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Hayward Rent Control

THE CITY OF HAYWARD’S RESIDENTIAL RENT STABILIZATION AND TENANT PROTECTION ORDINANCE

The City of Hayward’s new Residential Rent Stabilization and Tenant Protection Ordinance, which went into effect July 25, 2019, caps annual rent increases to a certain small percentage (“Residential Rent Increase Threshold”) and limits evictions to only those reasons enumerated under the law (“Just Cause for Eviction”).  The law also protects tenants from retaliation and harassment by their landlord, and prohibits discrimination against tenants based on their source of income. 

Are landlords required to notify their tenants about the Residential Rent Stabilization and Tenant Protection Ordinance?

Yes.  Landlords are required to notify their tenants about the ordinance within thirty days after its effective date of July 25, 2019.  Hayward, Cal. Mun. Code § 12-1.15.  A notice must be posted in the common area of the building or conspicuous location within the building.  Id.  Landlords are also required to notify all current tenants by providing them with a written notice that their unit is subject to the ordinance and by providing a current copy of the Residential Rent Stabilization and Tenant Protection Ordinance or City informational notice or handbook.  Id.  All new tenants must also be notified in writing by the landlord of the Residential Rent Stabilization and Tenant Protection Ordinance prior to entering into any oral or written rental agreement.  Id.  For both existing and new tenants, a document shall be executed by the landlord and tenant that states that the tenant has received the notice of the ordinance as required.  Id.  

What happens if the landlord fails to provide the tenant with the required notice of the ordinance?

If the landlord fails to provide a tenant with the required notice, the landlord will not be entitled to increase the tenant’s rent, and the failure to provide notice will be a defense to any action brought by the landlord to recover possession of the rental unit.  Hayward, Cal. Mun. Code § 12-1.15.   A Landlord may cure their failure to provide notice by giving it to the tenant before collecting any rent increase or initiating any action for possession of the unit.  Id. 

Can a tenant waive their rights under the ordinance?

No.  Terms in a lease or rental agreement, whether oral or written, that waives or modifies a tenant’s rights under the ordinance is against public policy and is void.  Hayward, Cal. Mun. Code § 12-1.20. 

ALLOWABLE RENT INCREASES

Which units are covered under the ordinance’s Residential Rent Increase Threshold?

Unless it falls under one of the exemptions below, all rental units with certificates of occupancy issued before July 1, 1979 are covered under the Residential Rent Increase Threshold section of the Hayward ordinance.  Hayward, Cal. Mun. Code § 12-1.04.  The properties covered under this section may only have their rent increased once per year and up to a certain small percentage.  

Properties that are not covered under the rent increase threshold are the following:

  1. Properties with certificates of occupancy issued after July 1, 1979.
  2. Single family homes and condominiums where the tenancy began after January 1, 1996.
  3. Mobile homes.
  4. Hospitals, extended care facilities, convalescent homes, nonprofit homes for the aged, or dormitories owned and operated by either an educational institution or a private organization.
  5. Motels, hotels, inns, tourist houses, rooming houses, and boarding houses; provided that such accommodations are not occupied by the same Tenant for thirty or more continuous days.
  6. Nonprofit co-operatives that are owned, occupied, and controlled by a majority of the residents.
  7. Units subsidized by any governmental agency or authority for term specified in written agreement with governmental unit, agency or authority.
  8. Accessory dwelling units if the primary residence is occupied by the property owner.
  9. Any residential real property that is alienable separate from any other unit or is a subdivided interest.  Id.

If you do not have rent-ceiling protection under the Hayward rent control ordinance, you may have protection under the State of California rent control statute.  Please click here to determine if you are covered by California rent control.

How much can a landlord increase the rent under the ordinance’s Residential Rent Increase Threshold?

Effective July 25, 2019, landlords can only increase a tenant’s rent up to 5% once in a twelve-month period.  Hayward, Cal. Mun. Code § 12-1.05. 

