Chapter 17.23

RENTAL DISPUTE MEDIATION AND ARBITRATION FOR DWELLING UNITS EXCLUDING MOBILEHOMES AND MOBILEHOME PARKS*

Parts:

Part 1

GENERAL

Sections:

*Editor’s note— Ord. 30032, § 1, adopted Nov. 28, 2017, amended Pts. 1 - 8 of Ch. 17.23 in their entirety to read as herein set out. Former Pts. 1 - 8 pertained to similar subject matter, and derived from Ords. 19696, 19892, 20200, 20605, 20606, 20607, 20608, 20609, 21131, 21132, 21133, 21134, 21162, 21183, 21509, 21575, 21735, 21970, 21999, 22019, 22675, 23028, 23340, 26559, 26649, 26767, 26792, 29730, 29913 and 30020. See the Code Comparative Table for a detailed analysis.

Subsequently, § 2 of Ord. 30032 added new Pt. 9, § 17.23.900, as set out herein.

• 17.23.050 Notice of apartment rent ordinance to tenant households.

• 17.23.060 Limit on electronic payment.

• 17.23.070 Reasonable accommodation; fair housing.

Parts 1 through 9 of this Chapter 17.23 shall be known as the "Apartment Rent Ordinance." (Ord. 30032.)

The purposes of the Apartment Rent Ordinance are to promote stability and fairness within the residential rental market in the City, thereby serving the public peace, health, safety, and public welfare. The Apartment Rent Ordinance recognizes the value of residential rental units as a critical resource amid the continuing shortage of and persistent demand for housing in the City of San José. In July 1979, the City enacted a rent control ordinance to alleviate some of the more immediate needs created by San José's housing situation: including but not limited to the prevention of excessive and unreasonable rent increases, the alleviation of undue hardship upon individual tenants, and the opportunity for landlords to earn a fair return. To further protect tenants from excessive and unreasonable rent increases, the Apartment Rent Ordinance generally limits annual rent increases, requires notices be provided to the City, regulates how much and what types of costs may be passed through to tenants, provides for monitoring of rents, and provides for an administrative review process for housing-related disputes. The rights and obligations created by the Apartment Rent Ordinance for landlords and tenants are created pursuant to the City's general police powers to protect the health, safety, and welfare of its residents and are in addition to any rights and obligations under state and federal law.

(Ord. 30032.)

T17:154

BUILDINGS AND CONSTRUCTION

§ 17.23.070

Parts 1 through 9 of the Apartment Rent Ordinance apply to each Rent Stabilized Unit, as defined in Section 17.23.167 and, as applicable, to each Covered Property as defined in Section 17.23.123.

(Ord. 30032.)

The City Manager may adopt or amend regulations for the administration and implementation of the Apartment Rent Ordinance. The Director, with the approval of the City Attorney, may adopt forms and notices to facilitate the administration and implementation of the Apartment Rent Ordinance. All forms and notices called for in this Chapter and the Regulations shall be adopted by the Director unless otherwise indicated. (Ord. 30032.)

• A. Each Landlord shall post a written notice and maintain such posting, on a form approved by the Director, of the applicability of the Apartment Rent Ordinance in a conspicuous location within each building containing one (1) or more Rent Stabilized Units. The Landlord shall have complied with this requirement by posting a Notice of the Apartment Rent Ordinance in the same location as a notice to tenants posted in accordance with subsections (1) or (2) of California Civil Code Section 1962.5(a) or immediately adjacent to the posting of the Residential Occupancy Permit in compliance with Section 17.20.630.

• B. Each Landlord shall notify the Tenant Household of the applicability of the Apartment Rent Ordinance prior to entering an oral or written rental agreement for a Rent Stabilized Unit. The Landlord shall have complied with the affirmative obligation to notify a Tenant under this Section by providing (1) written notice that the Rent Stabilized Unit is subject to this Chapter and, (2) a copy of the current

City informational notice or handbook for Tenants of Rent Stabilized Units ("Informational Notice"), if such notice is available from the City of San José, to the Tenant upon entering an oral or written rental agreement for the Rent Stabilized Unit.

(Ord. 30032.)

It shall be unlawful for any Landlord to demand or require either cash or an electronic funds transfer or online internet payment as the exclusive method of payment of Rent or Security Deposits, except that cash may be required for a limited period of time under the conditions allowed by California Civil Code Section 1947.3(a)(2), as amended. (Ord. 30032.)

• A. Nothing in this Chapter is intended to authorize a Landlord to deny a request for reasonable accommodation required under state or federal law, or to impose a charge for that accommodation where no charge is allowed by law.

• B. Nothing in this Chapter is intended to authorize a Landlord to avoid obligations imposed by federal, state or local fair housing law.

• (Ord. 30032.)

Part 2

DEFINITIONS

Sections:

• 17.23.110 Affordable rental unit.

• 17.23.112 Annual general increase.

17.23.115 Base year.

• 17.23.116 Buyout agreement.

17.23.117 Buyout offer.

• 17.23.120 Capital improvements.

T17:155

SAN JOSÉ CODE

§ 17.23.100

17.23.123 Covered property.

17.23.124 Current year. 17.23.125 Director.

17.23.126 Ellis Act ordinance.

17.23.127 For-cause termination.

17.23.130 Gross income.

17.23.131 Guest room.

17.23.132 Guesthouse.

17.23.135 Hearing officer.

17.23.136 Housing services.

17.23.137 Initial rental rate.

17.23.140 Landlord.

17.23.145 Multiple dwelling.

17.23.146 Municipal code. 17.23.150 Net operating income. 17.23.151 Notices. 17.23.155 Operating expenses. 17.23.160 Petition. 17.23.161 Petition examiner. 17.23.165 Regulations.

17.23.166 Rent.

17.23.167 Rent stabilized unit.

"Administrative Decision" means a Petition Examiner's final written determination on a Landlord or Tenant Petition. (Ord. 30032.)

"Affordable Rental Unit" means each Rental Unit that is owned or operated by any government agency, or any individual Rental Unit for which the Rent is limited to no more than affordable rent, as such term is defined in California Health & Safety Code Section 50053, for lower income households pursuant to legally binding restrictions recorded for the benefit of a government agency. However, if the ownership or operation, or the Rent limitation ceases, then the Rental Unit will no longer be considered an Affordable Rental Unit. The presence of one (1) or more Affordable Rental Units in a Multiple Dwelling shall not exempt any other Rental Unit in the same building that does not also meet the definition of Affordable Rental Unit. (Ord. 30032.)

"Annual General Increase" shall have the meaning provided in Section 17.23.310. (Ord. 30032.)

17.23.168 Rental unit.

17.23.169 Rental voucher unit.

17.23.170 Section.

17.23.171 Security deposit.

17.23.172 Specified capital improvements.

17.23.175 Tenant.

17.23.176 Tenant household.

17.23.177 Tenant protection ordinance.

"Base Year" shall have the meaning provided in Section 17.23.810.B.

(Ord. 30032.)

"Buyout Agreement" shall have the meaning provided in Section 2.01.3 of the Regulations. (Ord. 30032.)

Unless the context otherwise requires, the definitions set forth in this Part govern the construction of the Apartment Rent Ordinance. (Ord. 30032.)

"Buyout Offer" shall have the meaning provided in Section 2.01.4 of the Regulations. (Ord. 30032.)

T17:156

BUILDINGS AND CONSTRUCTION

§ 17.23.136

"Capital Improvements" means building, unit or property additions or modifications that replace or enhance an existing physical feature of a Rent Stabilized Unit or of a building containing a Rent Stabilized Unit or that provides new Housing Services to the Tenants as compared to the level of services as previously provided. (Ord. 30032.)

"Commission" means the Housing and Community Development Committee or successor. (Ord. 30032.)

"Consumer Price Index" means the Consumer Price Index For All Urban Consumers in the San Francisco-Oakland-San José all items index (1982-84 equals 100), as reported by the Bureau of Labor Statistics of the United States Department of Labor. In the event a successor index to the Consumer Price Index for all urban consumers for all items for the San Francisco-Oakland-San José area or comparable area is established by the Bureau of Labor Statistics, this definition may be updated accordingly in the Regulations. (Ord. 30032.)

"Ellis Act Ordinance" means the ordinance codified in Part 11 of Chapter 17.23. (Ord. 30032.)

"For-Cause Termination" is the termination of a tenancy based on a reason for eviction that would legally entitle a Landlord to evict a Tenant Household on three (3) days' notice under California Code of Civil Procedure Sections 1161(2) (for Tenant's nonpayment of Rent), 1161(3) (for Tenant's failure to perform a material term of rental agreement), or 1161(4) (for Tenant allowing a nuisance or other unlawful activity). (Ord. 30032.)

"Gross Income" shall have the meaning provided in Section 17.23.820.A. (Ord. 30032.)

"Guest Room" shall have the meaning provided in Section 20.200.460. (Ord. 30032.)

"Covered Property" means an individual building or complex of buildings containing one (1) or more Rent Stabilized Units, together with any common areas. (Ord. 30032.)

"Current Year" shall have the meaning provided in Section 17.23.810.C. (Ord. 30032.)

"Director" means the City's Director of the Department of Housing or the Director's designee. (Ord. 30032.)

"Guesthouse" shall have the meaning provided in Sections 20.200.470 and 20.200.480. (Ord. 30032.)

"Hearing Officer" shall have the meaning provided in Section 2.01.11 of the Regulations. (Ord. 30032.)

"Housing Services" means those services provided and associated with the use or occupancy of a Rental Unit, including but not limited to repairs, replacement, maintenance, painting, light, heat, water, elevator service, pest control, laundry facilities

T17:157

SAN JOSÉ CODE

§ 17.23.136

and privileges, janitorial service, refuse removal, furnishings, telephone, parking, storage, and any other benefits, privileges, or facilities. (Ord. 30032.)

"Initial Rental Rate" means the actual amount paid by the Tenant for the use and occupancy of the Rent Stabilized Unit at the commencement of the tenancy, or in the case of a Rental Voucher Unit, the sum of the rent paid by the Tenant and government agency. (Ord. 30032.)

"Landlord" means an owner, lessor, or sublessor who receives or is entitled to receive Rent for the use and occupancy of any Rental Unit or portion thereof, and the agent, representative, or successor of any of the foregoing. For purposes of this Chapter, Landlord does not include an individual who is a member of the Tenant Household whose primary residence is the same Rental Unit as the Tenant. (Ord. 30032.)

"Multiple Dwelling" means a multiple dwelling as that term is defined and used in Title 20 of this Code and includes all units subject to Part 8 of Chapter 17.20. (Ord. 30032.)

"Municipal Code" means the San José Municipal Code. (Ord. 30032.)

The following notices are defined terms for purposes of this Chapter with the following meanings.

• A. "Informational Notice" shall have the meaning provided in Section 17.23.050.B.

• B. Notice of the Apartment Rent Ordinance" shall have the meaning provided in Section 17.23.050A.

• C. "Notice of Re-Rental" shall have the meaning provided in Section 17.23.600.

• D. "Notice of Termination" means the notice informing a Tenant of the termination of its tenancy including but not limited to a notice to quit or vacate, a notice in accordance with California Civil Code Section 1946.1 or California Code of Civil Procedure Section 1162, as amended.

• (Ord. 30032.)

"Operating Expenses" shall have the meaning provided in Section 17.23.820.C. (Ord. 30032.)

"Petition" shall have the meaning provided in Section 2.01.14 of the Regulations. (Ord. 30032.)

"Petition Examiner" shall have the meaning provided in Section 6.06.05 of the Regulations. (Ord. 30032.)

"Regulations" means the regulations adopted by the City Council or pursuant to Section 17.23.040. (Ord. 30032.)

"Net Operating Income" shall have the meaning provided in Section 17.23.810.A. (Ord. 30032.)

"Rent" means the consideration, including any funds, labor, bonus, benefit, or gratuity, demanded or received by a Landlord for or in connection with the use or occupancy of a Rental Unit, including

T17:158

BUILDINGS AND CONSTRUCTION

§ 17.23.175

Housing Services, or for the assignment of a lease or rental agreement for a Rental Unit, including subletting.

(Ord. 30032.)

• A. "Rent Stabilized Unit" means a Rental Unit in any Guesthouse or in any Multiple Dwelling building for which a certificate of occupancy was issued on or prior to September 7, 1979 or that was offered or available for rent on or before this date.

• B. The following shall not be considered Rent Stabilized Units:

  1. Rooms or accommodations in hotels, motels, or Guesthouses which are legally rented to transient guests for a period of less than thirty (30) days consistent with the Municipal Code, except those rooms or accommodations subject to Part 2.5 of Chapter 20.80;

  2. Housing accommodations in any hospital, convent, monastery, extended care facility, emergency residential shelter, residential care facility, residential service facility, nonprofit home for Senior Citizens (as defined in the Unruh Act, as may be amended), fraternity house or sorority house, or in dormitories owned and operated by an institution of higher education, a high school or elementary school;

  3. Affordable Rental Units; and

  4. Rental Units in a building containing only one (1) or two (2) dwelling units.

• (Ord. 30032.)

"Rental Unit" means a structure or part of a structure (including but not limited to a Guest Room in a Guesthouse) offered or available for rent as a home, residence, or sleeping place, whether or not the residential use is a conforming use permitted under the San José Municipal Code, together with the land and appurtenant buildings thereto, and all

Housing Services, privileges, and facilities supplied in connection with the use or occupancy thereof. A Rental Unit shall not include a Mobilehome or Mobilehome Lot as defined in Section 17.22.160 and 17.22.170.

(Ord. 30032.)

"Rental Voucher Unit" means a Rental Unit that is restricted to occupancy by lower income households by a contract where the Tenant pays no more than 35% of their income towards the Rent, the remainder being paid with a government agency or a nonprofit administering government agency's funds, and where the rent is not increased on an annual basis, but only where allowed under the rules of the government agency.

(Ord. 30032.)

"Section" means a numbered section in Municipal Code Chapter 17.23 unless otherwise indicated.

