LAMC 165.09: Upcoming LA City Law Will Require a Landlord to Pay a Tenant if the Tenant Moves Due to Certain Rent Increases

LA city eviction attorney to evict a tenant

Under a proposed law that is likely to pass city council and take effect soon, landlords in the city of Los Angeles who raise the rent in excess of (1) the Consumer Price Index – All Urban Consumers, plus five percent, or (2) ten percent (whichever is less), will be required to pay the tenant substantial relocation assistance money if the tenant elects to move as a result of the rent increase, unless an exemption applies.

City of LA Landlords to Pay Tenants who Move as a Result of Certain Rent Increases

If it becomes law, Los Angeles Municipal Code (LAMC) section 165.09 will soon require landlords to pay tenants who decide to move out in the city of Los Angeles after landlords raise the rent in some cases.

If a landlord raises the rent on a Los Angeles city tenant by an amount that exceeds the lesser of (1) the Consumer Price Index – All Urban Consumers, plus five percent, or (2) ten percent, and as a result of that rent increase, the tenant decides to move out, the LA city landlord will be forced to pay the LA city tenant relocation assistance money. The proposed rental increase, whether imposed as a single increase or payable periodically over a 12-month period, shall be calculated as a percentage of the rental amount paid by the tenant immediately prior to the proposed increase.

Absurd, right?

To determine if the rent increase meets the relocation assistance threshold, the rent increase percentage will be calculated based on the amount that the rent was right before the rent increase.

How Much Money Does an LA City Landlord Have to Pay a Tenant Who Decides to Move After a Rent Increase?

Per LAMC 165.09(C), the amount due to a tenant shall be three times the fair market rent in the Los Angeles Metro area for a rental unit of a similar size as established by the United States Department of Housing and Urban Development plus $1,411 in moving costs. Yes, you heard that right. An LA city landlord will also have to pay the tenant moving costs under this rule when a tenant in LA city decides to move after a rent increase that exceeds the lesser of (1) the Consumer Price Index – All Urban Consumers, plus five percent, or (2) ten percent.

To be clear, the relocation assistance amount that an LA city landlord will have to pay to the tenant in the city of LA is not necessarily 3x the amount of the tenant’s monthly rent. Rather, it is 3x the fair market rent. The city will publish these numbers.

If the tenant owes the landlord accumulated/past-due rent at the time of the rent increase, the landlord can offset the past-due rent from any relocation assistance that would otherwise be due.

Landlord Tip: When raising rents in the city of LA on residential properties subject to this law, keep rent increases in any twelve month period slightly under 10% if you do not want to trigger the possibility of paying the tenant to move.

Reduced Relocation Assistance for Tenants Renting a Single Family Home when the Owner is a “Mom and Pop” Landlord

The amount of relocation money due to a tenant in the city of LA under this new rule will be reduced if the landlord qualifies as a “mom and pop” landlord and if the rental property is a single family residence. The reduced relocation amount due to a tenant will be equal to one months’ rent calculated at the rental amount payable by the tenant at the time of a written notice of a rent increase.

Here are the LA city requirements to meet the “mom and pop” definition under this law:

(1) The owner is a natural person or a natural person who holds the rental property in a trust or registered legal entity controlled by that natural person; and (2) the owner, and all trusts and legal entities controlled by the owner, own a single-family dwelling unit and no more than four additional dwelling units in the City all of which are on a lot or lots separate from the single-family dwelling unit.

LAMC 165.09(D)

When Must a Landlord Pay the Tenant?

If the LA city tenant qualifies for relocation assistance under the law because the landlord increased the rent in an amount that exceeds the lesser of (1) the Consumer Price Index – All Urban Consumers, plus five percent, or (2) ten percent, and the tenant moves out because of the rent increase, the landlord is required to make the payment on or before the 15th day after receiving the tenant’s written notification informing the landlord that the tenant is moving out due to the rent increase.

Once it goes into effect, this new law will impact residential properties that are not subject to LA’s RSO. LA’s RSO already regulates rent increases on RSO properties.

FAQ on Los Angeles Municipal Code (LAMC) 165.09

Does an LA city landlord always have to pay the tenant relocation assistance money if a tenant moves out after receiving a rent increase notice?

No. Only when the rent increase exceeds the lesser of (1) the Consumer Price Index – All Urban Consumers, plus five percent, or (2) ten percent, and the tenant decides to move out as a result of the rent increase. LAMC 165.09(A). And, only when the property is subject to this law.

Are any residential rental properties in the city of LA not covered by this new law?

Yes. RSO properties are not covered, as there are already other limits on rent increases for RSO properties. Also, the new law does not cover properties that are already covered by state law (AB1482). At the time of this article, the new law generally applies to properties built after 2008.

How much relocation assistance does a landlord have to pay a tenant under this law?

Three times the fair market rent in the Los Angeles Metro area for a rental unit of a similar size as established by the United States Department of Housing and Urban Development plus $1,411 in moving costs. LAMC 165.09(C).

Are there reduced relocation amounts for small “mom and pop” landlords?

Yes. If the landlord is a mom and pop landlord and the tenant is renting a single family residence, the amount of relocation assistance is equal to one month’s rent. LAMC 165.09(D).

Who is a “mom and pop” landlord under this rule?

A “mom and pop” landlord is when (1) the owner is a natural person or a natural person who holds the rental property in a trust or registered legal entity controlled by that natural person; and (2) the owner, and all trusts and legal entities controlled by the owner, own a single-family dwelling unit and no more than four additional dwelling units in the City all of which are on a lot or lots separate from the single-family dwelling unit. LAMC 165.09(D).

When must the relocation assistance be paid to the tenant?

Within 15 days after receiving written notice from the tenant that they are moving out as a result of the rent increase. LAMC 165.09(E).

Does the LA city landlord have to pay relocation assistance under the new law even if the tenant owes the landlord money for rent?

A landlord may offset a tenant’s accumulated rent or other amounts due to the landlord against any relocation assistance payable under this section. LAMC 165.09(B).

Additional Information

* It is important for landlords to understand what jurisdiction the rental property is located in, and whether or not there are any special tenant protections or rent control applicable to the property.

Last Minute Changes?

There could always be a last minute change to the law. Please be sure to bookmark this blog and follow us on social media. Also keep an eye on major news sources throughout LA.

Court Challenge?

Hopefully, this egregious law will be challenged and struck down as illegal and unconstitutional. But for now, this is one of the new laws in the city of Los Angeles that landlords will need to comply with once it takes effect. This is yet another example of the LA city council inflicting undue and potentially illegal actions against landlords and will likely be challenged in court. This law will almost certainly push small landlords out of the rental market in the city of LA.

Disclaimer

The information in this article and blog are not meant to be legal advice and is intended for educational purposes only. The laws change frequently and this article may not be updated to reflect current rules. Do not rely on this article when making legal decisions.

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This article is courtesy of the Law Office of David Piotrowski, a California law firm representing landlords with eviction matters.

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