HOW TO CORRECTLY COMPLETE YOUR RENT INCREASE NOTICES
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1 HOW TO CORRECTLY COMPLETE YOUR RENT INCREASE NOTICES
2 Overview 1. The Maximum Lawful Rent 2. How to Calculate Annual Increases 3. Agency Contact Information 4. Individual Assistance 2
3 The Maximum Lawful Rent There are three amounts that make up the maximum lawful rent: 1) MAR (short for Maximum Allowable Rent ) 2) pass-through of the registration fee 3) allowable surcharges from the property tax bill MAR + Registration Fee + Surcharges = Maximum Lawful Rent 3
4 Calculation of the MAR differs based on when the tenancy started. Pre-1/1/99 Tenancies The MAR is usually going to be based on the rent in effect on April 10, 1978, plus allowable increases approved by the Board since that time. Since 1/1/99 The MAR is usually going to be based on the initial rent at the start of the current tenancy, plus allowable increases approved by the Board since that time. 4
5 Learning the Current MAR for Any Unit Each year, the Agency sends property owners a MAR Report stating the MAR according to the Board s records; or Call, or come to the Rent Control office during business hours to request a MAR printout from our property database; or Use the Look up a Rent link on the Rent Control website to find the MAR in the Rent Control database. Santa Monica Rent Control Board 5
6 Sample Unit MAR History Database Printout Unit 1 MAR History MPP # Bedrms: 2 Letter Date: 9/23/87 Cert MAR: 424 Verif: Verify MAR: MAR Mailing: Run Date: Effective Date Old MAR Incr/ Decr New MAR Ref/Pet Other Reason for Change 09/01/ Gen l Adjust / 1.3% Next Sched Dropoff / Incr 09/01/ Gen l Adjust / 0.4% 09/01/ Gen l Adjust / 0.8% 09/01/ Gen l Adjust / 1.0% 09/01/ Gen l Adjust / $26 09/01/ Gen l Adjust/ $52 09/01/ Gen l Adjust / 2.0% 09/01/ Gen l Adjust / 1.0% 10/14/ D HE 1 st AdPart Comp Adj GA 09/01/ Gen l Adjust / 2.7% 12/20/ D HE Dec Grant 09/01/ Gen l Adjust / 2.3% Santa Monica Rent Control Board 6
7 Sample MAR Report 2016 UNIT ID MAR Report Current MAR As of 6/16/16 Market Rate Established 9/1/16 GA SITE ADDRESS: 1234 Sample St. RENT CONTROL ID# New MAR as of 9/1/16 1 $1807 9/01/05 1.3% $ $1956 2/05/07 $25 $ $ % $ $ /1/15 N/E $ $ % $ # # 7 Sec 8* Sec 8* 8 $2190 3/01/16 N/E $ $ % $ $1995 8/01/2007 $25 $2020 Santa Monica Rent Control Board 7
8 The Annual General Adjustment Each year the Board announces an increase to the MAR, known as the General Adjustment (or GA). The GA is primarily based on 75% of the percentage change in the Consumer Price Index (CPI) for the Los Angeles area for the 12 months ending in March. The annual GA increases the MAR for most controlled units, therefore increasing the maximum lawful rent for the units. The rest of this presentation will focus on increasing a tenant s rent due to the annual GA increase to the MAR. Santa Monica Rent Control Board 8
9 The 2016 General Adjustment The CPI increase in the Los Angeles area for the period ended March 2016 was 1.7%, and 75% of that is 1.275% or 1.3% after rounding. After holding a public hearing, the Board chose to set a maximum adjustment of $ The General Adjustment for 2016 is 1.3%, with a maximum of $ Santa Monica Rent Control Board 9
10 Requirements for Passing through Rent Increases to the Tenant A rent may be increased based on the new MAR as of September 1 st of each year only if: The tenancy started before September 1 of the previous year. All Rent Control registration fees and penalties for a property have been paid. The subject unit is properly registered. There are no uncorrected citations or notices of violation of health, safety, or housing laws for the property. The owner is in compliance with the Rent Control Law. The owner gives proper written notice to the tenant. Santa Monica Rent Control Board 10
11 Using the Rent Notice Form Provided by the Rent Control Agency Santa Monica Rent Control Board 11
12 Enter the current MAR on line 1. Santa Monica Rent Control Board 12
13 Enter the GA increase on line 2. Santa Monica Rent Control Board 13
14 On line 3, add lines 1 and 2 and round the sum to the nearest whole dollar amount. 14
15 Sample MAR Report 2016 UNIT ID MAR Report Current MAR As of 6/16/16 Market Rate Established 9/1/16 GA SITE ADDRESS: 1234 Sample St. RENT CONTROL ID# New MAR as of 9/1/16 1 $1807 9/01/05 1.3% $ $1956 2/05/07 $25 $ $ % $ $ /1/15 N/E $ $ % $ # # 7 Sec 8* Sec 8* 8 $2190 3/01/16 N/E $ $ % $ $1995 8/01/2007 $25 $
16 Follow the Numbers Santa Monica Rent Control Board 16
