On May 25, 2023, the City of San Diego passed a very tenant-friendly ordinance which is more protective than the Tenant Protection Act and replaces the former Tenant’s Right to Know Regulations (“TRTK”). The Residential Tenant Protections (“RTP”) apply only to certain residential tenancies located in the City of San Diego. I am going to summarize the most interesting protections under RTP. This article is not exhaustive, and you need to consult with an attorney before relying on these protections or remedies under the RTP. The ordinance is full of nuances, exceptions, and definitions that may require a trained legal professional.
There are certain residential tenancies that are exempt from the RTP. They are listed in Section 98.0703.
I am only going to address the most confusing exemptions. An exemption that is certain to confuse both tenants and landlords is the exemption under Section 98.0703 subdivision (l). Subdivision (l) creates an exemption for single-family dwellings, condominiums, and mobile homes. However, this exemption is not automatic, and the landlord cannot be a real estate investment trust, corporation, or limited liability company (where at least one member is a corporation). In order for the landlord to be exempt under subdivision (l), the landlord must also strictly comply with the notice requirements by providing an exemption notice to the tenant no later than 90 days from June 24, 2023, or September 22, 2023.
For the purposes of this article, I am not going to address “Just Cause” or “at-fault” evictions. The significant protections in the RTP are derived from Section 98.0704 subsection (b), which address “no fault just cause” evictions.
Under RTP, Landlord may terminate or refuse to renew a lease if a landlord acts in good faith and terminates the tenant for the following reasons:
1. Landlord seeks to recover possession to occupy the residential property for the landlord, spouse, domestic partner, child, grandchild, parent, or grandparent.
2. The landlord seeks to recover possession to withdraw the property from the rental market.
3. The landlord withdraws the property from the rental market because of an order issued by a governmental agency.
4. The landlord seeks to recover possession of the property to perform a substantial remodel.
While these no-fault just-cause reasons are similar to the Tenant Protection Act and TRTK, here is where the RTP differs and provides greater protection to tenants. Before the passage of RTP, landlords often acted in bad faith and removed tenants using reasons (1) through (4). After the tenant vacated, landlords would then relet the property at a much higher rental rate. RTP attempts to close this loophole by creating very powerful remedies for tenants. I will note the most abused no-fault reasons for removing tenants below and briefly comment on how the new RTP provides powerful tools for tenants and their attorneys to punish landlords for this type of conduct.
Landlord removes tenant because of substantial remodel
I’ve handled a fair amount of these types of terminations. Landlord provides notice to tenant that landlord intends to terminate the tenancy to perform a substantial remodel to the property. Tenant vacates and then Landlord either does not perform the remodel or the remodel is cosmetic in nature (e.g., new paint, flooring, appliances). Landlord then proceeds to relet the property for double the rent. Under RTP, the landlord now must strictly comply with the following: (1) post at the property the application for permits within 3 business days the application is submitted to the City of San Diego, (2) actually secure permits necessary for the substantial remodel, and (3) serve a copy of the permits with a written termination notice certified under the penalty of perjury. RTP then proceeds to narrowly define “substantial remodel” excluding cosmetic improvements alone and other work where the substantial remodel would require tenant to vacate for at least 30 days. I will discuss notice under penalty of perjury later and why I find this an interesting requirement. There is also additional protection from this substantial remodel removal, as I will discuss below.
Landlord removes tenant claiming the property is withdrawn from the rental market because he/she intends to occupy.
This is also a frequent reason for terminating or refusing to renew a tenancy where the landlord “withdraws” the property from the rental market with an intent to occupy. However, upon removing the tenant, landlord simply relets the property.
RTP attempts to address this by requiring landlord to offer the property for rent to the displaced tenant if the property is placed back into the rental market within five years from eviction. One potential weakness I see in the new protections is that the rental terms do not need to be “substantially similar.” Meaning that a landlord can remove a tenant for a substantial remodel and then significantly raise the rent. Another issue I see is that the displaced tenant is to advise the landlord in writing within 30 days of termination of his or her desire to receive a new lease and provide the landlord with new contact information. For the uninformed tenant, this creates a burden. I am aware that RTP requires landlords to send education materials to tenant regarding the new protections. However, I am not sure most tenants will consult the materials.
In the event of a no-fault just cause removal, Landlord is now required to provide a rental waiver or direct payment to tenant equal to two months of actual rent (or three months if tenant is a senior or disabled). This relocation assistance was previously unavailable in the City of San Diego.
Tenants may question the ability of the City of San Diego to provide enforcement to these protections. Here is where things get interesting. The RTP provides a number of extraordinary remedies that encourage lawyers like me to take these cases on a contingency fee (lawyer advances fees and shares in recovery). These power remedies include punitive damages, prevailing party attorney’s fees, and treble damages for non-compliance. Prior to RTP, lawyers were generally not incentivized to represent tenants in civil court and take on landlords for violations. Under the new RTP remedies, I would imagine lawsuits for violations will be significantly costly to landlords. For example, a landlord removes a tenant for a lawful reason. However, fails to pay tenant relocation assistance. Under RTP, a tenant lawyer could file a civil action seeking three times the relocation assistance and actual economic damages, including reasonable attorney’s fees. Here is a potential breakdown for damages:
(1) Relocation assistance (two month’s rent equaling $4,000)
(2) Treble damages (minimum of three times the relocation assistance totaling an additional $12,000)
(3) Reasonable attorney’s fees ($25,000) if the tenant lawyer prevails on a motion for summary judgment.
(4) Total judgment = $41,000. Who pays? If landlord fails to satisfy the judgment, lawyer can record a judgment lien on the property.
Here is where the notice under penalty of perjury comes in. If a landlord removes a tenant in bad faith and signs a notice under penalty of perjury claiming to engage in a substantial remodel and proceeds not to perform the remodel, landlord would be potentially subject to punitive damages, which would open the door for a run-away award by the trier of fact (judge or jury).
Again, this article is not meant to be a comprehensive guide to the new tenant protections. I authored this article to illustrate just how protective this new ordinance is and the RTP’s potential to actually fight back against landlords acting in bad faith.