What is Costa-Hawkins and how does it affect you

A state law known as the Costa-Hawkins Act allows a landlord, whose rental property would otherwise be subject to local rent control laws, to increase the rent without legal limit if one of the tenants move out.

With subtenants, Costa-Hawkins permits a landlord to change the rent to market rate for a sublessee if the master tenant no longer lives in the apartment and the sublessee did not reside in the unit before January 1, 1995. No rent increase is permitted, if one or more original tenants lives in the unit and sublets part of the unit with the landlord’s consent.

The landlord cannot raise the rent to market on a sublesse if the sublessee proves that the landlord waived her right to raise the rent. If the sublessee can show that the landlord told the sublessee that he could remain in the unit with the same rent as the master tenant, then the rent cannot be raised. The rent also cannot be raised if the landlord fails to serve written notice of a rent increase within 90 days of a written notice that the master tenant is leaving the unit. Finally, the landlord cannot raise the rent to market rate if the landlord receives written notice that the master tenant has left the unit and the landlord accepts rent from the sublessee. However, if the landlord receives written notice, the landlord can inform the sublessee that she has reserved the right to increase the rent at a later date.

The state law does not affect local eviction control laws. Therefore, it is possible for a rental property to be exempt from San Francisco, Oakland or Berkeley rent control, but still be subject to local eviction control laws.

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Mary Catherine Wiederhold

Real Estate Attorney
1458 Sutter Street
San Francisco, CA 94109

Mary Catherine Wiederhold
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