Chapter 9.60
RENT REVIEW

Sections:

9.60.010    Citation.

9.60.020    Definitions.

9.60.030    Notice of rent increase requirements.

9.60.040    Notice of availability of rent review required.

9.60.050    Rent review program.

9.60.060    Consultation/mediation procedures.

9.60.070    Income discrimination prohibited.

9.60.080    Rent review board procedures.

9.60.090    Rent increase deposit obligation.

9.60.100    Landlord retaliation prohibited.

9.60.110    Good faith participation review.

9.60.120    Annual review.

9.60.130    Administration fees.

9.60.010 Citation.

This chapter may be referred to as the “rent review ordinance” of the city of Fremont. (Ord. 13-2017 § 1, 10-3-17.)

9.60.020 Definitions.

“Base rent” means the rental amount required to be paid by the tenant to the landlord in the month immediately preceding the effective date of the rent increase.

“Consultation” means either (1) a confidential telephone call or other informal contact by the designated service provider or director with a landlord/responsible party and tenant for the purpose of resolving a proposed rent increase issue, or (2) mediation in which the landlord/responsible party and tenant meet with a neutral mediator for the purpose of resolving a proposed rent increase issue.

“Designated service provider” or “service provider” means a party or organization contracted by the city to provide needed services to implement the procedures contained in this chapter.

“Director” means a person designated by the city manager. Any duty required of the director may be delegated to a third party by the director and any service required to be performed by the director may be provided by a designated service provider as authorized by the director.

“Landlord” means any person, partnership, corporation, or other business entity offering for rent or lease any residential property in the city. “Landlord” shall include the agent or representative of the landlord.

“Participate in good faith” means the mutual obligation of the landlord and tenant to meet on each occasion when notified in consultation, mediation or rent review board proceedings, provide relevant information, exchange proposals, reasonably consider proposals by opposite parties and engage in meaningful discussion on the subject of proposed rent increases and issues related to the rent increase. Good faith participation includes the duty of the landlord to refrain from any unlawful detainer proceeding due solely to a withholding of rent while the parties are engaged in proceedings under this chapter.

“Party” means a person who participates in the rent review procedures of this chapter or their agent or representative.

“Rent” means a fixed periodic compensation paid by a tenant at fixed intervals to a landlord for the possession and use of property.

“Rent increase” means any upward adjustment of the base rent amount specified by the original contract.

“Rent review board” means a board comprised of five persons, who are nonparties, with two landlord representatives who own rental units in the city of Fremont, two tenant representatives who are residents in the city of Fremont, one neutral third party who is a resident of Fremont and is neither a landlord nor a tenant, and one alternate who is a neutral third party and a resident of Fremont, all of whom are appointed by the city council as set forth in Chapter 2.20, Article XV.

“Residential property” means any housing unit offered for rent or lease in the city consisting of one or more units whether attached or detached, single- or multiple-family, and mobile homes. Mobile homes are subject to this chapter only to the extent of the mobile housing unit itself, not the underlying real property pad.

“Responsible party” means the person with the final legal authority to adjust rent increases without limitations and resolve tenant issues on behalf of the residential landlord. “Responsible party” shall include the agent or representative of the responsible party.

“Responsible party declaration” contains the signature of the legal owner of the residential property certifying that the person authorized to represent him/her during consultation, mediation or rent review board proceedings has the authority to adjust rent increases and resolve tenant issues on behalf of the residential landlord.

“Retaliatory conduct” means those acts prohibited by Cal. Civ. Code § 1942.5 and Section 9.60.100(a).

“Shared housing unit” means a habitable space that a homeowner rents to one or more individuals that is located in the home where the homeowner is currently residing as his or her primary residence.

“Tenant” means any person having the legal responsibility for the payment of rent for residential property in the city. “Tenant” shall include the agent or representative of the tenant. (Ord. 13-2017 § 1, 10-3-17; Ord. 05-2019 § 1, 4-16-19.)

9.60.030 Notice of rent increase requirements.

(a)    Every landlord of residential property shall provide a rent increase notice that follows the procedure in Cal. Civ. Code § 827(b) regardless of the length of the tenancy and any other state law requirements before demanding or accepting any increase in rent. All landlords are encouraged to provide at least 90 calendar days’ notice of any rent increase in order to allow for orderly operation of the rent review procedures of this chapter. Rent increase notices seeking an increase of rent exceeding five percent shall also include a statement setting forth the reason for the rent increase.

