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3. Rent.
(a) Calculated on Square Footage Basis. Lessee shall pay Lessor rent each month in the amount determined by multiplying the square footage of the Property by three dollars and twenty-five cents ($3.25).
In the event that Lessor makes additional space available for Lessee’s use, that space shall automatically be included in the Property, as defined in Paragraph 1 of this Lease, and the square footage of the Property used in calculating the monthly rentamount shall be increased accordingly. Rent shall be calculated year-round on the totalsquare footage of the Property. There shall be no reductions in square footage for thepurpose of calculating rent during the off-season.
The amount charged per-square-foot shall be automatically increased each year on July 1 in an amount equal to any increase in the most recent Consumer Price Index released annually by the U.S. Bureau of Labor Statistics. In the event the Consumer Price Index decreases, no change in rent charged per-square-foot shall be made.
(b) Payment Procedures. Lessee shall remit its monthly rent by no later than the first day of each month during the Term of this Lease to Lessor at the address stated herein. There shall be no off-season period where rent is reduced or not due; rent shall be due on the first day of each month regardless of whether the Property was open for business during the month. Lessee is responsible for making the payments required by this section and Lessor will not and is under no obligation to send monthly invoices to Lessee regarding any such payments.
4. Use.
(a) Use. Lessee shall occupy and use the Property only for tables and chairs and similar furnishings to accommodate food and beverage sales and consumptionand for no other purpose whatsoever. The Property shall be open for business at leastnine (9) months each year for the Term of the Lease and Lessee may determine their ownhours and days of operation.. (h) Compliance with Law. Lessee shall, at all times and at Lessee’s expense, comply with all applicable federal, state and local laws, rules, regulations, and orders, and all covenants and restrictions of record regulating the Property and Lessee’s use of the Property, including but not limited to any license or permit issued by the Alcohol and Beverage Control Division regarding the Property. Lessee shall not use nor permit the use of the Property in any manner that will violate the same or disturb other property owners or tenants in the areas surrounding the Property or Property. (c) Condition of Property. Lessee has examined the Property and agrees to take possession in an “as is” condition. Lessee acknowledges and agrees that Lessor has made no representations, guarantees or warranties regarding the Property, or its fitness for any particular purpose, or regarding any common areas or improvements thereon, nor has Lessor made representations, guarantees or warranties regarding whether the Property and common areas and improvements thereon comply with
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applicable laws, rules, regulations, orders, or any covenants or restrictions of record in effect at the Effective Date of this Lease. Lessee assumes all responsibility regarding the California Occupational Safety Health Act, the legal use and adaptability of the Property and compliance with all applicable laws, rules, regulations, orders and covenants or record in effect during the Term of this Lease relating to the Property except as otherwise specifically stated in this Lease.
5. Hazardous Waste and Trash Disposal. Lessee shall not use, generate, store or dispose of any Hazardous Materials on the Property or permit the contaminationof the Property by Hazardous Materials. For the purpose of this section, Hazardous Materials shall include, without limitation, substances defined as “hazardous substances,” “hazardous materials,” “toxic substances,” hazardous wastes,” “extremely hazardous wastes” or “restricted hazardous wastes” or stated to be known to cause cancer or reproductive toxicity, under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. sections 9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. sections 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. sections 6901, et seq.; the Federal Water Pollution Control Act, 33 U.S.C. sections 1317, et seq.; sections 25115, 25117, 25122.7, 25140, 25249.5, 25249.8, 25281, 25316 or 25501 of the California Health & Safety Code; or any substances so defined or stated in any of the regulations adopted and publications promulgated pursuant to said laws as they may he amended from time to time.
Notwithstanding any other provision of this Lease, Lessee agrees to comply promptly, and at Lessee’s sole cost, with all applicable federal, state and local laws, rules regulations, permits and orders governing the use, management, storage, handling, cleanup, removal, disposal and shipping of Hazardous Materials. Lessee shall dispose of all trash and waste generated at the Property in a trash container at a location designated by Lessor.
6. Special Conditions.
(a) Outdoor Dining Tables and Chairs. Outdoor dining tables and chairs on the Property are not required to be brought indoors during hours in which the Lessee is not operating a business on the Property.
(b) Compliance with City Outdoor Dining Guidelines. Lessee must comply with all of the requirements of the City of Avalon’s current Guidelines for Outdoor Dining as approved by the City Council.
7. Lessee’s Repair and Maintenance Obligations. Lessee shall keep in good order, condition and repair, and shall replace, if necessary, the Property and every part thereof, structural and nonstructural occupied or used by Lessee, whether or not the needfor such repairs occurs as a result of Lessee’s use, any prior use, the elements, or the age of such portion of the Property. This includes, but is not limited to, glazing, plumbing, heating, air conditioning, ventilation, electrical and lighting fixtures and facilities, all equipment within the Property, fixtures, walls (interior and exterior), ceilings, floors, windows, doors, plate glass, skylights, landscaping, tree-trimming, and all fences and signs located on the Property.
8. Surrender. On the last day of the Term of this Lease, or on the date this Lease is earlier terminated, Lessee shall surrender the Property to Lessor in the same
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condition as when received, ordinary wear and tear and damage by casualty excepted, clean and free of debris. Lessee shall remove all trade fixtures, furnishings and equipment owned by Lessee and shall repair any damage to the Property occasioned by theinstallation or removal of Lessee’s trade fixtures, furnishings and equipment.
9. Lessor’s Right to Undertake Lessee’s Obligations. If Lessee fails to perform any of Lessee’s obligations under any paragraph of this Lease, Lessor may, at its option (but shall not be required to), enter upon the Property after ten (10) days’ prior written notice to Lessee (except in the case of an emergency, as determined by Lessor, in its sole discretion, in which case no notice shall be required), and perform such obligations on Lessee’s behalf. Any costs incurred by Lessor pursuant to this Paragraph, including interest thereon, shall become due and payable to Lessor together withLessee’s next rent installment.
10. Damage to Property. In the event that repairs are necessary to alleviate structural hazards because the Property is damaged by circumstances not caused by the negligence or willful misconduct of Lessee, its employees, contractors, agents, invitees or guests, Lessee shall inform Lessor in writing of SLICh necessity. Lessor shall then have theoption, in its sole discretion, to either immediately terminate this Lease or to provide forthe necessary repairs. In the event Lessor elects to terminate this Lease, no rent shallaccrue or be payable to the Lessor after the date Lessor terminates the Lease. If repairs which are made by Lessor prevent the Lessee from occupying a portion of the Property, but Lessee is able to operate on the Property during such repairs, Lessee shall be entitled to a proportionate reduction in the monthly rent, based on the ratio the floor area which Lessee is unable to occupy, from the date such repairs are commenced until the date the entire Property is available for Lessee’s occupancy. If the damage prevents Lessee from operating on the Property, then no rent shall be due from the date of damage, as determined by Lessor in its sole discretion, until completion of repairs. Lessee expressly waives the benefit of any statute now or hereinafter in effect which would otherwise afford Lessee the right to make repairs at Lessor’s expense or to terminate this Lease because of Lessor’s failure to keep the Property in good order, condition and repair.
11. Alterations and Additions. Except for the placement of tables, chairs and umbrellas as approved by the City Manager and provided that such placement is consistent with the City of Avalon’s current Guidelines for Outdoor Dining, Lessee shall not make any alterations, improvements, additions, Utility Installations exceeding $5,000 (Five Thousand Dollars) in value, hang or paint any signs visible from the exterior of the Property, or make any change to the exterior of the Property, without Lessor’s prior written consent. The term “Utility Installation” shall mean installation of carpeting, window coverings, air lines, power panels, electrical distribution systems, lighting fixtures, space heaters, air conditioning, plumbing, and structural changes. If Lessor authorizes any alterations, improvements, additions, or Utility Installations, all such improvements shall be Lessee’s sole responsibility and shall be installed and removed at Lessee’s sole cost and expense. Upon the removal of any improvement, alteration, addition or Utility Installation, Lessee shall restore the Property to its prior condition. Lessor may require Lessee to provide Lessor, at Lessee’s sole cost and expense, a lien and completion bond in an amount equal to one and one-half times the estimated cost of such improvements.Should Lessee make any alternations, improvements, additions or Utility Installations
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without the prior approval of Lessor, Lessor may require that Lessee immediately remove any or all of the same.
12. Release of Claim For Relocation Benefits. Lessee hereby acknowledges and agrees that Lessee has no claim or right to relocation benefits or compensation ofany kind or nature upon termination of this Lease for any reason, even if such termination was made by the unilateral election of Lessor in its sole discretion. Lessee expresslywaives any and all claims or rights to receive relocation benefits or compensation of any kind or nature. Lessee acknowledges that Lessor would not enter into this Lease but for this acknowledgment and waiver by Lessee. During any period of repair or reconstruction by Lessor during the Term of this Lease that requires Lessee to vacate the Property, Lessor shall be under no obligation to provide alternative space to Lessee, but Lessee shall be relieved of the obligation to pay rent during such time that Lessee is unable to utilize the Property. Lessee shall vacate the Property within sixty (60) days’ written notice to vacate for such purpose and shall be solely responsible for all costs of vacating from and relocating to reconstructed or newly constructed space, if any is available.
