BRHC Corner (January 2025)
The votes have been counted and Measure CC (the BRHC sponsored ballot measure) failed and Measure BB (the City Council sponsored ballot measure) has passed. Measure BB modifies language in the Rent Stabilization Ordinance and goes into effect on December 20, 2024.
Let’s take a quick look at the key changes to the ordinance.
Modification to Just Cause Reasons to Evict
Previously, good cause #4 for terminating a tenancy stated: “On the expiration of a fixed-term lease, the tenant refuses to sign a new lease that is substantially identical to the expired one.” This provision allowed landlords to require tenants to renew their lease under the same terms. If a tenant declined to sign the renewal for another fixed term, the landlord could notify them to vacate by the lease's end. In such cases, the landlord had the right to pursue eviction if the tenant remained in the unit without signing the new lease.
While most rental housing providers would never pursue eviction over a tenant's refusal to sign a renewed lease, some relied on the possibility of termination as a way to prompt tenants to clarify their plans. This approach was particularly useful with student tenants, who are notoriously poor at communicating their intentions to stay or move out. However, under the new regulations, tenants are no longer required to renew a lease for your preferred term. If they choose not to renew, you cannot evict them. In essence, tenants now have the option to switch to a month-to-month arrangement if that’s their preference.
Modification to Evictions for Nonpayment of Rent
The primary good cause for eviction is nonpayment of rent. Previously, landlords could serve a Three-Day Notice to Pay or Quit regardless of the amount owed. However, the law now restricts this right, allowing you to serve such a notice only when the tenant's unpaid rent equals or exceeds one month of the HUD Fair Market Rent (FMR) for a comparable unit. For instance, if the HUD FMR for a one-bedroom apartment in 2025 is $2,201, and your tenant pays $1,500 per month for their one-bedroom unit, you cannot serve a notice until their unpaid rent totals $2,201.
Prohibition of Ratio Utility Billing System Usage
This new regulation applies to leases starting after February 6, 2024, and to all future leases in Berkeley. If you typically charge tenants for utilities separately from the base rent because the utilities at your property are not individually metered, and your units are subject to rent control, you will no longer be allowed to do so. To recover utility costs, each unit must have separate utility meters, and tenants must be able to place the utility accounts in their own names. For leases that began between February 6, 2024, and December 19, 2024, you can no longer collect utility charges as a separate cost, even if you have been calculating and billing tenants monthly for them.
Modification of Eviction for Violation of a Lease Term
Before the law was modified, landlords could evict tenants for breaching the lease as long as the violation was deemed “substantial.” For instance, if your lease prohibited pets and a tenant brought one into the unit, you could serve a notice requiring them to remedy the violation or face eviction. Measure BB has tightened this rule, allowing eviction for breaching a material term of the lease only if it involves a “substantial violation of a material term of the lease causing actual injury to the landlord.”
The definition of “actual injury to the landlord” remains unclear. For example, if a tenant brings a pet onto the property and the landlord doesn’t reside there, does that cause actual injury? Likely not. Additionally, landlords must demonstrate that “the tenant’s behavior was unreasonable.” Is bringing a pet onto the property an unreasonable action? This will ultimately depend on how courts interpret and apply these terms in future cases.
Financial Penalties for Failure to Register a New Tenancy
Current law requires that you file a Vacancy Registration when a new tenancy takes place. You must do so within 15 days of the beginning of the lease term. There were no financial penalties if you failed to register the unit, although you would be considered out of compliance with the Rent Board and therefore unable to evict or raise rent.
Measure BB gives the Rent Board the power to levy a fine for tenancies they know have not been registered with the Rent Board. While those fines have yet to be established, rest assured this is the Rent Board’s way of forcing you to provide information for their records about each of your tenancies.
Make certain to attend BPOA’s January webinars on these changes to learn more about how to navigate the new regulations as well as learn best practices for managing in light of these changes.
The Berkeley Rental Housing Coalition is the political and legal arm of the BPOA. We fight against unbalanced, unfair, and poorly thought-out rental housing policy. To support this work, please consider upgrading your membership. The BHRC employs the feet-on-the-ground who hold the elected officials’ feet to the fire. To lend your support, contact Executive Director Krista Gulbransen, krista@bpoa.org or (510) 304-3575.