodation rented or offered for rent In the City of LA C of O on/before 10/1/78 2 or more on a lot Inventory Over 129,000 properties Approximately 636,000 rental units Includes condos, co-ops, rooming houses, mobile home parks*, hotels & motels

Not Covered Single one-family dwelling on a lot Units built after October 1, 1978 Non-profit units approved by LAHD Luxury Units approved by RSO Hotel & motel rooms, occupied less than 30 days Rental units in converted commercial buildings (adaptive re-use projects w/1 st rental use after 10/1/78) (Full list in LAMC “Rental Units”)

When Rent $ is Not Controlled: Properties not subject to the RSO “Vacancy Decontrol” Units Voluntarily Vacated Initial Rentals Following Certain evictions Non-payment Lease violation Compliance with City Attorney order Failure to relocate Condos * Still subject to rent registration and eviction controls Pre-1996 tenants protected by full rent control

Allowable Rent Increases (2 Kinds) 1) LAHD Approval Not Required Vacancy Decontrol – set to market upon re- rental after voluntary vacancy Annual Automatic Rent Increase 3% - 8% per RSO 3% as of 7/1/2008 Additional 1% each for gas & electric if owner- paid Increases for additional tenants 10% for each additional tenant Does not include 1 st minor dependent child

Allowable Rent Increases 2)Need City Approval Individual Adjustments Capital Improvements – improvements or replacements in rental units or common areas Primary Renovation – major upgrades/renovation Just & Reasonable – Review based on landlord’s NOI Approved through administrative review process, appealable to a Hearing Officer

Eviction Grounds Tenant at fault Non-payment of rent Lease violation (but not for unilateral change in terms) Nuisance (garden variety, drugs & gangs*) Illegal purpose* Failure to renew lease Denial of reasonable access Unapproved subtenant Failure to relocate per Tenant Habitability Plan* No-fault Owner/manager occupancy* Ellis (demo & withdrawal)* Government order* HUD foreclosure* * Landlord declaration required

RSO & Changes in Ownership Sale or foreclosure is not a legal reason for eviction! Also not a basis for a rent increase. A change in ownership does not change the terms of the tenancy under the RSO. Lender who forecloses assumes the role of the landlord.

Eviction Requirements Eviction notice Reason given to tenant 60 days as of January 1, 2007 for tenancies of at least 1 year (no-fault evictions) Extended notice for Ellis 120 days minimum Seniors/disabled up to 1 year Landlord declarations Filed with LAHD

Relocation Requirements – Landlord Responsibilities Landlord must provide relocation assistance in following evictions: RSO units Owner occupancy Ellis eviction Compliance with government order HUD foreclosure Permanent relocation in approved Tenant Habitability Plan Condo Conversions Demolitions Mobilehome park closures

New Relocation Amounts As of July 1, 2008: Type of Tenant< than 3 years 3 years or > < than 80% AMI ELIGIBLE $7,000$9,300 QUALIFIED$15,300$17,600

Relocation Process For RSO units, file Landlord Declaration of Intent to Evict File with LAHD Relocation Contractor Services Application Pay required LAHD Relocation Contractor fees Pay required administrative fees to LAHD Pay relocation to tenants LAMC G (RSO) / LAMC (Condo-Conversions) / LAMC (Demolitions)

Relocation Contractor LAHD refers property to Relocation Contractor (Paragon Partners) Paragon meets with tenants Based upon Tenant Assessment Form completed by tenant, Paragon completes Relocation Determination Form. Copy provided to tenant, owner, LAHD. Paragon provides tenants with counseling, referrals, listings, additional services for disabled and elderly.

Payment of Relocation Fee Payment required within 15 days of serving 120 day notice (RSO) or 60 day notice (non- RSO) on tenants. Or within 15 days of tenant’s request for relocation after Planning’s approval of tentative tract / parcel map. May deposit relocation payments in escrow accounts instead (RAC Regulation ) If tenant claims higher relocation based on low income status, owner may request LAHD hearing if disputes basis.

Failure to Pay Relocation Tenant may file a complaint with LAHD. LAHD will investigate, issue determination, refer non-compliance to City Attorney for prosecution. Failure to pay correct relocation amount is also a defense to an eviction in Superior Court. LAHD will not clear demolition permits until owner proves payment of relocation.

Ellis Act Restrictions New Construction After Ellis eviction, if demolished RSO building is replaced w/newly constructed rental units, the new units are subject to the RSO if rented within 5 years of the filing of the Ellis Landlord Declaration with LAHD (LAMC ) The initial rent = unrestricted.

Ellis Act Restrictions - New Construction Exemptions Exemption for rental units constructed after Ellis eviction (demolition): Owner does a one for one replacement of each demolished RSO units with an affordable housing unit, capped at 20% of total number of newly constructed rental units. Building of 4 units or less was owner occupied for 3 years prior to its demolition.

Restrictions on Re-Rental of Ellised Units If unit re-rented unit within 2 years of removal from rental market (tenant’s surrender of premises), owner is liable to tenant for actual and exemplary damages. City may also sue him. If re-rented within 5 years of filing of Ellis Dec, must be rented at old rent plus allowable RSO increases & tenant has right of 1 st refusal if tenant requested.

$ Relocation Assistance No-fault Owner/manager occupancy* Ellis (demo & withdrawal)* Government order* HUD foreclosure* Permanent Relocation per approved THP Payment within 15 days of notice Direct payment Escrow account 7/1/08 – 6/30/09 $9,300 or $17,600 seniors, disabled, families $7,000 - $9,300 everybody else (per household)