Los Angeles City Primary Renovation Work and Relocation- A Landlord Guide
Before you read on, just know you cannot relocate a tenant through "no fault just cause" during the current COVID-19 eviction moratoriums. However, this blog is still very useful for landlords who plan to partake in Primary Renovation Work or are looking to get tenants out permanently at some point.
Los Angeles City has very few ways in which a landlord can get a tenant out- primary renovation is one possible way. See my video/blog here on the difference between relocation and buyouts. While this blog focuses specifically on Los Angeles City, if you own multifamily property in other cities or unincorporated portions of Los Angeles County you can reach out to me to discuss the nuances of those laws, as they do vary from location to location.
Under California Civil Code §1946.2 "Substantial Remodel" is a basis to pay a tenant relocation fees and permanently get them out of the property. However, Los Angeles City has its own, stricter version of this and call it "Primary Renovation Work." It is essentially the same thing as "Substantial Remodel" but Los Angeles likes to be different.
Los Angeles Municipal Code covers the scope of Primary Renovation Work. The code is long and very boring to read, so I have done that for you. Below is a summary of the main points.
What is Primary Renovation Work? Simply, it is the replacement or substantial modification of the building that will render the building uninhabitable for a tenant during the work. The work itself requires that permits be pulled. The permit process for multifamily (apartments) requires that each permit applicant submit a Tenant Habitability Plan (THP). The THP process is what decides if a tenant must be temporarily relocated from the unit so that work can be performed. The THP also requires that a tenant receive 60 day notice before work under an issued permit can even start. Your contractor will be involved in the THP process as they will know the scope of work and effect it will have on the habitability of the unit.
Can a tenant be permanently relocated due to Primary Renovation Work? If the scope of work under the THP requires that a tenant be relocated from their unit for 30 or more days a tenant, at the tenant's own discretion, can elect to receive permanent relocation fees (discussed more below). Further, if work on a unit takes longer than 30 days a tenant's option to elect permanent relocation is renewed. A landlord cannot chose this, but a landlord can let the tenant know they have this option. A permanent relocation means what you think, the tenant does not come back when the work is done and the owner has possession of the unit.
This is where it really comes down to the tenant. There is a gamble in spending money on permits and renovation costs if you did all that only to move in the same tenant for their same rent because they did not opt for permanent relocation. Often a relocation turns into a tenant buyout, in which a landlord pays more to get the tenant to agree to permanently relocate. A tenant buyout can be done at any time as it is a voluntary agreement. Though a buyout comes with its own set of additional City requirements more information can be found here. Landlords often choose to go down this path to ensure the tenant moves out forever before dropping a pretty penny on unit rehabs.
What happens if a tenant requests permanent relocation? In order for a tenant to get permanent relocation they are to request it within 15 days of the notice of the THP. A tenant can also request it if the work is taking longer than the 30 days initially thought. Once requested the landlord then has 15 days to pay the tenant the relocation fees either (1) directly to the tenant(s) or (2) in an escrow set aside for the tenant to receive once they move, with escrow instructions to release funds necessary for the tenant to relocate such as costs for security deposits, moving expenses and utility connection charges.
What are the relocation fees? Effective through June 30, 2021 the Los Angeles City Relocation Fees:
0-3 Years- $8,750
3+ years- $11,500
Income below 80% Area Median- $11,500
Qualified Tenant- Senior 62+, disabled, 1+ minor children
0-3 Years- $18,500
3+ years- $21,900
Income below 80% Area Median- $21,900
What is a landlord responsible for in a temporary relocation? The landlord bears the burden of getting the tenant temporarily relocated and then moved back in. Here are the responsibilities of the landlord:
Pay for temporary shelter cost
Pay for moving costs to relocate tenant
Pay for moving costs to move tenant back in
A landlord must provide comparable housing either in the same building or elsewhere. In lieu of providing the comparable housing, the landlord and tenant can agree on a per diem fee to pay the tenant per each day the tenant must be relocated from the unit. This agreement must be in writing, provide notice to the tenant of their rights and be filed with the City.
What is a tenant responsible for in a temporary relocation? A tenant is required to continue to pay their rent to the landlord.
Do other cities have something similar? While outside the scope of this blog, other cities in Los Angeles county have similar options to permanently relocate tenants for substantial remodeling- Beverly Hills, Duarte, Glendale, Inglewood, Long Beach, and South Pasadena. Each one has its own set of guidelines, relocation fees and requirements. You will want to discuss with a lawyer before proceeding.
How can landlords get help with all the paperwork? This is where I come in. If you are seeking to get a tenant to relocate or want to engage in a tenant buyout agreement to push them towards moving out, I do the paperwork and communications with the City, tenant(s) and contractor directly. Landlords benefit from a buffer between themselves and the tenant, reducing animosity and miscommunication. My flat fee service includes:
Delivering buyout offer to tenant with all required disclosures
Filing disclosures with the City
Communicating/ negotiating directly with the tenant
Drafting the Voluntary Permanent Relocation Agreement (this goes by many names, ie. Tenant Buyout Agreement, Voluntary Lease Termination Agreement, etc.)
Filing final agreement with the City
If you are a landlord with questions about this topic or other landlord-tenant law you may contact me by phone at (818) 306-0686 or by email at email@example.com
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The information in this post is for general information purposes only. Nothing on this post should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.