(b)    All rent increase notices shall be in writing, shall show the name, address and phone number of the responsible party and shall be personally delivered to the tenant or mailed first-class to the tenant at the address of the tenant’s rental unit by first-class mail, postage prepaid. Service by mail shall be presumed complete within five calendar days of mailing. This presumption may be rebutted by the tenant.

(c)    Any rent increase notice issued in violation of this chapter shall be void. (Ord. 13-2017 § 1, 10-3-17; Ord. 05-2019 § 2, 4-16-19.)

9.60.040 Notice of availability of rent review required.

(a)    In addition to any rent increase notice required by state law, landlord shall also provide tenants written notice of the availability of rent review as provided in this chapter and provide information regarding how a tenant can obtain a copy of this chapter. This obligation shall extend to rent increases in any amount and to all affected tenants. This notice may be provided by personal delivery, first-class mail, text or email. No rent increase shall be valid for any purpose whatsoever without full compliance with this section.

(b)    The notice of availability of rent review shall be provided in English and the most commonly used languages within the city as determined by the director based upon the American Community Survey, the most recent census or other reputable source data and shall read as follows:

NOTICE:

Under California Civil Code Section 827(b), a Landlord must provide a Tenant with 30 days’ notice prior to a rent increase of 10 percent (10%) or less and 60 days’ notice of a rent increase greater than 10 percent (10%). In addition, Chapter 9.60 of the Fremont Municipal Code requires that a Landlord must at the same time provide and serve this written notice of the City’s Rent Review Program. This program provides a procedure for Landlords and Tenants to meet to discuss issues related to rent increases. Information about this program and a copy of Chapter 9.60 are available on the City’s website at www.fremont.gov, at the City of Fremont Family Resource Center located at 39155 Liberty Street in Fremont, California, the Development Services Center located at 39550 Liberty Street in Fremont, California, and other locations designated by the Human Services Director. Copies are also available in English and the most commonly used languages within the City as determined by the Human Services Director.

You are encouraged to contact the owner or manager of your rental unit whose name is ___________________(landlord to insert the name of the Responsible Party) at _________________(landlord to insert email address and telephone number) to discuss this rent increase for your rental unit. In addition, if you have received notice of a rent increase of more than five percent (5%) in the last 12 months, you are also entitled to review by the City’s Rent Review Board. To initiate the rent review process, you must request rent review by contacting ____________________ (landlords will be advised of the name and contact information for the service provider designated by the director that is to be inserted in this notice) within 15 days of the date of the notice of rent increase. Your Landlord will be notified of your request and you will be contacted by a housing professional to discuss the rent increase. Please note that petitioning for rent review does not guarantee a reduction in the rent increase.

Under California Civil Code Section 1942.5, it is illegal for a Landlord to retaliate against a Tenant for lawfully exercising his or her legal rights.

(c)    The city shall make copies of this notice available to landlords in English and the most commonly used languages within the city as determined by the director.

(d)    Any rent increase in violation of this chapter shall operate as a complete defense to an unlawful detainer action based on failure to pay any illegal rent increase. Any tenant required to pay an illegal rent increase may recover all illegal rent increase amounts, actually paid by the tenant, in a civil action.

(e)    Rent increases shall be limited to one increase in any consecutive 12-month period. If the parties agree to more than one rent increase in a 12-month period, it must be documented in a separate written agreement (not the rental agreement) and identify the agreed upon rental increases and the effective dates for each increase. (Ord. 13-2017 § 1, 10-3-17; Ord. 05-2019 § 3, 4-16-19.)

9.60.050 Rent review program.1

(a)    The provisions of this chapter shall apply to all residential rental units in the city. This chapter shall not apply to hotels, boarding houses, transient accommodations, dormitories, mobile home space renters, junior accessory dwelling units as defined in Section 18.25.1525, and shared housing units.

(b)    The rent review hearing board process may be initiated by either an affected landlord or an affected tenant requesting assistance with a rent increase exceeding five percent in any 12-month period by contacting the designated service provider within 15 calendar days of the date of the notice of rent increase and providing a copy of the notice of rent increase to the designated service provider.

(c)    The rent review procedures shall consist of consultation with the designated service provider which could result in an informal mediation with a third party followed by non-binding review by the rent review board of rent increases that exceed five percent in any 12-month period.

(d)    The designated service provider shall process requests for assistance as follows:

(1)    General Information Requests. When a party requests general information about the rent review program, the designated service provider shall provide the rent review information brochure to all parties in person or by mail or email, as may be appropriate, within one business day.