17 Registration Fee Pass-through The Rent Control Board charges a Registration Fee for each rentcontrolled unit to the owners of rent-controlled properties. MAR + Registration Fee + Surcharges = Maximum Lawful Rent Owners may pass a portion of the registration fee through to each tenant. For the 12 months starting September 1, 2016, the amount that may be passed through is $7.29 per month, as long as all fees are paid no later than August 1,
18 Registration Fee Waivers A waiver of the registration fee can be authorized by the Agency for units occupied by very-low income tenants who are ALSO: senior citizens, disabled, or are participating in a state or federal rent subsidy program (e.g., Section 8). A waiver of the registration fee can be also be authorized by the Agency for units occupied by owners of the property (at least a 25% ownership interest) who occupy the unit as their principal place of residence. No registration fee is charged for units for which a fee waiver was authorized; therefore, no registration fee pass-through may be charged to a tenant of such a unit. Santa Monica Rent Control Board 18
19 If a registration fee was paid for the unit, enter the registration fee passthrough on line 4. 19
20 Calculate Allowable Surcharges Surcharges are based on charges that are included in the property tax bill. MAR + Registration Fee + Surcharges = Maximum Lawful Rent A copy of the tax bill must be attached to the increase notice to the tenant in order to pass through these charges: Community College Bond, Unified Schools Bond, Stormwater Management User Fee and Clean Beaches & Ocean Parcel Tax. Santa Monica Rent Control Board 20
21 Sample Property Tax Bill Community College Bond, Unified Schools Bond, Stormwater Management User Fee, Clean Beaches & Ocean Parcel Tax, and School District Parcel Tax are abbreviated on the tax bill. The sample above lists them as they appear on the bill. 21
22 School District Special Taxes (Measure R) - Senior Owner Exemption Exemptions from this tax may be granted to property owners who meet the following qualifications: Must be 65 years old or older by June 30th of the year in which they apply; and Must own and occupy their property as their primary residence. Applications are available by contacting SMMUSD and asking to be put on the exemption application mailing list. Call SMMUSD at , ext
23 Clean Beaches and Ocean Parcel Tax Exemption available for low-income tenants who qualify and apply. To apply, call Rent Control Agency. Exemption available for low-income owners who qualify and apply. To apply, call Neal Shapiro at Santa Monica s Office of Sustainability and the Environment. (310) For this tax only, if the tax bill has been adjusted because a tenant has an exemption, when calculating the surcharge, divide the amount on the tax bill by the number of units that have NOT received an exemption, and do not pass this tax through the tenant with the exemption. 23
24 Follow the Numbers Santa Monica Rent Control Board 24
25 Calculating the Amount of the Surcharges Amount from the annual property tax bill TOTAL number of units on property 12 months = per unit monthly surcharge For example, if the Community College Bond charge on a property s tax bill was $1,258.80, and the property has 10 units: $1, (units) 12 (months) = $
26 Enter amounts from the tax bill, Santa Monica Rent Control Board 26
27 ... enter the number of units on the property, Santa Monica Rent Control Board 27
28 ... and calculate the surcharges. Put the results on lines 5a through 5e, 28
29 ... and put the total amount of the surcharges on line 5. Santa Monica Rent Control Board 29
30 Add lines 3, 4 and 5, and put the total on line 6. This is the new maximum lawful rent. 30
31 Rent Control Office Office Address Santa Monica City Hall 1685 Main Street, Room 202 Santa Monica, CA Phone (310) Website 31
32 Information Analysts Information Analysts are available to answer questions by phone, walk-in or . No appointment is necessary. Hours available: Monday - Thursday Walk-in: By phone: 8:00 am - 4:30 pm 7:30 am - 5:30 pm Fridays (closed every other Friday) Walk-in: By phone: 8:00 am - 4:30 pm 8:00 am - 5:00 pm. 32
33 Download Forms from Website Just go to the homepage and look for Notice of Change in Terms of Tenancy in the blue box entitled Quicklinks on the right side of the screen. 33
34 Individual Assistance Anyone needing further assistance may get help now in the order you are called. 34
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