If you own rental properties in LA City and are under the L.A. Rent Stabilization Ordinance then you should have already paid the registration fee for each one of your units at $24.51 (which was due on February 29, 2017). But did you know that by serving a 30 day notice you are able to pass on half of the fee to your tenants? Be aware though that as of 2017, this fee can now only be collected during the month of August. Let’s get into the LA City rent stabilization details.
How to Collect Half of the Registration Fee
The LA Rent Stabilization Division permits landlords to pass on half of the registration fees to their tenants by following two simple guidelines.
- You MUST hand the tenant a proper 30 day notice that your intent is to collect $12.25 in addition to the rent due for the following month. You must also hand a copy of the Rent Stabilization registration certificate to provide proof that you paid the fee.
- You can only collect this fee from your tenant during the month of August. It is strongly recommended that you provide the notice along with the receipt for payment for July rent (usually the first week of July).
Recover your SCEP (Systematic Code Enforcement Program) Fee too!
Landlords can also recover the full amount of the SCEP fee ($43.32 per rental unit) provided that the landlord has paid the fee to HCIDLA (Los Angeles Housing + Community Investment Department) and provides the tenant with a 30 day written notice and at a monthly surcharge rate of $3.61. A 30 day change of terms of tenancy will take care of the notice by providing information on why the rent has increased and that the tenant has the option to pay it all at once but will not be eligible for a refund if the tenant decides to move out.
Something else to keep in mind is that if your building is not under rent control, you can have the tenant pay the fee upfront after serving the proper notice.
Allowable rent increase through June 30, 2018
According to the Los Angeles Rent Stabilization Ordinance, or RSO, the landlord is allowed to make 1 annual rent increase (once every 12 months) at the rate of 3% (valid from July 1, 2017 – June 30, 2018).
Los Angeles City Security Deposit Interests
The interest rate set by the Rent Adjustment Commission for 2018 is 0.07%. Remember that landlords with housing subject to RSO have two options of determining the interest amount. The first option is to use the established interest amount and pay it to the tenant either monthly or yearly. The second option is use what the security deposit interest actually accrued. If the landlord decides to go with the latter, he or she must provide copies of the bank statement that show the interest earned.