City of Beverly Hills allows residential multifamily landlords to pass through to tenants the bimonthly cost of refuse collection and alley maintenance charged by the city. As of fiscal year 2022-23 those costs can add $40.36 to the monthly rent if passed-through by the landlord. And the landlord can pass it through unless the rental agreement explicitly says that the landlord will pay for refuse. While some tenants already pay for refuse, many more will be surprised to learn that an unexpected $40 can be added to the rent for a basic service like trash collection that should come with the housing.
When we first posted this explainer about refuse charges (in 2019) the city billed residential multifamily landlords $58.38 bimonthly for solid waste collection and alley maintenance. Collectively these costs are known as the ‘refuse fee surcharge’ in our rent stabilization ordinance which does allow the cost to be passed through to tenants as a surcharge on top of the monthly rent.
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.H.M.C. 4–6–8 (REFUSE FEE SURCHARGE)
In 2019 the refuse charge amounted to $29.19 per month for each dwelling unit. Most landlords didn’t pass it through to tenants because it was a relatively minor cost of doing business. Moreover the cost hadn’t changed in many years and so it didn’t attract much attention. However the city’s rates for solid waste collection and alley maintenance are on the rise. This year landlords will pay the city $40.36 monthly per dwelling unit, which is 38% more than in 2019. That is just the beginning!
In 2020 City Council agreed to raise the rates for both solid waste collection and alley maintenance and phase-in those rates over a five year period. Rates would rise for all city customers but rise much more steeply for multifamily customers (landlords). Under the proposed rate hike, for example, the bill for multifamily solid waste collection — one component of the refuse fee — will rise 50% faster than for single-family customers in each year of the proposed 5-year phase-in period. Once the rate hike is fully phased-in, multifamily customers will pay double what they paid for solid waste collection in 2019. Single-family customers would see a more moderate 60% increase.
Multifamily customers would see the city’s charge for alley maintenance rise even more steeply. By the end of the phase-in period multifamily customers will pay 170% more than in 2019. Again single-family customers get a relative break because their alley maintenance cost will rise more moderately. So at the conclusion of the five-year phase-in period, multifamily customers will be paying eight times more than single-family customers for alley maintenance….even though they sit on comparably-sized lots on either side of the same alley. Eight times the cost!
Renters Alliance protested the disproportionate effect of the proposed rate hike in an open letter to City Council. But only Councilmember Wunderlich questioned why the rate hike should fall so disproportionately on multifamily customers and, in the end, City Council approved it.
We knew that a steep rise in the refuse charge for multifamily landlords would prompt some of them to pass-through that cost to tenants. We went into detail about that inevitability in two posts: Solid Waste Services Rates are Rising and You May Pay and Proposed Solid Waste Rate Increase Returns to City Council.
Now that the rising refuse charge is beginning to bite and landlords are asking the Rent Stabilization Office about passing it through.
Tenants should understand when the refuse charge can and can’t be passed-through; and be able to recognize if the charge when passed-through is accurate. In no circumstance can a tenant pay more than the landlord’s cost for refuse.
What You Need to Know About the Refuse Fee Surcharge
The refuse fee surcharge pass-through is regulated by rent stabilization ordinance sections 4–6–8 (for Chapter 6 tenants) and 4-5-309 (for Chapter 5 tenants). For rent-stabilized tenants in Beverly Hills:
- Landlords may pass on 100% of the cost of the city’s refuse charges (called a ‘refuse fee surcharge’) so long as the rental agreement doesn’t say that the landlord pays for refuse. If the rental agreement says the landlord pays for refuse, then that is a provision that can’t be modified unilaterally by the landlord but instead only by mutual agreement with the tenant. This holds true when a tenancy has transitioned to month-to-month because the terms of the original agreement are still in effect.
- If the rental agreement does not prohibit it then the landlord may pass-through the cost of refuse to a tenant who does not currently pay for refuse. However the landlord must 1) provide written notice of the new pass-through by registered or certified mail no fewer than thirty days in advance of charging for refuse; and 2) provide the tenant with a copy of the landlord’s utility bill. No tenant can pay more than the landlord’s own cost for refuse because it is a pass-through cost.
- The refuse charge is composed of separate fees for solid waste collection and refuse alley maintenance. The current fees are published by the Department of Finance on the Taxes, Fees and Charges webpage and updated on July 1st each fiscal year (download the FY2022-23 fee schedule).