13. Insurance. The Lessee shall provide the Lessor with a copy of insurance upon execution of the Lease and upon renewal of insurance as follows:
(a) Workers Compensation Insurance. The Lessee is required to provide evidence of workers’ compensation coverage as follows:
Workers’ Compensation insurance with statutory limits as required by the Labor Code of the State of California.
ii. Employers Liability with limits of 1,000,000 per Accident; 1,000,000 Disease per employee; 1,000,000 Disease per
policy.
iii. The policy must include a written waiver of the insurer’s right to subrogate against the City of Ava Ion.
(b) Liability Insurance. For the Term of the Lease, Lessee shall maintain and keep in full force Commercial General Liability Insurance no less broad than ISO form CG 00 01 against any liability arising out of the ownership, use occupancy, or maintenance of the Property, and operation of Lessee’s business at the Property and all appurtenant thereto when used by Lessee. Such insurance he no less than the following:
Minimum Limits: 1,000,000 per Occurrence; 2000,000
General Aggregate; the General Aggregate shall apply
separately to each location.
ii. Prior written consent is required if the insurance has a deductible or self-insured retention in excess of $25,000. iii. The City of Avalon must be an additional insured for liability arising out the ownership, maintenance or use of that part of the premises leased to the Tenant/Lessee/Concessionaire (ISO form CG 20 ii or equivalent).
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iv. The insurance provided to the City of Avalon as an additional insured must apply on a primary and non-contributory basis with respect to any insurance or self-insurance program maintained by the City of Ava Ion.
v. The policy must cover inter-insured suits and include a “separation of Insureds” or “severability” clause which treatseach insured separately. (c) Property Insurance.
Prior to Lessee’s entry upon the Property and for the Term of the Lease, Lessee shall obtain and keep in full force and effecta policy of insurance covering loss or damage to the Property, in the amount of the full replacement value thereof, against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, commonly known as “broadform coverage” Lessee shall provide Lessor a copy ofthis insurance policy upon execution of this Lease.
Lessee shall also insure its fixtures, equipment and tenant improvements on the Property at its sole cost and expense. iii. The limits of said insurance shall not, however, limit the liability of Lessee hereunder.
iv. Lessee must name the City as Loss Payee on its property policy.
(d) Restrictions; Endorsements.
Lessee shall not do or permit to be done anything which shall invalidate the insurance policies during the Term of this Lease.
All policies of insurance shall be endorsed to: (1) name Lessor (and at Lessor’s option, any additional parties designated by Lessor) as an additional insured; (2) provide that such insurance is primary to any policy of Lessor, which shall not be called upon to contribute in any way; and (3) provide that the policy shall not be cancelled, terminated or modified without first providing thirty (30) days’ prior written notice to Lessor.
All insurance policies must be issued by an insurer with an A.M. Best rating of at least A:Vll. Lessee shall provide immediate written notice if (1) any of the required insurance policies are terminated; (2) the limits of any of the required policies are reduced; or (3) the deductible or self-insured retention is increased.
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14. Indemnification and Release.
(a) Indemnification. Lessee shall indemnify, defend, reimburse and hold harmless Lessor from and against any and all demands, claims, losses, damages or liabilities of any kind or nature, including claims for damage to property or persons, including wrongful death (‘Claim”), arising from or in connection with any act or omission of Lessee, including Lessee’s active and passive negligence or Lessee’s use of the Property or Property under this Lease, including, without limitation, any activity, work or things done, permitted or suffered by Lessee in or about the Property or elsewhere on the Property and any breach or default by Lessee of ths Lease. If any action or proceeding is brought against Lessor by reason of any such Claim, Lessee’s obligation to defend the same shall be done with counsel approved in advance by Lessor. (b) Release. Lessee hereby agrees that Lessor shall not be liable for, and hereby waives and releases Lessor from, any injury to Lessee’s business or any loss of income therefrom or for damage to the goods, wares, merchandise or other property of Lessee, Lessee’s employees, contractors, agents, invitees, gLiests, or any other person on the Property, nor shall Lessor be liable for injury to the person of Lessee, Lessee’semployees, agents, contractors, guests or invitees caused by any reason whatsoever, including without limitation, by fire, steam, electricity, gas, water, rain, the breakage,leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures on the Property or Property, or from any other cause or condition arising upon the Property or upon other portions of the Property which the Property are a part, or from other sources or places and regardless of whether the cause of such damage or injury or the means of repairing the same is inaccessible to Lessee except to the extent such injury or loss is caused by Lessor’s sole gross negligence or willful misconduct. Lessor shall not be liable for any damages arising from any act or neglect of any other lessees or possessors, if any, of the Property.
15. Utilities. Lessee shall arrange and timely pay for all gas, heat, light, disposal, power, and any other utilities and services needed or supplied to the Property, together with any taxes thereon.
16. Assignment and Subletting.
(a) Except as otherwise provided below, Lessee shall not convey, assign, transfer, mortgage, pledge, sublet or encumber any interest in the Property during the Term of this Lease, nor allow any other person (the employees, agents, servants and invitees of Lessee excepted) to occupy or use the Property, or any portion thereof, without Lessor’s prior written consent, which may be refused in Lessor’s sole discretion. (b) Any attempted conveyance, assignment, transfer, mortgage, pledge, sublet, or encumbrance shall be void where such consent has not been obtained, and the original Lessee shall remain responsible for any unpaid rents, fines, fees, or other liabilities arising from or related to the Property.
(c) Any subletting approved by Lessor shall not relieve Lessee of any of its obligations or liabilities under this Lease, and both Lessee and any subsequent lessor(s) will be deemed to be bound by this Lease.
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(d) Any dissolution, merger, consolidation, or other reorganization of Lessee or sale which results in a change of controlling persons shall be deemed an assignment of this Lease. Any such assignment or subletting without advance written consent of Lessor shall be void, and shall, at the option of the Lessor, constitute a default under the terms of this Lease.
17. Defaults and Remedies.
(a) Defaults. In addition to those items already designated to be a breach or default of this Lease elsewhere in the Lease, the occurrence of any of the following events shall be a material breach of this Lease and shall constitute an event of default:
Abandonment, vacation, or surrender of the Property by
Lessee without Lessor’s prior written consent (failure to OCCUPY and/or operate theProperty for ten (10) consecutive days shall be deemed an abandonment and vacation, unless at least ten (10) days before failing to occupy or operate the Property Lessee givesLessor written notice that Lessee intends to continue using the Property and will continue maintaining the Property while it is vacant, or the dispossession of Lessee from the Property (other than by Lessor by process of law or otherwise). ii. The failure by Lessee to make any payment of rent or any reimbursement or payment required to be made by Lessee, including applicable HarborUse Fees, Admission Taxes, or other fees and taxes to the City Associated with the operation of the business or use of the leased facilities hereunder, as and when due, where such failure shall continue for a period of three (3) days after written notice thereof from Lessor to Lessee.
iii. The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Lessee, if the failure has continued for a period of ten (10) days after Lessor demands in writing that Lessee cure the failure, provided however, that if the nature of Lessee’s default is such that more than ten (10) days are reasonably required for its cure, in Lessor’s sole discretion, Lessee shall not be deemed to be in default if Lessee commenced such cure within said 10-day period and thereafter diligently prosecutes such cure to completion to the satisfaction of Lessor.
iv. The making by Lessee of any general arrangement or
assignment for the benefit of any creditor, Lessee becoming a “debtor” as defined in 11 U.S.C. 101; the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Property or of Lessee’s interest in this Lease, where possession is not restored to Lessee within 30 days; or the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at the Property or of Lessee’s interest in this Lease, where such seizure is not discharged within thirty (30) days.
(b) Remedies. In the event of any such material breach or default by Lessee, Lessor may at any time thereafter, with or without notice or demand, and without
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limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such default or breach, do any of the following:
Terminate the Lease on sixty (60) days’ written notice to Lessee, in which case Lessee shall immediately surrender possession of the Property to Lessor on the termination date specified by Lessor. In such event, Lessor shall be entitled to recover from Lessee all damages incurred by Lessor by reason of Lessee’s default including, but not limited to, the cost of recovering possession of the Property, inciLiding all attorneys’ fees and court costs incurred, if any: expenses of reletting, includingnecessary renovation and alteration of the Property, reasonable attorneys’ fees, and any real estate commission actually paid in connection with such reletting; the value of the amount by which the unpaid rent for the balance of the term after the time of such award exceeds the amount of such rental loss for the same period that Lessor proves could not reasonably be avoided: and that portion of the leasing commission, if any, paid by Lessor for the unexpired Term of this Lease.
ii. Maintain Lessee’s right to possession in which case this Lease shall continue in effect whether or not Lessee shall have abandoned or vacated the Property. In such event, Lessor shall be entitled to enforce all of Lessor’s rights and remedies under this Lease, including the right to recover the rent as it becomes due hereunder.
iii. Pursue any other remedy available to Lessor at law or in equity.
18. Possessory Interest Tax. Lessee hereby recognizes that this Lease may create a possessory interest subject to property taxation, and that Lessee may be subject to the payment of property taxes levied on such interest.
19. Late Charges. Lessee acknowledges that late payment of rent or any SUS due under this Lease will cause Lessor to incur costs not contemplated herein, the exactamount of which will be extremely difficult to ascertain. Accordingly, if any sum due from Lessee is not received by the day it is due, then without requirement for notice to Lessee,Lessee shall pay a late charge of ten percent (10%) per month, plus interest at the rate of 1/2 of 1% (.005%) per month or portion thereof, from the date the rent becomes due. The Parties agree that such late charge represents a fair and reasonable estimate of the costsLessor will incur by reason of late payment. Acceptance of such late charge shall in no event constitute a waiver of Lessee’s default, nor prevent Lessor from exercising any of the other rights and remedies granted in this Lease. In the event that a late charge is payable for three (3) consecutive installments of rent, then the minimum monthly rent shall automatically become due and payable quarterly in advance, rather than monthly.The quarterly advance payments of rent will continue until Lessor notifies Lessee in writing.
