Early Lease Break Clause - Oakland, CA.

2 Replies

Can anyone tell me if it is legal to include an early lease break clause in Oakland, CA? I have scoured the internet and cannot find any information. The only information I am getting is from the EzLandlordForms website that says:

"California Civil Code requires the landlord to mitigate damages if a tenant needs to break a lease early. Generally a pre-determined or set fee may be considered a penalty, therefore it is usually not permitted."

This is related to my earlier post -

http://www.biggerpockets.com/forums/52/topics/1349...

I'm about to get him to sign an Early Lease Break Addendum stating that we will meet in the middle and he will pay for one of the two month's he is bailing on the lease and damages to the counters which were not easy water stains but probably oil stains and I will need for sure that whole month to get the unit back in shape. I was hoping to find out from possibly someone who knows about Oakland in particular and if I'm able to use an early lease break clause here.

Thanks in advance

Hi,

I am not an expert but I think you might be exempt from specific Oakland rent control according to http://www2.oaklandnet.com/oakca1/groups/ceda/documents/policy/dowd008111.pdf:

Excerpts:

8.22.030 Exemptions

A. Types of Dwelling Units Exempt. The following dwelling units are not covered units for purposes of this chapter, Article I only (the Just Cause for Eviction Ordinance (Chapter 8.22, Article II) and the Ellis Act Ordinance (Chapter 8.22, Article II)) have different exemptions):

....

8. A dwelling unit in a residential property that is divided into a maximum of three (3) units, one of which is occupied by an owner of record as his or her principal residence. For purposes of this section, the term owner of record shall not include any person who claims a homeowner’s property tax exemption on any other real property in the state of California.

...

D. Exemptions for Owner-Occupied Properties of Three or Fewer Units. Units in owner-occupied properties divided into three or fewer units will be exempt from this chapter, Article I under the following conditions:

1. One-Year Minimum Owner Occupancy. A qualifying owner of record must first occupy one of the units continuously as his or her principal residence for at least one year.

2. Continuation of Exemption. The owner-occupancy exemption continues until a qualifying owner of record no longer continuously occupies the property.

Hi Kathryn, thanks for the reply. I'm not sure how to interpret the clauses of that Article, especially with my tired eyes right now. Specifically with my "lease break clause". I am pretty small potatoes over here and just have one rental unit. It looks like I will have to pay a lawyer to get to the bottom of this. I just thought there might be an Oakland landlord that could chime in. However, after looking more carefully at this article it looks like this section:

F. The City Council believes that the relationship between landlords and tenants in smaller  owner-occupied rental properties involve special relationships between the landlord and the tenants residing in the same smaller property. Smaller property owners also have a difficult time understanding and complying with rent and eviction regulation. The Just Cause for Eviction Ordinance recognizes this special relationship and exempts from its coverage owner-occupied properties divided into a maximum of three units. For these reasons, the City Council believes owner-occupied rental properties exempt from the Just Cause for Eviction Ordinance should similarly be exempt from the Rent Adjustment Program so long as the property is owner-occupied. In order to permit tenants to adjust to the possibility of unregulated rents, and to address the potential for abuse of the owner-occupancy exemption by landlords who are motivated to move into a property to gain an exemption just to increase rent and not to reside in the property, this exemption should not take effect for one year after the amendment to This chapter exempting these rental units is adopted, or one year after the landlord begins owner-occupancy, whichever is later.

I'm not sure you answered my specific question, but you have brought the above paragraph to my attention which looks like it directly applies to me NOW being exempt from Oakland's rent control and the "Just Cause for Eviction Ordinance" since I moved back in and Owner occupy one of the two units. Very interesting - I will definitely have to get clarification from a legal professional on this info. 

Thanks, Kathryn

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