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By Jeremy B. Fancher
May 4, 2023
UPDATE: The Tenant Protection Ordinance was signed into law by Mayor Gloria on May 25th, 2023. The ordinance went into effect on June 24th, 2023. The notice required under this ordinance is due on September 22, 2023. The final language of the ordinance can be found HERE.
On April 25, the City of San Diego overhauled a major 19-year-old tenant protection ordinance known as the Tenants’ Right to Know Regulations. The new ordinance entitled “Residential Tenant Protections” (the “RTP Ordinance”) introduces a series of changes that directly impact anyone who owns or manages residential rental properties in the city. It went into effect on June 24, 2023.
- Applies to most residential dwellings and units
- Applies to all residential leases over 3 months, starting on day one of lease
- Updates at-fault and no-fault “just cause” eviction standards for residential tenants
- Mandatory tenant relocation assistance of 2-3x monthly rent
- Regulates buyout agreements
- Requires landlords to send written notices on existing leases to all covered tenants
- New remedies available to tenants in court, including money damages and injunctive relief
- Does not alter statewide rent cap imposed by the 2019 Tenant Protection Act
Summary of Changes
| 2004 Tenants’ Right to Know Regulations | 2023 RTP Ordinance | |
|---|---|---|
| Timeframe | • 2+ year tenancies • Protections beginning after two years | • 3+ month tenancies • Protections beginning on day one of tenancy |
| Exemptions | • Institutional Facilities • Government-owned or subsidized units • Certain owner-occupied homes • Rental units in hotels, motels, etc. • Mobilehomes • Transient occupancies | • New: Single-family homes, including mobilehomes, that are separately titled from any other dwelling unit* • New: Housing less than 15 years old (has been issued a certificate of occupancy within previous 15 years) • Certain owner-occupied homes and duplexes • Dormitories, residential care facilities, etc. • Mobilehomes *Requires notice to existing tenants |
| Relocation Assistance | • None | • Applies regardless of tenant income or length of tenancy • Direct payment equal to two months’ rent OR three months if tenant is disabled or a senior; or • Rent waiver equal to same amounts above |
| Tenant Right to Renew | • None | • Applies to most no-fault evictions • If property offered for rent within 5 years of termination, landlord must first offer to tenant • Tenant must provide written notice of desire to receive renewal offer within 30 days of termination notice • Landlord may use standard screening criteria |
| Termination of Tenancy | • Only just cause terminations, including withdrawal of rental structure from rental market and owner- or close family-occupancy | • No-fault just cause: • New: Owner- or close family-occupancy ONLY if lease expressly allows • Withdrawal of property from market • New: Per government or court order • New: Demolish or substantially remodel (subject to conditions discussed below) • At-fault just cause similar to 2004 ordinance |
| Notice Requirements | • Notice required only when landlord wishes to terminate tenancy | • For all tenancies: Must provide specific written notice and a Tenant Protection Guide in all new leases and to existing tenants within 90 days • For at-fault termination of tenancy: 3-day written notice and opportunity to cure followed by 3-day notice to quit without opportunity to cure • For no-fault termination of tenancy: 30 or 60 days (Cal. Civ Code 1946.1) notice including right to relocation assistance (direct payment or rent waiver) |
| Remedies/ Penalties | • No direct remedies available to tenants • Tenants may raise landlord’s violation of ordinance as affirmative defense in action by landlord to recover possession of a rental unit | • Direct statutory remedies available to tenants • Liability for wrongful eviction not less than 3x actual economic damages • 3x relocation assistance (plus actual economic damages) for failure to provide relocation assistance • Includes injunctive relief, money damages and punitive damages • Failure to comply with RTP Ordinance may void notices of termination |
| Buyout Agreements | • No guidance | • May not provide less relocation assistance than what is available under federal, state, or local law • Failure to strictly comply voids buyout agreement • Must be in writing |
Scope of RTP Ordinance
The new ordinance is limited to evictions and does not alter existing state law applicable in the City of San Diego. Specifically, the Tenant Protection Act took effect on January 1, 2020 and caps rent increases statewide for qualifying units. In San Diego, annual rent increases are limited to 10% of the lowest rent charged at any time during the 12 months preceding the increase. Rent increases are permitted only twice over any 12-month period. Rent increases require a 30-day notice. There is, however, no cap on how much a landlord can raise the rent from one occupant to the next. And, certain properties are exempt from the Tenant Protection Act, including condos and single family homes not owned by a real estate investment trust, corporation, or corporation-owned LLC, mobilehomes, commercial properties and buildings constructed in the past 15 years, among other exemptions.
