Rent Control in the City of Los Angeles
The city of Los Angeles passed the Rent Stabilization Ordinance (RSO) to prevent unreasonable rent increases while allowing landlords to make a profit on their real estate investments. Prudent Los Angeles property investors should familiarize themselves with the regulations of RSO.
If built before October 1978, the following dwelling structures are covered under RSO: all apartments, townhomes, condominiums, and duplexes, houses with two or more units on the same lot, and motels, hotels or rooming houses in which tenants live for more than 30 consecutive days. Mobile homes and mobile home pads are also covered under RSO if its permit was issued February 10, 1986.
Certain exemptions apply such as nonprofit organizations, government buildings, single dwellings and buildings outside the city of Los Angeles.
In addition to understanding which buildings are included in the ordinance, Los Angeles property owners should also understand when and how the regulations should be applied in order to legally increase rent. According to the rental control ordinances Los Angeles property owners may not increase rent by more than 4% a year.
However, there are a few exceptions to this rule. Landlords have the authority to increase rent by 10% if an additional person moves in and stays longer than 30 days. This rule does not apply to the first minor child. Landlords may also increase rent to pay for the building inspectors to inspect all of the units. This is known as the SCEP fee, or Systematic Code Enforcement Program. However, tenants must be notified in writing 30 days before the intended increase.
Finally, landlords may charge the tenant’s half of the rent registration fee which is charged once a year during the month of June. In addition to preventing unjustified rent increases, RSO also places restrictions upon land owners from evicting tenants unless the occupant makes one of several violations such as refusing to pay rent; damages the property; uses the property for illegal purposes; or if the tenant refuses to allow access to the building for necessary repairs, improvements or to allow Los Angeles realtors or real estate agents access for property showings.
In addition, under certain conditions, the Los Angeles real estate investors may evict a tenant if they wish to occupy the unit for themselves, an immediate family member, or resident manager. Eviction can also occur if the landlord chooses to demolish the unit.
Understanding the Rent Stabilization Ordinance (RSO), and when it is applicable, will assist Los Angeles real estate investors and property owners in effectively managing their tenants.
For more information on what you need to know about the city of Los Angeles Rent Control Ordinances before you buy or sell your next property contact an IET Real Estate Agent at 323 412-9060 or use the contact form below.