(2)    Tenant Initiation of Rent Review. A party requesting initiation of the rent review process shall be encouraged by the designated service provider to contact the opposite party to attempt resolution of the rent increase dispute. When such a request is made, the requester and all other parties shall be provided the rent review information brochure in person or by mail or email, as may be appropriate, and the designated service provider shall notify the opposite party by phone or email, as may be appropriate, within three business days that a request for assistance has been made.

(3)    Designated Service Provider Initiation of Rent Review. When a requesting party does not wish to contact the opposite party, the designated service provider shall record the request for assistance, initiate the consultation process, and give written notice to the affected parties within three business days.

(e)    The director is authorized, to the extent consistent with all the time limits and procedures in this chapter, to consolidate separate requests for consultation and rent review involving the same rent dispute issue. Consolidation shall not affect an individual’s desire to be separately represented or to bring a separate legal action.

(f)    In the event the parties do not reach written agreement resolving a rent increase issue, the director is authorized and shall have the duty to determine when proceedings under this chapter have been completed and to notify the parties of the termination of proceedings under this chapter. (Ord. 13-2017 § 1, 10-3-17; Ord. 23-2017 § 1, 12-12-17; Ord. 05-2019 § 4, 4-16-19.)

9.60.060 Consultation/mediation procedures.

(a)    The affected landlord/responsible party or tenant shall respond either orally or in writing to the designated service provider within two business days following phone contact. If the landlord designates a responsible party, the landlord shall also provide a responsible party declaration to the designated service provider within the same timeframe or within a time established by the designated service provider. Failure of either the landlord or the responsible party to respond to the designated service provider within two business days, or additional time if provided by the designated service provider, shall void the rent increase notice for all purposes.

(b)    The designated service provider shall attempt informal consultation in an attempt to reach an amicable resolution of the rent increase dispute for a period not exceeding 10 business days. Alternatively, the matter may be submitted to a neutral mediator at the discretion of the designated service provider. Any agreement reached during mediation shall have the same force and effect as a consultation agreement as set forth in subsection (d) of this section.

(c)    The responsible party and the tenant shall have the mutual obligation to participate in the consultation or mediation process in good faith.

(d)    Any agreement reached by the parties in consultation or mediation shall:

(1)    Be made in writing and signed by the parties to the agreement;

(2)    State the specific terms of the agreement including the duration and conditions of the agreement;

(3)    Be binding on the parties identified in the agreement;

(4)    Provide that the parties agree to binding arbitration by a city-appointed arbitrator to resolve any future dispute as to the interpretation or application of the agreement; and

(5)    Provide that any agent or representative signing a consultation or mediation agreement on behalf of other persons shall be responsible for promptly providing a copy of the agreement to the parties he or she represents.

(e)    A party to a consultation or mediation agreement may not initiate a rent review procedure concerning any rent increase covering the same time period included in the consultation or mediation agreement.

(f)    One or more tenants affected by a common rent increase may simultaneously participate in the same consultation or mediation proceeding with consent of the landlord. No tenant shall be bound by any consultation or mediation agreement they or their agent and/or representative did not agree to.

(g)    Failure of a responsible party to appear and participate in good faith in the consultation or mediation process shall void the notice of rent increase for all purposes. Failure of any affected tenant to appear and participate in good faith shall terminate all services under this chapter for the affected tenant for the duration of the subject rent increase and shall make the rent increase effective the date stated in the notice of rent increase. (Ord. 13-2017 § 1, 10-3-17; Ord. 23-2017 § 2, 12-12-17.)

9.60.070 Income discrimination prohibited.

(a)    For purposes of this subsection, “source of income” means all lawful sources of income or rental assistance program, homeless assistance program, security deposit assistance program or housing subsidy program, including, but not limited to, Housing Choice Voucher Program (Section 8) assistance. “Source of income” includes any requirement of any such program or source of income or rental assistance.

(b)    It is unlawful for any person to do any of the following as wholly or partially based on source of income:

(1)    To interrupt, terminate, or fail or refuse to initiate or conduct any transaction in real property, including, but not limited to, the rental thereof; to require different terms for such transaction; or falsely to represent that an interest in real property is not available for transaction;

(2)    To include in the terms or conditions of a transaction in real property any clause, condition or restriction;

(3)    To refuse or restrict facilities, services, repairs or improvements for any tenant or lessee;

(4)    To make, print, publish, advertise or disseminate in any way, or cause to be made, printed or published, advertised or disseminated in any way, any notice, statement or advertisement with respect to a transaction in real property, or with respect to financing related to any such transaction, which unlawfully indicates preference, limitation or discrimination based on source of income. For purposes of this subsection, “source of income” means all lawful sources of income or rental assistance program, homeless assistance program, security deposit assistance program or housing subsidy program. “Source of income” includes any requirement of any such program or source of income or rental assistance.

