Topic No. 019: Partial Exemption for Certain Single-Family Homes and Condominiums Under Costa-Hawkins
Pursuant to the Costa-Hawkins Rental Housing Act, as of January 1, 1999 single-family homes and condominiums are generally exempt from the rent increase limitations (but not the just cause eviction provisions) of the Rent Ordinance, but ONLY IF the tenancy commenced on or after January 1, 1996.
Any tenancy in a single-family home or condominium that commenced before January 1, 1996 is still subject to the entire Ordinance. This includes continuing tenancies even where there is no original tenant remaining who was living in the unit prior to January 1, 1996.
A single-family dwelling with a legal in-law unit constitutes a two-unit building and is not exempt from the Ordinance. A single-family dwelling with an illegal in-law unit also constitutes a two-unit building and is not exempt, unless both units are rented together as a single tenancy.
A single-family dwelling is not exempt if there is another residential structure on the same lot.
A house occupied by an owner who rents out more than one room as separate rental units, in a situation akin to a boarding house, may not qualify for exemption as a single-family dwelling.
Effective January 1, 2002, certain condominium units that have not been sold by the subdividing owner, are not exempt from the Ordinance. For such units, the lawful rent in effect for the unit on May 7, 2001 is the initial base rent for the unit.
The exemption for single-family homes and condominiums does not apply where there was an outstanding citation for a serious health, safety or building code violation that remained unabated for six months or longer preceding the last vacancy. The exemption is also not applicable if the prior tenancy was terminated by a notice to quit or based upon a change in the terms of the tenancy for which notice was given under Civil Code Section 827.
Since units exempted from rent control limitations by Costa-Hawkins are still subject to the just cause eviction controls of the Ordinance, the annual Rent Board fee will continue to be collected for these units.