Rental Unit Registration: What Does It Mean for Tenants? [Updated]

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. Registration starts in January. After the registration period closes in spring, a 15-day appeal window opens. The city then sends each rent-stabilized household a ‘notice of rent amount reported by the landlord’ If the reported rent is the amount paid then no action is required; an incorrect rent amount should be corrected through an appeal. But this is also an opportunity to see if the paid rent is the lawful rent. Here’s what you need to know.

Timely rental unit registration allows the city’s rent stabilization office to monitor our local rental housing market, as we described in our commentary: Rental Unit Registration: the Foundation of Rent Stabilization. Landlords pushed-back hard on the creation of the registry five years ago with lawsuits. And even today some landlords are slow to register their rental units. Every rent-stabilized unit must be registered; only condominiums, single-family homes and newer rental properties are exempted from this requirement.

The Registration Process

The registration process begins with each landlord registering all of their non-exempt units no matter whether they are vacant, tenanted or owner-occupied.

Once registered, the occupant of that unit receives a mailed notice from the rent stabilization office asking the tenant to confirm the reported rent amount. The letter is titled, ‘Notice of Rent Amount Reported by Your Landlord,’ and it is addressed to ‘occupant’ because the city does not generally maintain identifying information for tenants.

If the reported base rent amount appears correct then the tenant need not take any further action. The rent amount as reported by the landlord will then be ‘certified’ as the lawful base rent for the unit. However if the reported rent is not correct, then tenant should take this opportunity to correct the reported rent amount through an appeal.

‘Appeal’ sounds formal but it only refers to the process by which the reported base rent amount is verified by the city. Tenants have a 15-day window to appeal, starting on the date of the notice.  Harbor no trepidation about appealing an incorrect reported rent: this is simply a procedural step.

Discrepancies Can Arise

Most discrepancies are attributable to landlord reporting error. It could be a mistake when entering the figures for every unit, for example, or the landlord has erroneously included in the reported rent some monthly cost of a housing service (like storage or parking). Some landlords are less professional about keeping records and reported outdated amounts.

Mistakes do happen. A discrepancy arising from a simple mistake once appealed by the unit tenant will most likely be corrected without further action. Then the tenant is again notified of the corrected, reported rent amount prior to certification.

Occasionally a substantial disagreement arises over the lawful base rent amount. Say the landlord inflates the rent roll for lenders during a refinancing. If the discrepancy cannot be easily resolved, then the matter is referred to an administrative hearing officer who will determine the lawful base rent based on evidence presented by landlord and tenant.

Miss the appeal window? Know that an incorrect base rent amount can be disputed at any time by the tenant or the landlord. It is just easier to resolve any discrepancy during the 15-day appeal window. Read more about the appeals process on the rent stabilization office appeals webpage.

How to Identify the Lawful Base Rent

‘Base rent’ refers to the contract cost of the housing exclusive of additional charge(s) for a utility, storage or other services. It is also exclusive of any pass-throughs surcharge (such as for refuse collection). In the rental agreement the base rent will be stated separately from any add-on charge(s).

Identifying the lawful base rent is different depending on whether the tenancy is under a fixed-term lease or if it has transitioned to a month-to-month periodic tenancy after the expiration of the lease. If there is a fixed-term lease in effect then the lease will show the base rent (again separate from ancillary charges).

For a month-to-month tenancy the lawful base rent is the amount that is stated in the original rental agreement plus lawful rent increases since it expired. To calculate the lawful base rent first identify the original base rent then sequentially calculate each subsequent lawful rent increase.

With complete rental records the rent history can be reconstructed using a spreadsheet or a simple paper ledger. However not everyone has kept accurate records. In such a case we suggest using payment receipts and bank records to reconstruct the rent increase history.

Keep in mind:

• A rent increases can be no greater than the percentage increase that was in effect at the time the rent increase was to take effect. The rent stabilization office can provide the historical percentages for calculating the correct dollar rent increase in any year. (Those percentages differ depending on whether the tenancy is Chapter 5 or Chapter 6.)
• The rent cannot be increased more than once in every 12-month period. Once the rent increase takes effect then the rent cannot be raised again for another 12 months.
• A rent increase must be formally noticed to the tenant in writing and hand-delivered or posted no fewer than 30 days before the rent increase is to take effect (35 days if mailed).

If a past rent increase was not lawful then it should be brought to the attention of the rent stabilization office during an appeal. If the base rent is indeed corrected then the city should claw back any over-payment going back at least three years. If you feel you are overpaying please contact the Rent Stabilization Department at (310) 285-1031 or by email at bhrent@beverlyhills.org.

This 15-day appeal window is the perfect time to sharpen that pencil!