However, tenants should be aware that there are some circumstances where the 5% threshold does not apply.  Id.  Below are ways that a landlord may exceed the 5% threshold or pass through certain additional costs to the tenant:

  1. Unit Voluntarily Vacated: The rent may be raised beyond the allowed threshold amount if the unit was voluntarily vacated.  With some narrow exceptions found in Section 12-1.06 of the ordinance, there is no limitation on the amount of initial rent a landlord can charge when re-renting a vacant unit. 
  2. Eviction: The rent may be raised beyond the allowed threshold amount if the tenants were lawfully evicted from the unit. 
  3. Prior Lease: The threshold shall not apply if it would violate the terms of a lease that was entered into on or before July 25, 2019.
  4. Government-Utility Pass Through: The landlord may pass through an increase in costs of a utilities such as garbage, gas, electricity, and water.  If the increase in cost is more than 1% of the tenant’s existing rent, the landlord is required to provide the tenant with documentation supporting the increase amount.  If documentation is not provided, the tenant may file a petition with the Rent Review Office to determine if the increase is allowed.
  5. Capital Improvements: The landlord may petition the Rent Review Office to impose a pass through for capital improvements that were completed within two years of the filing of the petition.
  6. Banked Increase:  A landlord may add up prior allowable rent increases that the landlord did not take for up to ten prior years.  Any banked increases that were not imposed expire after ten years.  The total of the banked rent increases per year cannot exceed 10%.  A tenant that receives a banked increase above 10% may file a petition with the Rent Review Office for review.  Id.

If a tenant receives a rent increase above the allowable amount, they should contact the Rent Review Office or consult with an experienced attorney to confirm the increase is permitted.

What information must the rent increase notice contain?

Rent increase notices shall state that the landlord considers the rent increase consistent with the ordinance, provide the reason for the increase, provide the contact information for the Rent Review Office, encourage the tenant to contact the Office for explanation of the ordinance, provide contact information for the landlord, and include a blank copy of a petition form the Rent Review Office.  Hayward, Cal. Mun. Code § 12-1.15.

In addition to rent, what types of fees are landlords allowed to charge tenants under the ordinance?

Leases often contain provisions that provide for the collection of certain fees such as late payment charges or costs to replace lost keys.  These types of fees can become excessive and can act to punish the tenant.  Hayward’s ordinance allows only the following fees to be charged:

  1. Key Replacement: Tenants cannot be charged a replacement fee for a key or security card that exceeds the actual replacement cost plus ten dollars;
  2. Bounced Check: Tenants cannot be charged a service fee for a bounced check that exceeds the amount allowed under California Civil Code Section 1719(a)(1), which as of this writing is up to twenty-five dollars for the first insufficient payment and up to thirty-five dollars for all subsequent insufficient payments.
  3. Late Payment: Tenants cannot be charged a fee for late payment of rent that is more than five percent of the monthly rent for each payment of rent that is three or more days late.
  4. Application Screening: Tenants cannot be charged an application screening fee in excess of the amount allowed under California Civil Code Section 1950.6(b), which as of this writing is no more than the out-of-pocket costs that the landlord incurs to conduct the screening of the tenant.  Hayward, Cal. Mun. Code § 12-1.05. 

What types of petitions may be filed with the Hayward Rent Review Office?

Both tenants and landlords may petition the Rent Review Office regarding all matters related to rent increases.  Hayward, Cal. Mun. Code § 12-1.07.

Tenants may file a petition for the following reasons:

  1. The Landlord did not comply with the notice provisions of the ordinance regarding a rent increase, banked increase, or governmental-utility services increase.
  2. To request review of a rent increase of more than the allowable 5%.
  3. To contest a banked rent increase calculation or a banked increase of more than 10%.
  4. To request review of an increase in governmental-utility services that is more than 1% of the tenant’s rent.
  5. To request a reduction in rent based on decreased housing services.
  6. To contest a capital improvement pass through.
  7. To request review of a rent increase when unit has existing health, safety, fire, or building violations.  Id.

Landlords may file a petition for the following reasons:

  1. To request a rent increase in excess of the 5% threshold or to request an increase in excess of 10% percent that is inclusive of banking and/or capital improvement costs to obtain a fair return.
  2. To request a pass through of capital improvement costs.  Id.

How much time does a tenant have to file a petition with the Rent Review Office?

