Owners of Beverly Hills rental property which is not exempt from rent stabilization must register each rental unit with the city’s rental unit registry. The registration deadline falls in January. After accounting for the inevitable laggards the city then sends each renting household a notice of the rent amount that was reported by the landlord. It seems like a bureaucratic task but it is also a reminder to tenants to look back to prior rent increases to ensure each was correct. If the amount on the notice matches the lawful rent then no action is needed. If not then a tenant should appeal. Here’s what you need to know about the registration process.
Timely rental unit registration is the backbone of rent control. It allows the city’s Rent Stabilization Office to monitor the state of our rent-stabilized housing market and when necessary to verify that the rent charged by the landlord is the lawful rent. That is especially important at the time of a rent increase.
Most multifamily units are registered. But a multifamily unit need not be registered if it is exempt from rent stabilization. For example condominiums are exempt as are some rentals in newer buildings and single-unit detached homes. However lessors of any rented dwelling in the city must obtain the city’s Class E business license and pay the corresponding business tax. (Find out if your landlord has obtained a business license using the Department of Finance license search.)
The Registration and Appeals Process
The registration process begins with the landlord registering the unit with the rental unit registry. A unit is registered when it is leased and then subsequently each year at the time of annual re-registration. At re-registration the landlord provides the correct base rent for all occupied units.
Each spring the Rent Stabilization Office confirms the reported rent. Tenants receive a ‘notice of rent amount reported by your landlord’ in the mail. If the amount is correct then the tenant need take no action and the reported rent will be ‘certified’ as the lawful base rent.
However if the reported rent is not correct, then tenant should appeal the registered rent. ‘Appeal’ here sounds more formal that it actually is. Minor discrepancies will be resolved by the Rent Stabilization Office. (Most discrepancies concern minor reporting errors.) More significant discrepancies may be referred for an administrative hearing in order to determine the actual base rent.
Alternately, after the rent amount is certified the tenant may appeal the certified rent. If a tenant misses the 15-day window, for example, the rent amount is certified so the tenant would then request the certificate and afterward file an appeal. Refer to the Rent Stabilization Office rent appeals webpage for more information or contact the Rent Stabilization Department at (310) 285-1031 or by email at email@example.com.
Appeals are filed using the city’s online registration system. Yes you need to first create an account. Then login with the account username and password you chose.
To appeal the reported rent within the 15-day window, click on ‘Appeal the rent amount reported by your landlord.’
The next step is the record locator. Enter the the Assessor’s parcel number (AIN) and the Personal Identification Number (both are provided in the notice letter). Then select the correct site address and unit number. Click on ‘verify the validity of unit.’
You may only view the reported or certified rent amount for your own unit. And you may only verify validity during the 15-day reported-rent appeal window. If outside that 15-day window the system throws up an error.
Finally proceed through the subsequent steps to appeal the reported rent.
To appeal a rent that has been certified (for example after the 15-day window closes) then click on the other button, ‘Request a certificate of registration of the permissible rent level.’ Enter the Assessor’s parcel number (AIN) and the Personal Identification Number (both are provided in the notice letter). Proceed to select the correct site address and unit number then click on ‘verify the validity of unit.’
At this point the registration system will ask for a mailing address to which the certificate will be mailed. Once a certificate is generated then it may be appealed using these same steps.
Reviewing the Reported Rent for Accuracy
Appealing an incorrect reported rent is important so that the incorrect amount is not certified as the lawful base rent. In a future dispute over, say, an incorrect rent increase, the tenant will have to generate a rent certification and then proceed through appeal. It is simply easier to address any discrepancy during the 15-day window.
How to identify your correct lawful rent? Find the rental agreement or review financial statements to identify the earliest rent amount paid then multiply that original base rent by subsequent annual rent increases. Keep in mind that the base rent does not include any pass-throughs charges or other fees. The base rent is the amount identified on the lease as the rent.
This is the time to look for what may be an unlawful rent increase. For example the rent may have been increased by a percentage that was not then allowed. The RSO office can provide historical percentages. Verify that the increases came no more frequently than every 12 months and that the percentage increase was correct. Also look for ancillary charges (like parking, utilities or storage) that are not part of the base rent. Rent increases apply only to the base rent.
What constitutes an unlawful rent increase?
- Rent increases are allowed no more frequently than once every 12 months.
- Every rent increase must be properly noticed. Verbal or text notices do not suffice; the notice must be in writing and delivered either personally or by mail. And it must be served no fewer than 30 days before the increase took effect (35 days before if the notice was mailed).
- Rent increases cannot exceed the amount established by the city. The city long allowed 10% for Chapter 6 tenants but that cap was reduced in 2017 and each year, on July 1st, the city establishes the new Chapter 6 allowed percentage. Chapter 5 increases were generally lower but were posted monthly.
Reviewing the record prior to an appeal is a good time to sharpen the pencil to see whether the landlord has properly charged for ancillary housing services (like shared utilities or parking if not included in the rent). Take this opportunity to flag any instance where such a charge was erroneously billed — or erroneously included in the base rent.
- Shared utilities or any other charge should not have been rolled into the base rent. The rent increase is calculated only on the base rent.
- Charges for ancillary housing services must be specified in the rental agreement. Alternately, such a charge could be imposed through a properly-noticed change in the terms of tenancy. Any charge that was not imposed properly, or which was used to calculate the rent increase, should be brought to the attention of the RSO office.
- Pass-through charges must be allowed by the rent stabilization ordinance and properly passed-through. Pass-through charges (refuse for example) must be properly documented by the landlord. If a passed-through charge is questionable then ask the landlord to document it — or bring it to the attention of the RSO office.
- Shared utilities must be properly documented and accurately billed. Does the charge to the tenant reflect the tenant’s share of the cost as billed to the landlord? Unscrupulous landlords have been known to find revenue by cheating tenants on shared utilities. This is a good time to review every aspect of the rent payment including how utilities are billed.
Any concern about improper pass-through costs or suspected improper shared-utility billing should be brought to the attention of the city’s rent stabilization office immediately. Make sure that a case is opened and get a case number. Reach the office at (310) 285-1031.
Have you received a ‘Notice of Rent Amount Reported by Your Landlord’ and found your rent varied considerably from what you’re paying? Drop us a line! We are looking for instances where tenants have uncovered improper billing practices and rent overcharges.
- Over time a rent increase on charges over-and-above the base rent can add up. For example the average Chapter 6 rent: $2,427. Let’s say utilities or other costs add $150 to the base rent. The bad landlord could roll the charges into the base rent and use the total ($2,577) for calculating the rent increase. The good landlord applies the increase increase only to the base rent ($2,427) and counts the $150 utilities charge separately. The difference is significant! In the 10th year of a tenancy the bad landlord would collect $65 per month more than the good landlord. And because annual rent increases compound, at the end of that 10-year hypothetical tenancy the bad landlord would have collected a cumulative $3,711 in unlawful overcharges over the period if he demanded the maximum 4.1% increase each year and applied that increase annually to the total (base rent + charges) rather than the base rent only. ↩
- For example, some Chapter 6 tenants see the city’s refuse fee passed-through to them. Any city-allowed pass-through must be properly documented. ↩