20. Severability. If any portion of this Lease is ruled by a court of competent jurisdiction to be invalid, the remaining portions shall remain in full force and effect.
21. Entire Agreement: Amendments. This Lease contains all agreements of the Parties with respect to the Property. No prior agreement or understanding pertaining
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to any such matter shall be effective, whether oral or in writing. This Lease may only be modified in writing, signed by the Parties,
22. Notkes. Any notice required or permitted to be given under this Lease shall he in writing and given by personal delivery or by first class mail to the address and person below. Either Party may, by notice to the other, specify a different address for notice purposes. Notice given by personal delivery shall he deemed received upon personal delivery. Notice given by mail shall be deemed received three (3) days after deposit in the U.S. Mail.
Lessor: City of Ava Ion
P.O. Box 707
Avalon, California 90704
Tele: (310) 510-0220
Fax: (310) 510-2478
Attention: Administration -Leases
Lessee: Seabring, Inc.
Walsworth WFBM, LLP
One City Boulevard West, Fifth FloorOrange, California, 92868-3677 Tele: (714) 634-2522
Fax: (714) 634-0686
_________________________
Attention: Ron Bevins
23. Waivers. The waiver or failure to enforce any provision of this Lease by Lessor shall not be deemed to be a waiver of any future breach of that same provision or of any other provision of this Lease. Lessor’s consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor’s consent to or approval of any subsequent act by Lessee. The acceptance of rent by Lessor shall not be deemed to be a waiver of any preceding breach by Lessee of any provision of this Lease, other than the failure of Lessee to pay the particular rent so accepted, regardless of Lessor’s knowledge of such preceding breach at the time of acceptance of such rent.
24. HjnOyj. Lessee has no right to retain possession of the Property or any part thereof beyond the expiration or termination of this Lease, If Lessee, with Lessor’s consent, remains in possession of the Property or any part of the Property after the expiration or termination of the Term of this Lease, such occupancy shall be a tenancy from month to month subject to all the provisions of this Lease.
25. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies available at law or in equity.
26. Binding Effect: Choice of Law. This Lease shall be binding upon and inure to the benefit of the Parties, their personal representatives, heirs, successors and
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assigns. This Lease shall be governed by and construed in accordance with the laws of the State of California. Venue shall be in Los Angeles County.
27. Attorneys’ Fees and Costs. If either Party brings an action to enforce the Terms of this Lease or declare the rights of the Parties under this Lease, the prevailing Party shalt be entitled to recover all costs and expenses incurred in such action, including reasonable attorneys’ fees as fixed by the court or arbitrators.
28. Right to Enter Property. Lessor and Lessor’s agents shall have the right to enter the Property, at reasonable times for the purpose of inspecting the same, showing the same to prospective purchasers, lenders, or lessees, and making such alterations, repairs, improvements or additions to the Property or Property as Lessor may deem necessary or desirable. Lessor may, at any time, place on or about the Property any “For Sale” signs and Lessor may, at any time, during the last 120 days of the Term of this Lease place on or about the Property any “For Lease” signs.
29. Records; Audit. Lessee shalt keep records, reports and books of account substantially in accordance with general accepted accounting principles to reflect accurately the gross receipts, expenditures and net income of Lessee concerned with and related to its operations and activities under this Lease. Lessor shall have the right to inspect and audit Lessee’s financial accounts, books and records to ensure Lessee’s compliance with this Lease, at any time during the Term of this Lease. Lessor will provide a minimum written notice of the request to audit forty-eight (48) hours in advance of the audit.
30. Nondiscrimination. Lessee covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through it, and this Lease is made and accepted upon and subject to the requirement that there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the use, occupancy, tenure, or enjoyment of the Property, nor shall the Lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of employees, contractors or vendors in the Property.
31. Quiet Possession. Upon Lessee’s payment of the rent for the Property and ,observing and performing all of the covenants, conditions and provisions to be observed and performed under this Lease, Lessee shall be entitled to have quiet possession of the Property for the Term of this Lease subject to all of the provisions of this Lease.
32. Compliance with Lessor’s Rules for Use of Property. Lessee agrees that it will abide by, keep and observe all reasonable rules and regulations which Lessor may make from time to time for the management of the Property, including, without limitation, the delivery of supplies, the parking of vehicles and the preservation of the good order.
The violations of any such rules and regulations shall be deemed a material breach of this Lease.
33. Third-Party Beneficiaries. There are no intended or incidental third-party beneficiaries of this Agreement.
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34. Counterparts. This Lease may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument and a fully executed Lease.
35. Compliance with Cahfornia CivU Code Section 1938. Pursuant to and in compliance with California Civil Code section 1938, Lessee is notified that the Property has not undergone inspection by a Certified Access Specialist.
36. Authority to Execute. The individuals executing this Lease on behalf of each Party represent and warrant that they are fully authorized and legally capable of executing this Lease on behalf of that respective Party, and binding that Party thereto. [Signatures to Lease Agreement on Next Page]
65059.00003\85 1341 1
Signature Page to Lease Agreement
The Parties hereto have executed this lease on the date stated below:
Dated: i I Lessee
I — I -
By: Cv fk%’i
Its:
City of/vaIon
N k\
Denise A. Radde,
Interim City Manager
Dated:
By:
Its:
65059.00003\$5 I 3411.1
EXHIBIT I
to
Lease Agreement
LEGAL DESCRIPTION OF PROPERTY
[Insert behind this page]
6505900003\85 13111.1
EXHIBIT I
to
Lease Agreement
LEGAL DESCRIPTION OF PROPERTY
[Insert behind this page]
65059.00003\85 1341 1.1
Coyote Joes
Untitled
A
= 3 8ft
B
= 1 1 ft
2 of
4 Coyote Joes
Untitled
A= 38ft
3 of 4
Coyote Joes
Untitled
4 of 4
Clift
A= 38ft
4 \ \ \‘ *S
‘ \‘
CITY OF AVALON CITY COUNCIL
MEETING DATE: October 22, 2024 AGENDA ITEM:
ORIGINATING DEP: Administration CITY MANAGER: V21€
PREPARED BY: Devin Hart, Management Analyst
Robert Greenlaw, Director of Public Works
SUBJECT: Cabrillo Mole Rehabilitation Phase II Pre-Construction Stage 0 RECOMMENDED ACTION(S): 1. Hear a presentation regarding Construction Stage 0 of Phase II of the Cabrillo Mole Rehabilitation Project. 2. Authorize the implementation of Stage 0 of the Cabrillo Mole Rehabilitation Project including approval of the Cabrillo Mole Temporary Facility Plan, four step procurement process, administrative procedure for existing tenants at the Cabrillo Mole, and approval of the site plan. 3. Make the affirmative finding that the City has made itsbest effort to relocate the tenants at the Cabrillo Mole, and suitable facilities for the Catalina Island Company’s ticket booth, Island Enterprises’ ticket booth and storage area, Catalina ATM, Inc., and Fish Feeder business cannot be accommodated. 4. Delegate authority to the City Manager to negotiate and execute reasonable rent agreements with tenants that will berelocated to temporary facilities during construction including the Avalon Blue Line Baggage, Catalina Express, Catalina Passenger Services (Flyer), and Eli’s Island Deli.
REPORT SUMMARY: The Cabrillo Mole Ferry Terminal is a multimodal transportation hub usedby cross-channel carrier passengers traveling between the City and the mainland, cruise ship disembarkmentlembarkment, and serves as the primary entry point to the City. In 2020, the Citycompleted Phase 1 of the Cabrillo Mole Rehabilitation Project which included the rehabilitation and reinforcement of the existing concrete members, replacement of the steel grates, and repaired the concrete deck and railing — for a total project cost of $5.10 million.
The next portion of the project, budgeted at $20 million, will replace and reconfigure the existing building and structures to improve passenger queuing and adjacent transportation circulation.
In order to accommodate sustained, mostly uninterrupted operations of the Cabrillo Mole, construction of the new facility has been broken into 10 construction stages. The Pre Construction Stage — Stage 0 — Includes the following four steps:
1. Installation of grates at the old steamer ramp ways along the easterly face of the Mole wharf.
This portion of the project will be implemented by a competitive procurement as outlined in Avalon Municipal Code Section 3-4.106(d). The City will solicit a request for bids (RFB) from qualified contractors to install grates over the top of two existing cut outs along the easterly face of the Mole. These grates will allow construction and emergency vehicles an approximate twenty-foot pathway so they may access the full length of the mole throughout the construction project. The grates will become a permanent addition to the mole wharf. In addition, the southern portion of the mole wharf (last two grates near the crane) was scheduled to originally be completed during the Phase 1 project; however, due to fundingand timing constraints, mainly associated with COVID-1 9, the work was not completed. After bids are received, the final contract will be brought back to City Council for final approval.
2. Installation of utility systems and other temporary infrastructure to support the future Cabrillo Mole facility as well as temporary facilities.