Tenants have thirty days after service of a notice for rent increase, banked increase, government-utility services increase, or any notice of a unit’s applicability under the ordinance to file a petition for review.  Hayward, Cal. Mun. Code § 12-1.07.   When a tenant has not received notice of the unit’s applicability as required by the ordinance, the tenant also has thirty days from the day they knew of the noncompliance with the requirement to file a petition for review of rent.  Id.

What happens after a petition is filed with the Rent Review Office?

If the petition is accepted, the Rent Review Officer will notify the parties.  Hayward, Cal. Mun. Code § 12-1.07.  The tenant is required to make a good-faith attempt to meet and confer with the landlord within ten days after filing their petition.  Id.  Meet and confer means that the tenant is required to try to work it out with the landlord before the petition can move forward. If the parties cannot come to an agreement during that time, they will head to mediation.

A mediator will be assigned and the mediation will take place within thirty days of acceptance of the petition.  Id.  The parties may agree together to waive mediation for a tenant petition and go directly to arbitration.  Id.  Mediation may be unilaterally waived by the landlord when the landlord is the party that filed the petition.  Id.

Mediation is meant to be a non-adversarial process that assists the tenant and landlord in coming to a resolution of a dispute over the rent increase.  The mediator is a neutral (i.e. not on anyone’s side) third-party that will facilitate a discussion between the parties to reach an agreement, which will be a legally enforceable contract.

If the mediator determines that the parties have reached an impasse, the case will be referred to the Rent Review Officer for arbitration.  Id.  An arbitrator will be assigned within twenty-one days and the arbitration shall be held no more than thirty days after the assignment.   Id.  Both oral and documentary evidence may be presented, and the parties shall have the right to examine documents, and examine and cross-examine witnesses.  Id.  The arbitrator will then render their binding written decision within twenty days after the hearing.  Id.

Does a tenant have to pay the increased rent amount while their petition is pending to be heard with the Rent Review Office?

It is possible that a tenant may refuse to pay the portion of the rent increase that is in excess of the 5% threshold or refuse to pay the entire increase as long as they have a petition pending with the Rent Review Officer.  Hayward, Cal. Mun. Code § 12-1.07.

Before a tenant exercises their rights under the Tenant’s Right of Refusal section of the ordinance, though, they should speak to the Rent Review Office or a tenant attorney to help them determine if they meet the requirements to withhold rent and to determine if a partial or total non-payment is applicable to their circumstance.

JUST-CAUSE EVICTIONS

Which units are covered under the Just Cause for Eviction section of the ordinance?

Unless it falls under one of the below exemptions, all rental units in Hayward are covered under the Just Cause for Eviction section of the ordinance. Hayward, Cal. Mun. Code § 12-1.13.  Tenants that live in a unit covered under this provision cannot be evicted unless there is a just-cause reason under the law.  Id.

Properties that are not covered under the Just Cause for Eviction provision are the following:

  1. Units in a residential property where the owner of record occupies a unit in the same property as their principal residence and shares the kitchen or bathroom with the tenant.
  2. Hospitals, extended care facilities, convalescent homes, nonprofit homes for the aged, or dormitories owned and operated by either an educational institution or a private organization.
  3. Motels, hotels, inns, tourist houses, rooming houses, and boarding houses; provided that such accommodations are not occupied by the same Tenant for thirty or more continuous days.
  4. Nonprofit co-operatives that are owned, occupied, and controlled by a majority of the residents.
  5. Nonprofit facilities that providing short term treatment, assistance, or therapy for alcohol, drug, or other substance abuse and the housing is provided incident to the recovery program, and where the client has been informed in writing of the temporary or transitional nature of the housing. 
  6. Nonprofit facilities which provide a structured living environment that has the primary purpose of helping homeless persons obtain the skills necessary for independent living in permanent housing and where occupancy is restricted to a limited and specific period of time of not more than 24 months and where the client has been informed in writing of the temporary or transitional nature of the housing at its inception.
  7. Affordable housing acquisitions and rehabilitation development projects that receive a subsidy or funding from a federal, state, or local agency for the purpose of substantially rehabilitating a property and converting the rental units to affordable rental housing.  Id.

If you do not have just-cause eviction protection under the Hayward rent control ordinance, you may have protection under the State of California rent control statute. 

What are the reasons for eviction under the Just Cause for Eviction section of the ordinance?