(Ord. 30032.)

"Security Deposit" shall have the meaning provided in California Civil Code Section 1950.5, as amended.

(Ord. 30032.)

"Specified Capital Improvements" shall have the meaning provided in Section 17.23.330. (Ord. 30032.)

"Tenant" means a person or persons entitled by written or oral agreement, or by sufferance, to the use or occupancy of a Rental Unit. (Ord. 30032.)

T17:159

SAN JOSÉ CODE

§ 17.23.176

"Tenant Household" means all Tenant(s) who occupy any individual Rental Unit, and each minor child of any Tenant whose primary residence is the Rental Unit.

(Ord. 30032.)

"Tenant Protection Ordinance" means the ordinance codified in Part 12 of Chapter 17.23. (Ord. 30032.)

Part 3

INITIAL RENT AND RENT INCREASES; PETITION AND HEARING PROCESS

Sections:

• 17.23.310 Limits on rent increases.

• 17.23.315 Limits on all fees and pass through charges.

• 17.23.320 Exceptions to limits on rent increases and other charges.

• 17.23.325 Council initiated exceptions to limits on rent increases and other charges.

• 17.23.330 Petitions for pass through for specified capital improvements.

• A. Valid Decontrol. The Initial Rental Rate for a new tenancy in a Rent Stabilized Unit may be set by the Landlord if the Rent Stabilized Unit was vacant due to one (1) of the following two (2) circumstances.

  1. Voluntary Vacancy. The prior Tenant Household voluntarily terminated the tenancy.

  2. For-Cause Termination. A Landlord legally terminated the prior tenancy as a For-Cause Termination.

• B. Exceptions to Decontrol. Only the Rent charged consistent with this Chapter to the former Tenant, plus any annual adjustment authorized by this Chapter, may be charged for a Rent Stabilized Unit in the following circumstances.

  1. No Cause Termination. A Landlord terminated a tenancy without cause in accordance with Section 1946.1 of the California Civil Code or Section 827 of the California Civil Code.

  2. Continuing Tenancy. An existing Tenant or existing member of the Tenant Household, (including individuals who are not listed on an existing rental agreement), has entered into a new oral or written rental agreement for the same Rent Stabilized Unit.

  3. Unlawful Landlord Activity. A Landlord effectively terminated a tenancy without cause by encouraging the Tenant to terminate the tenancy through unlawful activities prohibited under the Tenant Protection Ordinance, the Apartment Rent Ordinance, or state law.

  4. Any Other Illegal Evasion. A Tenant terminated a tenancy because of illegal conduct by the Landlord or any other means by which a Landlord fraudulently seeks to set a new Initial Rental Rate.

• (Ord. 30032.)

• A. Annual Rent Increase Limit. The Rent of any Rent Stabilized Unit may not be increased by more than the Annual General Increase unless otherwise authorized by Petition. If the Landlord has not substantially complied with the City's request to register or re-register a Rent Stabilized Unit pursuant to the procedures in the Regulations, the Landlord may not increase the Rent for the Rent Stabilized Unit.

• B. The "Annual General Increase" is limited to: The monthly Rent charged for the previous twelve (12) months for the Rent Stabilized Unit multiplied by five percent (5%).

T17:160

BUILDINGS AND CONSTRUCTION

§ 17.23.315

• C. Rent Adjustments Based Upon COVID-19 Rent Increase Moratorium.

  1. Notwithstanding subsection B., Landlords who enter into reduced rent agreements with their Tenants pursuant to the COVID-19 Rent Increase Moratorium Ordinance, Ordinance No. 30405, may calculate their Annual General Increase upon the prior charged rent under their rental contract and not on the monthly rent charged under the reduced rent agreement.

  2. This subsection shall expire twelve (12) months after expiration of the COVID-19 Rent Increase Moratorium Ordinance, Ordinance No. 30405.

• D. Rent Increase Frequency Limit. Not more than one (1) Rent increase, including the Annual General Increase, any increase allowed under Chapter 13 of the Regulations, and any increase authorized by a final decision after a Petition may be imposed in any twelve (12)month period. An increase in Rent authorized by a decision on a Petition filed pursuant to Section 17.23.350 C. or Part 8 of this Chapter may be imposed after notice has been provided pursuant to California Civil Code Section 827, if the decision states that the initial increase is exempt from the twelve (12) month interval requirement under this Section.

• E. Rental Voucher Unit - Rent Increases. During the time a Rental Unit serves as a Rental Voucher Unit, the Initial Rent shall be subject to this Chapter, but its Rent may be adjusted annually consistent with the published rules of the applicable government agency in lieu of the Rent adjustments allowed under this Chapter.

• (Ord. 30032, 30421.)

• A. Limitation on Pass Through Charges. No pass through of charges to Tenants is authorized except as expressly provided in this Chapter.

Without altering the generality of the foregoing sentence, no charges for utility services (such as electricity, natural gas, telephone, water, waste water, sewer and refuse or waste management services) may be passed through to Tenants by Landlord. No charges may be passed through that are assigned to Tenants by virtue of ratio utility billing or similar unmetered allocation arrangements. This section is not intended to prohibit the government entity or nonprofit administering the voucher from imposing conditions based on regulations with respect to utility payments on Rental Voucher Units, or to prohibit submetered water, gas or electricity.

1. Existing Agreements End; New Agreements Prohibited.

   • i. Existing written rental agreement, amendment or addenda provisions for payment or pass through of utility service or similar charges or for ratio utility billing to the Tenant ("Passthrough Agreements") that were executed by the Landlord and the current Tenant prior to January 1, 2018 are void on the date that the Petition Examiner's or Hearing Officer's decision is issued on the petition described in subsection A.2 or A.3, or void after October 31, 2018 if the Landlord does not submit a complete petition on or before October 31, 2018. A renewal by the same parties on the same terms of a Passthrough Agreement initially executed prior January 1, 2018 shall be subject to this subsection A.1.i, not subsection A.1.ii.

   • ii. Passthrough Agreements entered into after January 1, 2018 are void.

   • iii. Verbal rental agreement, amendment or addenda provisions for payment or pass through of utility service or similar charges or for ratio utility billing to the Tenant are void.

T17:161

SAN JOSÉ CODE

§ 17.23.315

• iv. Notwithstanding subsection A.1.ii, Passthrough Agreements executed prior to May 1, 2018 with a new Tenant shall be shall be subject to subsection A.1.i, not subsection A.1.ii, if the Landlord can prove that he/she has, prior to July 1, 2017 required utility pass through agreements with the same terms for all Tenants in the building.

2. Landlord Petition for One-time Offset Increase. If a Landlord has a written Passthrough Agreement for water, sewer and/or trash executed by the existing Tenant prior to January 1, 2018, the Landlord may file a petition with the City during the period from July 5 to October 31, 2018 for a one-time increase in rent ("Offset Increase") which increase, if awarded, shall not be subject to the one (1) increase in any twelve (12) month period limitation in Section 17.23.310. The petition process shall be in accordance with the Regulations.

the existing Tenant prior to January 1, 2018, the Landlord may file a petition with the City during the period from July 5 to October 31, 2018 for a one-time increase in rent ("Offset Increase") which increase, if awarded, shall not be subject to the one (1) increase in any twelve (12) month period limitation in Section 17.23.310. The petition process shall be in accordance with the Regulations.

3. Landlord Petition for One-time Offset Increase for Unmetered Gas and Electricity. If the units in the Landlord's building are not metered for gas and electricity due to the age or type of the building, the Landlord has complied with the requirements of Civil Code Section 1940.9 at the commencement of tenancy and Landlord has a written Passthrough Agreement for gas and/or electricity executed by the existing Tenant prior to January 1, 2018, the Landlord may file a petition with the City during the period from July 5 to October 31, 2018 for a one-time increase in rent for gas and electricity ("Gas/Electricity Offset Increase") which increase, if awarded, shall not be subject to the one (1) increase in any twelve (12) month period limitation in Section 17.23.310. The petition process shall be in accordance with the Regulations.

   4. If the pass through or Passthrough Agreement has been the subject of a Hearing Officer Decision or Voluntary Agreement that disallowed the pass through, no Offset Increase is allowed. If the unit is a Rental Voucher Unit no Offset Increase is allowed.

   5. The Offset Increase amount will be the lesser of: (i) the average of the monthly charges paid by the Tenant in 2017 under the Passthrough Agreement for water, sewer and/or trash, or (ii) $86 for a studio, $91 for a one-bedroom, $102 for a two-bedroom and $149 for a three bedroom.

   6. The Gas/Electricity Offset Increase amount will be the lesser of: (i) the average of the monthly charges paid by the Tenant in 2017 under the Passthrough Agreement for gas and/or electricity, or (ii) $36 for a studio, $58 for a one-bedroom, $70 for a two-bedroom and $84 for a three bedroom.

   7. The Petition for One-Time Offset Increase can be challenged by the Tenant as provided in the Regulations.

   8. For a petition brought under subsection A.1.iv, the offset amount, the references in subsection A.5 and A.6 to the average of the monthly charges paid by the Tenant shall refer to 2018, prior to the date of petition filing.

• B. Limitation on Fees. The following fees may not be charged to Tenants except as provided:

  1. Excess Replacement Fees. No Landlord shall charge a Tenant a replacement fee for a key or security card that exceeds the actual replacement cost plus ten dollars ($10.00) unless approved by Petition or the Regulations.

  2. Excess Bounced Check Service Fees. No Landlord shall charge a Tenant a service charge for a dishonored ("bounced") check that exceeds the amount allowed under California Civil Code Section

T17:162

BUILDINGS AND CONSTRUCTION

§ 17.23.320

1719(a)(1), as amended. Landlord need not provide Tenant with a third party invoice for this service charge.

3. Late Payment Fees. No Landlord shall charge a Tenant a fee for late payment of Rent exceeding a total of five percent (5%) of the monthly Rent for each payment of Rent that is three (3) or more days late.

   4. Application Screening Fees. No Landlord shall charge a Tenant an application screening fee in excess of the amount allowed under California Civil Code Section 1950.6(b), as amended.

• C. Separate Line-Item Required. No Landlord may pass through any charge to any Tenant allowed under this Part unless the charge is clearly listed on the rental agreement and the Rent invoice (if any) and is accompanied by a true and correct copy of the invoice or bill paid by the Landlord for such charge.

• D. Tenant Petitions Authorized. In the event a Tenant disputes the pass through of a charge or the calculation of the Tenant's share of the charge, the Tenant may file a Petition for a determination as to whether such charge may be passed through pursuant to this Section and whether the calculation of the Tenant's share comports with this Section and any Regulations governing such pass through. Any of the following reasons provide grounds for such a Petition:

  1. There exists a dispute as to the genuineness of the bill or the amount of the charge.

  2. The pass through of the charge is not authorized under this Chapter.

  3. There exists a dispute as to whether the Tenant had the right to use and occupy the Rental Unit during the billing period or any portion of the billing period.

  4. Mathematical errors in the relevant calculations.

  5. Copies of the Landlord's invoice or bill were not provided as required.

• E. Security Deposit. Except as provided in Section 17.23.320.C, a Security Deposit, once established, cannot be raised for the duration of the tenancy. For purposes of this Section only, where several Tenants occupy one (1) Rental Unit, the Tenancy shall be deemed to continue so long as any one (1) of the Tenants who occupied the Rental Unit when the deposit was set continues to occupy the Rental Unit.

• (Ords. 30032, 30090, 30110.)

• A. Rent Increase Awards for Landlord Fair Return Petitions. A Landlord may increase rents in excess of the Annual General Increase to the extent a higher rent is authorized in a final Hearing Officer's decision on a Landlord Petition for fair return filed in accordance with Part 8 of this Chapter.

• B. Pass Through Awards for Landlord Specified Capital Improvements Petitions. A Landlord may impose a pass-through charge in addition to Rent to the extent authorized in a final Administrative Decision or Hearing Officer's decision on a Landlord Specified Capital Improvements Petition filed in accordance with Section 17.23.330. Provided however, in no event may the total monthly amount imposed for Specified Capital Improvements exceed three percent (3%) of the monthly Rent validly charged for the Rent Stabilized Unit on the date of the filing of the Petition. Charges for Specified Capital Improvements shall not be considered Rent for purposes of this Chapter and shall not increase when Rent increases, nor shall they be considered part of Rent for the purpose of calculation of the Annual General Increase. Following a valid vacancy decontrol of Rent for a Rent Stabilized Unit in accordance with Section 17.23.300, any awarded charges for Specified Capital Improvements for that unit shall expire.

• C. One-Time Payments for New Additional Housing Services. A Tenant Household may file a

T17:163

SAN JOSÉ CODE

§ 17.23.320

joint Petition to allow the Tenant to make a payment of a one-time fee or increase the Tenant's Security Deposit in order to receive or be entitled to certain new or additional Housing Services that are expressly excluded in the written rental agreement, to the extent that these Housing Services that are identified in the Regulations. The one-time payment for new or additional Housing Services may not exceed five percent (5%) of the monthly Rent validly charged at the time of the Tenant request. The one-time payment or additional Security Deposit shall not be considered Rent for purposes of this Chapter and shall not be included when calculating a Rent increase or subject to the one (1) increase in any twelve (12)-month period limitations in Section 17.23.310.

(Ord. 30032.)

• A. Other Fees, Charges, and Costs that May Be Passed Through to Tenants. The following charges may be passed through to Tenants, separate from Rent only in compliance with the requirements below. These charges shall not be considered Rent for purposes of this Chapter and shall not increase when Rent increases, nor shall they be considered part of Rent for the purpose of calculation of the Annual General Increase.

Annual Fees imposed under Chapter 17.23.

