Leases & Renewals

What are the laws and best practices regarding leases, changes in terms of residency and subresidents?

The importance of using a lease cannot be overstated. A lease is a binding contract that defines the terms of residency so that all residents are aware of the rules and regulations. Moreover, in rent-controlled cities, rent laws change on a regular basis. EBRHA's city-specific leases are updated annually to reflect these changes.

Change in Terms of Residency

If an owner wants to make a change to the existing agreement, e.g., update house rules or pet agreement:

• Month-to-Month residencies: Typically, 30-Day notice is sufficient to change terms of a month-to-month residency.
• Fixed-term agreements: Typically, owners can make changes to terms of residency after the lease expires, but changes can also be agreed upon during the lease term with resident.
• Best practice: Attach a cover letter explaining the need for change in terms and serve the changes personally (if possible).
• If unsuccessful, owner should attempt to both leave notice with someone of suitable age and mail or “post and mail.” (See CA Code of Civil Procedure 1162).

 
Reduced Services

Master Residents vs. Subresidents

Question:  Why would a property owner want to make a new resident a subresident and not an original resident?

Answer:  Under Costa Hawkins, the property owner can increase the rent to market rate after the last original resident has moved out.

Question:  How do property owners treat subresidents differently than residents?

Answer:  Property owners don’t take work orders or rent directly from subresidents. If property owners do this, then the owner’s actions can be interpreted as treating the subresidents like they are original residents.

Question:  Do property owners need to put subresidency in writing?

Answer:  There are two schools of thought on this. Some attorneys advise screening your subresidents and put it in writing that the new resident is a subresident (If that’s what you chose to do—use one of our forms: “Change of Tenant Agreement” or “Change of Terms of Tenancy” in the Operational Notices section of our Rental Housing Forms page). Others say do not talk to or acknowledge the subresident, because if you interact with a subresident in any way then you are changing the relationship from an owner/subresident relationship to an owner/resident relationship. 

Question:  One of my residents in Oakland asked if her significant other can move into her unit. Am I obligated to accept a new resident? If so, what is the best way to add a new resident to the lease? Also, can I require them to sign a new lease and raise their rent? 

Answer:  The first thing you need to do is review your rental agreement. Does it contain a provision prohibiting or limiting subleasing? If so, then you can generally refuse a request to move in a roommate. If not, or if the rental agreement is oral, then you typically cannot prevent a resident from moving in a roommate.

However, even if you have a provision that prohibits or limits subleasing, the analysis doesn’t end there. Oakland’s Just Cause for Eviction Ordinance permits subleasing under certain circumstances even if the rental agreement prohibits it. For instance, if the proposed roommate is intended to replace a departing roommate (one-for-one replacement), then the property owner/manager cannot reasonably deny a resident’s written request.

So in your scenario, if your resident kicked out a roommate in order to move in her significant other, then you probably cannot prevent it since this is likely authorized by law as a one-for-one replacement. But if no one has moved out and moving her significant other in would increase the number of permitted occupants, then you may reasonably say no to the request.  If you are going to allow a resident to move in a roommate, then you cannot charge more rent for doing so. This would violate Oakland’s rent ordinance. You can, however, add the new roommate to the rental agreement and have him or her sign it. But it is important to know that doing so may preclude you from increasing the rent in the future if the original tenant moves out and leaves the roommate behind.  In other words, you may be stuck with the roommate as your resident at the rent controlled rental rate.  Whenever a property owner/manager is faced with a proposed sublease/roommate situation, the property owner/manager should consult with an attorney to determine the best course of action.

Contributor: Steve Williams, Attorney