Raising Rent or paying relocation allowance San Bernardino County

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Raising Rent or paying relocation allowance San Bernardino County

Daniel Higuera
Los Angeles, CA · Member since 2016 · 19 posts · 4 votes

Hello BP, 

I got an offer accepted on a duplex in SB County. Both units are tenanted with way under market rent. Good bones in the property but in much need of TLC. The idea is this will be an owner occupied property so live in 1 rent the other.

This is where i need your expertise. Both tenants are long term month to month and are about 400$ under market rent. In order to get into the unit and rehab it i would have to give 60 day notice to vacate. Along with notice to vacate I've read that I must pay each tenant a relocation allowance of $16k since they have been in the unit for more than 3 years. Does any one who have experience in this confirm or clarify this? 

Also, if I vacate one unit and leave the tenant in the 2nd unit, can I raise the rent to market value without any repercussions?

Thank you all in advance!

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    6y

    I believe the relocation fees only apply when you are "evicting" the tenant. If the tenant is on a month-to-month lease, you are not evicting them; you are terminating. Give them 60 days notice of termination, no relocation fees are necessary.

    READ THIS

    California is heavily regulated but they also have a lot of resources available. I highly recommend you figure out how to contact the housing authority or look at one of their many guides available online. You can also purchase the California edition of "Every Landlord's Legal Guide" by NOLO which is one of the best resources out there.

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  • Daniel Higuera
    OP
    Los Angeles, CA · Member since 2016 · 19 posts · 4 votes
    6y

    @Nathan Gesner Thank you for the recommendation. I have purchased the book on amazon. I am consulting with an attorney on Monday and hopefully they echo what you've said. 

    1Reply
  • Lynnette E.
    Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
    6y

    A better pathway, depending on where you are in negotiations is to have the current landlord evict one and give the 60 day notice of a rent increase to the other.

    0Reply
  • Daniel Higuera
    OP
    Los Angeles, CA · Member since 2016 · 19 posts · 4 votes
    6y

    @Lynnette E. That is a great idea! I will bring it up to the current landlord! thank you for the tip!

    0Reply
  • Samad Javed
    Los Angeles, CA · Member since 2017 · 17 posts · 18 votes
    6y

    @Daniel Higuera

    How did you come up with the $16k relocation fee?

    0Reply
  • Daniel Higuera
    OP
    Los Angeles, CA · Member since 2016 · 19 posts · 4 votes
    6y

    @Samad Javed I found it off the LA Fair Housing Laws website. 

    $8k relocation for tenants living in the property for less than 3 years

    $16k relocation for tenants living in the property for more than 3 years 

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  • Lynnette E.
    Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
    6y
    Originally posted by @Daniel Higuera:

    @Samad Javed I found it off the LA Fair Housing Laws website. 

    $8k relocation for tenants living in the property for less than 3 years

    $16k relocation for tenants living in the property for more than 3 years 

     You do know that those do not apply outside of LA County, right?  And that rent in LA is much higher than SB?  You could offer much lower $...if anything.  SB renters are not used to a relocation fee.

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  • Kyle J.
    Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
    6y

    @Daniel Higuera Los Angeles rent control doesn’t apply outside of Los Angeles.

    I don’t believe San Bernardino County has its own rent control so there shouldn’t be any reason for you to pay a $8k or $16k relocation fee, regardless of how long the tenant has lived there.

    The new statewide California rent control could come into play with how much you can raise the rent. However, if you owner-occupy this duplex, then it’s possible you could be exempt from the new rent control limits. 

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  • Daniel Higuera
    OP
    Los Angeles, CA · Member since 2016 · 19 posts · 4 votes
    6y

    @Kyle J. Thank you for linking that article. It did provide some further insight. I got word that 1 tenant is leaving willingly while the other would like to stay. I would like to renovate both units and bring the rent up to market value so ill have to ask the current owner to issue notice to vacate. Otherwise the deal wouldn't work at current rent (~400$ under market rent)

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