Cudahy Municipal Code Art. II General Provisions

(1) A landlord shall not increase the rent for a covered rental unit by more than the change in CPI, or three percent, whichever is lower. For purposes of this section, “change in CPI” means the percentage change in the Consumer Price Index over the previous 12-month period ending in March of each year.

(2) A landlord shall not impose more than one rent increase for a covered rental unit in any 12-month period, calculated from the date the rent increase takes effect, unless otherwise permitted pursuant to this chapter.

(3) The department shall announce the annual maximum allowable rent increase effective as of July 1st of the same year, in accordance with the department’s procedures and guidelines.

(4) A landlord may impose an annual rent increase for any covered rental unit, as allowed in this section, only after providing at least 30 days’ written notice to the tenant of the rent increase pursuant to California Civil Code Section 827.

(5) A landlord may impose an annual rent increase only upon registering the rental unit with the city and paying any required annual registration fees pursuant to CMC 5.13.100, and maintaining compliance with state and local laws and requirements.

(6) A landlord who does not impose a rent increase or imposes only a portion of the permitted rent increase in any 12-month period, as provided in this section, waives that annual rent increase or the remaining portion of that permitted annual rent increase for the remainder of the tenancy. A landlord shall not bank any waived and/or unused portions of permitted annual rent increases for use in future years.

(7) This chapter does not supersede a landlord’s right to set the initial rent for new tenancies under state law.

(8) A tenant of a covered rental unit subject to this chapter shall not enter into a sublease that results in a total rent for the rental unit that exceeds the allowable rent authorized by this section. Nothing in this chapter authorizes a tenant to sublet or assign the tenant’s interest where otherwise prohibited.

(9) A tenant may refuse to pay a rent increase which is in violation of this chapter. Such refusal to pay the unallowed increased amount in excess of permitted rent charges shall be an affirmative defense in any action brought to recover possession of a rental unit or to collect the rent increase owed. (Ord. 736 § 2 (Exh. A), 2023).

(1) A landlord may pass through 50 percent of capital improvement costs to existing tenants in covered rental units in accordance with the provisions of this section.

(2) Capital improvements must be for the primary benefit, use and enjoyment of tenants, cost-factored, and amortized over a useful life of at least five years, and permanently fixed in place or relatively immobile and appropriate to the use of the rental property.

(3) Capital improvements eligible for pass-through cost recovery include, but are not limited to:

(a) The addition, but not the replacement, of the following improvements to a rental unit or common areas of the building in which the rental unit is located: air conditioning, security gates and other security items, swimming pool, sauna or hot tub, fencing, children’s play equipment permanently installed on the premises, and other similar improvements as determined by the department.

(b) Replacement or substantial modification of any structural, electrical, plumbing, or mechanical system that requires a permit pursuant to state or local law.

(c) Abatement of hazardous materials, such as lead-based paint, mold or asbestos, in accordance with applicable federal, state, and local laws.

(4) Capital improvements cannot include regular maintenance or repairs from wear and tear, or be the result of a landlord’s failure to perform regular maintenance and repairs, or repairs covered by insurance.

(5) Application Process.

(a) A landlord must apply to the department for recovery of capital improvement costs, on a form approved by the department, within 12 months from the date of completion of the capital improvement.

(b) The capital improvement cost recovery application must contain the following information, and be accompanied by copies of relevant supporting documentation:

(i) A description of the completed capital improvement;

(ii) A copy of all estimates, contracts, bills, invoices, and other documentation reasonably necessary to establish the cost of the capital improvement;

(iii) The proposed amortization period to be used based on the department’s procedures and guidelines, if the period differs from 60 months;

(iv) A list of tenants that will be affected by or benefit from the capital improvement;

(v) The formula used to calculate the pro rata share of each tenant;

(vi) The monthly cost to each affected or benefiting tenant;

(vii) The commencement and completion dates of the capital improvement; and

(viii) Such other information as the department may reasonably request.

(c) Within five calendar days after submission of the application with the department, the landlord shall serve each affected tenant with notice of the application via personal service or certified mail return receipt requested. The notice must include a copy of the application.

(d) Within 10 calendar days after submission of the application, the landlord shall file with the department a proof of service signed under penalty of perjury stating that a copy of the application was served upon the affected tenant(s). Such proof of notice is required before the application will be reviewed by the department.