1. Reserved.

2. New Charges. A Landlord may pass through to a Tenant a share of charges imposed on the Landlord by governmental agencies or by public utilities subject to regulation by the California Public Utilities Commission, subject to the limitations in subsection 3 below where all of the following conditions are met:

   • a. The charge is a new charge, as opposed to an increase in an existing

charge, which the governmental agency or the public utility requires the Landlord to pay; and

• b. Such pass through has been authorized by resolution of the City Council in which the charge in question was expressly identified; and

• c. The Landlord passes through the charge in accordance with the rules specified in such a resolution adopted by the City Council and the Regulations; and

• d. The Landlord passes through the charge in accordance with the rules specified in such a resolution adopted by the City Council and the Regulations.

3. Conditions to Pass Through Charges to Tenants. No charge described in subsection 2 above may be passed through to any Tenant pursuant to this Section unless all of the following conditions are satisfied:

   • a. The total charge by the Landlord may not exceed fifty percent (50%) of the total amount paid by the Landlord; and

   • b. No Landlord may require a Tenant to pay any amount of any charge that is attributable to any period of time that the Tenant was not entitled to use and occupy the Rental Unit; and

   • c. No Landlord may require a Tenant to pay any amount of any charge that is attributable to common areas or Rental Units other than the Tenant Household's Rental Unit; and

   • d. No Landlord may require a Tenant to pay more than its share of the charge attributable to that Tenant's Rental Unit that is permitted to be passed through to Tenant.

(Ord. 30032.)

T17:164

BUILDINGS AND CONSTRUCTION

§ 17.23.350

• A. Purpose. The purpose of this Section is to provide an incentive for certain improvements by allowing Landlords to petition for a limited pass through to the Tenant of the amortized costs of the improvements listed in Appendix B to the Regulations ("Specified Capital Improvements") subject to the following conditions:

  1. The charge must comply with the limitations in Section 17.23.320.B.

  2. The Specified Capital Improvement must do one (1) of the following: provide new Housing Services or enhanced Housing Service functionality to the Tenants; increase the safety (including ADA accessibility), sustainability (water or energy conservation) or seismic readiness of the Rent Stabilized Unit (or of a building containing a Rent Stabilized Unit).

  3. The Specified Capital Improvement must have been completed within twelve (12) months prior to the filing of the Petition and must meet the criteria in the Regulations.

• B. Petition Required. A Landlord must petition for and receive an Administrative Decision authorizing a pass through for any costs to be charged to Tenants pursuant to this Section prior to passing through any charges.

• C. No Pass Through for Improvements to Maintain Existing Housing Services. The following may not be passed through to the Tenant unless explicitly authorized by the Regulations: (1) the costs of a Specified Capital Improvement that replaces an existing physical feature of a Rent Stabilized Unit (or of a building containing a Rent Stabilized Unit) with a physical feature of similar kind and quality; or (2) the costs of a Specified Capital Improvement that maintains a similar level of functionality as a prior physical feature of a Rent Stabilized Unit (or of a building containing a Rent Stabilized Unit).

• (Ord. 30032.)

• A. Tenant Petitions. There is hereby established a Tenant Petition process, which process and procedures shall be set forth in the Regulations. A member of a Tenant Household may submit a Petition to the Director on any one (1) or more of the following grounds: to allege a Rent increase in violation of the Ordinance; to request a reduction in Rent based on decreased Housing Services; to contest a fee or charge as an unauthorized or excessive pass through; to allege other violations of the Ordinance or Regulations; or other specific grounds that may be provided by the Regulations.

• B. Landlord Petitions. There is hereby established a Landlord Petition process, which process and procedures shall be set forth in the Regulations. A Landlord may submit a Petition to the Director on any one (1) or more of the following grounds: to request a Rent increase in excess of the Annual General Increase in order to obtain a fair return as described in Part 8; to request the ability to pass through a charge for Specified Capital Improvements; or other specific grounds that may be provided by the Regulations.

• C. Joint (Unopposed) Petitions. There is hereby established a Joint Petition process, which process and procedures shall be set forth in the Regulations. A Tenant may file a Petition to request approval of a one-time payment or Security Deposit increase pursuant to Section 17.23.320.C, if the Landlord has signed the Petition. Subject to the conditions in the Regulations, a Tenant may file a Petition for an increase in the Rent of up to five percent (5%) for an additional Tenant if additional occupants are prohibited in the written rental agreement or an increase in the Rent of up to fifty dollars ($50) for a second parking space if only one (1) parking space is reserved for the Tenant in a written rental agreement, provided that no increase in the Rent is allowed for a Tenant's dependent child, foster child, spouse,

T17:165

SAN JOSÉ CODE

§ 17.23.350

domestic partner, parent or minor in the Tenant's care, which terms may be further defined in the Regulations.

• D. Petitions Affecting Rental Voucher Units. A Tenant or Landlord filing a Petition that applies to a Rental Voucher Unit must indicate that on the Petition and provide a copy of the Petition to the government agency or nonprofit administering government agency's funds within the time period specified in the Regulations for notice to the other party. The government agency or nonprofit administering government agency's funds shall be entitled to participate in the Petition process, and to file a Petition or response within the time period specified in the Regulations.

• (Ord. 30032.)

Part 4

FEES

Sections:

The costs of providing services and administering this Chapter shall be reimbursed to the General Fund by imposition of a fee chargeable against each Rental Unit in the City of San José subject to the provisions of this Chapter. This is the fee previously codified in Section 17.23.480 and 17.23.490 pursuant to Ordinance No. 19696. (Ord. 30032.)

• A. Timing and Method. The fee imposed pursuant to Section 17.23.400 shall be paid at the time at which the residential occupancy permit fee, if applicable, is due and paid under Title 17 of this Code, provided that the fee may also be collected by a supplemental billing, or collected in an alternative manner if so

  • provided in the Regulations. Said fee may be included as an Operating Expense under the definition contained in Section 17.23.820. The City Manager shall report to the City Council no less than once each year regarding the City Manager's recommendation and the recommendation of the Commission as to the amount of such fee necessary to recover the costs of administering this Chapter. The amount of the fee shall be determined by resolution of the City Council adopted from time to time. The fee shall not exceed the amount found by the City Council to be necessary to administer this Chapter, and the Council's finding in this regard shall be final. Payment by the Landlord of the fee shall be made at the same time and in conjunction with the residential occupancy permit fee, or in an alternative manner if so provided in the Regulations and the Director of Finance is hereby authorized to collect said fees in this manner.

• B. Late Payment. Whoever fails, for more than thirty (30) days after date of notice, to pay the fee required hereunder shall, in addition to said fee, pay an additional late charge assessment as determined by resolution of the City Council. No portion of any charge or fee for late payment or submission authorized by this Section, or any portion thereof, may be passedthrough to the Tenant.

• C. Fee Credit Upon Transfer. In the event the residential occupancy permit is transferred to a subsequent owner of the Rental Unit for which the fee has been paid, the subsequent owner shall be deemed to have paid said fee for the Rental Unit.

• D. Fee Exemptions. The Regulations shall provide procedures and standards for a Landlord to prove eligibility for fee exemptions for Rent Stabilized Units based on claims of owner occupied units or units exempt pursuant to the definition provided in Section 17.23.167.B, Rent Stabilized Unit.

• (Ord. 30032.)

T17:166

BUILDINGS AND CONSTRUCTION

§ 17.23.530

Part 5

ENFORCEMENT

Sections:

• 17.23.520 Waivers.

• 17.23.530 Excessive rents demanded or received; civil and criminal liability.

• 17.23.540 Affirmative defense against unlawful detainer actions.

• 17.23.550 Civil action for wrongful eviction.

• 17.23.560 Disclosure to purchasers of real property.

• 17.23.570 Administrative citations; injunctive relief.

• 17.23.580 Rights and obligations cumulative.

• A. Penalty for Violations of this Chapter. In addition to all other remedies provided by law, including those set forth in Chapter 1.08 of Title 1 of the San José Municipal Code, and as part of any civil action brought by the City, a court may assess a civil penalty in an amount up to the greater of two thousand five hundred dollars ($2,500) per violation per day, or ten thousand dollars ($10,000) per violation, payable to the City, against any person who commits, continues, operates, allows, suffers, or maintains any violation of a provision of this Chapter 17.23, subject to California Civil Code Section 1947.7, as amended.

• B. Attorney Fees. The prevailing party in any civil action brought pursuant to this Chapter 17.23 shall be entitled to the reasonable costs of bringing such civil action, including court costs and attorney fees.

• (Ord. 30032.)

Possession of a Rental Unit shall not be recovered by a Landlord from a Tenant, and the Tenant Household, who is not otherwise in violation of the terms of occupancy of the Rental Unit, if either:

• A. The Landlord's dominant motive in seeking to recover possession of the Rental Unit is retaliation against the Tenant for exercising any rights under this Chapter 17.23; or

• B. The Landlord's dominant motive in seeking to recover possession of the Rental Unit is to evade the purposes of this Chapter 17.23.

• (Ord. 30032.)

• A. Nonwaiver. Any waiver or purported waiver by a Tenant of rights granted under this Chapter 17.23 prior to the time when such rights may be exercised shall be void as contrary to public policy.

• B. Waiver of Rights. It shall be unlawful for a Landlord to attempt or seek to waive, or to waive, in a written or oral rental agreement, the rights granted a Tenant under this Chapter prior to the execution of, or as a condition of entering into or extending, a written or oral rental agreement.

• (Ord. 30032.)

• A. Misdemeanor. Any Landlord found to have received, imposed, or demanded prohibited pass through charges, other fees or charges or any Rent in excess of the Rent allowed under this Chapter 17.23 and its implementing Regulations shall be guilty of a misdemeanor, subject to the provisions of California Civil Code Section 1947.7, as amended.

• B. Civil Penalties. Any person found to have demanded, accepted, received or retained any payment of Rent in excess of the Rent allowed under this Chapter 17.23 and its implementing

T17:167

SAN JOSÉ CODE

§ 17.23.530

Regulations or pass through charges, other fees or charges that are not allowed under this Chapter 17.23, shall be liable to the Tenant from whom such payment was demanded, accepted, or received for the amount that was impermissibly charged, plus damages as determined and not to exceed five hundred dollars ($500) or three (3) times the amount by which such payment exceeded the Rent allowed, whichever is greater. Remedies provided in this paragraph are in addition to any other legal remedies and are not intended to be exclusive.

(Ord. 30032.)

Rent Stabilized Units. A Landlord seeking to terminate a tenancy of a Tenant or Tenant Household for a Rent Stabilized Unit must comply with Section 17.23.600(A) of the Apartment Rent Ordinance and the Tenant Protection Ordinance. Noncompliance shall constitute an affirmative defense for a Tenant of a Rent Stabilized Unit against any unlawful detainer action under California Code of Civil Procedure Section 1161.

Unit shall disclose to a potential buyer in writing, prior to the close of escrow that the Rent Stabilized Unit is subject to this Chapter 17.23 and implementing regulations. Upon request by the City, such Owner or former Owner shall provide the City with a copy of such written disclosure.

• B. Failure of an Owner to make the disclosure set forth in Section 17.23.560 shall in no way excuse a purchaser of a Rent Stabilized Unit from any right, responsibility, or obligation under this Chapter 17.23.

• (Ord. 30032.)

• A. The Director may enforce the rights and responsibilities created by this Chapter 17.23 and the Regulations, including issuance of an administrative citation in accordance with Chapter 1.15 of the San José Municipal Code.

• B. The City Attorney may seek injunctive relief to restrain or enjoin any violation of this Chapter or the Regulations.

• (Ord. 30032.)

(Ord. 30032.)

In addition to any other remedies provided by law, any Landlord found to have evicted a Tenant from a Rental Stabilized Unit in violation of the Apartment Rent Ordinance is liable to that Tenant for a fine of up to ten thousand dollars ($10,000), and the reasonable costs incurred by the Tenant as a result of the eviction, including the costs of moving the Tenant Household and the reasonable costs of bringing such suit, including court costs and attorney fees.

(Ord. 30032.)

property.

• A. Any Owner, as that term is defined in Part 11 of this Chapter 17.23, of a Rent Stabilized

• A. Rental in Violation of City Ordinance. If a Landlord rents a Rent Stabilized Unit: (i) in violation of the City's Short Term Rental Ordinance, Part 2.5 of Chapter 20.80, or for an unpermitted non-residential use; (ii) in material violation of the City's Housing, Fire or Building Codes, Chapter 17.20, or Title 24; or (iii) in violation of the implied warranty of habitability, such rental shall also be considered a violation of this Chapter and may give rise to any of the remedies or penalties identified in this Part 5.

• B. Tenant Protections. Tenants shall have the right to seek the protections set forth in the Tenant Protection Ordinance in addition to any remedies available under Parts 1 through 9 of this Chapter.

T17:168

BUILDINGS AND CONSTRUCTION

§ 17.23.600

• C. Failure to Provide a Notice of Termination; Evasion. If a Landlord fails to comply with Section 17.23.600, requires a Tenant to enter into a new lease under another name, or otherwise seeks to evade the restrictions on Rent in this Chapter, such actions shall also be considered a violation of this Chapter and may give rise to any of the remedies or penalties identified in this Part 5.

• D. Additional Rights and Obligations. The rights and obligations set forth in Parts 1 through 9 of this Chapter are in addition to those set forth in any other Part or Chapter of the Municipal Code.

• (Ord. 30032.)

Part 6

EVICTIONS - RENT STABILIZED UNITS

Sections:

• A. Copy of Notice of Termination to City. A copy of each and every Notice of Termination issued to a Tenant of a Rent Stabilized Unit shall be filed with the Director within three (3) days after the service thereof on the Tenant.

