The principle behind rent is that a tenant pays for housing with the understanding that the operating costs of rental housing from everyday grounds-keeping to the new roof is borne by the landlord. But not always! Beverly Hills allows a landlord to pass through to his tenants each month certain charges like the entirety of the city’s bill for refuse collection and alley maintenance. How can a tenant be sure she is paying the correct refuse charge?
Before we go into details about the refuse pass-through let’s cut to the chase. Beverly Hills allows a landlord to pass through to all rent-stabilized tenants his cost for alley maintenance and refuse collection, which is $29.19 per unit when billed monthly. Some landlords choose not to pass through the refuse charge and, arguably, trash service should be covered by rent. But some landlords pass on the cost and that is perfectly allowable as long as: 1) the charge is no more than the landlord is billed by the city; and 2) so long as the tenant is properly notified at the outset. This explainer shows how it works.
How Alley and Refuse Fees Get Passed-Through
Passing-through the cost of alley maintenance and refuse collection seems straightforward enough. The city bills the landlord which then turns around and adds that cost (no more, no less) to the tenant’s rent. That’s how the city’s rent stabilization program website presents it:
Refuse fee surcharge and water service penalty surcharges may be passed through to tenants in addition to the permitted annual adjustment (B.H.M.C. §§ 4–6–7, 4–6–8, 4–5–307, 4–5–308).*
But those 21 words don’t identify the refuse fee. How much is it? And why call it a surcharge? Nor does does the Municipal Code identify the fee. Here is section 4–6–8 (REFUSE FEE SURCHARGE) from the rent stabilization ordinance:
A. In addition to the rent otherwise permitted by this chapter, the landlord may pass through to the tenant of an apartment unit regulated by this chapter the cost of any refuse fee imposed by the City pursuant to a resolution or ordinance of the City Council. B. In order to qualify for the pass through authorized by subsection A of this section, the landlord shall: (1) Provide written notice, by registered or certified mail, to all tenants thirty (30) days in advance of the imposition of the pass through, of the provisions of this section, that the pass through is not part of the base rent, that the refuse fee may be increased by the City, and any other information required to be given by the Rent Stabilization Office. (2) Provide all tenants with a copy of the landlord’s utility bill which sets forth the appropriate refuse fee and the basis for the calculation of the pass through.
Incidentally, both chapters 5 and 6 of the rent stabilization ordinance allow for the refuse pass-through (the respective code sections feature identical language).
While a tenant may be surprised to learn that a refuse charge will be added to the rent, she will be as surprised at how difficult it is to verify as correct the monthly charge that is added. The city’s utilities webpage and solid waste webpage says nothing about it. And a call to the city’s billing department will leave a tenant scratching her head. The city’s Rent Stabilization Program website is silent on the amount of the refuse fee. (Even locating that brief explanation included above is a challenge.)
But if a tenant knows precisely where to look she can find the refuse fee buried in the city’s Schedule of Taxes and Fees. And it happens that fee it’s not a single fee but actually two fees: alley maintenance and refuse collection.
The alley and refuse fees are assessed on a per-unit basis which should make calculating the refuse pass-through easy: add them together to get a total per-unit charge of $58.38. But the city bills these costs bimonthly. That means the landlord must divide that total per-unit fee in half for a monthly pass-through. That would be $29.19 per unit.
The $29.19 per-unit figure should appear on the landlord’s notice to pass-through the refuse charge. But that was not the figure on the notice received by one tenant.
Where did that $58.38 figure come from? Is it even the correct amount? The bill offers no explanation and the landlord did not (as required by the ordinance) explain the calculation.
The city’s utility bill enumerates (provided with the notice) makes it no easier. It shows two fees as $219.72 for refuse $130.56 for the alley. These total $350.28.
But how does $350.28 translate into a monthly pass-through charge? Because the landlord didn’t explain his $58.38 charge we don’t know.