This portion of the project will be implemented by a competitive procurement as outlined in Avalon Municipal Code Section 3-4.106(d) and as previously authorized by the City Council on December 12, 2023. The scope of work associated with this bid will include installation of upgraded utility systems to support the new facility as well as utilities to support temporary facilities that will be used during the construction project. The contractor will also raise the planter areas adjacent to Floats 4 and Floats 5 and install decking to provide a space for queuing for commercial businesses relocated to the roadway during construction. After bidsare received, the final contract will be brought back to City Council for final approval.
3. Purchase of long-lead equipment associated with the upgraded utility system.
This portion of the project will be implemented by a competitive procurement as outlined in Avalon Municipal Code Section 3-4.106 (a). Staff will solicit via posted notice, telephone request, mail, email or fax, price quotes for equipment necessary for the utility systems, butmay have more than 12 month lead time, including the electrical switching gear. After quotes are received, the procurement authorization will be brought back to City Council for finalapproval.
4. Purchase temporary facilities.
This portion of the project will be implemented by a competitive procurement as outlined in Avalon Municipal Code Section 3-4.106 (a). Staff will solicit via posted notice, telephone request, mail, email or fax, price quotes for lease or purchase of office containers to house commercial entities during construction, as well as restroom facilities. Staff anticipateprocurement of one 40” container, two 20’ containers, and one 10’ container, in addition to stand alone restroom facilities. After quotes are received, the procurement authorization will be brought back to City Council for final approval.
All businesses at the Cabrillo Mole will be impacted by the construction project. City Staff developed the Cabrillo Mole Temporary Facility Plan to allow for the relocation of the mostessential services in order to preserve the highest level of operation for the duration of the project.Currently there are 11 lessees at the Cabrillo Mole:
• Avalon Blue Line Baggage • Catalina Island Company• Catalina ATM, Inc. • Island Enterprises• Catalina Passenger Services (Flyer) • Gregory Wenger dba Fish Feeder• Catalina Express • Assorted Antennas (3) • Eli’s Island Deli
Per the City’s leases with the current tenants at the Cabrillo Mole:
Mole Renovation. Lessor will use its best efforts to relocate Lessee’s business during renovations of the Mole if such renovations render the Property unfit for the operation ofLessee’s business. Lessor makes no guarantees regarding the size, location, fitness oravailability of any temporary alternative premises. Upon completion of the Mole renovations, lessees affected by the renovations will have first right of refusal to reopen their businesses in renovated space on the Mole. In the event Lessor is unable to locate suitable alternative temporary space for Lessee’s business during the Mole renovation,Lessee hereby releases Lessor from all liability related to the same, as further describedin Paragraph 14 of this Lease.
The space available for temporary facilities is small — accounting for a cumulative total of approximately 720 square feet. Temporary facilities will be placed within the street at the tops of Floats 4 and 5. As described in Step 4, the adjacent planter area will be raised with decking installed to provide space for queuing. The temporary facilities will be container boxes minimally outfitted with drywall finishes, flooring, HVAC systems, and electrical and internet hook ups.
While developing a temporary facility plan for the relocation of tenants, City Staff prioritized essential services — passenger transport, restroom facilities, baggage handling, etc. Additionally, Staff considered if the operator had redundant locations within Avalon. In balancing the needs of the public and emergency services, the proposed temporary facility plan will relocate the Catalina Express, Catalina Flyer, Eli’s Island Deli and Avalon Blue Line Baggage. Staff haveidentified these as essential services directly related to operations at the Cabrillo Mole.
Though Staff have made its best effort to identify an appropriate location for the other tenants at the Cabrillo Mole, a suitable location cannot be identified. Three of the commercial businessesthat will not be relocated have additional operation facilities in Avalon — the Catalina Island Company and Island Enterprise businesses have ticketing facilities on the Pleasure Pier, Fish Feeder has additional feeding stations on the Pleasure Pier as well as along Lover’s Cove.
As outlined in the lease agreements, all tenants, including those not provided a temporary facility location, will be offered first right of refusal for space within the new Cabrillo Mole facility.
City Staff recommend the City Council delegates authority to the City Manager to negotiate and execute reasonable rent agreements with tenants that will be relocated to temporary facilitiesduring construction including the Avalon Blue Line Baggage, Catalina Express, Catalina Passenger Services (Flyer), and Eli’s Island Deli. Staff anticipate these temporary leases will only be in place for approximately 2 years.
If approved, City Staff will begin negotiating new leases with tenants that will be relocated, taking into consideration capital outlays that may be needed for tenant improvements in the temporary facilities as well as the new facility. Additionally, Staff will inform tenants that will not be relocated of the timeline for construction and of their options under the current lease agreements.
To minimize the impact to businesses and visitors during the summer, Staff hope to completethe work outlined for Stage 0 by April 2025. Tenants that will be relocated will be allowed to begin any necessary tenant improvements to ensure continuity of operations from the time the temporary facilities are deemed inhabitable until the City’s contractor is ready to begin demolition of the existing structure — currently projected to occur in December 2025.
A tentative timeline for Stage 0 is as follows:
Tentative Deadline V Task
City Council presentation and authorization
to solicit RFP for Design Build component of
November 19, 2024 the project (Stages 1-9).
Begin solicitation of RFQI RFP for DesignDecember 1, 2024 Build component of the project (Stages 1-9).
January 1, 2025 Finalize Stage 0 procurement.
Deadline to submit qualifications for DesignJanuary 30, 2025 Build.
Stage 0 scope of work completed.
Authorize tenants to begin TI projects in
April 30, 2025 temporary facilities.
Deadline to submit proposals for DesignJune 7, 2025 Build.
July 1-16, 2025 Interview of Proposal Finalists.
City Council authorizes City Manager to
July 17, 2025 negotiate DesJgfl-Build contract.
November 2025 Tenant relocation deadline.December 1, 2025 Demolition of Cabrillo Mole begins.
City Staff will make a future presentation to City Council regarding the remaining 9 stages of the Phase II Cabrillo Mole Rehabilitation Project.
Pursuant to the California Environmental Quality Act (“CEQA”), the City adopted a Mitigated Negative Declaration (“MND”) on May 19, 2021 for the Cabrillo Mole Phase II RedevelopmentProject (‘Approved Project”). The MND was not challenged within the statutory period prescribed by the Public Resources Code and is presumed valid in accordance with Public Resources Code section 21167.2. Under CEQA, when taking subsequent discretionary actionsin furtherance of a project for which a MND has been adopted, the lead agency is required to review any changed circumstances to determine whether any of the circumstances under Public Resources Code section 21166 and State CEQA Guidelines section 15162 require additional environmental review.
The current action, Pre-Construction Stage — Stage 0 (“project”) implements the Approved Project. None of the conditions under State CEQA Guidelines section 15162 requiring subsequent environmental review have occurred because the project is a phase of the Approved Project and:
November 1, 2024 Becin solicitation of Stage 0 scope of work. a) does not constitute substantial changes that would require major revisions of the MND due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; and b) does not constitute substantial changes with respect to the circumstances under which the project was developed that would require major revisions of the MND due to the involvement of new significant environmental effects or a substantial increase in the severity of the previously identified significant effects; and c) does not present new information of substantial importance that was not known and could not have been known with the exercise of reasonable diligence at the time the MND was adopted, showing any of the following: (i) that the project would have one or more significant effects not discussed in the MND; (ii) that significant effects previously examined would be substantially more severe than shown in the MND; (iii) that mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects, but the applicant declined to adopt such measures; or (iv) that mitigation measures or alternatives considerably different from those previously analyzed would substantially reduce one or more significant effects on the environment, but which the applicant declined to adopt.
The MND fully analyzed and mitigated all potentially significant environmental impacts that would result from the project. Accordingly, no subsequent CEQA review is required.FISCAL IMPACTS: Undetermined.
CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: The City will not have a plan to support the construction of the Cabrillo Mole Project.
FOLLOW UP ACTION: Implement City Council direction.
ADVERTISING, NOTICE AND PUBLIC CONTACT: This item was properly listed on the posted agenda pursuant to the Brown Act.
ATTACHMENTS:
1. Temporary Facility Plan to be provided under separate cover.
2. Presentation to be provided under separate cover.
CITY OF AVALON CITY COUNCIL
MEETING DATE: October 22, 2024 AGENDA ITEM:
ORIGINATING DEP: Administration CITY MANAGER: V
PREPARED BY: Devin Hart, Management Analyst
Robert Greenlaw, CIP Director
SUBJECT: Five Corner Pedestrian Improvements Project Contract Award RECOMMENDED ACTION(S): 1. Authorize the City Manager to execute a contract with JordhalConstruction, Inc. for the completion of the Five Corners Pedestrian Improvement Project for a base scope not exceed the sum of $4,737,805. 2. Authorize the City Manager to amend the construction contract to approve construction line items once a scope of work, to be proportionally reimbursed by third-party entities, is finalized for a not to exceed amount equal to a reimbursement agreement amount. 3. Authorize the City Manager, at his discretion, to amend the construction contract to approve additive items for a not to exceed sum of $350,000 for development items associated with a future workforce housing project.
REPORT SUMMARY: The bidding deadline for contractors interested in the City’s Five CornerPedestrian Improvement project was September 10, 2024 at 11 a.m. No bids were received by the stated deadline; however, Jordhal Construction, Inc. submitted a proposal at 2:45 p.m. on the deadline date. The bid received by Jordhal Construction, Inc. was approximately twice the sum anticipated by the engineer’s estimate.