(6) A landlord may not pass through costs of capital improvements to tenants until the department approves the landlord’s application and the landlord registers each affected rental unit and pays any required annual registration fees pursuant to CMC 5.13.100.

(7) No pass-through cost recovery shall be approved in an amount that would exceed five percent of the rent in effect at the time the pass-through application is filed with the department. If the total amount of calculated pass-through costs would result in an increase that exceeds five percent, the pass-through cost amortization period may be extended beyond the established amortization period to allow the landlord to recover eligible capital improvement costs while not exceeding the maximum increase authorized by this subsection.

(8) A landlord shall provide written notice of an approved pass-through cost to tenants in accordance with California Civil Code Section 827 and the notice shall be delivered at least 30 days before the approved pass-through cost takes effect.

(9) The approved pass-through cost should appear as a separate line item on a rent statement along with the end date of the amortization period and any remaining pass-through balance. An approved pass-through cost is not considered rent for purposes of this chapter.

(10) Pass-through cost recovery applications will be considered and determined by the director in accordance with guidelines and procedures established by the department; and the director’s determination may be appealed to a hearing officer in accordance with the procedures set forth in CMC 5.13.130. (Ord. 736 § 2 (Exh. A), 2023).

(1) Landlord’s Fair Return Application for Rent Increase. A landlord may file a fair return petition (“application for rent increase”) with the department to request an increase in rent for a covered rental unit, beyond that which is otherwise permitted under CMC 5.13.050, if the landlord contends, in good faith, that they are not receiving a fair and reasonable return on the landlord’s investment from the allowable rent increases under CMC 5.13.050, in accordance with the provisions of this section.

(a) Presumption. It shall be a rebuttable presumption that the annual net operating income earned by a landlord, and rent increases allowed under CMC 5.13.050, provide the landlord with a fair and reasonable return on the investment. A landlord shall have the burden to prove the necessity of any additional rent increase necessary to earn a fair and reasonable return.

(b) Nothing in this section shall be interpreted to authorize a rent increase for a covered rental unit in excess of the amount authorized pursuant to California Civil Code Section 1947.12.

(2) Approval of the landlord’s application for rent increase may become effective only after all of the following:

(a) A landlord has provided written notice to the affected tenant of the approved rent increase for the covered rental unit in accordance with California Civil Code Section 827; and

(b) A landlord has registered each affected rental unit in the rental property, and is current on payment of registration fees, pursuant to CMC 5.13.100.

(3) Review and Approval of Application for Rent Increase.

(a) The department shall consider the following factors, as well as any other relevant factors, in reviewing the application for rent increase and making its determination, and no one factor shall be determinative:

(i) Changes in the CPI.

(ii) The rental history of the affected covered rental unit(s) and the rental property, including the base rent and pattern of past rent increases or decreases.

(iii) Increases or decreases in property taxes.

(iv) The history of any prior hearings or determinations on an application for rent increase by landlord.

(v) The addition of capital improvements on the rental property.

(vi) The physical condition of the affected covered rental unit(s) and building, including the quantity and quality of maintenance and repairs performed during the preceding 12 months, as well as the long-term patterns of operating, maintenance, and capital improvement expenditures.

(vii) The need for repairs caused by circumstances other than ordinary wear and tear.

(viii) Any increase or decrease of housing services since the last rent increase.

(ix) Any existing rental agreement lawfully entered into between the landlord and the tenant.

(x) A decrease in net operating income.

(xi) A fair and reasonable return on the building prorated among the rental units in the building.

(xii) If landlord received rent in violation of this chapter or has otherwise failed to comply with this chapter.

(b) The director may approve or deny an application for rent increase and make the following determinations, with written findings in support thereof, in compliance with the provisions of this chapter:

(i) The department determines the rent increase in the amount requested by landlord is necessary and appropriate to ensure the landlord receives a fair and reasonable return on the landlord’s investment, and will not cause an undue financial burden on the affected tenant.

(ii) The department determines a lesser rent increase than the amount requested by landlord more appropriately ensures a fair and reasonable return on the landlord’s investment and will not cause an undue financial burden on the affected tenant.

(iii) The department determines no additional rent increase is necessary and appropriate to ensure the landlord receives a fair and reasonable return on the landlord’s investment.

(c) Nothing in this section shall be interpreted to authorize a rent increase for a covered rental unit in excess of the amount authorized pursuant to California Civil Code Section 1947.12.