- Refuse is billed by the city bimonthly on a per-unit basis except for those multifamily buildings that have trash picked up curbside (instead of using alley cans). This service is billed by the city on a per-square foot basis and is apportioned to tenants according to a formula which must be provided to tenants (along with the utility bill). Because the refuse is a bimonthly charge, it must be divided by two in order to determine the correct monthly pass-through cost.
Real World Example: The Challenge of Understanding the Pass-Through
A few years ago a tenant provided her notice of rent increase which included a line for the refuse pass-through. The notice also included a copy of the landlord’s utility bill. This tenant asked Renters Alliance whether the refuse charge was calculated correctly. We couldn’t square the figures until we did some digging.
The challenge for this tenant is to understand how the landlord’s $350.28 bimonthly refuse bill translates into a monthly charge that can be lawfully passed through. Because the landlord didn’t explain how the $58.38 refuse pass-through was determined, we had to work through a few steps to understand it.
First we went to the Schedule of Taxes and Fees to determine the current bimonthly per-unit fees for alley and refuse. According to the fee schedule the correct fees for alley refuse are $21.76 and $36.62 respectively. That equals a total bimonthly refuse charge of $58.38 per dwelling unit that would be paid by the landlord.
21.76 + 36.62 = 58.38.
Again these are the city’s charges. Next we took the landlord’s refuse bill ($350.28) and divided it by the number of units at that property (6). That produced a bimonthly total refuse charge of $58.38.
$350.28 / 6 = $58.38.
At first glance the refuse line item on the landlord’s notice accurately reflects the city’s charge. That is proper because 100% of the city’s refuse charge can be passed through! However if it is passed through as a monthly charge, the bimonthly charge must be divided by two.
58.38 / 2 = 29.19.
The correct monthly refuse pass-through is $29.19. We had to go some way to figure out that the landlord was double-billing this tenant (and probably all six households at that property) but we couldn’t have done so without an understanding of how the refuse pass-through charge is supposed to be calculated. After all the city’s refuse bill would seem to support for the landlord’s $58.38 monthly pass-through…until you recognize that it is a bimonthly bill.
Wouldn’t it be easier if a tenant could simply verify the allowed per-unit refuse charge by consulting the city’s website? Yes it would. But neither the finance office nor the city’s Rent Stabilization Office provides that information. In fact there is no information about any pass-through on the RSO website.
In this instance we were able to counsel this tenant that the landlord was doubling the allowed refuse pass-through and urged this tenant to inform the landlord — and to pursue any past overcharges through the Rent Stabilization Office (310-285–1031). If you suspect that your landlord is passing-through a substantially higher charge for refuse than is allowed then please get in touch with Renters Alliance.
We put this explainer together because tenants need to know about the refuse pass-through but the city isn’t informing us.
We expect more landlords will pass through the refuse to charge once they realize that they can pass it through…at least to certain tenants. And it is very likely that they will do so for all new tenants. So it is important that all tenants understand how to understand when a refuse charge can be passed-through and how it should be calculated. (In this explainer we didn’t cover curbside refuse charges because they will vary by property.)
The lesson here is that if a refuse charge already appears on the rent bill, please look twice to make sure that it is being calculated properly. If the landlord begins to pass it through, please make sure that it is properly noticed and calculated. If there are any errors you will be able to get back any overcharge.
And second, our Rent Stabilization Office provides virtually no information that would help a tenant to understand whether and how the refuse charge can be lawfully passed-through to tenants. Undoubtedly some are overpaying for refuse (as did this tenant) and it should be the city’s responsibility to inform tenants so that we are not at a disadvantage relative to the landlord. In this regard our RSO office is too often asleep at the switch.
Final note. When we first published this refuse fee explainer in 2019 we reached out to City Hall to confirm the amount of the refuse fees charged to landlords that could be passed-through. We had them before us in black and white because they are listed in the city’s Schedule of Taxes and Fees. But we couldn’t get confirmation from City Hall. If we didn’t know where to look for that information and didn’t know how to calculate the monthly refuse pass-through, we too would be looking at the landlord’s rent-increase notice and assume that the $58 monthly pass-through was correct. After all the landlord must know his business, right?