• B. Supplement to Notice of Termination of Tenancy Filing. Until the Rent Stabilized Unit is first registered pursuant to the Regulations, the copy of the Notice of Termination provided to the Director, excluding copies of the Notice of Termination based on a three (3)day notice to pay or quit, shall be accompanied by a "filing statement" from the Landlord or property manager, made under penalty of perjury, setting forth all of the following information in a form approved by the Director:

  1. The amount of Rent that the Tenant Household being evicted is currently paying each month;

  2. The date of the most recent Rent increase to the Tenant who has received the Notice of Termination;

  3. The physical address of the Rent Stabilized Unit being vacated;

  4. The names of the Tenants being evicted; and

  5. Such other information as may be reasonably requested by the City.

• C. Notice of Re-Rental to the City. Unless the Landlord is already obligated to re-register the Rent Stabilized Unit on vacancy or rerental pursuant to the Regulations, once a Tenant Household has vacated a Rent Stabilized Unit, such Landlord shall be required to provide the Director with the following information in a form approved by the Director, subject to California Civil Code 1947.7, as amended:

  1. The amount of Rent that the subsequent Tenant is actually paying each month; and

  2. The physical address of the Rent Stabilized Unit; and

  3. The name, of each subsequent Tenant; and

  4. A copy of the written rental agreement (if any) between the Landlord and Tenant; and

  5. The reason the prior Tenant vacated the Rent Stabilized Unit, if known; and

  6. Such other information as may be reasonably requested by the City.

• D. Use of Personal Information. Personally-identifying information about Tenants and Tenant Households received by the City pursuant to this Section shall be used for investigation and prosecution of violations of the Municipal Code or other applicable laws. Unless the City receives permission from such individuals, City staff shall not otherwise provide such information to third parties unless required to do so by law or court order. For so long as the City requires registry of rents and requires the Landlord to provide the name of present or former

T17:169

SAN JOSÉ CODE

§ 17.23.600

tenant, the following information, when required to be provided by and received from the Landlord is confidential and shall be treated as confidential information within the meaning of the Information Practices Act of 1977: the name of a present or former Tenant and any additional information provided concerning the Tenant.

• E. Each Violation a Separate Violation. For purposes of assessing civil and criminal penalties, violations of the requirements set forth in this Section shall be considered separate violations of this Chapter.

• (Ord. 30032.)

Part 7

TENANT BUYOUT AGREEMENTS

Part 8

FAIR RETURN STANDARD

Sections:

• 17.23.810 Fair return standard.

• 17.23.820 Calculations of gross income and operating expenses.

• 17.23.830 Adjustment of base year net operating income.

• 17.23.840 Establishment of base year operating expenses in the absence of expense records.

• 17.23.845 Purchasers of rent stabilized properties after the base year.

• 17.23.850 Allocation of rent increases.

Sections:

• 17.23.860 Authority to insure a fair return.

• 17.23.870 Landlords to retain 2014 records.

The purpose of this Part 7 is to increase the fairness of Buyout Offers and Agreements by requiring Landlords provide Tenants with a City Disclosure form, and permitting Tenants to rescind Buyout Agreements, provided certain conditions are met, within forty-five (45) days of executing the Buyout Agreement. An additional goal is for the City to obtain data relating to the prevalence of Buyout Agreements, so as to monitor the level of tenant displacement, and regulate compliance with the purposes of this Chapter. (Ord. 30032.)

Subject to the requirements of Chapter 14 of the Regulations, a Landlord may negotiate with a Tenant to obtain a voluntary vacancy by agreement.

(Ord. 30032.)

A Landlord may Petition for a Rent adjustment in order to obtain a fair return in the event that the other increases allowed pursuant to the Apartment Rent Ordinance do not provide a fair return. This Part sets forth the standards for determining whether or not a Landlord is obtaining a fair return and what Rent increase would be required to provide a fair return if a Landlord is obtaining less than a fair return. (Ord. 30032.)

• A. Fair Return Standard. A fair return is the Base Year Net Operating Income adjusted by the percentage increase in the Consumer Price Index since the Base Year. "Net Operating Income" is the Gross Income from a Covered Property net of Operating Expenses, as such amounts are calculated and adjusted pursuant to this Part. Debt service costs are not included in calculating Net Operating Income.

T17:170

BUILDINGS AND CONSTRUCTION

§ 17.23.820

• B. Base Year. The "Base Year" is the 2014 calendar year, provided that where the Rent for Rent Stabilized Units has been set in a prior fair return decision regarding a Petition pursuant to this Part, in which case the calendar year that was the Current Year in the prior determination may be used as the Base Year for the purposes of reviewing a subsequent fair return Petition.

• C. Current Year. The Current Year is the most recent calendar year preceding the submission of a Petition pursuant to this Part.

• D. Calculation of Consumer Price Index. The Consumer Price Index ("CPI-U") for the Base Year shall be 251.985, which equals the annual average for 2014 reported by the Bureau of Labor Statistics for the CPI-U index for all urban consumers for all items for the San Francisco-Oakland-San José area. The CPI-U for the Current Year shall be the annual average for the Current Year reported by the Bureau of Labor Statistics for the CPI-U index for all urban consumers for all items for the San Francisco-Oakland-San José area. In the event a successor index to the CPI-U index for all urban consumers for all items for the San Francisco-Oakland-San José area is established by the Bureau of Labor Statistics, this calculation method may be updated accordingly in the Regulations.

• (Ord. 30032.)

• A. Calculation of Gross Income. For the purposes of determining the Net Operating Income, Gross Income shall be the sum of the following:

  1. Rent, calculated on the basis of one hundred percent (100%) rental occupancy at the Rents in effect at the end of the Base Year or Current Year, as applicable; and

  2. Income from coin operated laundry facilities, vending machines and similar income; and

  3. Interest from security and cleaning deposits (except to the extent paid to Tenants); and

  4. All other income or consideration received or receivable in connection with the use or occupancy of the Rent Stabilized Units and the Covered Property.

• B. Adjustments of Gross Income.

  1. Vacancy and Unpaid Rent. Rents shall be adjusted for uncollected rents due to vacancy and unpaid Rent to the extent such are reasonable and beyond the control of the Landlord. Adjustments pursuant to this Section are subject to the limitation that the ratio of uncollected Rents due to vacancies and unpaid Rent in the Current Year shall not exceed the ratio in the Base Year, unless the Landlord can demonstrate that the higher ratio is reasonable, is not the outcome of asking Rents exceeding market rents, and will likely be reoccurring.

  2. Separately Charged Fees. Gross Income shall be adjusted to include other fees and charges not included in Rent that are paid to the Landlord or Landlord's designee by Tenants. If the Landlord collects any fees or charges that are not allowed under the Apartment Rent Ordinance, this fact may be considered in the determination on the Petition. In no event shall the collection of unauthorized fees or charges in the Base Year or Current Year be applied so as to result in a Rent increase to the Tenant.

  3. Owner Occupied Rental Units or Rental Units Otherwise Not Rented at Market Levels. If a Rent Stabilized Unit is not rented in an arm's length transaction during the Base Year or Current Year or a portion thereof, the potential market rental income for such Rent Stabilized Units shall be included in calculating adjustments to Gross Income, which income shall be estimated based on the

T17:171

SAN JOSÉ CODE

§ 17.23.820

Rents of comparable Rental Units on the Covered Property, or if there are no comparable Rental Units on the Covered Property, the current market rents of comparable Rental Units in the immediate area.

4. Increases in Rent Based on Vacancy Decontrol. The Rent of Rent Stabilized Units that received a Rent increase following a valid vacancy decontrol pursuant to California Civil Code Section 1954.53 at any time from the first date of the Petition's Current Year through the date of the last hearing on the Petition, shall be computed at the Rent Stabilized Unit's new Rent after vacancy, for all twelve (12) months of the Petition's Current Year. In addition, if the Rent Stabilized Unit is eligible for an Annual General Increase during any month of the Current Year, the general adjustment shall be included for such months.

ate of the Petition's Current Year through the date of the last hearing on the Petition, shall be computed at the Rent Stabilized Unit's new Rent after vacancy, for all twelve (12) months of the Petition's Current Year. In addition, if the Rent Stabilized Unit is eligible for an Annual General Increase during any month of the Current Year, the general adjustment shall be included for such months.

5. Illegal or Uninhabitable Rentals during the Base Year. If a Rent Stabilized Unit was rented in violation of the Municipal Code during the Base Year, the Base Year rent for that unit shall be established pursuant to Section 17.23.820.B.3, unless the Rent Stabilized Unit was uninhabitable in the Base Year. If a Rent Stabilized Unit is uninhabitable in the Base Year, any adjustment to income shall be made in consideration of the duties of the Landlord under law and the purpose of this Chapter.

6. Other Income in Violation of Municipal or State Law. If not already accounted for as Rent, Gross Income shall be adjusted to include other income to a Landlord from renting a Rent Stabilized Unit in violation of the City's Short Term Rental Ordinance, Part 2.5 of Chapter 20.80, in violation of any other local or state law or regulation. If the Landlord earns income in violation of the law, this

fact may be considered in the determination on the Petition. In no event shall the collection of unpermitted or illegal Rent or Gross Income in the Base Year or Current Year be applied so as to result in a Rent increase to a Tenant Household.

• C. Calculation of Operating Expenses. For the purposes of determining Net Operating Income, Operating Expenses shall include the following expenses to the extent they are incurred in connection with the operation of the Covered Property:

  1. Annual fees assessed under Chapter 17.23 to the extent that they are not passed through to Tenants;

  2. Business license fees;

  3. Real property taxes;

  4. Utility costs paid by the Landlord to the extent that they are not passed through to Tenants;

  5. Insurance;

  6. Normal and reasonable repair and maintenance expenses for one (1) or more Rental Units and the Covered Property. Repair and maintenance expenses shall include, but not be limited to, building maintenance including carpentry, painting, plumbing and electrical work, supplies, equipment, refuse removal, security services or systems, cleaning, fumigation, landscaping, and repair or replacement of furnished appliances, drapes, and carpets;

  7. Reasonable management expenses (contracted or owner performed), including necessary and reasonable advertising, accounting, other managerial expense. Management expenses are presumed to be six percent (6%) of Gross Income, unless established otherwise. Management expenses in excess of eight percent (8%) of Gross Income are presumed to be unreasonable and shall not be allowed unless it is established that such expenses do not

T17:172

BUILDINGS AND CONSTRUCTION

§ 17.23.820

exceed those ordinarily charged by commercial management firms for similar residential properties;

8. Attorneys' fees and costs that are:

• a. Incurred in connection with successful good faith attempts to recover Rents owed or with successful unlawful detainer actions not in violation of applicable law, to the extent the same are not recovered from Tenants;

  • b. Legal expenses that are necessarily incurred in dealings with respect to the normal operation of the Rent Stabilized Units or Covered Property, to the extent such expenses are not recovered from adverse or other parties;

  • c. Reasonable and necessary costs incurred in obtaining a Rent increase pursuant to this Chapter, including administrative or judicial proceedings in connection with this Chapter, except where the pass-through of such expenses would constitute a violation of public policy or would contravene the exclusion in Section 17.23.820.D.5.

• Any attorneys' fees and costs included in Operating Expenses pursuant to this Section shall be amortized over a period of five (5) years, unless it is demonstrated that an alternate amortization period would be more reasonable and more consistent with the purposes of this Chapter.

• 9. Replacement of facilities, materials or equipment not included in Section 17.23.820.C.6 necessary to maintain the same level of services as previously provided, to the extent that they are not passed through to Tenants and subject to the condition that said expenses shall be amortized in accordance with the standards for Operating Expense amortization in the Regulations.

• D. Exclusions from Operating Expenses. For the purposes of determining Net Operating Income, Operating Expenses shall not include:

  1. Avoidable and unnecessary expenses incurred during or since the Base Year including expenses for additional maintenance and repair work which would not have been necessary if the maintenance had not been unreasonably deferred by the Owner or a prior Owner;

  2. Debt service, including mortgage interest and principal payments and other expenses associated with obtaining debt services, including but not limited to appraisal and title insurance costs;

  3. Fees, other than fees expressly authorized by Section 17.23.820.C;

  4. Penalties, fees or interest imposed for violation of this Chapter or any other law;

  5. Legal expenses excluded as set forth in this Chapter or the Regulations;

  6. Contributions to lobbying efforts or organizations which lobby on behalf of apartment owners on local, state or federal legislative issues;

  7. Depreciation;

  8. Any expenses for which the Landlord has been or was eligible for reimbursement by any rebate or discount, Security Deposit, insurance, judgment for damages, settlement or any other method or device;

  9. Any expense incurred in conjunction with the purchase, sale, lease (but not including individual rental agreements with Tenants) financing or re-financing of the building that contains the Rent Stabilized Units, including, but not limited to, loan fees, payments to real estate agents or brokers, appraisals, legal fees, accounting fees, etc.; and

  10. Any other expense that does not benefit the Covered Property, including, but not limited to, the cost of or forming a cor-

T17:173

SAN JOSÉ CODE

§ 17.23.820

poration, partnership or other entity or buying out a stockholder or partner of the Landlord.

• E. Adjustments to Operating Expenses.

  1. Interest Allowance for Amortized Expenses. Allowances for amortized Operating Expenses shall include an interest allowance as provided in the Regulations.

  2. Adjustment of Unusually Low or High Expenses. A claimed expense(s) for a particular type of Operating Expense shall be adjusted if the claimed expense(s) is:

     • a. Not representative of the annual recurring level of the expense; or

     • b. In the case of Base Year expenses, not a reasonable representation of average expenditures for that item in the years preceding and following the Base Year; or

     • c. In the case of Current Year expenses, is not a reasonable estimate of future recurring annual expenditures for that item.

Unusually high or low expenses in a particular year shall be adjusted to allow for a reasonable comparison between the annual recurring level of the expense(s) in the Base Year and the Current Year. This adjustment may be made by using an average of the particular expense over a number of years or amortizing an amount that is above the average, or using an industry average or adjusting expense levels from other years by the CPI-U or by some other reasonable methodology. In making such adjustments for specific items, the goal shall be to establish an amount for that particular Operating Expense that most reasonably serves the objectives of obtaining a reasonable comparison between the recurring level of expense(s) in the Base Year and the Current Year.

3. Amortization of Non-recurring expenses. Non-recurring expenses which are "substantial" shall be amortized over a reasonable period. For purposes of this paragraph, non-recurring expenses are substantial if they exceed one (1%) of the annual Rent (as determined pursuant to Section 17.23.820.A.1).

