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APARTMENT LIFE

New owner wants a major rent hike

January 28, 2007|Kevin Postema | Special to The Times

Question: Can the new owner of a five-unit apartment building under Los Angeles' rent control ordinance raise rents to market after many years of below-market rates?

Although both my mother and I are on the deed, she did all the management of the property and didn't raise the rents for years.

Now that I am managing the building, I want to get the rents up. She recently passed away. Is that considered a change of ownership?

Answer: Even if it is considered a change of ownership, the rents cannot be raised. When it comes to raising rents under the L.A. ordinance, "If you don't use it, you lose it."

You can raise the rents every year on the anniversary date of your tenants' last increases with 30-day notices.

The current rent increase amount is 4% until July 1. It increases to 5% at that time. If you have rent increases that can be implemented before July 1, you can send out the rent increase notices for those tenants 30 days before their due dates for the 4%, or you can hold off on them and wait until June 1 to give 30-day notices of 5% increases that take effect on July 1.

Generally, when units covered by the ordinance become vacant and new tenants move in, then you can raise the rents to market levels.

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Section 8 rentals: The pros and cons

Question: I own a rental house in Hesperia. I am considering renting to a Section 8 tenant. What are the advantages and disadvantages of this?

Answer: The primary advantage of renting to a Section 8 (government subsidized) tenant is that you will get at least the government's portion of the rent (usually about 70% of the total) even if the tenant doesn't pay his or her part.

The disadvantages include the fact that the house will be inspected by Section 8 personnel, who often hold owners to higher habitability standards than they might otherwise encounter, and extra paperwork.

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Make way for the newlyweds

Question: My mom owns and lives in a duplex that is covered by Los Angeles rent control. I am getting married in May, and Mom would like for the tenants who are living in the other half of the duplex to move out so that my spouse and I can move in after the wedding.

The tenants have minor children, and we were told that under the ordinance, we would have to pay them $8,000 to move. If we live there for a year and then move out, can my mother raise the rent to the market level for the next tenants?

Answer: She cannot re-rent the unit at market rates when you move out. Although tenants are only rarely "evicted" in these scenarios, your mother must file a Landlord Declaration of Intent to Evict with the Los Angeles Housing Department to do so.

If the tenants do not move voluntarily, they may be evicted and some money from their relocation assistance payment may be deducted to pay for it.

The amount of the relocation assistance payment is $8,550, not $8,000. Qualified tenants include seniors 62 years old or older, the disabled and renters with one or more minor dependent children. Others get $3,450. The amounts of those relocation assistance payments rise to $8,950 and $3,600, respectively, as of July 1.

After you have lived there for one year and then move out, the rent your mother can charge new tenants is the amount that the tenants who preceded your tenancy paid plus any increases that were allowed while you occupied the unit.

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Kevin Postema is the editor of Apartment Age magazine, a publication of the Apartment Assn. of Greater Los Angeles, an apartment owners' service group; aptlifeaagla@aol.com.

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