Passing on the Trash Collection Fees to Tenants
Gash NookalaPro Member
San Diego · Member since 2017 · 31 posts · 12 votesHello,
Landlord here.
With the new Trash collection Fee that the San Diego county is adding , my rental HOA also started charging those fees. My current rental Lease says Landlord will pay for the Trash Collection (because HOA covered it). My Lease is not up for renewal for many more months.
With this unforeseen monthly charges coming up, are there any provisions for modifying lease to pass this on to the Tenant or should landlord be absorbing it? I use standard California Real Estate Lease documents. My Condo has this due July 1st and is approx $40
Thanks
You cannot change a lease mid lease to include the trash fee if your current lease states the trash is included. So you will need to wait until the lease term ends before changing the lease to have the tenant pay for trash.
I have 7 units affected by the new trash fee. I have tenants pay all utilities that they can impact the cost (water, gas, electricity, cable/internet, etc). Seeing that the tenant does not impact the trash cost, I have included the trash fees in the rent. This works well seeing that the city is collecting the trash fee as part of the property tax bill.
I am not sure why this was unforeseen as the voters passed measure B in 2022.
Good luck
Thanks Dan for input.
I was thinking that along with this increase in Trash collection fee, the state may have allowed it to pass to Tenants through some additional law. Looks like that's not the case.
I will have to wait till Lease renews.
Yeah, it was unforeseen for me because I did not pay close attention.
Are there any forums where landlords (not full time property managers) are made aware of these upcoming legislations and advice on how to navigate them?
There is a forum topic on BP dedicated to San Diego RE investing but I did not see anything on this trash fee.
There are also numerous RE meetup organizations and some of them had the trash fee covered. For example AOA had a short article in the email newsletter.
However , the trash was well covered in local social media and traditional media. The UT ran multiple stories on the bait and switch and had what voters approved by less than 0.5% was very little like the final signed off law. Similar for essential San Diego and times of San Diego. Social media (nextdooor, facebook, etc) had numerous threads/posts on what home owners could do to protest the fee (protest period ended early this month). I posted on maybe a dozen Nextdoor threads on the final day of the protest period that it was the last opportunity to voice a protest.
The protest requirements are crazy difficult. No protest counts as a yes vote. Only form of protest that counted was a letter that the protestors had to address the envelope and place a stamp as the city was not about to make it easy to protest through online means or by providing an addressed envelope. The requirement was that a majority of the valid voters needed to protest to stop the fee. I think the protest did fairly well to get about 25% of the eligible voters to protest. Note this is a significantly higher number than is required for a recall. I believe, as it is executed today, it to be a near impossible criteria; it is the only threshold I am aware of the requires a majority of the eligible voters to vote and all uncast votes count in favor of the initiative.
If you are unaware here are measure b discrepancies from passed to what was implemented:
- fee proposed was $23 to $29 per month. Initial fee proposed was $54/month, but ended up getting reduced to $44.
- the calculation for the initial cost included a fee processing budget. This implies a periodic bill like virtually all other utilities. To save monetary the city decided to add the fee to the property tax bill. Note if you do not pay your property tax, you lose your property versus most utilities you do not pay for, the worst that can happen is your utilities are turned off.
- the passed measure indicated the charge would be cost of service only. The cost being charged includes building a reserve trash fund. Much of the reduction from $54 to $44 was slowing down the collection of this reserve fund. San Diego has a poor history of “borrowing” funds that have been allocated for other purposes. This reserve might as well be looked at as a general fund emergency source.
There are legal challenges to this bait and switch. This will, cost the city money but far less than what they will be collecting from the trash fee. At least one council member is on public record as admitting this is nothing like what the voters passed. His comments will help the case against the fee. However the initiative was written with the cost being a projected cost and the vote was for actual cost. Even though the accounting for the projected cost included a billing department, there was nothing in the initiative stating how the fee would be collected. The initiative says the cost will be actual cost of trash collection. Is building a trash reserve actual cost of the trash collection. Not a lawyer but seems in the gray area. Even if the reserve fund gets struck down, the actual costs are significantly higher than what was estimated in measure b.
I am convinced the only reason it passed the city council is because the city was grossly over budget for the next fiscal year and had to cut numerous services and raise numerous fees. If trash was still from the general fund (which would be the case if the council did not approve this bait and switch), then further cuts or fee increases would be required.
However, this level of bait and switch breaks voter trust. The voters are going to be very leery of voting for any future tax increase. They should be, the council passing this shows that they cannot be trusted to implement what the voters voted for and if they get a voter approved tax increase they will modify it to meet their desires regardless of it being very different than what the voters (barely) approved.
I have 7 city of San Diego trash fee impacted. ~$500/year * 7 is $3.5k. My numbers are not tight so I still do fine but $3.5k is a lot of money that I would rather enjoy than pay for trash that was previously paid via the general fund that was largely paid by property taxes. They did not reduce anyone’s regular property tax to reflect the trash fee was now not coming from the general fund. I pay a lot of property taxes , I think I was already paying enough property tax to include trash pick up.
Good luck
Thanks Dan. Always appreciate your detailed replies.