4. Calculation of Management Expenses. It shall be presumed that management expenses increased by the percentage increase in the CPI-U between the Base Year and the Current Year, unless the Landlord can demonstrate that the level of management services that are beneficial to the Tenants has increased. A change from owner management in the Base Year to third party management in the Current Year, in itself, shall not be considered an increase in management services beneficial to the Tenants.

5. Mixed Use Properties; Segregation of Expenses and Income. If a portion of the Covered Property is not used as residential rental property with Rent Stabilized Units or includes units which are not rent stabilized, this must be declared in the Petition, and any Income and Operating Expenses must be fairly allocated, consistent with the purposes of this Chapter, between the other uses and the rent stabilized portion of the property covered by the Petition.

6. Apportionment of Operating Expenses. In the event that a particular Operating Expense covers several years of costs, the costs shall be fairly allocated to the year that they are attributable to, even if they were paid for in a different year.

(Ord. 30032.)

• A. Presumption of Fair Return. The Apartment Rent Ordinance presumes that the Landlord received a fair return in the Base Year.

T17:174

BUILDINGS AND CONSTRUCTION

§ 17.23.830

• B. Rebutting the Presumption. The presumption that the Landlord received a fair return in the Base Year based on reasonable expenses may be overcome by sufficient evidence showing that income was unusually low or expenses were unusually high for a particular Covered Property in the Base Year as described in this Part.

• C. Authority to Adjust Net Operating Income. The Hearing Officer may adjust the Base Year Net Operating Income if the Hearing Officer finds:

  1. The Landlord's Operating Expenses in the Base Year were unusually high or low in comparison to other years due to unusual circumstances. In such instances, adjustments may be made in calculating Operating Expenses so the Base Year Operating Expenses reflect average expenses for the Covered Property over a reasonable period of time. The Hearing Officer shall consider the following factors in making this finding:

     • a. The Landlord made substantial Capital Improvements during the Base Year, which were not reflected in the Base Year rents;

     • b. Substantial repairs exceeding one (1%) of the annual Rent (as determined pursuant to Section 17.23.820.A.1) were made due to damage caused by uninsured disaster or vandalism, provided that the property was not uninsured or unreasonably underinsured as determined by the Hearing Officer, which were not reflected in the Base Year rents;

     • c. Maintenance and repair were below accepted standards or resulted from the unreasonable deferral of other repairs or work;

     • d. Other expenses were unreasonably high or low, notwithstanding prudent business practice.

2. The Landlord's Gross Income during the Base Year was unusually high or low. In such instances, adjustments may be made in calculating Gross Income consistent with the purposes of this Chapter. The Hearing Officer shall consider the following factors in making this finding:

   • a. The Gross Income during the Base Year was unusually low because some Tenants had unusually low Rents for the quality, location, age, amenities and condition of the housing as compared to the Rent for comparable units without housing violations in the immediate area in which the Rent Stabilized Unit is located. In the event that a claim is made pursuant to this Section, the Landlord shall pay for an appraisal of Base Year rents for comparable buildings made by an appraiser selected by the City. The appraisal, which shall be presented as evidence, shall be conducted in a manner consistent with the standards in the Regulations.

   • b. The Gross Income during the Base Year was significantly lower than normal because of destruction of all or part of the premises and/or temporary eviction for construction or repairs;

   • c. There was a special relationship between the Landlord and Tenant (such as a family relationship) resulting in abnormally low rent charges;

• d. The Rents had not been increased for five (5) years preceding the Base Year;

  • e. The Tenant lawfully assumed maintenance responsibilities in exchange for low Rent increases or no Rent increases; or

T17:175

SAN JOSÉ CODE

§ 17.23.830

• f. Other special circumstances which establish that the Rent was not set as the result of an arms-length transaction.

• (Ord. 30032.)

If Base Year Operating Expense information is unavailable, the Landlord shall submit a request to the City to accept the Petition without complete Base Year Operating Expense information in a manner consistent with the standards in the Regulations. In the absence of Base Year Operating Expense information, it shall be presumed that Operating Expenses have increased by the same percentage as the CPI-U since the Base Year, except that data or rate information or other sources of cost information may be considered in estimating the level of particular Operating Expenses in the Base Year. Information on increases or decreases in costs between the Base Year and the Current Year may be introduced by the Landlord, Tenant or members of the Tenant Household, City staff, and/or the Hearing Officer. (Ord. 30032.)

If the Landlord can show that the Landlord purchased the Covered Property between January 2015 and May 2016 in an arm's length transaction, and that reasonable attempts were made to obtain the records regarding Gross Income from the prior owner, and no information on the Base Year Gross Income is available from Tenants or City Staff, the Landlord may request to the City to accept a Petition for an adjustment under Section 17.23.820 using the year of purchase as an Alternative Base Year, in which case, the provisions of Section 17.23.810 shall be adjusted accordingly. (Ord. 30032.)

Rent increases resulting from a Landlord Petition for fair return shall be allocated equally among

all Rent Stabilized Units in the Covered Property; subject to the condition that the Hearing Officer, in the interests of justice, shall have the discretion to apportion the Rent increases in another manner necessary to ensure fairness.

(Ord. 30032.)

If a court finds that a Landlord has been denied a fair return, notwithstanding any other provision in this Section, the Hearing Officer may provide for a Rent adjustment that is adequate to provide a fair return. (Ord. 30032.)

Landlords are required to keep all financial records for 2014 which may be necessary for making a Net Operating Income determination. Failure to retain such records of Base Year Operating Expenses may result in the loss of the ability to demonstrate the need for a fair return Rent increase after September 1, 2016. (Ord. 30032.)

Part 9

RENT REGISTRY

Sections:

• A. Rent Registration. The procedures for registration shall be established in this Part and the Regulations. All registration requirements are subject to California Civil Code Section 1947.7, as may be amended. The Landlord shall complete and submit to the Director a registration for each Rent Stabilized Unit on a City approved form, annually unless some other interval is specified by the City in the Regulations.

• B. Copy of Registration to Tenant. If requested by the City, each Landlord shall provide to an

T17:176

BUILDINGS AND CONSTRUCTION

§ 17.23.1110

• adult member of the Tenant Household of a Rent Stabilized Unit a true and correct copy of the completed registration form that pertains to their Rent Stabilized Unit within ten (10) days of submission to the Director. The Landlord may redact any information that does not pertain to that Rent Stabilized Unit except the name and address of the Landlord.

• C. Regulations. The Regulations adopted by the City Manager for the implementation and administration of this Chapter 17.23 may address the contents and submission of registrations, including deadline for submissions by Landlords.

• D. Implementation of an Alternate Registry Procedure. Notwithstanding Section 17.23.900.A, the City Council by resolution may, at any time after the second annual registration cycle is complete, change to another interval for, or vacancy-based, registration.

• E. Landlord Tenant Collusion. It shall be a violation of this Chapter to report an amount of Rent for a Rent Stabilized Unit to the Director other than the actual amount paid by the Tenant Household for the use and occupancy of the Rent Stabilized Unit, or in the case of a Rental Voucher Unit, the sum of the rent paid by the Tenant and government agency.

• F. Upon failure to submit the registration or reregistration for a Rent Stabilized Unit required pursuant to the Regulations within thirty (30) days of the date the registration or reregistration is due, the Landlord shall pay a late registration fee as set forth in the schedule of fees adopted by resolution of the City Council.

• (Ord. 30032.)

Part 10

RESERVED

Part 11

ELLIS ACT

Sections:

• 17.23.1145 Recording of memorandum.

• 17.23.1150 Relocation assistance.

• 17.23.1151 Voluntary alternative relocation.

• 17.23.1160 Effective date of withdrawal; extension of tenancy.

This part shall be known as the "Ellis Act Ordinance."

(Ord. 29902.)

• A. Owners of residential rental property are entitled to certain rights under California Government Code Sections 7060 - 7060.7, as amended (the "Ellis Act"). The purposes of this Part 11 are to: (1) set forth the city's requirements for withdrawal of a building containing covered residential rental units from the residential rental market in accordance with the Ellis Act; and (2) mitigate any adverse impact on persons displaced by that withdrawal through the provision of relocation assistance. This Part 11 complements existing state regulation of the landlord-tenant relationship and is intended to provide tenants with the maximum protections under the Ellis Act and to support the city's apartment rent ordinance. This Part 11 does not supersede any state law, or grant or deny any entitlement to the use of real property. The rights and obligations created by this Part 11 for owners of residential rental property and tenants are created pursuant to the city's general police powers to protect the health, welfare, and safety

T17:177

SAN JOSÉ CODE

§ 17.23.1110

of its residents and are in addition to any rights and obligations under state and federal law and are being adopted pursuant to the provisions of the Ellis Act.

• B. The Ellis Act broadly regulates how property owners may remove any tenants from residential rental units in order for the property owner to withdraw all units in a building from the

residential rental market. The sequence of events to remove a tenant, withdraw a building, and subsequent regulation of the property is summarized in the table below. The table below is provided for information purposes. The provisions of the Ellis Act and this part shall govern.

Summary of State and Local Ellis Act Removal Provisions

T17:178

BUILDINGS AND CONSTRUCTION

§ 17.23.1120

*Earliest effective withdrawal date for certain tenant households with minors in school may be extended to 60 days after the conclusion of the school year. (SJMC §17.23.1160.)

**The right to return to a unit under the original lease terms applies to all tenancies created after December 31, 2002; different rules apply for tenancies commenced prior to that date. (Gov. §7060.2(e).)

(Ord. 29902.)

In addition to the definitions provided in Title 17, Chapter 23, Part 2, for purposes of this Part 11 the following terms are defined as follows:

• A. "Base assistance" means that portion of the relocation assistance provided to all tenant households to mitigate any adverse impact on persons displaced from a covered unit due to the withdrawal of a building containing the covered unit from the residential rental market.

• B. "Catastrophically ill" means having a severe illness requiring prolonged hospitalization or recovery as certified by a physician.

• C. "Covered unit" means all of the following:

  1. Rent stabilized units, as defined in Subsection G of Section 17.23.1130.

  2. All residential rental dwelling units in a building that contains a residential rental dwelling unit that would be a rent stabilized unit but is tem-

porarily exempt under Subsection C of Section 17.23.150 because the unit is owned or operated by any government agency or the rents for the unit are subsidized by any government agency.

• D. "Director" means the director of the department of housing or the director's designee.

• E. "Notice of intent to withdraw" means a city approved form giving notice of an owner's intent to withdraw a building containing at least one covered unit from the residential rental market in accordance with California Government Code Sections 7060 - 7060.7, as amended.

• F. "Owner" means the fee owner of property that includes a building that contains at least one covered unit, and includes any successor in interest.

• G. "Qualified assistance" means that portion of the relocation assistance provided to mitigate the adverse impact on

T17:179

SAN JOSÉ CODE

§ 17.23.1120

tenant households that are low income, or contain minor children, elderly persons, terminally or catastrophically ill persons and/or disabled persons displaced due to the withdrawal of a building containing the covered unit from the residential rental market.

• H. "Relocation assistance" means the total payments of financial assistance from an owner to a qualified tenant household in accordance with Section 17.23.1150.

• I. "Rent stabilized units" means the units subject to the city's apartment rent ordinance provided in Title 17, Chapter 23, which includes rooms or accommodations occupied for thirty days or more in a guesthouse and units in any multiple dwelling building for which a certificate of occupancy was received on or prior to September 7, 1979, as those terms are defined in Sections 20.200.340, 20.200.470, and 20.200.480 of the San José Municipal Code.

to the city's apartment rent ordinance provided in Title 17, Chapter 23, which includes rooms or accommodations occupied for thirty days or more in a guesthouse and units in any multiple dwelling building for which a certificate of occupancy was received on or prior to September 7, 1979, as those terms are defined in Sections 20.200.340, 20.200.470, and 20.200.480 of the San José Municipal Code.

• J. "Right to return" means the obligation of the owner(s) of a building containing a covered unit to honor a request by certain tenants to receive an offer to return to and rent a covered unit when an owner returns the covered unit to the residential rental market, or, if the covered unit has been demolished, the right to rent a replacement covered unit, under certain circumstances and terms described in Section 17.23.1170. The right to return shall serve as a right of first refusal which must be complied with and specifically described in the memorandum required under Section 17.23.1145.

• K. "Tenant" means a residential tenant, subtenant, lessee, sublessee, occupant, or any other person entitled by written or oral lease, or by sufferance, to use or occupy a covered unit.

• L. "Tenant household" means one or more tenant(s) who occupy any individual cov-

ered unit, including each dependent of any tenant whose primary residence is the covered unit.

• M. "Terminally ill" means certified by a physician as having a terminal illness.

• (Ord. 29902.)

• A. Fees. The City shall establish fees for Cityincurred costs which shall be paid by any Owner who exercises the privilege to withdraw Covered Units from rent or lease. The City shall set the fee so as to recover all costs of administering this Part. The fees shall be paid to the City prior to the service of the Notice of Intent to Withdraw on any Tenant. Failure to pay the fees prior to service of the Notice of Intent to Withdraw shall invalidate such notice.

• B. Copies of Forms. Owner shall make copies of notices and forms available if a Tenant indicates the items have been misplaced or lost or are otherwise needed.

• C. New Tenants During the Withdrawal Process. If the Owner desires to rent a Covered Unit to a new occupant after delivery of the Notice of Intent to Withdraw, the Owner shall comply with this subsection). Owner shall first comply with all requirements of this Part 11, including but not limited to the delivery of notices to the City and Tenants, and the provision of Relocation Assistance in accordance with Section 17.23.1150 with respect to the unit to be rented. Prior to such rental, Owner shall also provide a Notice of Pending Withdrawal on a City approved form to any new potential occupant of the Covered Unit for acknowledgement. If the Owner complies with this subsection, the new occupant shall not be entitled to Relocation Assistance or other benefits under this Part. If the Owner fails to comply, the new occupant of the Covered Unit shall be entitled to Relocation Assistance under this Part.