(d) The department’s decision may be appealed to a hearing officer, in accordance with the procedures set forth in CMC 5.13.130.

(4) Notices Upon Filing Application for Rent Increase. Within five calendar days after submission of an application for rent increase with the department, the landlord, at their own expense, shall provide written notice of said application to each affected tenant via personal service or certified mail return receipt requested.

(5) Submittal to Department of Application for Rent Increase. Upon receipt of an application for rent increase, the department shall review and evaluate whether there should be a rent increase in accordance with this section and the department’s procedures and guidelines.

(a) The application shall be on a form approved by the department, signed under penalty of perjury, and must be accompanied by an application fee, if any, and must include the following:

(i) The specific rent increase or adjustment requested;

(ii) Copies of any books, records, papers, or other financial information relevant to the review of the application; and

(iii) Other documentation reasonably required by the department relevant to the application.

(b) Application Fees. The department may set a reasonable application fee to be paid by the applicant at the time of the filing based on the administrative expenses incurred in reviewing and processing the application.

(c) The department shall have the authority to deem an application complete.

(6) Right of Assistance. All parties to an application for rent increase may seek assistance from attorneys or any other person designated by said parties.

(7) Consolidation. Applications for rent increase pertaining to tenants in the same building or rental property may be consolidated for determination at the election of the department. (Ord. 736 § 2 (Exh. A), 2023).

(1) Tenant Application for Adjustment. A tenant of a covered rental unit may file a petition for adjustment (“application for adjustment”) with the department for its determination, if the tenant contends, in good faith, that they should receive an adjustment to their monthly obligation(s) because of a landlord’s potential violation(s) of this chapter. A tenant must file an application for adjustment within 180 days from the date the tenant knew, or reasonably should have known, of the landlord’s potential violation(s), in accordance with the provisions of this section.

(a) Unlawful Rent and/or Fees or Charges. A tenant may file an application for adjustment with the department due to a landlord’s demand for rent, fees, or other charges that may be in excess of that permitted for a covered rental unit under this chapter.

(b) Failure to Maintain Habitable Premises. A tenant may file an application for adjustment with the department to request a refund of, or decrease in, rent proportional to a landlord’s potential failure to maintain the covered rental unit as a habitable premises in accordance with applicable laws or the rental agreement.

(i) A landlord shall not be liable to a tenant for failure to maintain habitable premises if the tenant caused the condition that is the subject of the application.

(ii) Prior to filing an application for adjustment for failure to maintain habitable premises, a tenant shall file a complaint with the proper enforcement agency and provide such proof of complaint filing to the department.

(c) Decrease in Housing Services. A tenant may file an application for adjustment with the department for a service reduction in housing services, without a corresponding reduction in rent, which may be considered an increase in excess of permitted rent.

(2) Prior to filing an application for adjustment with the department, a tenant shall:

(a) Provide written notice to landlord identifying the potential violation(s) of excess rent, fees or charges, failure to maintain habitable premises and/or decrease in housing services; and

(b) Provide a reasonable opportunity for the landlord to correct the issues.

(3) Review and Determination of Application for Adjustment. The department shall consider the following factors, as applicable, as well as any other relevant factors, in making its determination and no one factor shall be determinative:

(a) Increases or decreases in rent or housing services since the effective date of this chapter.

(b) The pattern of recent rent or housing service increases or decreases.

(c) Whether the landlord has received payment in excess of the maximum allowable rent, fees, or charges permitted by this chapter or has otherwise failed to comply with this chapter.

(d) When and how the service reduction was first identified by the tenant and when and how the landlord was notified of the alleged service reduction, orally, or in writing, and landlord’s response to such notice and whether housing services were reinstated or restored by the landlord, and if so, when and how.

(e) Whether any habitability violations stated by the tenant in the application were improved or corrected, and if so, when and how.

(f) The status of the habitability issues as of the date the application is signed.

(4) Notice Upon Filing Application for Adjustment. Within five calendar days after submission of an application for adjustment with the department, the tenant shall provide written notice of said application to the landlord via personal service or certified mail return receipt requested.

(5) Submittal to Department of Application for Adjustment. Upon receipt of an application, the department shall review and evaluate whether there should be an adjustment to tenant’s monthly obligations in accordance with this section and the department’s procedures and guidelines.