On September 17, 2024, the City Council authorized the City Manager, per the City’s Purchasing Policy, Avalon Municipal Code Section 3-4.206 (e), to enter into negotiations with Jordhal Construction, Inc. to modify the scope of the project to align with available funding.
This project is primarily funded by grants including funds from Metro Local Transportation Funds, via the Los Angeles County Metropolitan Transportation Authority (Metro), State of California’s State Active Transportation Grant via the California Transportation Commission (CTC), and a local match from the City, primarily from City’s SB1 annual allocation from the state.
To bring the project within budgetary alignment City Staff negotiated a base bid of $4,737,805.
The revised scope meets all of the criteria outlined in the grant agreements, but removes approximately $349,790 of work associated with construction of City Hall parking, and a development pad to be used for a future workforce housing project.
Additionally, Staff negotiated to select an additive bid item — replacing the decorative hardscape of the roundabout and adjacent area with concrete and paving in lieu of decorative payers. Staff also negotiated a $75,000 cost savings in the clearing, grubbing and demolition scope, by partnering with an entity in the removal of trees and some landscaping along Tremont Avenue.
Also removed from the base scope of this project, is a scope of work for the select utility systems.
At the time this staff report was authored, the above referenced utility scope accounted for approximately $1.4 million of the initial bid sum. Utility personnel are reviewing the scope of work and bid provided by Jordhal to ensure it accurately encompassed the needed relocation and essential upgrades. This portion of the project will be awarded once an agreement with the responsible third-parties entities, outlining their commitment to proportionally reimburse the City for work perlormed, is executed.
The allocation of funding from CTC — approximately $3.21 million — was awarded to the City on April 8, 2024. Per the allocation letter, funds for construction must be awarded within 6 months of the date of the allocation letter. The City’s preliminary deadline to award a contract for this project was October 8, 2024; however, City Staff have requested and received an extension to the contract award deadline.
To preserve the funding allocation from CTC - $3.21 million — and to continue to advance this project toward completion, City Staff requests the City Council authorizes the City Manager to execute a contract with Jordhal Construction, Inc. for the completion of the Five Corners Pedestrian Improvement Project on the condition the contract may not exceed the sum $4,737,805.
Additionally, City Staff recommend the City Council authorize the City Manager to amend the agreement to approve construction line items once a scope of work, to be proportionally reimbursed by a third-party, is finalized for a not to exceed amount equal to the reimbursement agreement amount.
Lastly, as the total project sum is now under the budgeted amount, $5.3 million, City Staff request the City Council authorizes the City Manager, at his discretion, to amend the agreement to approve additive items for a not to exceed sum of $350,000 for development items associated with future workforce housing.
GOAL ALIGNMENT: City Infrastructure: Roadways, ADA Improvements, Pedestrian Improvements.
FISCAL IMPACTS: Project 180003 is included in the 2024-25 budget in the Capital Improvement Program.
CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: Critical infrastructure will continue to be deficient and grant funds may be lost due to timely use of fund requirements.
FOLLOW UP ACTION: Execute an agreement with Jordhal Construction, Inc. and execute additive bid items if conditions are met.
ADVERTISING, NOTICE AND PUBLIC CONTACT: This item was properly listed on the posted agenda pursuant to the Brown Act.
ATTACHMENTS: Bid tabulation available upon request.
CITY OF AVALON CITY COUNCIL
MEETING DATE: October 22, 2024 AGENDA ITEM: /
ORIGINATING DEP: City Attorney CITY MANAGER:
PREPARED BY: Scott Campbell, City Attorney
SUBJECT: Options for City Council in Considering Tenant Protection and Rent Control Measures
RECOMMENDED ACTION(S): Consider and discuss tenant protections and rent control options available under State law, and provide direction to City of Avalon (“City”) staff to evaluate and report back on any desired local options available to the City.
REPORT SUMMARY: The purpose of this staff report is to provide the City Council withinformation on State law as it relates to tenant protections and rent control, and provide examples of what other cities have codified locally so the City Council may consider what policy options it is interested in exploring for Avalon.
City of Avalon’s Municipal Code and Existing Tenant Protections The City currently has no specific provisions in the Avalon Municipal Code (“AMC”) that impose City-created rent control (also known as “rent stabilization”). Chapter 9-1 1 of the AMC includesCity-specific Affordable Housing requirements. The purpose of Chapter 9-1 1 is meant to“[e]ncourage the availability of dignified, safe, and affordable workforce housing within the City of Avalon by promoting development of decent living environments and removing unnecessarybarriers to such development.” (AMC 9-11.101(c).) This includes a City inclusionary housing requirement to construct a percentage of affordable housing as part of any new residential development. Specifically, for any new residential development creating five or more for-sale or rental units, developers are required to set aside at least 20% of those units at an affordable rent or cost (pursuant to State income limits). However, these City requirements are only applicable to new commercial or residential development, and do not provide tenant protectionsor affordability controls for existing housing stock.
II. State Law: The Tenant Protection Act of 2019 and Its Subsequent Changes A. 2019 Framework, the Tenant Protection Act
In 2019, the State Legislature approved and the Governor signed Assembly Bill 1482, the Tenant Protection Act (the “Act”). The Act set the “floor” with a series of new tenant protection measures that must be followed by all California landlords. However, cities can go above that “floor” in setting more protective local controls for its tenants.
The Act broadly prevents landlords from terminating or declining to renew leases with tenants of at least a year without “just cause,” as defined under California Civil Code section 1946.2. “Just cause” is divided into two categories, “no-fault” termination and “at-fault” termination, which each have their own eligibility criteria and protections for tenants. The information below is meant to provide a non-exhaustive summary of the provisions under the Act. Importantly, when a landlord evicts a tenant under no-fault just cause, the landlord must pay relocation assistance equal to one-month’s rent, regardless of tenant income1. As described in additional detail below, a number of cities have required more significant relocation benefits than onemonth, and expanded the types of evictions eligible for relocation benefits. • No-Fault Termination: includes but is not limited to, withdrawal of the unit from the rental market; or an intent to demolish or “substantially remodel” the residential property.
a The definition of a “substantial remodel” that qualifies as a no-fault termination includes:
when the remodel “cannot be reasonably accomplished in a safe manner”with the tenant present, and requires the tenant to vacate for at least 30 consecutive days, and either:
• (1) replacement or substantial modification of any structural, electrical, plumbing, or mechanical system that requires a permit; or • (2) the abatement of hazardous materials.
• At-Fault Termination: includes but is not limited to, instances where tenant is in default on rent; breach of any material term of the lease (generally after landlord issues a written notice to correct); and a nuisance as defined under State law (including unlawful possession of weapons and the manufacture, cultivation, or possession for sale of controlled substances).
The Act also includes a statewide “floor” of rent control. Specifically, State law limits rent increases over a 12-month period, with a maximum increase of no more than 5% plus thepercentage change in the Consumer Price Index (“CPI”), or 10% percent, whichever islower.
It is important to note there are a series of exemptions from the applicability of the Act written into State law. The following reflects a non-exhaustive list of housing types that are not subject to State law tenant protections, which include: affordable housing restricted by deed or subjectto existing rent or price controls; dormitories; single-family, owner-occupied residences; housing less than 15 years old; and some mobile homes.B. State Law Amendments Strengthening the Act (SB 567)Senate Bill 567, which became operative on April 1, 2024, tightened the rules for no-fault just cause evictions, substantial remodels and rent increases. SB 567 created stricter enforcement rules to reduce the ability of landlords to evict tenants and then rent out the unit at market rate.1 To be eligible, a tenant must have continuously and lawfully occupied a residential real property for 12 months ormore.
For an eviction by the landlord because the landlord or their family member will be moving into a dwelling unit with an existing tenant (a type of no-fault just cause eviction), the landlord or family member must not already live on the property or have access to another vacant unit onthe property. The landlord or family member also must move in within 90 days of the tenant moving out, and stay in the unit for at least a year. Tenants have the right to know therelationship of any family member who is moving in, and can request proof. A vacating tenantis also given the opportunity to move back in at the same rent rate, along with moving expenses, if the landlord or family member does not move in within the specified timeframe or fails to stay for the full year.
For substantial remodels, landlords must provide a detailed notice outlining the work to be done, any necessary permits, and inform tenants that they can return to their units if the work is not completed or if they do not need to vacate during certain days.Regarding the Act’s rent control provisions, SB 567 introduced penalties for landlords who collect rent above the maximum allowed, based on the rent amount that was overcharged, thatmay also include attorneys’ fees and court costs. A landlord may also be penalized up to three times the amount of charged rent, if they acted willfully or with malice. They may also be liablefor damages. These new laws did not change the existing law on rent control orallowable rent increases under the Act.
It is important to note that as a general rule, the State-adopted Costa-Hawkins Rental Housing Act (“Costa-Hawkins”) limits the extent to which cities and counties can enact rent control or rent stabilization ordinances. Specifically, the City of Avalon could only adopt a rent control measure that applied to apartments (excluding single family homes and/or condominiums) thatreceived their certificate of occupancy before February 1, 1995. Costa Hawkins allows only the owner/landlord (and not local government) to set the rental rates for units that received certificates of occupancy after February 1, 19952. Additionally, cities and counties can legislate only on rental increases, and may not set the initial rental rate. For those reasons,in all the cities and counties with rent control ordinances that are described below, any time a tenant voluntarily moves out, the landlord is permitted to set the new rent without restriction, based on the new tenancy.