• D. City Approved Forms. Director may adopt such forms as are necessary or convenient for the administration of this Part 11, subject to review and approval of the City Attorney.

T17:180

BUILDINGS AND CONSTRUCTION

§ 17.23.1140

• E. Every Owner must provide to each Tenant of a Covered Unit a notice of Tenant rights to extend the tenancy on a form specified by the City, which may include contact information for the City and shall include the following statement:

  • "In accordance with the State's Ellis Act, the City of San José requires landlords to allow certain tenants to extend their tenancy beyond the minimum one hundred twenty (120) day notice period when a landlord intends to withdraw the dwelling unit from the residential rental market. The elderly, disabled, and households with a child enrolled in kindergarten through 12th grade may be eligible for extended tenancies if requested."

• F. Withdrawal of less than an entire building is not allowed under this Part.

• G. The City Manager may adopt regulations for the administration of this Part.

• H. Non-Rent Stabilized Properties. Buildings with three (3) or more units that do not contain any Covered Units may be permanently withdrawn from the residential rental market. Such a permanent withdrawal of a building will be consistent with this Part if the Owner has completed all of the following as described this Part and the Regulations: (i) served Notices of Intent to Withdraw on the Tenants and the City, (ii) complied with the provisions of Section 17.23.1160 requiring 120 day notice for all Tenants and Extended Notice for certain Tenants prior to termination of tenancy, and (iii) paid the filing fee including the fee for Relocation Specialist Services described in Section 17.23.1150.E. Upon completion of these requirements for the entire building and expiration of the notice periods, the Owner will be considered to have met the relocation obligations of this Part for the purposes of evaluation for demolition permits under Section 20.200.460 and for the purposes of satisfying the requirements for relocation under the Tenant Protection Ordinance, Sections

17.23.1250.A.9 and 17.23.1250.B.2. These properties shall not be subject to the requirement to pay Base or Qualified Assistance, to provide the Tenant Qualification forms, to record a memorandum regarding re-control, or to provide a right of return.

(Ords. 29902, 30088.)

• A. Service on Tenants; Filing Fee. No less than one hundred twenty days prior to the date upon which the building is intended to be withdrawn from the rental market, the owner shall pay to the city the fee set pursuant to Section 17.23.1130 and personally serve or deliver by first class mail the notice of intent to withdraw to each tenant. Failure to pay the fee shall invalidate the notice of intent to withdraw.

• B. Service on City. Any owner seeking to withdraw a building from the residential rental market that contains at least one covered unit must deliver to the director a copy of each notice of intent to withdraw within ten days of service on the tenants.

• C. Contents. The notice of intent to withdraw shall contain the following statements, under penalty of perjury, stating that the owner intends to evict in order to remove the building from rental housing use, the address or location of the building and covered unit, the number of covered units to be removed from rental housing use, the names of the tenants of each covered unit, the date on which the covered unit will be withdrawn from rental housing use and the rent applicable to that covered unit. It shall describe the rights of return and the re-control of rents that may apply under this Part 11 and the tenant's rights to regain possession of the premises and to damages as set forth in Sections 17.23.1170 - 17.23.1190, and such other information reasonably necessary for the city's administration of this Part 11. The notice of intent to withdraw shall be accompanied by tenant qualification forms,

T17:181

SAN JOSÉ CODE

§ 17.23.1140

postage prepaid, addressed to the owner and the director which form will allow the tenant household to qualify for a qualified assistance or an option to extend tenancy pursuant to Section 17.23.1160, and to correct erroneous information on the notice of withdraw.

• D. Correction. Any tenant that receives a notice of intent to withdraw may correct or supplement any of the information on the notice of intent to withdraw via written notice delivered to the director and owner within thirty days.

• E. The director shall adopt a form notice of intent to withdraw and provide versions in the other two most commonly spoken languages in San José. Owners must provide the tenant household with a completed copy of the notice of intent to withdraw in English and, if requested, a copy of a non-English version.

• (Ord. 29902.)

The owner shall record a memorandum on a city approved form in the official records of Santa Clara County encumbering the property where the covered unit is located upon the earlier of: ten days of delivery to the city of the notice of intent to withdraw, or at least one day prior to sale or transfer of any property on which a building containing a covered unit to be withdrawn from the residential rental market is located. The memorandum must be executed by the fee owners of the property. The memorandum shall summarize the obligations of the owner and any successor in interest to the owner related to the property including the tenant right to return and the re-control requirement under this Part 11 and the city's apartment rent ordinance for certain units returned to the residential rental market in accordance with Section 17.23.1180. The summary memorandum must encumber the property for ten years from the effective date of withdrawal of the building containing the covered unit from the residential rental market. The owner shall deliver to the director a conformed copy of the recorded memorandum within sixty days of delivery to the city of the notice of intent to withdraw. (Ord. 29902.)

• A. Relocation Assistance Benefits. When an owner withdraws a building containing a covered unit from the residential rental market and in connection with the withdrawal causes one or more tenancies to be terminated, the owner must provide, and each tenant household residing in a covered unit is entitled to receive from the owner, notice of and access to an application for all vacant residential rental unit(s) owned by the owner and located within the City of San José, as well as the following:

  1. The owner must pay and the tenant household must receive relocation assistance. The base assistance required pursuant to Subsection C of Section 17.23.1150 must be deposited into escrow at the time of delivery of the notice of intent to withdraw to the tenants. Any qualified assistance due pursuant to clauses (a) - (d) of Subsection C.2 of Section 17.23.1150, must be deposited into escrow as soon as the completed tenant qualification form has been verified by the relocation specialist and approved by the director. The owner is neither responsible for nor liable to divide the relocation assistance among the tenant(s) that comprise a tenant household entitled to relocation assistance.

  2. Owner must pay to the city a fee for the relocation specialist services as described in Subsection E of Section 17.23.1150 which fee shall be collected as part of the filing fee.

  3. Refund of Security Deposit. Owner must refund to tenant any security deposit paid by the tenant with any interest due. The owner may withhold any properly itemized deductions from the security deposit under California Civil Code Section 1950.5, as amended.

• B. Escrow Account. The owner must deposit the relocation assistance into an escrow account with a San José bank or commercial escrow

T17:182

BUILDINGS AND CONSTRUCTION

§ 17.23.1150

• company and provide for disbursement to the tenants consistent with this part. The tenant household may obtain the base assistance from escrow immediately. The tenant household may obtain the qualified assistance from escrow on or before the earlier of: the first business day after the tenant gives a thirty-day notice to the owner under California Civil Code Section 1946.1, as amended, or the last day of tenancy for which the owner has received rent.

• C. The amount of relocation assistance per covered unit shall be set by the city council via resolution and may be based on the number of bedrooms per covered unit or such other metric as provided in the resolution. The amount of relocation assistance per covered unit may thereafter be amended by resolution, and shall be comprised of the following components.

  1. Base assistance for all tenant households.

  2. Qualified assistance for tenant households that qualify under one or more of the following categories:

     • a. Tenant households that are lower income households, as defined in California Health and Safety Code Section 50079.5, as amended, and annually listed, as adjusted for household size, by the regulations of the state housing and community development department for the County of Santa Clara.

• b. Tenant households when at least one tenant is sixty-two years old or older.

  - c. Tenant households when at least one tenant is a person with a disability, as defined in California Government Code Section 12955.3, as amended, or is terminally or catastrophically ill as evidenced by a physician's determination. 
  
  - d. Tenant households when at least one tenant has a custodial or family relationship with an individual residing in the covered unit who is under the age of eighteen and is enrolled
  

in school in any grade between and including kindergarten through twelfth grade.

3. Special assistance, in lieu of base assistance and qualified assistance, for a tenant household that accepts an offer of an alternate rent stabilized unit pursuant to Section 17.23.1151.

Each tenant household shall receive the base assistance payments and may receive one allocation of qualified assistance if the tenant household is eligible for a category of qualified assistance as described in clauses (a) - (d) of Subsection C.2 of Section 17.23.1150. Any tenant household that is eligible for any of the qualified assistance categories identified above must complete a tenant qualification form and provide a copy to the owner and the city.

• D. Annual Adjustment. The amounts set by the city council via the resolution shall be adjusted each year as provided in this subsection unless otherwise specified by the city council in a subsequent resolution. The annual adjustment shall be an increase that is equal to the amounts for each component of the relocation assistance multiplied by the percentage increase (if any) in the Consumer Price Index - Rent for all urban consumers for the San Francisco-Oakland-San José area as published by the U.S. Department of Labor Statistics for the twelve-month period ending on the last day of February of each year, unless otherwise specified by the city council. Amounts shall be rounded to the nearest whole dollar.

• E. Relocation Specialist Services. When an owner withdraws a building containing a covered unit from the residential rental market and in connection with the withdrawal causes one or more tenancies to be terminated, the owner must, pay a fee to the city for providing relocation counseling for the tenant. The city will contract with a relocation specialist with experience in providing relocation services to tenants in the San José area to provide these

T17:183

SAN JOSÉ CODE

§ 17.23.1150

services. The relocation specialist shall contact the tenants to explain the procedures for obtaining assistance under the part. The relocation specialist shall verify tenant qualification forms. The relocation specialist shall provide services including meetings with tenants on site; providing current information on local vacancies, and assisting each tenant household in crafting a relocation plan on a form approved by the city. The relocation specialist must provide services to disabled persons and persons with no or limited English proficiency and ensure relocation assistance, procedures and tenant's rights are fully explained to those persons.

(Ord. 29902.)

• A. If the owner is withdrawing a building containing a covered unit as defined in Subsection G of Section 17.23.1130 then the owner, at its sole discretion, may offer to relocate the tenant household to another rent stabilized unit owned by the owner ("alternate rent stabilized unit") prior to delivering the first relocation assistance payment into escrow, so long as the alternate rent stabilized unit was voluntarily vacated in accordance with the apartment rent ordinance. The terms of the rental agreement for the alternate rent stabilized unit must be substantially similar to a continuance of the tenancy of the initial rent stabilized unit in accordance with California Civil Code Section 1945, including but not limited to the same monthly rent as would be due for the initial rent stabilized unit.

• B. The alternate rent stabilized unit offered in accordance with this section may be accepted by the tenant household at the tenant household's sole discretion. All tenants on the existing rental agreement must agree in writing to the rental of the specific alternate rent stabilized unit for the acceptance to be effective. If the written agreement is obtained prior to the tenant household's inspection of the alternate

rent stabilized unit, it must be contingent on the tenant household's inspection of the alternate rent stabilized unit.

• C. If the offer of the alternate rent stabilized unit is not accepted or if it is revoked after inspection of the alternate rent stabilized unit, the tenant household shall be entitled to receive all additional relocation assistance to which the tenant household is entitled pursuant this part.

• D. The offer by an owner and acceptance by a tenant household pursuant to the terms herein to create a new tenancy in an alternate rent stabilized unit under substantially similar terms as the tenancy in the initial rent stabilized unit is an express waiver by the owner of any right to vacancy decontrol of the alternate rent stabilized unit as may be conferred by state or local law and an express waiver by the tenant household to any additional relocation assistance payments under Subsection C of Section 17.23.1150 beyond the special assistance payment. An offer by an owner to relocate a tenant household to an alternate rent stabilized unit and provide special assistance shall only fulfill the owner's duty to provide relocation assistance under Subsection C of Section 17.23.1150 if the tenant household accepts the offer and executes a new rental agreement with terms substantially similar to the terms of tenancy for the initial rent stabilized unit.

• E. If the tenant household accepts the offer and executes a new rental agreement with the owner in accordance with this section and the owner provides the special assistance, then the owner shall have no further relocation assistance obligation regarding the initial rent stabilized unit under Subsection C of Section 17.23.1150.

• (Ord. 29902.)

• A. If the covered unit is occupied on the date of delivery to the city of the notice of intent to withdraw, then the tenancy may only be termi-

T17:184

BUILDINGS AND CONSTRUCTION

§ 17.23.1170

nated for cause as defined in Subsection B.2 of Section 17.23.1110 and the owner may not withdraw the building containing the covered unit from the market until one hundred twenty days from the date of delivery to the city in person or by first-class mail of the notice of intent to withdraw.

• B. Notwithstanding Subsection A of Section 17.23.1160, if at least one tenant in a covered unit to which a notice of intent to withdraw applies is either at least sixty-two years old, disabled (as defined in California Government Code Section 12955.3, as amended), terminally ill, or catastrophically ill and if that tenant has lived in the covered unit for at least one year prior to the date of delivery to the city of the notice of intent to withdraw, then the owner must provide notice of and allow the tenant to exercise an option to extend the tenancy for one year from the date of delivery to the city of the notice of intent to withdraw.

  1. To exercise the option to extend the tenancy for one year from the date of delivery to the city of the notice of intent to withdraw, the qualifying tenant must give written notice to the owner of the extension of the tenancy within sixty days of delivery to the city of the notice of intent to withdraw.

  2. If the owner receives a notice of extension of the tenancy, then the owner must provide notice of the extension of the tenancy to the director in the monthly report pursuant to Section 17.23.1175.

• C. Notwithstanding Subsection A of Section 17.23.1160, if at least one tenant in a covered unit to which a notice of intent to withdraw applies has a custodial or family relationship with an individual residing in the covered unit who is under the age of eighteen and is enrolled in school in any grade between and including kindergarten through twelfth grade, and if that minor individual has lived in the covered unit for at least one year prior to the date of delivery to the city of the notice of

intent to withdraw, then the owner must provide notice of and allow the tenants to exercise an option to extend the tenancy through the current scholastic year, plus an additional sixty days from the completion of the scholastic year.

1. To exercise the option to extend the tenancy through the scholastic year plus sixty days, the tenant must give written notice to the owner of the extension of the tenancy within sixty days of delivery to the city of the notice of intent to withdraw.

2. If the owner receives a notice of extension of the tenancy through the scholastic year plus sixty days, then the owner must provide notice of the extension of the tenancy to the director in the monthly report pursuant to Section 17.23.1175.

(Ord. 29902.)

