BILL ANALYSIS Ó
SB 775
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Date of Hearing: August 19, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 775
(Allen) - As Amended July 8, 2015
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|Policy |Housing and Community |Vote:|7 - 0 |
|Committee: |Development | | |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill amends the Petris Act to state that its rent level
certification provisions do not apply to tenancies commencing on
or after January 1, 1999, for which the owner of the property
may establish initial rent under the Costa-Hawkins Rental
Housing Act (Costa-Hawkins). This bill excepts from this
SB 775
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exclusion a tenancy for which the property owner provides the
local rent control agency with the tenancy's initial rent in
writing signed under penalty of perjury, which creates a
rebuttable presumption that the statement of the initial rent is
correct.
FISCAL EFFECT:
Negligible state fiscal impact.
COMMENTS:
1)Purpose. According to the author, some individuals are
attempting to take advantage of the five-day certification
process in the Petris Act to certify rent levels at higher or
lower rates while either the tenant or landlord is not
available to contest the certification. This bill amends the
Petris Act to state that its provisions do not apply to
tenancies commencing on or after January 1, 1999, the
effective date of Costa-Hawkins, thereby eliminating the
opportunity for abuse.
2)Background. In 1986, the Legislature adopted the Petris Act
which directs a city with rent control ordinances requiring
rent level registration to certify the maximum allowable rent
for every rent controlled unit under its jurisdiction. Upon
the request of a landlord or tenant, a city must certify the
permissible rent for a rent controlled unit or if no
certification is on file, provide a certification process to
determine the maximum allowable rent. A city must provide
the certification within five business days of the date of the
request.
Nine years after the Petris Act was enacted, the Legislature
enacted Costa-Hawkins which preempts local adoption of strict
vacancy-control, rent control laws that do not allow a
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property owner or landlord to increase the rent when a unit is
vacated and a new tenancy is created. Instead, Costa-Hawkins
permits a vacancy decontrol-recontrol form of local rent
control where an owner is authorized to increase the rent
without restriction to a new tenant when the tenancy is
voluntarily vacated, abandoned, or terminated by lawful
eviction. The new rent for the new tenant would then be
subject to local rent controls for the duration of the
tenancy. Costa-Hawkins applied to tenancies entered into
after January 1, 1999 and protected the tenancy rights of all
occupants in place prior to January 1, 1999.
Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081