For Your Consideration
An abridged version of the Apartment Association of Monterey County's strictly voluntary guidelines for landlords.
Thursday, May 31, 2001
Damage Control: Steve Romberg, president of the Apartment Association of Monterey County, created a set of voluntary guidelines advising landlords to keep rent increases reasonable.
"While there may be circumstances under which these guidelines cannot be followed, the following voluntary guidelines are submitted for the consideration of residential property managers and owners:
1. Keep rent increases reasonable for your residents.
2. Give your residents predictability and the opportunity to plan ahead.
*Provide at least a 60-day notice for rent adjustments, even if only 30 days'' notice is required by California Civil Code 827.
*While the California Civil Code does not set an upper limit on rent adjustments... consider limiting upward rent adjustments to 10 percent or less.
*Consider adopting a policy of one annual rent adjustment.
*If your monthly rent is below ''market,'' in your opinion, do not attempt to bring the monthly rent up to ''market'' suddenly for your existing residents. Instead, phase in any such rent adjustments over an extended period, bearing in mind the resident''s rent history at your property and the resident''s economic circumstances.
3. Attach a sensitively written letter to your notice of rent adjustment.
4. Point out any increased operational costs such as taxes, utilities, maintenance, and debt service.
5. Point out upcoming or recent improvements to the property.
6. Consider using the Cost of Living Index (CPI) as a guideline for rent adjustments. CPI information is available from the U.S. Department of Labor, Bureau of Labor Statistics, Fax-On-Demand, phone (415) 975-4567. Consider using the San Francisco-Oakland-San Jose CPI, All Items, for Urban Wage Earners and Clerical Workers (CPI-W), although there are also other indexes available to use.
7. Even though many properties will not support a calendar year-end ''rent rebate,'' if after all expenses, debt service and return on investment are paid and the property supports a ''rent rebate'' at the end of the calendar year (December), consider giving a rebate of some amount of rents paid for the prior year to residents in the form of a gift. It will be appreciated, especially in December. Example rebate: $100-200, or more, or less.
8. When residents want to discuss their rent adjustment, be knowledgeable about their rent history at your property; be willing to listen to them openly and consider special arrangements, such as a phased-in rent adjustment, for hardship cases.
9. Attend to all maintenance requests promptly. They are part of the costs of doing business. Do not begrudge residents their requests for maintenance or repair, or even improvement to the property. ... A rent adjustment notice should not be used as a response to maintenance and repair requests from particular residents.
10. Be responsive if a mediation agency calls and be willing to enter into a mediation discussion.
11. If you plan on adjusting rents after a current resident vacates, to be effective with the new resident, consider the following:
*New resident(s) may face the same economic problems of affordability as your existing resident(s).
*There will always be another owner who charges either a higher rent or a lower rent for premises comparable to yours. You do not always have to rent to new residents at ''top of the market.'' While rents are a function of supply and demand, consider not maximizing rents due to a shortage of supply. If you do so, when supply increases, or residents relocate to less expensive geographical areas, yours may be the first premises that will become vacant.
*For new residents, consider requiring the first month''s rent plus security deposit, and not requiring a last month''s rent deposit. Keep security deposits reasonable.
12. Consider how your actions concerning adjusting rents may effect the public perceptions of you, your company and the industry. You are in the business of providing rental housing, and your residents are your customers. As in any business, you should strive as much as possible to satisfy your customers at all times, which is the foundation for business success.
We are in a housing crisis of short supply and high demand in Monterey County. By following the above voluntary guidelines, you can be a part of the solution to the problem of how to provide affordable rental housing in Monterey County.
The above voluntary guidelines are suggestions for the property manager and owner''s use in their absolute and unqualified discretion. None of the above suggestions are meant to be involuntary, coercive, or in furtherance of violation of any anti-trust, price fixing, or any anti-competition laws."
For a copy of the guidelines, call the Apartment Association at 649-4707.