First, we went back to the schedule of taxes and fees to fiddle with some figures. We totaled the bimonthly fees for alley and refuse ($21.76 and $36.62 respectively) and then multiplied by six to arrive at an annual total for refuse and then divided by 12 to arrive at a monthly ‘surcharge’: $29.19.
(($21.76 + $36.62) x 6 bill cycles) / 12 months = $29.19 per month
But the bill shows a pass-through refuse charge of double that: $58.38. It is a mistake of arithmetic because the landlord overlooked the city’s bimonthly billing cycle?
Second, where did the $350.28 total for refuse on the city’s bill come from? Again with the schedule of taxes and fees in hand we can take that bimonthly refuse total of $58.38 and divide it into the bimonthly refuse bill of $350.28. We wind up with 6 because this is a 6-unit property. The $350.28 total for the refuse and alley fees is the bimonthly billing for six units in the building:
$350.28 / (($21.76 + $36.62) = 6 (apartments)
That’s a long way to go to arrive at an accurate per-unit monthly refuse charge and to figure out the bill forwarded by the landlord. Wouldn’t it be easier if a tenant could simply verify the per-unit allowed refuse charge by, say, checking the city’s website?
Is your landlord passing-through a substantially higher charge? Contact the city’s Rent Stabilization office at (310) 285–1031 and get in touch with Renters Alliance too because are interested to hear from tenants who have been overcharged for utilities.
It’s Not Just the Money: It’s the Notice!
Some landlords don’t pass through a refuse charge at all. But those that do should pass it through to tenants lawfully. And that includes proper notice.
Let’s turn back to the rent stabilization ordinance. Subsection 4–6–6(B) is very specific about how the landlord must notice the new pass-through charge:
(1) Provide written notice, by registered or certified mail, to all tenants thirty (30) days in advance of the imposition of the pass through, of the provisions of this section, that the pass through is not part of the base rent, that the refuse fee may be increased by the City, and any other information required to be given by the Rent Stabilization Office. (2) Provide all tenants with a copy of the landlord’s utility bill which sets forth the appropriate refuse fee and the basis for the calculation of the pass through.
If your landlord has not properly notified you of a refuse charge according to those two conditions you should contact the city’s Rent Stabilization office at (310) 285–1031. There may even be tenants who have long been paying the refuse charge but were never properly notified. We will be interested to know what the Rent Stabilization office has to say about that!
First, it took quite a bit of time to identify the proper per-unit refuse and alley fees. They are buried n the city’s Schedule of Taxes and fees. And it was more trouble than it should be to find the phone number for the city’s utility billing office (310-285–2436). When we reached billing, those folks could only say is that the utilities are billed bimonthly and that the figure (for all the units) was correct. They were no help to the tenant who questions the per-month fee added to the rent.
Next contacted the Rent Stabilization office to ask, Are we on the right track with our $29.10 figure? Staff there would simply not confirm it. It should not be so difficult to asses whether the landlord’s refuse pass-through charge is correct!
Second, looking more closely at the refuse and alley fees suggests shows are regressive: the same per-unit fee will apply to a single-person household that generates far less trash than a large household. Each pays the same charge when it is passed-through by the landlord. Why not index the refuse charge to number of bedrooms, say? Then the city would be sending the right message: those who generate more solid waste will shoulder their proportional share of the cost to dispose of it.
Third, having tenants pay for an alley maintenance fee begs a question: Are we getting our money’s worth? Multifamily alleys service many more households than do single-family alleys. And they are very much worse for the additional usage. Often our alleys are a shambles. Take a look at the 200 block Reeves-Canon alley: are we getting our money’s worth?
*The rent stabilization program website points out that the refuse charge may be passed-through “in addition” to the rent. That is correct: the base rent for each unit is the contract rent at the inception of tenancy plus any lawful increases since. Any pass-through charge(s) is not included in the base rent and a rent increase will not apply to the pass-through charge. However the city’s website incorrectly identifies the Chapter 5 rent stabilization ordinance sections that apply to the refuse pass-through. The correct section is 4-5-309 (not 4-5-307 and 4-5-308) and for a tenant’s convenience we actually link it!