New Exemptions
The RTP Ordinance expands the scope of exemptions (§98.0703) available under the 2004 City of San Diego ordinance. Residential rental properties that are alienable separate from the title to any other dwelling unit (e.g., single-family homes, condominiums, mobilehomes) are exempt from all requirements, provided that the landlord is not a real estate investment trust, a corporation, a limited liability company (LLC) with at least one member being a corporation, or the management of a mobilehome park. Note that properties owned by an LLC with individuals as members will be exempt. Landlords must provide specific written notice to tenants for this exemption to apply.
Housing that has been issued a certificate of occupancy within the previous 15 years (unless it is a mobilehome) is exempt. While it is not clearly defined, this likely means future new housing will enjoy a 15-year exemption.
Housing subject to affordable housing subsidies for families of very low, low, or moderate income (as defined in California Health and Safety Code section 50093) is exempt. Notably, Section 8 housing is not exempt.
Mobilehomes subject to the Mobilehome Residency Law are exempt. This law is outside the scope of this article, but details of the law and its requirements can be found here: 2003 MOBILEHOME RESIDENCY LAW (ca.gov). Certain landlord-occupied properties are exempted, generally where the landlord maintains their principal residence. This includes properties where the tenant shares bathroom or kitchen facilities with the landlord, single-family residences in which no more than two bedrooms or accessory dwelling units (ADUs) are leased, and duplexes when the landlord occupies it at the beginning of the tenancy.
Updated Just Cause Requirements
At-Fault Just Cause
In line with the 2019 California Tenant Protection Act, just cause now includes two categories: at-fault and no-fault. At-fault just cause (§98.0704(a)) includes conventional reasons such as failure to pay rent, refusal to renew lease, breach of a material term of the lease, causing a nuisance, criminal activity and committing of waste. There are 12 total categories under the new ordinance, expanding from 5 categories under the 2004 Tenants’ Right to Know ordinance. The RTP Ordinance continues to allow landlords to demand that tenants sign a lease renewal after the initial lease has expired, so long as it is on similar terms and for a similar duration. Refusal to sign creates an at-fault just cause for eviction. Additional categories include a criminal threat, regardless of where it was made, directed at the landlord or any other tenant. The definition of a criminal threat can be found here. An additional new category is a tenant that is an employee, agent, or licensee of the landlord who fails to vacate the property after their termination.
No-Fault Just Cause
The overhaul brings San Diego in line with state law. Under both the Tenant Protection Act and RTP Ordinance, no-fault just cause includes owner or close relative move-in, withdrawal from the rental market, compliance with a court or government order, and substantial remodel or demolishment of the property.
Substantial Remodel/Demolishment
With respect to substantial remodel or demolishment, San Diego added requirements on top of the state law. An application for the required permit must be posted at the property within three business days of submittal. The permit must be issued first, before a landlord is permitted to serve a notice to terminate the tenancy. And the tenant must be served a copy of the permit with the written termination notice. This notice must be signed under penalty of perjury and state the reason for termination, scope of work, and why it would require the tenant to vacate for at least 30 days and cannot be performed with the tenant in place. Cosmetic improvements alone, such as painting, decorating or minor repairs are specifically excluded.
Intent to Occupy
In certain circumstances, landlords are permitted to evict tenants to occupy the rental property. Spouses, domestic partners, children, grandchildren, parents, and grandparents of the landlord are included, so a landlord is not required to personally occupy the rental property. However, unless the tenant consents, the lease must expressly permit the landlord to unilaterally terminate the lease for this purpose. If existing leases do not contain this term, they may be added to a new or renewed lease. To add this provision, landlords may make a written demand on the tenant to execute a written extension or renewal of the lease if the original lease has expired. The renewal or extension must be offered on substantially similar terms for a substantially similar duration. The RTP Ordinance expressly allows a landlord to add a unilateral intent to occupy provision, as it will be considered a substantially similar term. Refusal to sign constitutes an at-fault just cause for eviction.
Notice Requirements
There are multiple notice requirements under the RTP Ordinance. First, a landlord must provide a specific written notice in no less than 12-point font for any new or existing lease falling under the ordinance. The contents of the notice are provided in Section 98.0705(a) and can be accessed here. The notice must also include a Tenant Protection Guide, which will be prepared and made available by the City of San Diego. For existing leases, landlords have 90 days to provide the notice, meaning they must be delivered by August 23, 2023. For leases entered into after May 25, 2023, the landlord must provide the notice at the time of signing.
Second, for an at-fault just cause termination of tenancy, the RTP Ordinance requires a 3-day written notice to cure followed by a 3-day notice to quit if the violation is not cured. (§98.0706(a)). The initial notice is governed by state law. (Cal. Civil Code 1161(3)). It must include a description of the violation and provide an opportunity to cure.
