Temporary Moratorium on Rent Increases for Rent-Controlled Tenancies During the COVID-19 Pandemic
Information for Tenants and Landlords
Updated November 3, 2020
UPDATE: The rent freeze expired on October 21, 2020, and has not been extended or renewed as of the date of this publication. This webpage will be updated if any changes occur.
On April 24, 2020, the Mayor signed emergency legislation passed by the Board of Supervisors that temporarily prohibited certain rent increases during the COVID-19 pandemic (hereinafter referred to as “the temporary rent freeze”). On July 7, 2020 and August 25 2020, the temporary rent freeze was extended by the Board of Supervisors through October 21, 2020.
The temporary rent freeze applied to all rent increases and passthroughs that were effective between April 7, 2020 and October 21, 2020 (unless extended), even if the rent increase notice itself was served before April 7, 2020. However, rent increases or passthroughs that went into effect prior to April 7, 2020, or after October 21, 2020, are not affected.
What Types Of Increases Does The Temporary Rent Freeze Prohibit?
The temporary rent freeze only applied to annual allowable (and banked) rent increases, operating and maintenance expense rent increases, and “passthroughs” for rent-controlled tenancies under the San Francisco Rent Ordinance (i.e. - increases permitted by Rent Ordinance Section 37.3(a)).
The temporary rent freeze did not restrict the following types of rent increases:
- Rent increases for properties that are exempt from San Francisco’s local rent control regulations (See the Rent Board’s Info-To-Go topics or call our counselor line for more information).
- Rent increases that are permitted by state law, such as an increase based on the Costa-Hawkins Rental Housing Act or the Tenant Protection Act of 2019.
- Rent increases authorized by Rent Board Rules and Regulations Section 1.21, where the Rent Board has determined that there is no “tenant in occupancy” of the rental unit.
How Does The Temporary Rent Freeze Work?
The temporary rent freeze prohibited any rent increase that would otherwise be permitted by Rent Ordinance Section 37.3(a) from taking effect during the temporary rent freeze.
A landlord could still serve a notice of rent increase to be effective during the temporary rent freeze, but only to establish or preserve a tenant’s “anniversary date” for the purpose of future rent increases (see the examples below). In addition, the temporary rent freeze did not prevent a landlord from petitioning the Rent Board for certification of a rent increase or passthrough that requires Rent Board approval. However, if the landlord did serve a notice of rent increase that was effective during the temporary rent freeze, the tenant need not pay the increase until the landlord serves a new rent increase notice pursuant to Civil Code Section 827 that is effective after October 21, 2020.
- The tenant’s base rent on May 1, 2019 is $1,000.00.
- On March 20, 2020, the landlord served a notice of rent increase to be effective on May 1, 2020 (during the rent freeze), which increased the tenant’s rent by 1.8% from $1,000.00 to $1,018.00. The rent increase notice also included a 12-month bond passthrough of $10.00 for tax year 2019-2020. Since the rent freeze deferred the rent increase (including the bond passthrough), the tenant continued to pay $1,000.00.
In order to begin collecting the deferred rent increase, the landlord must serve a new notice “reinstating” the deferred rent increase pursuant to California Civil Code Section 827 (CC 827), to be effective after October 21, 2020. CC 827 requires service of a thirty-day written notice of rent increase if the increase is 10% or less. A ninety-day written notice is required if the increase, either by itself or combined with any other rent increase in the 12 months prior to the effective date of the increase, is more than 10%. An additional five days must be added to the notice period if the notice is mailed.
Tip for landlords: When preparing a notice to reinstate a rent increase that was deferred by the temporary rent freeze, make sure you clearly explain that the notice is intended to reinstate the prior rent increase that was deferred by the temporary rent freeze, and that the tenant’s anniversary date for the purpose of future rent increases is the effective date of the first rent increase notice.
Continuing The Example From Above:
- On October 15, 2020, the landlord served a rent increase notice pursuant to CC 827, to be effective on December 1, 2020, which “reinstates” the May 1, 2020 rent increase. Beginning on December 1, 2020, the tenant must begin paying the new rent of $1,028.00 (base rent of $1,018.00 + $10.00 bond passthrough). The bond passthrough will be paid over a period of 12 months, beginning on the month it was reinstated (in this case, December 2020 through November 2021). However, the tenant's “anniversary date” is May 1, 2020, the effective date of the original notice, and the landlord may increase the tenant's base rent again 12 months later, on May 1, 2021. In addition, the landlord may impose a new bond passthrough for tax year 2020-2021 effective May 1, 2021, even though the tenant will still be paying the deferred bond passthrough from the prior year at that time. The tenant is not responsible for any retroactive rent increase payments for the period prior to when the deferred rent increase was reinstated on December 1, 2020.
- In the alternative, the landlord may wait until the tenant’s next anniversary date (May 1, 2021) to simultaneously reinstate the deferred rent increase from May 1, 2020, AND impose the new annual allowable rent increase effective May 1, 2021. The increase for May 1, 2021 would be calculated on the increased base rent of $1,018.00 that was reinstated pursuant to the notice. The landlord’s rent increase notice should clearly explain that the notice is intended to BOTH reinstate the prior rent increase that was deferred by the temporary rent freeze, and to impose the new annual increase on top of the reinstated base rent.
The following types of rent increase passthroughs were also deferred and could not go into effect during the temporary rent freeze:
- Capital Improvement Passthroughs
- General Obligation Bond Passthroughs
- Water Revenue Bond Passthroughs
- Utility Passthroughs
If the landlord did serve a notice of rent increase for a passthrough amount that was effective during the temporary rent freeze, the increase is deferred and the landlord must follow the same steps described above to "reinstate" the deferred passthrough. Whenever reinstated, the passthrough will apply for the same number of months as stated in the original notice.
What If A Rent Increase Was Paid During The Temporary Rent Freeze?
If you are a landlord and you collected increased rent from a tenant that should have been deferred by the temporary rent freeze, immediately refund the tenant for the amount of the overpayment.
If you are a tenant and paid a rent increase that should have been deferred by the temporary rent freeze, notify your landlord (consider directing them to this webpage) and request that the overpayment be refunded.
What If A Dispute Arises Regarding The Tenant’s Rent Amount?
If the landlord does serve a notice of rent increase for a passthrough amount that is effective during the temporary rent freeze, the increase is deferred and the landlord must follow the same steps described above to "reinstate" the deferred passthrough. Whenever reinstated, the passthrough will apply for the same number of months as stated in the original notice.
What If A Rent Increase Was Paid During The Temporary Rent Freeze?
If a dispute cannot be resolved informally, either the landlord or the tenant may file a petition with the Rent Board requesting a determination of the tenant’s lawful rent amount.
For more information, visit our website (www.sfrb.org) and check back regularly for updates. You may also speak to a Rent Board counselor by phone at (415) 252-4600 during regular hours: Monday through Friday, 9:00 a.m. to 12:00 p.m., and 1:00 p.m. to 4:00 p.m.