(c)    It is unlawful for any person to use a financial or income standard for the rental of housing that does either of the following:

(1)    Fails to account for any rental payments or portions of rental payments that will be made by other individuals or organizations on the same basis as rental payments to be made directly by the tenant or prospective tenant;

(2)    Fails to account for the aggregate income of persons residing together or proposing to reside together or an aggregate income of tenants or prospective tenants and their cosigners or proposed cosigners or proposed cosigners on the same basis as the aggregate income of married persons residing together or proposing to reside together. (Ord. 05-2019 § 5, 4-16-19.)

9.60.080 Rent review board procedures.

(a)    Following completion of the consultation or mediation procedures, either party may submit a written request for review by the rent review board within five business days of completion of consultation or mediation if the rent increase notice seeks an increase of rent of more than five percent in the last 12-month period.

(b)    A hearing before the rent review board shall be held no more than 45 calendar days from the date of receipt of the request for hearing. The director shall provide notice to the parties when a hearing is scheduled. Participants in the hearing shall be the parties to the consultation or mediation and other persons deemed necessary by the director or rent review board.

(c)    The purpose of the hearing shall be to allow the rent review board to examine witnesses, review the documents in the record and make formal findings of fact and a recommendation to resolve the rent issue. In the discretion of the rent review board, any hearing that is convened may be continued for the convenience of a party. The rent review board may proceed with a hearing in the absence of the landlord/responsible party.

(d)    The landlord/responsible party shall present evidence to explain the rationale or reason for a rent increase in excess of five percent of the base rent.

(e)    The rent review board shall evaluate the reasonableness of the rent increase, taking into consideration the factors listed below. These factors are illustrative and not exclusive. The rent review board is free to consider any factors relevant to the issue of the reasonableness of the rent increase as between the parties.

(1)    Past history of rent increases for the same rental unit, including timing and amount;

(2)    Impact of the rent increase on the affected household;

(3)    Past history of landlord costs for capital improvements, maintenance and operation, debt service, rehabilitation and provision of housing services;

(4)    Existing market value of rents within the same rental complex or for similarly situated units;

(5)    Return on investment to the landlord;

(6)    The San Francisco-Oakland-San Jose All Urban Consumer Price Index; and

(7)    Service reductions for the rental unit or rental complex during the tenant’s occupancy of the unit.

(f)    The rent review board shall direct the board secretary to consult with the board chairperson to issue a written decision and shall mail the findings and recommendation to the parties within five business days following completion. If the parties mutually agree to a resolution at any time prior to the conclusion of the hearing, their agreement may be memorialized in a binding written agreement at the hearing.

(g)    The determination of the rent review board shall be advisory to the parties and shall not be binding. However, if the parties agree with the board’s determination, they may formalize it into a binding agreement signed by both parties.

(h)    One or more tenants affected by a common rent increase may simultaneously participate in the same rent review proceeding with the consent of the landlord.

(i)    Failure of a responsible party to appear and participate in good faith in the rent review process shall void the notice of rent increase for all purposes and the landlord shall be prohibited from serving a new notice of rent increase for a period of 90 calendar days. Failure of any tenant to appear and participate in good faith in the rent review process shall terminate all services under this chapter for the affected tenant for the duration of the subject rent increase and shall make the rent increase effective on the date stated in the notice of rent increase. (Ord. 13-2017 § 1, 10-3-17.)

9.60.090 Rent increase deposit obligation.

(a)    Every tenant shall pay the existing base rent as it becomes due.

(b)    In the event the rent review process exceeds the rent increase notice period, each affected tenant shall deposit with the landlord 50 percent of the rent increase amount, as it becomes due, in the customary form practiced by the landlord and tenant or in any agreed form. The landlord shall retain this deposit in the landlord’s operating account. “Fifty percent of the rent increase amount” shall mean 50 percent of the amount which exceeds the existing base rent. The landlord shall provide the tenant with a receipt acknowledging the delivery of the deposit and agreeing to relinquish the deposit if required by this chapter.

(c)    In the event the parties reach an agreement pursuant to this chapter reducing the amount of the proposed rent increase:

(1)    The landlord shall immediately credit to the tenant the difference between the agreed rent increase and the deposit if the deposit exceeds the amount of the agreed rent increase.

