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All Forum Posts by: Joseph Miguel

Joseph Miguel has started 6 posts and replied 19 times.

@Dee Sivad i have been able to verify that '"[constitutional] fair return" is the fair market value' is not a true statement. CFR have to be defined by the city and courts and are based off the US constitution. Most municipalities (and courts) have stated that MNOI is the go-to formula.

Post: HomeTap-Startup equity partners.

Joseph MiguelPosted
  • Posts 19
  • Votes 11
i'm looking into this too; more out of interest if it's a good way to finance that next property.

Compound interest will take $100->$160 in ten years at about ~4.7% interest rate.
Quote from @Becca F.:

Does this rent control apply to Oakland SFH or if it's a 2 unit or more?

Case law: https://cases.justia.com/california/court-of-appeal/2020-a15...

In Owens, the landlord owned and lived in a single-family home located in Oakland, California, and rented individual rooms in the home to three unrelated tenants. One of those tenants filed a petition pursuant to Oakland’s Rent Adjustment Program complaining about disruptive construction work and hazardous conditions at the premises. The tenant alleged that the landlord did not provide her notice about the Rent Adjustment Program and terminated her lease when she sought a reduction in rent due to the construction work. The landlord responded that the lease was not subject to the Rent Adjustment Program since the rental was for “sole use of one or more rooms and shared use of common areas (such as a kitchen) in the residence,” which was a single-family home.

In its decision, the court focused on the definition of a “dwelling unit” as used in the exception found in Civil Code section 1954.52(a)(3)(A), which provides that “an owner of residential real property may establish the initial and all subsequent rental rates for a dwelling or a unit about which the following is true…It is alienable separate from the title to any other dwelling unit….” . While the landlord defined the dwelling unit as his single-family home; the court, after analyzing the statutory definitions of the term, the determined that the dwelling unit at issue was the separate room being rented to the tenant.[2] As a result, the landlord had converted his single unit dwelling into a multi-unit dwelling that was subject to Oakland’s Rent Adjustment Program since the individual rooms were not alienable separate from the title to any other dwelling unit.

Under the court’s decision, tenants in Oakland renting rooms in a single-family home or a condominium are entitled to the protections provided by Oakland’s Rent Adjustment Program. By extension, other California tenants living in municipalities that have rent control laws are likely protected to the extent the landlord was relying on the same Costa-Hawkins exception as the landlord in Owens and operating under a similar leasing arrangement. It is important to note that the court here did not consider the landlord’s argument that the tenant was in actuality renting and sharing the entire home, and not just a room because the landlord raised this argument for the first time on appeal.

My advice now: never rent out anything in oakland. I've heard of house hacking cases where the tenants essentially evict an owner with false complaints to the rent board. 

Quote from @Bruce Woodruff:

So the Gov't gets to decide what is "fair return'....?

Here is a partial copy of rental board decision. Search for "OAK064976.pdf" on google

Per case law the courts have not decided on a specific formula or what percentage of CPI. So in essence unless your going to fight (and pay) for a fair return against a fascist Oakland rent administrators - your profits will slowly decrease.

Quote from @Christie Gahan:

Ok. Thank you.

From your perspective, do renters think that these rent controls will guarantee that they will get a rent increase every year?  Or, do they believe that rents would have been raised anyway ? 

They anticipate small increases; these are always less that CPI so unless a landlord here is willing to go to the expense of petitioning the board the rents will in time always fall significantly below market value.

Quote from @Christie Gahan:
What is this exemption for "Banking" ?   
In several California cities there is this concept of 'banked rent'; that is rent increases from past years that were not applied. Currently, banked rent increases are not allowed in Oakland.
EBRHA has an RAP owners representation service for small mom and pop landlords that looks pretty good: https://www.ebrha.com/rap-owner-assistance

Per Bornstein law in this article: https://bornstein.law/the-stench-of-lawsuits-over-oakland-tr...

"an owner can file a petition with the Rent Adjustment Program (RAP) to
raise the rent due to “increased housing service costs” relating to ..."

@Paul Merriwether and @Christie Gahan, 'fair return' is a constitution right of owners under US and CA constitution. Someone correct me if i'm wrong but fair return is all encompassing and includes all conditions listed by @Paul Merriwether.

@Christie Gahan, yes! It is insane and they make the process extremely difficult.

As @Paul Merriwether stated; Oakland acknowledges rent increases above CPI is possible under the section of 'fair return' here: https://www.oaklandca.gov/resources/learn-more-about-allowab...