• A. Tenant(s) of covered units whose tenancies are terminated in connection with the withdrawal of a building containing the covered unit(s) from the residential rental market in accordance with this Part 11, are entitled to receive, and owner(s) must deliver to the tenant household, on a form approved by the city notice of the tenant(s) right to return to and rent the same unit at the rent determined pursuant to Section 17.23.1180A if:

  1. The tenant has provided the owner a current mailing address and email address at which to receive a notice of the right to return; and

  2. An owner returns the covered unit to the residential rental market within five years of the effective date of withdrawal of a building containing the covered unit from the residential rental market.

• B. Owner(s) of a building containing a covered unit that was withdrawn from the residential rental market within the previous ten years but after the five-year period described in Subsection A of Section 17.23.1170 must provide

T17:185

SAN JOSÉ CODE

§ 17.23.1170

one hundred twenty days written notice to the city and tenant of the intent of the owner(s) to return the covered unit to the residential rental market.

• C. Any tenant(s) displaced from a covered unit in connection with the withdrawal of a building containing a covered unit from the residential rental market may request the right to return from the owner(s) within thirty days of receipt by the city of an owner(s) written notice of intent to return the covered unit to the residential rental market. Following the notice required to be given to the city, the city may request that the owner extend an offer to renew the tenancy to the tenant. However, nothing in this section shall be construed to relieve the owner of the obligation to directly contact the tenant or former tenant and to advise the tenant that the withdrawn covered unit is again offered for rent or lease. Notice shall be on a form approved by the city.

• D. The city may create a registry of tenant contact information for use by tenants and owners to facilitate communication regarding a right to return, relocation assistance, and other topics. Each owner shall use any information in the registry, in addition to information provided voluntarily by each tenant, when complying with right to return obligations under Subsection A of Section 17.23.1170. The city may attempt to inform any tenant(s) displaced due to the withdrawal of a building containing a covered unit upon receipt by the city of an owner(s) written notice of intent to return the covered unit to the residential rental market.

• (Ord. 29902.)

• A. Owner shall submit a monthly report to director during period that commences with the city's receipt of the notice of intent to withdraw and ends with the final termination of tenancy for all covered units and completion of withdrawal under this part. The report shall be on a city form and shall include informa-

tion relating to the occupancy of units, any thirty-day notices received, request for right to return, and any leasing activity with asking rents.

• B. At least one hundred twenty days before the rental or leasing of any unit in a building being returned to the rental market, owner shall submit a report to director regarding compliance with Section 17.23.1170 and Section 17.23.1180 and status of tenant notification of right to return, and list of tenants not found/contacted.

(Ord. 29902.)

• A. If a building containing a Covered Unit is withdrawn from the residential rental market and is returned by an Owner to the residential rental market within five (5) years, then that unit must be offered and rented or leased at the lawful rent in effect at the time the Notice of Intent to Withdraw was delivered to the City, plus any annual adjustments authorized by Title 17, Chapter 23 of this Code. This Section applies regardless of the occupancy status of each Covered Unit when the building was withdrawn from the residential rental market and regardless of whether a displaced Tenant exercises a Right to Return.

• B. If a building containing a Covered Unit is demolished and new unit(s) are built on the same property and offered for rent or lease within five (5) years of the effective date of withdrawal of the building containing the Covered Unit, the number of newly constructed rental units equal to greater of (i) the number of Covered Units or (ii) fifty percent (50%) of all newly constructed rental units located on the property where the Covered Unit was demolished shall be deemed Rent Stabilized Units subject to the Apartment Rent Ordinance, Title 17, Chapter 23 of this Code. Any new units made subject to the Apartment Rent Ordinance which are in excess of the number of demolished Covered Units shall remain sub-

T17:186

BUILDINGS AND CONSTRUCTION

§ 17.23.1190

ject to the Annual General Increase limit of the monthly Rent charged for the previous twelve (12) months for the Rent Stabilized Unit multiplied by five percent (5%) in the event that Section 17.23.310.B is amended to change the Annual General Increase limit.

• C. Waiver for Projects with On-Site Affordable Units. If at least twenty (20) newly constructed rental units are being created, the re-control requirement under this Section will be waived in the event that the Owner:

  • (i) develops fifteen percent (15%) of the newly constructed units as on-site affordable rental units consistent with the standards and affordability restriction requirements in the Inclusionary Housing Ordinance, Chapter 5.08 of Title 5 of the San José Municipal Code and its implementing guidelines; and

  • (ii) develops an additional five percent (5%) of the newly constructed units as on-site affordable rental units restricted at 100% of area median income, but otherwise consistent with the standards in the Inclusionary Housing Ordinance and implementing guidelines.

• (Ords. 29902, 30088.)

• A. Criminal Penalty. Any owner found by a court of competent jurisdiction to be guilty of a willful violation of Subsection A of Section 17.23.1170 shall be subject to up to a one thousand dollar fine and/or six months in jail.

• B. Civil Enforcement.

  1. Any owner(s) that fail(s) to comply with this Part 11 may be subject to civil proceedings for exemplary damages for displacement of tenant(s) initiated by the city for actual and exemplary damages, as well as any other alternative remedy available under the law or equity, including without limitation, injunctive relief to prevent termination of a tenancy.

  2. Any owner(s) that fail(s) to comply with the notice requirement defined in Subsection A of Section 17.23.1170 if the violation occurs within two years of the effective date of withdrawal may be subject to civil proceedings for actual, exemplary, and/or punitive damages (in an amount which does not exceed the contract rent for six months) initiated by the city or by any tenant who would otherwise be entitled to a right to return, which action(s) must be brought within three years of withdrawal of the building containing a covered unit from the residential rental market.

  3. Any owner(s) that fail(s) to comply with this Part 11 may be subject to civil proceedings for actual and exemplary damages as well as any other alternative remedy available under the law or equity, initiated by any tenant who would otherwise be entitled to relocation assistance. Civil proceedings by any tenant regarding relocation assistance under this Part 11 shall be brought within three years of the withdrawal of the building containing a covered unit.

  4. If an owner seeks to displace any tenant(s) from a covered unit in a building to be withdrawn from the residential rental market by an unlawful detainer proceeding, the tenant(s) may appear and answer or demur pursuant to Section 1170 of the California Code of Civil Procedure, as amended, and may assert by way of defense that the owner has not complied with the applicable provisions of this Part 11 and/or the Ellis Act.

• (Ord. 29902.)

T17:187

SAN JOSÉ CODE

§ 17.23.1200

Part 12

TENANT PROTECTION*

Sections:

healthy, safe, and vibrant city. The rights and obligations created by this Part for landlords and tenants are created pursuant to the City's general police powers to protect the health, safety, and welfare of its residents and are in addition to any rights and obligations under state and federal law. (Ords. 29912, 29911.)

• 17.23.1240 Just cause protections.

• 17.23.1250 Just cause termination.

• 17.23.1260 Notice of termination to the tenant and city.

This Part shall be known as the "Tenant Protection Ordinance." (Ords. 29912, 29911.)

The purposes of this Part are to promote stability and fairness within the residential rental market in the City, thereby serving the public peace, health, safety, and public welfare. This Part is intended to enable tenants in the City to petition for regarding their grievances, request correction of code violations and necessary repairs, and exercise all of their rights under local, state, and federal laws without fear of retaliation. This Part regulates landlord and tenant relations by promoting fair dealings between landlords and tenants in recognition of the importance of residential housing and the landlord-tenant relationship as components of a

*Editor’s note— Urgency Ord. 29912, § 1(Exh. A), adopted and effective May 9, 2017, added Part 12, §§ 17.23.1200 - 17.23.1290. Subsequently, Ord. 29911, adopted May 16, 2017 and effective June 16, 2017, also added Part 12, and has been codified as superseding Ord. 29912, as set out herein.

Subject to any exceptions, additions, and clarifications included in regulations that may be adopted by the City Manager for administration of this Part, the below listed terms are defined as follows:

• A. "Apartment Rent Ordinance" means Parts 1 - 10 of Chapter 17.23 of Title 17 of the San José Municipal Code.

• B. "Director" means the Director of the Housing Department or the Director's designee.

• C. "Ellis Act Ordinance" means Part 11 of Chapter 17.23 of Title 17 of the San José Municipal Code.

• D. "Just Cause Protections" means those protections afforded to a Tenant Household under Section 17.23.1240.

• E. "Just Cause Termination" shall have the meaning provided in Section 17.23.1250.

• F. "Guesthouse" shall have the meaning provided in Sections 20.200.470 and 20.200.480.

• G. "Guest Room" shall have the meaning provided in Section 20.200.460.

• H. "Habitual" shall have the meaning provided in regulations adopted by the City Manager for administration of this Part.

• I. "Hotel or Motel" shall have the meaning provided in Section 20.200.540.

• J. "Landlord" means an owner, lessor, or sublessor who receives or is entitled to receive rent for the use and occupancy of any Rental Unit, and the agent, representative, or successor of any of the foregoing.

T17:188

BUILDINGS AND CONSTRUCTION

§ 17.23.1230

• K. "Multiple Dwelling" means "Dwelling, Multiple" as defined in Section 20.200.340.

• L. "Notice of Termination" shall have the meaning provided in Section 17.23.1260.

• M. "Owner" means a fee owner of the property where the Rental Unit is located who holds at least a fifty (50) percent interest in the property.

• N. "Rent Stabilized Units" means Rental Units that are subject to rent stabilization under the City's Apartment Rent Ordinance, which includes rooms or accommodations occupied for thirty (30) days or more in a Guesthouse and units in any Multiple Dwelling building for which a certificate of occupancy was received on or prior to September 7, 1979, as those terms are defined in Sections 20.200.340, 20.200.470, and 20.200.480 of the San José Municipal Code.

ect to rent stabilization under the City's Apartment Rent Ordinance, which includes rooms or accommodations occupied for thirty (30) days or more in a Guesthouse and units in any Multiple Dwelling building for which a certificate of occupancy was received on or prior to September 7, 1979, as those terms are defined in Sections 20.200.340, 20.200.470, and 20.200.480 of the San José Municipal Code.

• O. "Rental Unit" means a structure or the part of a structure that is used as a home, residence, or sleeping place by one person who maintains a household or by two or more persons who maintain a common household, and which household pays Rent for the use and occupancy for periods in excess of seven days whether or not the residential use is a conforming use permitted under the San José Municipal Code. For purposes of this Part, Rental Unit includes Guest Rooms in any Guesthouse and, subject to any requirements in the Regulations, does not include Rental Units owned or operated by any government agency, or any individual Rental Unit for which the Rent is limited to no more than affordable rent, as such term is defined in California Health & Safety Code Section 50053, for lower income households pursuant to legally binding restrictions recorded for the benefit of a government agency.

  • P. "Security Deposit" means shall mean funds deposited with the Landlord for the purposes described in California Civil Code Section 1950.5, as amended.

  • Q. "Tenant" means a residential tenant, subtenant, lessee, sublessee, or any other person entitled by written or oral rental agreement, or by sufferance, to the use or occupancy of a Rental Unit.

  • R. "Tenant Household" means one or more Tenant(s) who occupy any individual Rental Unit, including each dependent of any Tenant whose primary residence is the Rental Unit.

• S. "Unpermitted Unit" means a structure or parts of a structure that are being rented as a home, residence, or sleeping place, where the use as a home, residence, or sleeping place is not authorized, permitted, or otherwise approved by the City.

• (Ords. 29912, 29911, 30031.)

• A. Subject to any exceptions, additions, and clarifications included in regulations that may be adopted by the City Manager for administration of this Part, this Part applies to the following:

  1. Rent Stabilized Units;

  2. Rental Units in any Multiple Dwelling, excepting permitted Hotels and Motels;

  3. Guest Rooms in any Guesthouse; and

  4. Unpermitted Units.

• B. The City Manager may adopt regulations for the administration and implementation of this Part. The Director of Housing, with the approval of the City Attorney, may adopt forms and notices to facilitate the administration and implementation of this Part.

• C. Tenants of a unit or guestroom described in subsection A, above, shall be entitled to Just Cause Protections commencing on the first day of tenancy.

• (Ords. 29912, 29911.)

T17:189

SAN JOSÉ CODE

§ 17.23.1240

• A. A Landlord may not terminate the tenancy of a Tenant unless the Landlord can demonstrate:

  1. that the Landlord served a Notice of Termination to the Tenant Household and delivered a copy of the Notice of Termination to the City in accordance with Section 17.23.1260; and

  2. that the termination qualifies as a Just Cause Termination in compliance with Section 17.23.1250.

• B. Nothing under this Part shall abrogate the protections afforded to survivors of violence consistent with California Code of Civil Procedure Section 1161.3, as amended, and the Violence Against Women Act, Public Law 103322, as amended.

• C. Each Landlord shall either post a written notice and maintain such posting, or serve each existing and future Tenant a copy of a notice, on a form approved by the Director in the three most commonly spoken languages, of the applicability and requirements of the Tenant Protection Ordinance, placed in a conspicuous location within each building containing one (1) or more Rental Units. The Landlord shall have complied with this requirement by posting a Notice of the Tenant Protection Ordinance in the same location as a notice to Tenants posted in accordance with subsections (1) or (2) of California Civil Code Section 1962.5(a) or immediately adjacent to the posting of the Residential Occupancy Permit in compliance with Section 17.20.630.

• D. A notice terminating tenancy shall include a statement of the following: 1) The notice is being served in good faith; and 2) That information regarding the notice terminating tenancy, including information on homeless prevention, is available from the Rent Stabilization Program, 200 E. Santa Clara St., 12[th ] Floor, San José, CA 95112, phone (408) 975-4480.

• (Ords. 29912, 29911, 30194, 30194.)

• A. Just Cause Terminations. If a Landlord can show any of the following circumstances with respect to a termination of tenancy, the termination will qualify as a "Just Cause Termination."