Landlords may not evict a tenant that resides in a unit covered under this provision of the ordinance unless there is a reason under the law to do so.  Hayward, Cal. Mun. Code § 12-1.13. 

The following are the fifteen just-causes for eviction under the ordinance:

  1. Failure to pay rent;
  2. Breach of lease;
  3. Willful and substantial damage to the unit;
  4. Refusal to sign a new lease that is materially the same as the original lease;
  5. Nuisance;
  6. Unreasonably preventing landlord’s entry to the unit upon proper written notice;
  7. Temporary eviction for substantial repairs when necessary to bring the unit up to code compliance and the landlord has obtained any necessary and required permits to do so;
  8. Demolition of the unit when landlord has obtained any necessary and required permits to do so;
  9. Owner move-in or relative move-in;
  10. Owner move-in pursuant to lease provision allowing owner to move in;
  11. Tenant is convicted of using the unit for illegal purposes;
  12. Tenant is using the unit to manufacture, distribute, sale, or possession of a controlled substance as defined by California law;
  13. Breach of reasonable written rules and regulations that are applicable to all tenants;
  14. Lawful termination of tenant employment as resident manager; and
  15. Threats by a tenant to commit a crime that could result in death or great bodily harm to another person on the property and a police report of the threat has been made.  Id.

Are relocation benefits available for tenants that are displaced through a no-fault eviction under the Just Cause for Eviction section of the ordinance?

No.  At this time, the ordinance does not require landlords to pay relocation benefits to tenants that are displaced due to a no-fault eviction such as an eviction for owner move-in, demolition , or temporary eviction to conduct substantial repairs.

What are the requirements for an owner-move-in eviction in Hayward?

A landlord must own 51% of the property to do an owner-move-in eviction in Hayward.  If there is a comparable vacant unit available, the landlord must move into that unit. 

RETALIATION AND HARASSMENT

What is the Prohibition Against Retaliatory Eviction and Harassment Against Tenants section of the ordinance?

In an effort to further protect tenants from unjust and unlawful treatment, Hayward’s ordinance prohibits landlords from harassing and retaliating against tenants.  Hayward, Cal. Mun. Code § 12-1.12(b) and (c).  A landlord is in violation of the law when they do any of the following in bad-faith:

  1. Interrupt, terminate, or fail to provide housing services required by contract, housing, health, or safety laws, or threaten to do so;
  2. Fail to perform repairs and maintenance or threaten to do so;
  3. Fail to exercise due diligence in completing repairs and maintenance once undertaken or fail to follow appropriate industry repair, containment, or remediation protocols designed to minimize exposure to noise, dust, lead paint, mold, asbestos, or other building materials with potentially harmful health impacts;
  4. Abuse their right of entry into the unit;
  5. Influence or attempt to influence a tenant to vacate a rental unit through fraud, intimidation or coercion, which shall include threatening to report a tenant to U.S. Immigration and Customs Enforcement;
  6. Refuse to accept or acknowledge receipt of a tenant’s rent payment;
  7. Interfere with a tenant’s right of privacy;
  8. Offer payments to a tenant to vacate more than once in six months, after the tenant has notified the landlord in writing the tenant does not want to receive further offers of payments to vacate;
  9. Substantially and directly interfere with a tenant’s right to quiet and enjoyment their rental unit;
  10. Verbally or physically abuse or intimidate; and
  11. Retaliate in any manner against a tenant because of their having exercised a right under the law.  Id.

What units are covered under the Prohibition Against Retaliatory Eviction and Harassment Against Tenants section of the ordinance?

Unless it falls under one of the exemptions below, this section of the ordinance shall apply to all rental units.  Hayward, Cal. Mun. Code § 12-1.12(a).  This section shall not apply to the following types of units:

  1. Units in a residential property where the owner of record occupies the same property as their principal residence and shares the kitchen or bathroom with the tenant. 
  2. Hospitals, extended care facilities, convalescent homes, nonprofit homes for the aged, or dormitories owned and operated by either an educational institution or a private organization.
  3. Motels, hotels, inns, tourist houses, rooming houses, and boarding houses; provided that such accommodations are not occupied by the same Tenant for thirty or more continuous days.
  4. Nonprofit co-operatives that are owned, occupied, and controlled by a majority of the residents.  Id.