On November 5th 2024, California voters will consider Proposition 33, which would eliminateCosta-Hawkins and give cities and counties more rent control authority while also preventing the State from taking future actions that limit local rent control.3 C. New California Laws with Additional Tenant Protections There are two, additional new laws aimed at improving housing security and protecting tenantsfrom unfair evictions and rent increases that are described briefly below. • AB 12: Limits the security deposit landlords can collect to a maximum of one month’s rent. An exception is made for “small property” owners (those with no 2 See California Civil Code section 1954.52.
The California Legislative Analyst’s Office’s nonpartisan Proposition 33 analysis can be located at:
https:/IlaocaqovIBallotArys/PrQppsWon?nurnber=33&year=2O24. more than two properties and a total of four or fewer units), who may still collect up to two months’ rent.
• AB 1418: Prevents local governments from adopting regulations that encourage evicting tenants based on calls to law enforcement, alleged criminal activity, or other alleged nuisances. AB 1418 also prohibits local governments from requiring or encouraging landlords to conduct criminal background checks when screening tenants.
Ill. Examples of Tenant Protection and Rent Control Actions Taken by Other Cities The City Council may provide direction to codify requirements set out under State law so Avalon may take local, administrative enforcement action, including issuing administrative citations that include City approved penalty amounts, or adding local civil or criminal remedies.
The City Council may also provide direction for City staff to evaluate — for possible future review and adoption — more protective local tenant protection and rent control actions. Below are examples of what a number of other cities have done, that can serve as a reference point for what may be of interest to Avalon.
A majority of the cities cited below are charter cities. Charter cities have greater authority to govern themselves than a general law city, like Avalon. However, and as described above, theTenant Protection Act and related State laws provide the “floor,” not the ceiling. State law allows local tenant protection and/or rent control ordinances so long as they provide the sameor better protections for tenants, with corresponding findings that the local ordinance is bothconsistent and “more protective” than State law. This is true for both charter cities and general law cities.
Accordingly, should Council provide direction to evaluate rent control in the City of Avalon, the City’s ordinance can be more protective than the “floor” set out under the Act, should ensure aprocess by which landlords can petition (appeal) the City to increase the otherwise allowable rent increase for a fair return of investment, and finally, upon direction, our office will ensure the proposed local ordinance is otherwise consistent and not preempted by any State or Federal law (including Costa-Hawkins) or any law after the voters vote on Proposition 33. Any adopted ordinance should also evidence the City’s interest in promoting long-term stability andcertainty for renters, in addition to any other Avalon-specific public purposes.
Whatever direction the City Council provides, City staff will work with the City Attorney’s Office to ensure any proposed policy change on tenant protections and/or rent control that come backto the City Council are vetted consistent with State law.
A. Examples of Locally-adopted Rent ControllRent Stabilization Ordinances • Culver City. Culver City has adopted a series of more expansive rent control and tenant protections than under State law. For relocation assistance, Culver City requires a relocation fee to be the greater of three times the tenant’s current monthly rent or an amount established U.S. Department of Housing and Urban Development (“HUD”) formula that is based on fair market rent.
Culver City does not allow no-fault just cause eviction when the tenant is 62 years or older, is disabled or terminally ill, is a qualifying low-income tenant under State income limits, or when the tenant has school-aged children who are protected from eviction during the school year term.
Culver City caps annual rent increases at no more than 5% annually. However, if thepercentage change to the consumer price index (“CPI”) on an annual basis is less than 2%, rent increases in Culver City may not exceed 2% that year. If CPI is greater than5%, the annual 5% cap still applies and no increase may exceed that percentage.
There are exemptions, including but not limited to, when State or Federal law expresslyexempts the unit from price control and when the landlord receives governmentsubsidies for the unit. Importantly, Culver City’s rent control measures apply only tootherwise eligible units that received their certificate of occupancy before February 1, 1995. This threshold date is within local rent control measures, since it is controlled under State law (see discussion above on Costa-Hawkins).
Similar to other cities and regulations discussed in additional detail below, landlordsmay petition the city if they believe the rent control regulations prevent them from earning a fair return on their property investment.
For no-fault terminations, such as property demolition or when a landlord or their relative is moving in, Culver City requires landlords to pay relocation assistance. This amount is typically three times the monthly rent plus an additional $1,000. Small landlords, defined as those owning three or fewer units, are required to pay less.Landlords can deduct any past due rent from the relocation payment.Landlords in Culver City must also register their rental units annually with the city, and pay an annual fee per rental unit. Culver City’s annual fee is established by City Council resolution, meant to recover the City’s reasonable costs managing the program (similar to other cities with annual registration fees, described below). A penalty isimposed for late registration, and Culver City has enforcement mechanisms in place to ensure compliance. This includes issuing administrative citations with fines of up to $1,000 per day. Culver City may also bring civil actions against landlords who violate these regulations.
County of Los Angeles. The County of Los Angeles imposed rent control on units in unincorporated areas of the county via an ordinance in 2018, and have been expanding and refining its codified provisions since that time. The County’s Department of Consumer and Business Affairs (“County Department”) is responsible for the calculation of the annual, allowable rent increase, for evaluating landlord petitions seeking a higher increase based on a fair return of investment theory, and also runs the County registry.
The County Department promulgates the necessary procedures and guidelines for how the program is run.
The County of Los Angeles has rent control limits for qualifying rental units, and separately for “luxury units” as defined. A “luxury unit” has 2-bedrooms or less, is located in a complex with at least 25 dwelling units, and, as of September 11, 2018, charges more than $4,000 per month in rent. Over calendar year 2023, an annual rent increase was limited to 5% for luxury units. Currently, the annual rent increase shall not exceed 10% for luxury units, though the County Department retains the ability to amend that percentage in the future.
Only one rent increase is allowed over a 12-month period, and any rent paid in excess of the local ordinance must be reimbursed to the tenant. Units subject to the county’s rent control are required to be within buildings with two or more units, and for thereasons discussed above, must have received their Certificate of Occupancy (or equivalent) on or before February 1, 1995.
For all non-”luxury units” subject to rent control, the formula is calculated by the CountyDepartment annually based on the following evaluation of the Consumer Price Index (“CPI”) for the Los Angeles-Riverside-Orange County, California area:
o 1. If the change in CPI is eight percent (8%) or higher, the maximum allowable annual rent increase will be eight percent (8%);
o 2. If the change in CPI is between three percent (3%) and eight percent (8%), the maximum allowable annual rent increase will be equal to the change in CPI; o 3. If the change in CPI is between one percent (1 %) and three percent (3%), the maximum allowable annual rent increase will be equal to three percent (3%); o 4. If the change in CPI is between negative two percent (-2%) and one percent (1%), the maximum allowable annual rent increase will be equal to the change in CPI plus two percent (2%); and
o 5. If the change in CPI is less than negative two percent (-2%), no annual rent increase is permitted.
However, for calendar year 2024, the county’s ordinance limits the maximum allowable rent increase permitted to 4%. Additionally, the Board of Supervisors, by a 3-2 vote this past June, provided additional direction for staff to evaluate a more tenantprotective rent cap of 3% for qualifying rental unit, with 4% permitted for smaller property owners, and 5% for luxury units4.
Landlords may file an application with the County Department if they do not believe they are receiving a fair and reasonable return on their investment based on the allowable rent increase. The Los Angeles County Code includes a rebuttal presumption that therent increase is fair and reasonable, and the landlord has the burden to prove thenecessity of any additional rent increase to earn a fair and reasonable return. The county evaluates a number of factors to determine whether the landlord has proven the 4 (June 5,
2024).
burden to increase rent above the set formula, including but not limited to: rental history; changes in property taxes; improvements made to the rental property and its overall physical condition; and decreases in net operating income. The landlord must provide notice to its tenant(s) when they file a request with the county to increase above the applicable rent cap: Tenants may also file an application with the county if they believe they are owed in an adjustment in their monthly rent obligation.
A landlord must register each rental unit with the county annually, and the county may require the landlord to also register all housing services available to the tenant at that time. The landlord must pay an annual registration fee adopted by the Board of Supervisors sufficient to cover operating costs to the county to implement, administer and enforce its rent stabilization and tenant protection laws. Currently, that amount is $90 per rent stabilized unit, with a 10% late penalty. Landlords are permitted to recover up to 50% of those costs from their tenants, provided they provide timely notice and otherwise compliant.
• Santa Ana. Beginning in 2021, Santa Ana limited annual rent increases to no more than 3% of the current rent, or 80% of the change in the Consumer Price Index, whichever is less. If the change in the CPI is negative, no rent increase is allowed.
Currently, 3% is the maximum allowable rent increase ‘for the period of September 1, 2024 through August 31, 2025,” based on applicable CPI.5 The City announces the allowable rent increase amount no later than June 30 of each year. Like other jurisdictions described herein, Santa Ana’s rent control provisions do not apply to units exempt under Costa-Hawkins (including units that received a certificate of occupancy after February 1, 1995).
Santa Ana included findings within its adopted ordinance that a CPI-based increase provides a just and reasonable return on landlord’s property, adopted to: “encourage good management, reward efficiency, and discourage the flight of capital, as well as to be commensurate with returns on comparable investments, but not so high as to defeat the purpose of curtailing excessive Rents and rental increases.” Santa Ana does allow a landlord to submit a petition to the Rent Stabilization Program Administrator (a role selected by the City Manager), requesting a rent increase in excess of what is otherwise allowed. In evaluating a petition, the Program Administratorappoints an impartial hearing officer, who looks to many of the same factors utilized in other jurisdictions (rental history; changes in property taxes; the need for repairs, etc.).