  1. Nonpayment of Rent. After being provided with written notice of the identity and mailing address of the Landlord, and the amount of rent due, the Tenant has failed to pay rent to which the Landlord is legally entitled pursuant to any written or oral rental agreement and under the provisions of state or local law, unless the Tenant has withheld rent pursuant to applicable law, and said failure has continued after service on the Tenant of a written notice setting forth the amount of rent then due and requiring it to be paid, within a period, specified in the notice, of not less than three days.

  2. Material or Habitual Violation of the Tenancy.

     • a. The Tenant has failed to cure a violation of any material term of the rental agreement within a reasonable time after receiving written notice from the Landlord of the alleged violation or has committed Habitual violations of the rental agreement, but only if either clause

       • (i) or (ii) applies:

       • i. The demand to cure is based on terms that are legal and have been accepted in writing by the Tenant or made part of the rental agreement; or

       • ii. The demand to cure is based on terms that were accepted by the Tenant or made part of the rental agreement after the initial creation of the tenancy, so long as the Landlord first notified the Tenant in writing that he or she need not accept

T17:190

BUILDINGS AND CONSTRUCTION

§ 17.23.1250

such terms or agree to their being made part of the rental agreement.

• b. The following potential violations of a tenancy can never be considered material or Habitual violations:

  • i. An obligation to surrender possession on proper notice as required by law.

  • ii. An obligation to limit occupancy when the additional Tenant(s) who join the Tenant Household are any of the following: a dependent child or foster child, a minor in the Tenant's care, the spouse, domestic partner, or parent (which terms may be further defined in the regulations adopted by the City Manager), of a Tenant; so long as the total number of adult Tenants in the unit does not exceed the greater of either the maximum number of individuals authorized in the rental agreement or two adults per bedroom, or in the case of a studio unit, two adults. The Landlord has the right to approve or disapprove a prospective additional Tenant who is not a dependent child or foster child, a minor in the Tenant's care, spouse, domestic partner, or parent of a Tenant, provided that the approval is not unreasonably withheld.

3. Substantial Damage to the Rental Unit. The Tenant, after written notice to cease and a reasonable time to cure, causes substantial damage to the Rental Unit, or common area of the structure or rental complex containing the Rental Unit beyond normal wear and tear, and refuses,

after written notice, to pay the reasonable costs of repairing such damage and to cease engaging in the conduct identified in the notice to cease.

4. Refusal to Agree to a Like or New Rental Agreement. Upon expiration of a prior rental agreement the Tenant has refused to agree to a new rental agreement that contains provisions that are substantially identical to the prior rental agreement as may be further described in the regulations adopted by the City Manager, and that complies with local, state and federal laws.

5. Nuisance Behavior. The Tenant, after written notice to cease, continues to be so disorderly or to cause such a nuisance as to destroy the peace, quiet, comfort, or safety of the Landlord or other Tenants of the structure or rental complex containing the Rental Unit. Such nuisance or disorderly conduct includes violations of state and federal criminal law that destroy the peace, quiet, comfort, or safety of the Landlord or other Tenants of the structure or rental complex containing the Rental Unit, and may be further defined in the regulations adopted by the City Manager.

6. Refusing Access to the Unit. The Tenant, after written notice to cease and a reasonable time to cure, continues to refuse the Landlord reasonable access to the Rental Unit, so long as the Landlord is not abusing the right of access under California Civil Code section 1954, as amended.

7. Unapproved Holdover Subtenant. The Tenant holding over at the end of the term of the oral or written rental agreement is a subtenant who was not approved by the Landlord.

8. Substantial Rehabilitation of the Unit. The Landlord after having obtained all necessary permits from the City, seeks in good faith to undertake substantial re-

T17:191

SAN JOSÉ CODE

§ 17.23.1250

pairs which are necessary to bring the property into compliance with applicable codes and laws affecting the health and safety of Tenants of the building, provided that:

• a. The repairs costs not less than the product of ten (10) times the amount of the monthly rent times the number of Rental Units upon which such work is performed. For purposes of this subsection, the monthly rent for each Rental Unit shall be the average of the preceding twelvemonth period; and

• b. The repairs necessitate the relocation of the Tenant Household because the work will render the Rental Unit uninhabitable for a period of not less than thirty (30) calendar days; and

• c. The Landlord gives advance notice to the Tenant of the ability to reoccupy the unit upon completion of the repairs at the same rent charged to the Tenant before the Tenant vacated the unit or, if requested by Tenant, the right of first refusal to any comparable vacant Rental Unit which has been offered at comparable rent owned by the Landlord; and

• d. In the event the Landlord files a petition under the Apartment Rent Ordinance within six (6) months following the completion of the work, the Tenant shall be party to such proceeding as if he or she were still in possession, unless the Landlord shall submit with such application a written waiver by the Tenant of his or her right to reoccupy the premises pursuant to this subsection; and

• e. The Landlord shall have provided relocation assistance as required by subsection B of Section 17.23.1250, below.

9. Ellis Act Removal. The Landlord seeks in good faith to recover possession of the Rental Unit to remove the building in which the Rental Unit is located permanently from the residential rental market under the Ellis Act and, having complied in full with the Ellis Act and Ellis Act Ordinance, including the provision of relocation assistance as required by subsection B of Section 17.23.1250, below.

10. Owner Move-In. The Owner seeks in good faith, honest intent, and without ulterior motive to recover possession for: (a) the Owner's own use and occupancy as the Owner's principal residence for a period of at least 36 consecutive months commencing within three months of vacancy; or (b) the principal residence of the Owner's spouse, domestic partner, parent(s), child or children, brother(s), or sister(s) (each an "authorized family member") for a period of at least 36 consecutive months and commencing within three months of vacancy, so long as the Rental Unit for the Owner's authorized family member is located in the same building as the Owner's principal residence and no other unit in the building is vacant. It shall be a rebuttable presumption that the Owner has acted in bad faith if the Owner or the Owner's qualified relative for whom the Tenant was evicted does not move into the Rental Unit within three months from the date of the Tenant's surrender of possession of the premises or occupy said unit as his/her principal residence for a period of at least thirtysix (36) consecutive months. The Owner shall have provided relocation assistance as required by subsection B of Section 17.23.1250, below.

11. Order to Vacate. The Landlord seeks in good faith to recover possession of the Rental Unit in order to comply with a court or governmental agency's order to

T17:192

BUILDINGS AND CONSTRUCTION

§ 17.23.1250

vacate, order to comply, order to abate, or any other City enforcement action or order that necessitates the vacating of the building in which the Rental Unit is located as a result of a violation of the San José Municipal Code or any other provision of law, and provides a notice of the right to reoccupy. The Landlord shall have provided relocation assistance as required by subsection B.3 of Section 17.23.1250, below.

12. Vacation of Unpermitted Unit. The Landlord seeks in good faith to recover possession of an Unpermitted Unit in order to end the unpermitted use. The Landlord shall have provided relocation assistance as required by subsection B.3 of Section 17.23.1250, below.

13. Criminal Activity.

• a. The Tenant Household, after receiving a written notice to cure (which notice shall include the return provisions listed in subsection d below) by removing the Violating Tenant (as defined below) from the household, and, where necessary, amending the lease to remove the Violating Tenant's name, fails to do so within a reasonable time, by one of the following methods as further described in the regulations:

  - i. Filing a restraining order or providing evidence to the Landlord of similar steps being taken to remove the Violating Tenant from the household. 
  
  - ii. Removing the Violating Tenant from the household and providing written notice to the landlord that the Violating Tenant has been removed. 
  

  • b. For purposes of this subsection 13, a "Violating Tenant" shall mean an adult Tenant that is indicted by a

grand jury or held to answer pursuant to Penal Code Section 872, as amended, for a serious felony as defined by Penal Code Section 1192.7(c), as amended, or a violent felony as defined by Penal Code Section 667.5(c), as amended, which occurred during the tenancy and within 1,000 feet of the premises on which the Rental Unit is located. The term "premises" shall mean "Lot," as defined in Section 20.200.660 of the San José Municipal Code.

  - c. The past criminal history of a Tenant shall not be a factor in determining whether the Tenant is a Violating Tenant. 

  - d. If a Violating Tenant, as defined above, is acquitted from the charges or the charges are dismissed or reduced, he or she may return to the Rental Unit as a Tenant, so long as: 1) the Tenant Household still resides in the Rental Unit; and 2) the Tenant Household consents to the Violating Tenant's return. 

• B. Relocation Assistance.

  1. Tenants who receive a Notice of Termination that relies on subsections A.8 or A.10 of Section 17.23.1250 as the just cause rationale to terminate the tenancy must receive, and the Landlord must provide the following relocation assistance to the Tenant Household. The relocation assistance must be provided to the Tenant Household concurrent with delivery of the Notice of Termination to the Tenant Household.

     • a. Relocation Assistance. An amount equal to the Base Assistance provided for in the Ellis Act Ordinance, as set by resolution of the City Council.

T17:193

SAN JOSÉ CODE

§ 17.23.1250

  - b. Refund of Security Deposit. Owner must refund to the Tenant Household any security deposit paid by the Tenant Household, provided, however, that the Owner may withhold any properly itemized deductions from the security deposit pursuant to California Civil Code section 1950.5, as amended. 

2. Tenants who receive a Notice of Termination that relies on subsection A.9 of Section 17.23.140 as the just cause rationale to terminate the tenancy must have received, and the Landlord must have provided, all applicable Relocation Assistance provided for in the Ellis Act Ordinance.

3. Tenants who receive a Notice of Termination that relies on subsection A.11 or A.12 of Section 17.23.1250 as the just cause rationale to terminate the tenancy must receive, and the Landlord must provide, Relocation Assistance as defined in Part 11 of Chapter 17.20, or if the unit is unpermitted, an amount equal to the Base Assistance provided for in the Ellis Act Ordinance.

• (Ords. 29912, 29911, 30031, 30089, 30194, 30194.)

• A. A Notice of Termination means the notice informing a Tenant Household of the termination of its tenancy in accordance this Section and with California Civil Code Section 1946.1 and California Code of Civil Procedure Section 1162, as amended.

• B. Each Notice of Termination delivered to a Tenant or to a Tenant Household residing in a Rent Stabilized Unit must use the form approved by the Director or such other notice in compliance with the requirements of this Part.

• C. The Notice of Termination provided to Tenants must contain the reason for the termination of tenancy in accordance with subsection A of Section 17.23.1250.

• D. A Landlord must mail or deliver to the City a true and accurate copy of any Notice of Termination delivered to a Tenant within 3 days of delivering such notice to a Tenant or Tenant Household.

• E. A Landlord must mail or deliver to the City a true and accurate copy of any summons and complaint delivered to a Tenant or Tenant Household for unlawful detainer to pursuant to California Code of Civil Procedure Section 1161, as amended, within 3 days of delivering such summons and complaint to a Tenant or Tenant Household.

(Ords. 29912, 29911.)

• A. No Landlord may threaten to bring, or bring, an action to recover possession, cause the Tenant to quit the Rental Unit involuntarily, serve any notice to quit or Notice of Termination, reduce any housing services, report or threaten to report the Tenant, Tenant Household, or individuals the Landlord knows to be associated with the Tenant to the immigration authorities, or increase the rent where the Landlord's intent is retaliation against the Tenant for the Tenant's assertion or exercise of rights under this Part.

• B. Any such retaliation shall be a defense to an action to recover possession, or it may serve as the basis for an affirmative action by the Tenant for actual and punitive damages and injunctive relief. In an action by or against a Tenant, evidence of the assertion or exercise by the Tenant of rights under this Part within six months prior to the alleged act of retaliation shall create a rebuttable presumption that the Landlord's act was retaliatory. For purposes of this subsection, "rebuttable presumption" means that the Court must find the existence of the fact presumed unless and until its nonexistence is proven by a preponderance of the evidence. A Tenant may assert retaliation affirmatively or as a defense to the Landlord's action without the aid of the rebuttable pre-

T17:194

BUILDINGS AND CONSTRUCTION

sumption regardless of the period of time which has elapsed between the Tenant's assertion or exercise of rights under this Part and the alleged act of retaliation.

• C. No Landlord shall provide information to any immigration authority regarding the immigration or citizenship status of any Tenant, Tenant Household, or individual the Landlord knows to be associated with the Tenant or Tenant Household, for the purposes of harassing, intimidating, or retaliating against a Tenant or Tenant Household, influencing a Tenant to vacate a Rental Unit, or recovering possession of a Rental Unit, in accordance with Civil Code Section 1940.35(a), as amended.

• D. A Landlord does not violate subsection (A) or (C), by complying with any legal obligation under any federal government program that provides for rent limitations or rental assistance to a qualified Tenant.

(Ords. 29912, 29911, 30089.)

• A. Affirmative Defense. Each Landlord that seeks to terminate a tenancy of a Tenant must comply with this Part. Non-compliance with any applicable component of this Part shall constitute an affirmative defense for a Tenant against any unlawful detainer action under California Code of Civil Procedure Section 1161, as amended.

• B. Criminal Penalties. Any Landlord found by a court of competent jurisdiction to be guilty of violating any provision or failing to comply with any requirements of this Chapter shall be guilty of a misdemeanor punishable by up to a $500 fine for a first offense and up to a $1000 fine for any subsequent offenses.

• C. Civil Remedies.

  1. Any Landlord that fail(s) to comply with this Part may be subject to civil proceed-

ings for displacement of Tenant(s) initiated by the City or the Tenant Household for actual and exemplary damages.

2. Whoever is found to have violated this Part shall be subject to appropriate injunctive relief and shall be liable for damages, costs and reasonable attorneys' fees.

3. Treble damages shall be awarded for a Landlord's willful failure to comply with the obligations established under this Part.

4. Nothing herein shall be deemed to interfere with the right of a Landlord to file an action against a Tenant or non-Tenant third party for the damage done to said Landlord's property. Nothing herein is intended to limit the damages recoverable by any party through a private action.

(Ords. 29912, 29911.)

Editor’s note— Ord. 30031, § 3, adopted Nov. 28, 2017, repealed § 17.23.1290, which pertained to notices to vacate; Chapter 17.23 suspended, and derived from Ords. 29912 and 29911.