DISCRIMINATION AND SOURCE OF INCOME

What is the Prohibition of Discrimination Related to Source of Income section of the ordinance?

Under the California Fair Employment and Housing Act (FEHA), it is unlawful for a landlord to discriminate against a tenant based on their source of income.  The Prohibition of Discrimination Related to Source of Income section of the ordinance provides broader protections for tenants than the FEHA does as the ordinance contains a more expansive definition of “source of income”.  The ordinance defines source of income to include “rent assistance from any federal, state, local, or nonprofit administered benefit or subsidy program, among other sources.”  Hayward, Cal. Mun. Code § 12-1.14. 

The ordinance prohibits landlords from doing any of the following based wholly or in part on the tenant or prospective tenant’s source of income: refuse to enter into or renew a rental agreement, interrupt or terminate a tenancy, falsely represent the unit is not available for rent, require additional terms/clauses/conditions/restrictions, restrict a tenant’s access to facilities or services, or refuse to make repairs or improvements.  Id.

The ordinance also prohibits rental unit advertisements that discriminate based on a person’s source of income.  Id.

What units are covered under Prohibition of Discrimination Related to Source of Income section of the ordinance?

This section of the ordinance applies to all rental units in the City of Hayward except for units where the property owner or their family member resides in the same building as the tenant and shares a bathroom or kitchen facility with the tenant.  Hayward, Cal. Mun. Code § 12-1.14.

PENALTIES FOR A LANDLORD THAT VIOLATES THE LAW

What are the tenant’s remedies against a landlord that has violated the City of Hayward’s Residential Rent Stabilization and Tenant Protection Ordinance?

Tenants may bring a civil lawsuit against their landlord for violating the City of Hayward’s Residential Rent Stabilization and Tenant Protection Ordinance.  If a landlord demands, accepts, receives, or retains rent from the tenant that they are not entitled to the landlord will be liable for actual damages, and attorney fees and costs.  Hayward, Cal. Mun. Code § 12-1.18(a).  If the landlord has been found to have acted willfully or with oppression, fraud, or malice, they shall also be liable for a civil penalty of $500 or, if greater, three times the amount of money the landlord accepted, received, or retained in violation of the provisions of this ordinance.  Id.

Also, a landlord who fails to provide a tenant with any information, documentation, or notice required by the ordinance shall be guilty of an infraction and shall be fined up to a $100 for the first conviction, up to $200 for the second conviction, and up to $500 for the third conviction. Hayward, Cal. Mun. Code § 12-1.18(b).  Should a landlord be convicted of three or more times of violating this provision in a twelve-month period the landlord will be guilty of a misdemeanor and fined up to $1,000 or imprisoned for six months, or both.  Id.  Additionally, a landlord that does not provide the City with any information, documentation, or notice required by the ordinance will suffer the same consequences of fines and imprisonment.  Hayward, Cal. Mun. Code § 12-1.18(c). 

Damages for violation of the Prohibition Against Retaliatory Eviction and Harassment Against Tenants section may include an award for mental and/or emotional distress and/or suffering, or for minimum damages of $1,000, whichever is greater.  Hayward, Cal. Mun. Code § 12-1.12.  Damages will be tripled (trebled) if a defendant acted in knowing violation of, or in reckless disregard of this provision of the ordinance.  Id.  A landlord will also be held liable for an additional civil penalty of up to $5,000 for each violation of this section committed against a person who is a veteran, disabled, or aged sixty-five or over.  Id.  

Damages for violation of the Prohibition of Discrimination Related to Source of Income section of the ordinance may include monetary damages. Hayward, Cal. Mun. Code § 12-1.14.  For a violation that occurred during the tenancy, the court shall award the tenant three times the amount of one month’s rent.  Id.  For a violation that occurred prior to the tenancy, the court shall award the tenant three times the amount of one month’s rent that the landlord advertised for the unit at the time of the violation.  Id.

The City of Hayward’s Residential Rent Stabilization and Tenant Protection Ordinance is extensive and can be difficult for a tenant to navigate on their own. Tenants who believe their landlord has violated the ordinance should contact Tobener Ravenscroft to discuss their options with a tenant rights attorney.

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