New owner section 8 tenant rent increase exceptions for over 10%?

8 Replies

Hi I'm a new owner of a duplex in California for over a year. I inherited a section 8 tenant (by choice) who was on a month to month lease playing below fmv. I immediately gave her 60 day notice of rent increase, to fmv, which was a $410 increase from her previous rent which hadn't increased for several years. I requested a increase of rent to hap & was approved. I started receiving payments. Recently I received a notice that says due to an executive order 2017 b-51-18 (wild fire victim displacement price gouging by landlords) I illegally raised rent above10%. And must pay back. I spoke with a hap agent & was told although I sent a REQUEST for rent increase to them and they APPROVED and even started paying out that it was my responsibility to be aware of this & be mindful not to increase the rent above 10%. Im liable???

@Deshawn Maull

It depends on where your rental is located.  The below applies to not just you but all landlords that have rentals in Butte, Los Angeles and Ventura County.  This is definitely one of the struggles of owning in California.

Many of you know that as of January 1, 2019, it is illegal to raise rents above 10% when the Governor or President of the United States declare a State of Emergency in California, which extends for 30 days after that declaration. 

The important thing to note is that California is still in a State of Emergency for Butte, Los Angeles and Ventura County related to the wildfires.  Governor Newsom extended the State of Emergency through November 2019 for these counties, which means the limitation on raising rents will carry throughout 2019. 

It is also not allowable for a landlord to give a tenant notice to vacate for the purpose of raising rents to market during this time. If you have any questions about the State of Emergency, feel free to contact the Los Angeles Department of Consumer and Business Affairs at (213)974-1452.

For some “light” reading on the matter, see the following:

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB1919

https://www.gov.ca.gov/wp-content/uploads/2018/11/11.14.18-Wildfire-Executive-Order.pdf

@Michael T. thank you for your knowledge but shouldn’t hap be responsible? When I purchase the property i put in a request to increase rent to fmr through Hap which they processed & payed out. They should’ve rejected my request, which they are known to do. Worst case scenario what could happen with this?

The executive order applies to the entire state, not just the counties where the state of emergency was declared. 

Here’s an excerpt from the Attorney General’s website that further explains that:

“The statute does not restrict its protection to a city or county where the emergency or disaster is located. It is intended to prevent price gouging anywhere in the state where there is increased consumer demand as a result of the declared emergency.“ 

As for what is the worst case scenario that could happen, I suppose being criminally charged like the landlord in this story: 

Novato landlord charged with price gouging as prosecutors scour for cases after fires

It’s too bad the Housing Authority didn’t catch it before they approved your request for the rent increase. Hopefully they’re only asking you to repay the amount paid above what would have been a 10% increase, and not the entire amount of the increase. 

If you don’t agree with them though, you could always consult with an attorney and get their opinion on the matter. 

@Deshawn Maull depending on when you purchased the property, when everything was submitted for the increases and when they processed everything.  I haven't read through the entire executive order so I'm not sure.  It maybe retroactive?

My recommendation is to reach out to the Consumer and Business Affairs at (213)974-1452.

My free advice which is worth as much as you are paying

1. Stop the bleeding: starting now lower the rent back or at least back to rent + 10%.   In writing to the tenet and HAP.

2. Who sent the "notice" that you were illegal.   If it was HAP you talked with them already.  If it was someone else then contact them and explain.

3a.  It is the DA that prosecutes the case (the illegal part).   I would consider contacting the DA and walk them through how it was approved and you had no idea it was illegal and ask how they would like it handled.   You are then committed to do what they ask.   If they want it paid back then pay it back (presumably to HAP), if they say no more going forward then do that.   Whatever they ask get them to put the agreement in writing and make sure it includes a part about if you do your part they won't prosecute.   

Now do you need a lawyer for this part, ideally yes, but in practice they are not looking to go after you.   The tenet was not harmed in that they did not pay.  So if you trust the DA is not out for blood then I would just work with them.

3b.   If you don't trust the DA, they contact a lawyer (criminal) and do what they tell you to do.  That is the most expensive but least risky option.  

Deshawn,

Unfortunately yes you are. It’s the owners responsibility to know the law.