Rent Hike Notices May Arrive by Mail

Question: I just received a rent increase notice in the mail. My landlord says she now can send rent increase notices through the mail. Is this true?

Answer: The law has changed. Effective Jan. 1, 2001, Civil Code 827 and Civil Code Procedures 1013 allow for a rent increase notice to be served on a tenant by first-class mail or by Express Mail only.

But rent increase notices can still be served directly to a tenant (known as “personal” service). They can also be handed to a third person at the rental unit (known as “substituted” service). Substituted service requires another copy of the notice to be mailed by first-class mail to the tenant’s address.

Posting rent increase notices on doors, even if a copy is also mailed, is no longer considered proper service. It is recommended that mailed increase notices not be sent by certified mail, return receipt requested, because the recipient can refuse it. If a rent increase notice is sent by first-class or express mail, the effective date for the increase is extended by five calendar days. This means that a 30-day notice (for an increase of 10% or less) becomes a 35-day notice and a 60-day notice (for an increase of more than 10%) becomes a 65-day notice from the date the notice is dropped in the mail. The 35- or 65-day rule applies only to mailed rent increase notices--not other types of changes made to a tenancy.

If the place of mailing is outside of California but within the United States, the notice is extended for 10 calendar days, or 20 days if mailed from outside the United States. Rent increase notices served by fax are permitted only if both parties have agreed in writing to this service. For notice by fax, the time period is extended by two court days. A court day is any day the court is open, i.e., all weekdays, except holidays.

All mailed notices must bear a notation of the date and place of mailing and all faxed notices must list the date and place of transmission as well as the telephone number to which the notice was faxed.

This rule allowing service of rent increases by first-class mail is not allowed for other changes to a tenancy, such as new house rules or pets. Service for these changes can only be by personal or substituted service.

If Lease Is Broken Early,

Fee May Be Enforced

Q: My one-year lease contains a break-lease clause, which requires me to pay an additional one-month’s rent if I leave before the lease expires. I am thinking about relocating to be closer to my family. Is this break-lease fee enforceable if I move early?

A: The answer is probably yes. As a general rule, a tenant who breaks a lease is responsible for the remaining rent under the term of the lease, subject to the landlord’s duty to mitigate those damages by taking reasonable action to find a replacement tenant. The tenant is also responsible for the re-rental expenses such as advertising.

In practice, it can be difficult to predict or calculate the actual damages. For example, the parties can disagree about whether the landlord missed opportunities to re-rent. The resulting damages can be difficult to collect even if a judgment is obtained.

A break-lease fee is an attempt by both parties to eliminate these uncertainties by negotiating a finite limit on the losses in advance. As long as the clause was considered by the parties at the time the lease was signed, it should be enforceable. But the fee is binding on both parties. A landlord cannot collect the break-lease fee and then also seek the full damages if the unit is not rented quickly.

How Deposit Is Handled

Depends on Location

Q: My tenant has requested that I pay her interest on her deposit and that I also provide a bank statement showing that her security deposit has been put in a special savings account. To my knowledge, I can do anything I want with deposits I collect. The only responsibility I have is to settle the deposit after a tenant moves. Is this correct?

A: Unless the rental property is in a city with a rent-control ordinance that requires interest be paid on security deposits, there is no state law that requires a landlord to pay interest or to keep security deposit funds in a special savings account.

There is a difference between having to pay interest on a security deposit and having to keep the funds in an interest-bearing account. Locally, only Santa Monica requires deposits to be kept in a separate interest-bearing account.

This column is prepared by Project Sentinel, a rental housing mediation service in Sunnyvale, Calif. Questions may be sent to 1055 Sunnyvale-Saratoga Road, Suite 3, Sunnyvale, CA. 94087, but cannot be answered individually.

For housing discrimination questions, complaints or help, call the state Department of Fair Housing and Employment at (800) 233-3212 or the Fair Housing Council, Fair Housing Institute or Fair Housing Foundation office in your area:

San Fernando Valley: (818) 373-1185.

South-Central Los Angeles: (213) 295-3302.

Westside Los Angeles: (310) 474-1667.

Orange County: (714) 569-0828.

San Bernardino County: (909) 884-8056.

San Diego County: (619) 699-5888.

Ventura County: (805) 385-7288