(2)    The tenant shall immediately pay to the landlord the balance of the rent increase amount if the agreed rent increase exceeds the deposit amount.

(3)    All payments shall be in the customary form practiced by the landlord and tenant or in any agreed form.

(d)    If the parties fail to reach any agreement, the landlord shall retain the full amount of the deposit and the tenant shall pay the full balance of the rent increase amount immediately following notice by the director.

(e)    If the director finds that a landlord did not participate in the rent review process in good faith, the full amount of the rent increase deposit shall be released to the tenant within 30 days following the final good faith determination.

(f)    If the director finds that a tenant did not participate in the rent review process in good faith, the full amount of the rent increase deposit shall be retained by the landlord and the remaining balance of the rent increase amount shall be paid by the tenant to the landlord within 30 days following the final good faith determination and notification by the director. In addition, any pending proceedings before the rent review board shall be dismissed and the tenant will be barred from subsequently challenging that rent increase before the rent review board.

(g)    A tenant failing to make a rent increase amount deposit when due shall be deemed in breach of the obligation of good faith participation and the rent increase will be considered valid.

(h)    In the event the landlord fails to retain any deposit in the operating account, the rent increase shall be void for all purposes and the landlord shall be liable to the tenant in a civil action for the amount of the deposit. (Ord. 13-2017 § 1, 10-3-17.)

9.60.100 Landlord retaliation prohibited.

(a)    No landlord may take any action increasing any rental amount, reducing any service, causing the tenant to involuntarily quit the premises (constructive eviction) or discriminating against any tenant or household members of a tenant because of the tenant’s use of any remedy provided by this chapter.

(b)    Adverse retaliatory actions suffered by a tenant within 180 days of the tenant’s exercise of any right or process under this chapter shall be presumed to be retaliatory conduct under this chapter. This presumption may be rebutted by the landlord, in which case the landlord shall carry the burden of persuasion to prove the adverse action was not in retaliation for the exercise of any right or process under this chapter.

(c)    Retaliatory conduct by a landlord in violation of this section shall be void and shall be remedied by a civil penalty up to $2,000 or to an amount authorized in Cal. Civ. Code § 1942.5.

(d)    Any rent increase in violation of this section shall be void and shall be rolled back to the prior rental amount. The landlord shall not be allowed to notice a new rent increase for a period of six months following the retaliatory conduct.

(e)    Retaliatory conduct by a landlord in violation of this section shall be a defense to an unlawful detainer or eviction action. (Ord. 13-2017 § 1, 10-3-17.)

9.60.110 Good faith participation review.

(a)    Any party to a rent review proceeding under this chapter may request the director to investigate a claim of failure to participate in good faith by another party to the proceeding. The director shall be responsible for investigation of allegations of a lack of good faith participation by any party. The director may not delegate this duty to a person other than a city employee.

(b)    Any determination that a party has failed to participate in good faith in a proceeding under this chapter shall only be made after a five-business-day notice of hearing to all affected parties, a fair hearing by a hearing officer appointed by the city manager and the rendition of factual findings supported by the record. Following the fair hearing, the director shall give prompt notice of the good faith determination by first-class mail, postage prepaid, to the affected parties. (Ord. 13-2017 § 1, 10-3-17.)

9.60.120 Annual review.

The director shall annually prepare a report to the city council assessing the effectiveness of the rent review program established in this chapter and recommending changes to the program as may be appropriate. (Ord. 13-2017 § 1, 10-3-17.)

9.60.130 Administration fees.

(a)    One hundred percent of the costs incurred in the administration of the provisions of this chapter shall be reimbursed by residential rental unit owners to the city. The fee shall be determined by the city from all the costs incurred in the administration of this chapter, in the prior calendar or fiscal year, based on (1) the general costs of administration, including the costs of defending this chapter and (2) the direct costs incurred in the rent review process, including the costs of hearing. The general costs shall be apportioned equally to all residential rental units in the city as allowed pursuant to state law.

(b)    The administration fees imposed by subsection (a) of this section shall be paid by the residential rental unit owner within 45 days from the date of mailing of the billing by the city. Assessment and collection of penalties for delinquent payment of the fees imposed by this section shall be as provided in Chapter 5.05. The city manager shall recommend to the city council the amount of administration fees, and the city council shall adopt such fees by resolution. (Ord. 23-2017 § 3, 12-12-17.)


1

Code reviser’s note: Ord. 05-2019 amends Section 9.60.050(a), and is effective July 1, 2019.