Under the City of San Jose Rent Ordinance, any increase greater than eight percent in a twelve month period is subject to mediation and arbitration. This does not apply to two unit buildings, single family homes and condominiums. Nor does it apply to new construction built after September 7, 1979. Additionally, where a landlord has not increased the rent for two years, the rent can be increased twenty-one percent without triggering mediation and arbitration. Once a unit becomes vacant the landlord may increase the monthly rent to whatever the market will bear.
A tenant affected by a rent increase greater that eight percent (or twenty-one percent in certain cases) may file a petition for mediation and arbitration. The petition must be filed before the rent increase takes affect.
The hearing officer will determine whether the rent increase is reasonable looking at (1) whether the landlord is receiving a fair return, (2) whether the increase was arbitrary, capricious or unreasonable, and (3) whether the tenant will suffer an unjustified economic hardship. The hearing officer can also take into account the quality of the rental unit, including habitability issues and health and safety violations.
Unlike other rent ordinances, the San Jose Rent Control Ordinance does not have strict eviction protections. Instead the statute states that a landlord cannot wrongfully evict a tenant or retaliate against a tenant after a tenant exercises rights to protected rent. The rent ordinance has a minimum civil penalty of $10,000, including moving costs, attorney fees and court costs.
San Jose landlords who are not in compliance with minimum requirements for habitable premises may not be allowed to collect or increase rent and may be liable for civil penalties, including punitive damages and emotional distress damages. The Code Enforcement Division of the San Jose Department of Planning will inspect residential units for serious health and safety code violations. Rodents, no heat, leaks, mold, sewage issues, and electrical problems are the types of issues that must be remedied. Where a landlord has failed or refused to make such repairs, San Jose Code Enforcement will issue a citation.