(a) The application shall be on a form approved by the department, signed under penalty of perjury, and must be accompanied by an application fee, if any, and must include the following:

(i) The specific adjustment requested and the basis for such adjustment;

(ii) Copies of any books, records, papers, or other financial information relevant to the review of the application; and

(iii) Other documentation reasonably required by the department relevant to the application.

(b) Application Fees. The department may set a reasonable application fee to be paid by the applicant at the time of the filing based on the administrative expenses incurred in reviewing and processing the application.

(c) The department shall have the authority to deem an application complete.

(6) Right of Assistance. All parties to an application for adjustment may seek assistance from attorneys or any other person designated by said parties.

(7) Consolidation. Applications for adjustment for tenants who live in the same building or rental property may be consolidated for determination at the election of the department. (Ord. 736 § 2 (Exh. A), 2023).

(1) Landlord may not demand or receive a security deposit, however denominated, in an amount or value in excess of the security deposit charged or received at the initiation of the tenancy.

(2) As used in this section, security deposit means any “security” as defined in California Civil Code Section 1950.5. (Ord. 736 § 2 (Exh. A), 2023).

(1) On or before July 1, 2024, and by July 1st of each subsequent year, a landlord must register with the department each rental unit that is rented or available for rent for a term exceeding 30 consecutive days by filing a rental registration in a form approved by the department. After initial rental unit registration, a landlord shall notify the department and update the rental registration within 30 days of the start of a new tenancy or any subsequent change in tenancy or ownership.

(2) Registration must include, but is not limited to, the following information:

(a) Property information, including address, year built and certificate of occupancy date.

(b) Rent for each rental unit in the rental property at the time of registration and the date and amount of the last rent increase.

(c) Ownership information for the rental property.

(d) The number of total rental units in the rental property.

(e) The number of bedrooms and bathrooms for each rental unit.

(f) Tenant information, including names and move-in dates.

(g) A description of housing services.

(h) Any additional information reasonably required by the department to implement this chapter.

(3) Registration Fee. A landlord must pay an annual registration fee for each rental unit as established by resolution of the city council. Such fees are intended to recover the city’s reasonable costs to implement, administer and enforce its rent stabilization and tenant eviction protection regulations as set forth in this chapter and Chapter 5.14 CMC. The registration fee established by this subsection shall be waived for any rental unit in a residential real property containing four or fewer dwelling units in which the owner occupies one of the units as the owner’s principal place of residence, so long as the owner continues in occupancy. For purposes of this subsection:

(a) The term “owner” means a natural person who owns at least a 25 percent ownership interest in the residential real property.

(b) A waiver under this subsection shall expire by operation of law when the owner ceases to reside on the property as their principal place of residence.

(4) Registration Fee Pass-Through. A landlord may recover 50 percent of a registration fee from the tenant. A landlord may only collect one annual registration fee pass-through cost at a time and must also meet the following requirements to pass through this registration fee:

(a) Timely and accurately submits an annual registration for each rental unit in the rental property;

(b) Lists the registration fee pass-through cost as a separate line item on the monthly obligation(s) statement;

(c) Provides tenant with 30 days’ notice before collecting any registration fee pass-through cost; and

(d) A tenant’s payment to the landlord for the registration fee pass-through cost is paid in 12 equal, monthly installments, unless otherwise agreed to by the tenant. (Ord. 736 § 2 (Exh. A), 2023).

(1) Mandatory Notices to Tenants. Landlords must provide to each tenant, prior to, or at the time of agreeing to rent or lease a covered rental unit, a notice of tenant rights under this chapter. The department shall publish a form notice of tenant rights in English and other frequently spoken languages. Landlords must provide the form notice in the following circumstances:

(a) When entering into a rental agreement, by including a copy of the form notice as an exhibit or attachment to the written rental agreement;

(b) When renewing a rental agreement; and

(c) When providing notice of a rent increase or decrease in a covered rental unit.

(2) Notice Regarding Potential Pass-Through Costs and Fees. A landlord shall include language in the rental agreement that tenant may be subject to pass-through costs and fees that have been reviewed and approved by the department.

(3) If the rental agreement is negotiated or written in a language other than English, the landlord must also provide the form notice of tenant rights in English and the language in which the rental agreement was negotiated or written. (Ord. 736 § 2 (Exh. A), 2023).