Does a Revocable Living Trust Affect Your Owner-Occupancy Exemption?

Many Berkeley rental housing providers place their property into a revocable living trust as part of their estate planning. If you are claiming an owner-occupancy exemption, you may wonder whether transferring title to a trust changes your eligibility.

Fortunately, the answer is generally no.

The Berkeley Rent Board recognizes that a revocable living trust should not automatically prevent an otherwise qualified owner from claiming an owner-occupancy exemption. However, because title is no longer held directly by a natural person, the Rent Board requires additional documentation to verify that the exemption still applies.

If your property is held in a revocable living trust, you should expect to submit an Amended Registration Statement together with a Living Trust Declaration for Owner-Occupancy Exemption when claiming the exemption.

Why Does Berkeley Require a Living Trust Declaration?

Berkeley limits owner-occupancy exemptions to qualifying natural persons. A revocable living trust is not a natural person, but it is also not a corporation, LLC, partnership, or other business entity.

Rather than disqualifying these properties altogether, the Rent Board created a process that allows qualifying owners to demonstrate that they remain entitled to the exemption.

The Living Trust Declaration does not create an exemption. Instead, it documents that the person claiming the exemption continues to satisfy the owner-occupancy requirements despite holding title through a revocable living trust.

Three Ways to Qualify

The Rent Board recognizes three situations in which a person may claim an owner-occupancy exemption through a revocable living trust.

1. You Are Both the Grantor and the Trustee

This is the most common arrangement.

You transferred your property into your own revocable living trust and continue to serve as trustee while occupying the property as your principal residence.

Because you remain both the grantor and trustee, you may continue claiming the owner-occupancy exemption after submitting the required declaration.

This provision allows owners to complete routine estate planning without sacrificing an otherwise valid exemption.

2. You Are the Grantor, but Someone Else Is the Trustee

Some owners appoint another individual—such as an adult child, trusted family member, or professional fiduciary—to serve as trustee while they are still living.

In this situation, the owner-occupancy exemption may still apply, provided the grantor retains authority over rent increases and eviction decisions for the property.

The Living Trust Declaration requires the grantor to certify that this authority has been retained.

Why this matters: The Rent Board looks beyond legal title to determine who actually controls the rental property.

3. You Are the Sole Surviving Beneficiary

The third scenario addresses what happens after the original owner dies.

If all grantors and trustees of the revocable living trust are deceased, the sole surviving beneficiary may continue claiming the owner-occupancy exemption by certifying that they occupy the property as their principal residence.

This provision helps ensure that a qualifying family member does not automatically lose an owner-occupancy exemption simply because ownership remains in the trust following the original owner's death.

Additional Documentation May Be Required

The Living Trust Declaration is the standard form used to establish eligibility, but the Rent Board may also request additional documentation to verify the exemption, such as a Certification of Trust or other supporting evidence.

Owners should be prepared to provide any documentation the Rent Board reasonably requires to establish their eligibility for the exemption.

Key Takeaway

Transferring your Berkeley property into a revocable living trust does not automatically affect your eligibility for an owner-occupancy exemption.

However, because the title is held by the trust rather than directly by the owner, Berkeley requires additional documentation to verify that a qualifying natural person remains entitled to claim the exemption. Understanding these requirements before transferring property into a trust can help avoid unnecessary delays or questions when claiming an owner-occupancy exemption.