Third, for a no-fault termination, written notice in no less than 12-point font must be provided to the tenant at least 30 or 60 days before the proposed date of termination. The timeframe is governed by California Civil Code Section 1946.1. If the tenant has resided at the property for more than one year, the notice period is 60 days. It is reduced to 30 days if it has been less than one year. In addition, only 30 days is required if the dwelling or unit is alienable separate from the title to any other dwelling unit, the landlord has contracted to sell it and established an escrow, the purchaser is a natural person or persons, notice is given no more than 120 days after the escrow has been established, notice was not previously given to the tenant pursuant to 1946.1, and the purchaser intends to reside at the purchased property for at least one full year after the termination of the tenancy. Full details can be found here: 1946.1(d).
The notice must state a description of the basis for termination, the tenant’s right to relocation assistance under the RTP Ordinance and state the tenant’s right to receive an offer to renew the tenancy and that the tenant has 30 days from the notice date to inform the landlord in writing of their desire to receive such an offer (if applicable). Failure to strictly comply with any of the above notice requirements will render void any notice of termination. Tenant remedies are described in more detail below.
Mandatory Relocation Assistance
The City of San Diego will now require landlords to pay relocation assistance to tenants affected by no-fault evictions. (§98.0706(c)). It applies to most no-fault evictions, but there are two main exceptions: evicting based on intent to withdraw the unit from the rental market and evicting under a government or court order if the ordering agency determines that the tenant is at fault for the conditions triggering the need to vacate.
For all other no-fault evictions, relocation assistance equal to two months’ current rent must be provided in the form of either a rent waiver or direct payment at landlord’s election. If the tenant is disabled or over the age of 62, the assistance is increased to three months’ rent.
If a landlord elects to provide a direct payment to the tenant, the initial notice must state the amount and that the landlord has 15 days from the notice date to provide the payment. If a landlord elects to waive rent instead, the notice must state the amount of rent waived and that no rent is due for the final corresponding months of the tenancy.
Tenant’s Right to Renew
For a no-fault termination of tenancy, unless for the purpose of removing the rental property from the market, a landlord is required to first offer to lease the property back to the displaced tenant if it is offered for rent within 5 years of the eviction date. The requirement only applies if the tenant responds to the initial termination notice within 30 days and provides a mailing or email address to which the landlord can send the offer. The right to renew is not absolute. A landlord has the right to use industry accepted screening methods when offering the renewal. The minimum screening criteria must be included in the written offer for the new tenancy.
Buyout Agreements
The RTP Ordinance introduces specific requirements on offering buyout agreements to tenants (§98.0707). Landlords are now required to provide a written disclosure to tenants before making a buyout offer, which includes the tenant’s rights and relocation assistance eligibility. The buyout agreement itself must meet certain requirements, such as being in writing and including specific statements in bold letters. (98.0707(a)). A buyout agreement may not be for less than any amount of relocation assistance owed to the tenant under federal, state, or local law and would be automatically void. More generally, any failure to strictly follow the requirements for buyout agreements renders the agreement void. And the buyout agreement is void if it purports to waive or limit a tenant’s rights under section 98.0707.
Retaliation by Landlords
San Diego will now prohibit retaliation against tenants who exercise their rights under the law (§98.0708). Landlords must be cautious not to engage in any retaliatory behavior, as this could lead to legal action and potential damages. Retaliation is not defined in the ordinance and may be broadly construed.
Tenants’ Legal Remedies
The RTP Ordinance provides tenants with various legal remedies in case of violations (§98.0709). This includes the ability to file a civil action against a landlord for non-compliance with the ordinance’s provisions. A tenant filing suit may seek injunctive or equitable relief, money damages, and punitive damages against the landlord.
If a landlord attempts to recover possession of a residential property (or actually recovers possession) in violation of any provision of the RTP Ordinance, the landlord is liable for wrongful eviction for damages of at least 3 times the actual economic damages. In addition, should a landlord fail to provide requisite relocation assistance, the landlord is liable for damages of at least 3 times the required relocation assistance (totaling 6-9 months’ current rent) plus 3 times the actual economic damages.
As to any civil action between a landlord and tenant falling under the RTP Ordinance, the prevailing party is entitled to recover costs and reasonable attorney fees even if they are not provided in the lease agreement. Remedies under the RTP Ordinance are cumulative and in addition to any other remedies available. And, the City of San Diego may also enforce the RTP Ordinance, including civil and criminal remedies.
Conclusion
If you have any questions about the new Residential Tenant Protection ordinance, please reach out to Jeremy Fancher at jfancher@hechtsolberg.com or (619) 239-3444 ext. 1105.