In addition, a Santa Ana hearing officer may evaluate changes in utility charges, reasonable operating expenses, and compare the rent lawfully charged to comparablerental units in the City of Santa Ana in making their determination.
Landlords may also submit a “Capital Improvement Petition” to the Program Administrator seeking a pass-through of certain costs to tenants to construct capital improvements in the unit. Such capital improvements include but are not limited to structural, electrical, plumbing, or mechanism systems; roofing; carpeting; and air bttps://www.santa-anorQ/departrnents/rent-stabWzation/. conditioning systems. Santa Ana requires that pass-through costs must be calculated by looking at the amortization over the useful life of the improvement, but in no instance may the cost exceed 10% of the current rent.
• Ojai. The City of Ojai’s ordinance limits annual rent increases to 4%, which the City finds provides a just and reasonable return on a landlord’s property, and includes the same public purpose as Santa Ana (e.g. the rent cap encourage good management, rewards efficiency, and discourage the flight of capital). Ojai, like other jurisdictions described above, allows landlords to petition the city for an additional increase as necessary for their reasonable return on investment. The landlord must provide notice to the tenant of their petition, and the landlord is responsible for all costs associated with Ojai’s review of that rent adjustment petition. In Ojai, the Community Development Director holds a noticed public hearing within 60 days following the submittal of a complete petition, and the Director’s decision is ultimately appealable to the PlanningCommission. • Sacramento. The City of Sacramento follows the Act and applicable State law as it relates to rent control: an annual increase can be 5% plus the percentage change in the annual cost of living. Similar to other jurisdictions, Sacramento also includes the right of a landlord to petition for a higher amount than the annual rent adjustment. InSacramento, the landlord must demonstrate by a preponderance of the evidence that such an adjustment is necessary to provide the landlord a fair rate of return. A hearingexaminer looks at a series of factors in considering the petition, some of which overlap with other jurisdictions, including but not limited to: change in property taxes; unavoidable increases or decreases in maintenance and operating expenses; plannedimprovements or deterioration of the unit; and (specific to Sacramento) any change in number of tenants and compliance with Sacramento’s Housing Services.
Sacramento, similar to other jurisdictions, sets the annual tenant protection program fee, as established by the city council an annual basis to fund the city’s costs. In Sacramento, the City Manager is empowered to adopt administrative procedures to implement the rent control obligations.
B. Examples of Other Tenant Protections, Adopted Locally:
• Long Beach. The City of Long Beach offers increased relocation payments for any tenants displaced due to City’s code enforcement activities; for instance, when the Building Official issues a notice to vacate for necessary repairs of the unit. Finding that low income tenants were most at risk of being displaced for substantial repairs,remodels or demolition, Long Beach requires relocation benefits in the amount of $3,366.00 per household, with additional payments due when the tenant is disabled.
Additionally, Long Beach imposes a penalty, in an amount not to exceed $10,000, for failure to make timely, required relocation payments on a specific property with a displaced tenant.
• Pasadena. Pasadena includes heightened relocation benefits for tenants that are in “good standing” (generally meaning the tenant is not in breach of their rental agreement) in households at or below 140% of the median income. In that instance, landlords are required to provide two and half months in fair market rents as established by the U.S. Department of Housing and Urban Development (“HUD”), for a rental unit of a similar size. Pasadena also requires landlords pay a $1,306.00 moving expense foradult households, or $3,935.00 for households with dependents, disabled, or senior members6. There are exceptions from these relocation requirements for single familyhomes and condominium units.Pasadena also offers temporary relocation benefits if a landlord is required to temporarily (less than 120 days) recover possession of a rental unit. In those instances,the tenant should be paid an amount based on a daily rate equal to two (2) times thedaily pro-rata portion of the rental rate. The landlord must also pay actual costs associated with moving and storage.
FISCAL IMPACTS: None.
CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: The City will still follow the requirements of State law, including the Tenant Protection Act, and its existing Municipal Code requirements, but will not provide direction to explore additional tenant protections.FOLLOW UP ACTION: That the City Council provide City staff with direction regarding what, if any, tenant protections and/or rent control measures that are permissible under State lawshould be explored for the City of Avalon. Any follow-up would return to City Council for futureconsideration and possible codification.
ADVERTISING, NOTICE AND PUBLIC CONTACT: Pursuant to the Brown Act.ATTACHMENTS: Prior presentations to the City Council regarding tenant protections. 6 These figures have automatically increased annually since the time Pasadena’s ordinance was adopted.
CITY OF AVALON CITY COUNCIL
MEETING DATE: August 15, 2023 AGENDA ITEM:
ORIGINATING DEP: City Attorney CITY MANAGER:
PREPARED BY: Scott Campbell, City Attorney
SUBJECT: Presentation and Discussion on Landlord Tenant Regulatory Options RECOMMENDED ACTION(S): Consider existing landlord tenant regulations under state law, as well as City options for creating additional regulations, and direct Staff to prepare a tenantlandlord ordinance for future consideration if the Council deems it appropriate.
REPORT SUMMARY: State law provides certain landlord tenant regulations throughout the state, but cities may enact additional regulations if they so choose. The report summarizes current state regulations and discussions other regulations cities have enacted.
California’s Tenant Protections
California’s Tenant Protection Act of 2019 (‘TPA”) prevents a landlord from evicting tenants without ‘just cause,” Just cause may be “at-fault” or “no-fault.” At-fault just cause allows the landlord to evict and provide little to no assistance. But no-fault just cause requires the landlord to provide assistance to the evicted renter (even though the landlord still gets to evict).1 A (-fault
“At-fault” just causes include: default in payment of rent, breach of a material term, nuisance, waste, refusal to sign a new lease, criminal activity, unauthorized assignment or subletting, refusing entry to landlord, using the property for an unlawful purpose, and termination of employment if employee housing.
No-fault
“No-fault” just causes include: use of the unit by the owner’s family; withdrawal of the unit from the rentai market; a court or other government order to vacate the property; and “intent to demolish or to substantially remodel” the unit, With no-fault just cause, the landlord must pay relocation assistance equal to one month rent, regardless of tenant income.
Exemptions
The TPA does not apply to a short-term rental or hotel; housing for a nonprofit hospital, religious facility, or various care facilities; school dorms; owner-occupied housing (sharing kitchen or bathroom with owner); single-family owner-occupied residences; an owner-occupied duplex; housing built within the last 15 years (except for mobile homes); housing that is separately Temporary Rent Control. The TPA also created statewide rent control, capping annual rent increases at five percent plus CPI (10 percent max) — but the oniy until 2023, so it is largely moot now. 6O5O.OOOOO\.I 1 53924. I
“alienable (i.e., that can be sold separately from the land, like mobile homes) if the owner is not a corporation; or deed- or covenant-restricted affordable housing.
Floor, not ceiling.
The TPA sets the floor for new tenant protections; it does not prevent a city from adopting additional protections.
The TPA does not apply to properties that are subject to a local ordinance that requires just cause for termination if the local ordinance was adopted before September 2019. (I.e., if the ocalordinance predates September 2019 and it has a just-cause requirement, it prevails over the TPA even if the TPA is more strict.)
Nor does the TPA apply to properties that are subject to a newer local ordinance (postSeptember 2019) — as long as the ordinance is at least as protective as the TPA Summarizing the TPA
The statewide TPA provides some benefits (one-month’s rent for relocation) in some situations (specific enumerated no-fault evictions). It does not prevent eviction. It allows eviction for a majorremodel. And it doesn’t apply to several types of housing.
Avalon has no local tenant-protection ordinance, so any ordinance that it might adopt must be at least as protective as the TPA.
Options for Additional Local Protections
Many California cities adopt local regulations to provide additional protections for renters. These additional protections tend to be the following:
• Eliminating or narrowing certain just causes (e.g., not allowing “major remodel” as a nofault just cause). • Increasing relocation assistance (e.g., three or four months’ worth of rent).• Expanding the protections to other types of dwellings (e.g., eliminating exemption for newer homes).
• Imposing rent control.• Create rent registry and rent-control board to consider exceptions to rent-control restrictions.
Require minimum lease periods (e.g., one-year mm initially).
The Council may consider these and other options for providing additional tenant protections as long as they are at least as protective as the TPA.FISCAL IMPACTS: None.
CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: Only those tenant protections that are imposed by state and county laws and regulations will apply.
ADVERTISING, NOTICE AND PUBLIC CONTACT: Pursuant to the Brown Act.ATTACHMENTS: None 65059000004] 539243 I
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Agenda
Local Code, Tenant Protection Act of 2019
At-fault vs. No-fault terminations; relocation requirements Rent Control until 2030
Possible Next Steps for Avalon
Potential Local Provisions
What has been done elsewhere
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Local Code, State Authority for Tenant Protections BEST
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Avalon Municipal Code: Rental Inclusionary Housing requirements (AMC 9-Il. 104); but no local protections for renters not covered by those provisions.
Tenant Protection Act of 2019 (AB 1482):
Restrictions on Termination (At-fault vs. No-fault termination); and Relocation Benefits for No-Fault: 1-month rent
Broad Exemptions (existing income-restricted housing; transient housing; units < 15 years; condos)
Sets Statewide Rent Control (until 2030):
Once a year: Only one rent increase in any 12-month period; or multiple increases that do not exceed the maximum allowable annual rent increase;
Maximum rent increase based on changes to Consumer Price Index (“CPI”): between 5-10% with CPI change.
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Tenant Protection Act of 2019 BEST
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Termination Obligations at eviction: No-fault termination requires 1-month’s rent owed as relocation assistance (At-fault termination: no relocation, follows procedure to evict), when tenants have occupied for 1-year or more (or one or more tenant has occupied for 2-years or more):
No-fault termination: (e.g. intent to owner-occupy; withdrawal of the unit from the rental market; law or order that requires vacating the parcel; intent to demolish or substantially remodel the residential real property;
Substantial
etc.)
remodel (Civil Code 1946.2 (a)(2)(D)(ii)): replacement or substantial modification ...that requires a permit; abatement of hazardous materials ...that requires tenant to vacate for> 30 days (not cosmetic improvements alone)
At-fault termination: (e.g. rent default, material breach, nuisance, waste, unwillingness to execute a written extension, criminal activity, assigning or subletting, refusing to allow the owner to enter the residential property)
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Tenant Protection Act of 2019 BEST
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Relocation Benefits: Owner must notify tenant of their relocation rights for no-fault tinaAT Exemptions (not covered by the Act):
Transient and tourist hotel occupancies;
Housing accommodations within: nonprofit hospitals; religious facilities; extended care facilities; licensed residential care facilities for elderly/adults;
Housing
Dormitories;
where tenant shares bathroom or kitchen facilities with the owner-occupied primary residence; Single-family owner-occupied residences;
Duplexes (w/ owner’s principal place of residency);
Housing less than 15 years old;
Residential real property (including a mobilehome) that is separate from title to any other dwelling unit, so long as owner is not: a real estate investment trust; corporation; LLC 5 BBKLAW COM
Tenant Protection Act of 2019 BEST
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Rent Increase: Over a 12-month period, maximum increase is no more than 5% pIus the percentage change of the Consumer Price Index, or 10%, whichever is lower.
Exemptions (not covered by the Act):
Affordable housing restricted by deed or housing subject to existing rent or price controls; Single-family
Dormitories;
owner-occupied residences;
Housing less than 15 years old;
Residential real property (including a mobilehome) that is separate from title to any other dwelling unit, so long as owner is not: a real estate investment trust; corporation; LLC BBKLAW.COM 6
City’s Options to Craft Local Tenant Protections BEST
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Tenant Protection Act is the floor, not ceiling: City can provide the same or better protections for tenants with findings that local ordinance is more protective.
Examples from other jurisdictions:
Long Beach;
Culver City;
Palm
Pasadena;
Springs;
West Hollywood.
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City’s Options to Craft Local Tenant Protections BEST
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Common/Potential Local Tenant Protections:
Narrow no-fault termination, including eliminating the substantial-remodel basis for nofault just cause; Expand tenant protections to other types of dwelling units (i.e. newer units); Increase the amount of relocation assistance (e.g. 3 or 4 months’ worth of rent); Impose rent control (limit the amount that could be charged in 12-month period); and Form a rental board to hear evidence and consider rent control issues.
In other jurisdictions, retains the right to evict a tenant based on at-fault terminations.
Local, enhanced measures could be limited to certain multi-family dwellings with a minimum or maximum number of units.
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Other Jurisdictions: What has been
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Long Beach:
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City Council adopted an urgency ordinance that temporarily removed a no-fault termination based on a substantial remodel.
Higher relocation assistance for substantial remodel: Owner can choose to waive last month’s rent; or, for relocation “the greater of $4,500 or two months of the tenant’s rent that was in effect when the owner issued the notice to terminate the tenancy.” B8KLAW.COM 9
Other Jurisdictions: What has been BBK
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Culver City (rent control):
Only one increase in 12-month increase (or cumulative rent increases) that cannot exceed annual changes to Consumer Price Index (CPI): If CPI change is less than 2%, rent increases may not exceed 2%; If CPI change is greater than 5%, maximum rent increase permitted is Exemptions:
5%.
State or Federal law expressly exempt the unit; units was certified for occupancy after 2/1/1995; units that can be separately owned (single-family home; townhomes; condos); unit is part of a subdivision; landlord received government subsidy.
Rates may be re-established when tenant voluntarily vacates, evictions are for just cause (at fault or some no-fault grounds)
Other Jurisdictions: What has been BBK
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Culver City (tenant protections):
Relocation payment owed for “no fault” terminations: three times (3x) monthly rent or market rate of unit, plus $1 ,000, with limited exceptions.
Landlord may deduct past due rent.
“Small landlords” (defined as those owning 3 units or less within and outside of Culver City) shall only pay 50% of the amount of relocation assistance otherwise due.
No fault terminations: demolish; remove from rental market; move-in landlord or landlord’s relative, provided they must continue to occupy property for at least 3 years; comply with deed or regulatory restriction; comply with government or other order necessitating the vacancy.
Tenants protected from eviction: long-term tenants who are 62 years old or disabled; terminally ill tenants; low-income tenants; tenants with school-aged children protected during the school year.
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Other Jurisdictions: What has been BBK
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Culver City (Penalties & Petitions):
Rent registry: $167 per unit, per year. $15 fee for change in ownership. Penalty:
20% late fee first day of each month following annual due date, up to a maximum of 100% (identical penalty for complete failure to register a unit) Petitions: Landlords can seek to petition against applicability of City’s ordinances to receive a “fair and reasonable return” on their property investment.
City can issue administrative citations (up to $1,000 a day), bring civil actions against offending property owners.
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Other Jurisdictions: What has been BBK
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Pasadena: heightened relocation benefits
Tenants “in good standing” at or below 140% of median income receive (unless exception applies):
relocation allowance equal to 2 1/2 months’ Fair Market Rents as determined by HUD based on rental units of a similar size;
Moving expense allowance in the amount of $1,449 for adult households or $4,372 for households with dependents, disabled, or senior members (amounts increase automatically).
Receive enhanced relocation allowance and moving expenses when tenant has been in unit more than 10-years Relocation triggered: demolition; permanent removal of unit from the rental market; occupancy by landlord or landlord’s family member; government order to vacate; change of ownership of the rental unit that results in a rent increase exceeding annual CPI increase plus 5% in a year.
Temporary relocation (not to exceed 120 days): Daily pro rata rent amount, doubled, plus moving and storage fees.
Other Jurisdictions: What has been BBK
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Palm Springs:
Maximum Rent Increase: ballot measure approved in 1980 (expanded in 1990): rents are limited to 75% of the increase in the Consumer Price Index for the City of Los Angeles over a 12-month period
Exceptions: units built after 1979; commercial units; 4-units or less where owner occupies I unit; transient rentals; nonprofits; units with subsidized rent; RV parks; etc. “Base Rent”: what the unit was charging on September 1, 1979.
Hardship waivers: landlords can seek a hardship waiver from the Rent Review Commission Rent Stabilization: units not subject to above approved ballot measures: rent increases shall not exceed 10% or 5% pIus Consumer Price Index change, whichever is lower over 12- month period (landlord can file a fair return petition for rent increase) BBKLAW COM 14
Other Jurisdictions: What has been BBK
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Palm Springs:
Rent Review Commission: 5-member Rent Review Commission appointed by, and serving at the pleasure of, the City Council. Residents of the City, cannot have landlords or tenants of rental units subject to the voter-approved rent control ordinance.
Powers and duties: to consider administratively requests of tenants, landlords, or other interested parties re: interpretations of City’s rent control measures; alleged violations by landlords; hardship adjustments/reasonable rate of return requests by landlords (can authorize rent increases)
Reports & Standards: semiannual written reports and recommendations to the City Council, adopt administrative rules of procedure regarding the hearings.
Other Jurisdictions: What has been BBK
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West Hollywood:
Rent Stabilization Ordinance (RSO), complicated calculations on Maximum Allowable Rent:
Move in before 1979: either multi-family (more than 1-unit w/ Certificate of Occupancy before 7/1/1 979); or 1 unit wl CoO before 7/1/79 and occupant moved in before 1/1/1996. Maximum Allowable Rent (MAR) is based on the move-in date with a 10% total increase that can be charged for any vacancy.
Tenants moved in between 1/1/96-12/31/1 8: Annual general adjustment allowed, established by Rent Stabilization Commission once annually, and MAR can only be increased if unit in substantial compliance with RSO (proper registration, re-registration with new tenants; fees paid by landlord) Post 1/1/1 999: MAR established with the beginning of the tenancy, MAR can only be increased once a year by the amount determined by the Commission.
Notice: Municipal Code requires a 30 or 60 day notice from landlord to tenant if increasing rent subject to the amount determined by the Commission. For 2023, the total rent increase was 2.50% (with a $6 registration fee).
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West Hollywood:
Just Cause Eviction: nearly all residential units subject to eviction provisions, not just RSO, for only the following reasons: Nonpayment ofrent; substantial violation of lease terms; nuisance (causing damage to the unit); illegal uses (including short-term rental); refusal to provide access; subtenants; owner intends to live in unit; etc.
Landlord cannot evict if a comparable unit in the building is already vacant and available.
Rent Stabilization Commission: Empowered to promulgate regulations; publish allowable increases; verify eligibility; hold hearings for a rent adjustment application in a rental complex (landlord or tenants); landlord can petition Commission for a rent adjustment to “permit a just and reasonable return.”
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