Rent Control and Rent Stabilization Ordinance Fees

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Los Angeles City is known for its strict rent control and regulation. Owners must keep track of registration, an RSO and or SCEP fee, rent increase restrictions and more. Here is a breakdown of some of the rent control rules an owner/manager must follow in Los Angeles City.

RSO Rental Property Registration

The Rent Stabilization Ordinance requires all owners to register and pay a fee for all of their rental property units that are subject to the ordinance before they can start collecting rents in the City of Los Angeles. If your rental property is subject to rent control and you don’t have it registered or are not current on RSO fees, you can’t collect rent from your residents.

Certificate of Rent Registration

RSO Rent registration fees must be paid yearly and a copy of the registration must be provided to every one of your residents every year. It’s recommended that you mail this copy to every resident so you can have proof that you served it. Another option is to personally hand it to them, or post it on your resident’s front door. Again, you can’t collect rent from your residents if the copy of the certificate of rent registration has not been served to your residents.

Los Angeles Rent Controlled Property Fees

There are two fees owners must pay annually if they rent or intend to rent their rental units in Los Angeles City and are subject to RSO and/or SCEP. They both must be paid in full in January of every year and they become delinquent if they are not paid by the last day of February.

Both of these fees are on a per unit basis and are not proratable. For example, if one of your rental units was only rented for a few months out of the year, you still must pay the full price of both fees.

Rent Stabilization Ordinance (RSO) Fee

  • $38.75 per unit or $96.88 (total) per unit if delinquent.

Systematic Code Enforcement Program (SCEP) Fee

  • $43.32 per unit, $129.96 (total) per unit if delinquent.

It is the responsibility of the owner to pay their annual fees. The failure of not receiving an annual bill or notification doesn’t relieve you of your legal responsibility to pay the annual fees for each of your rental units and does not waive the penalties.

Who pays RSO Fee?

The owner can pass half of the RSO fee to the resident in August. The owner must provide the resident with a 30 days notice notifying them of said surcharge. If you do not provide the resident adequate notice, you may not pass half of this fee off to them.

Who pays SCEP Fee?

The owner may also pass the SCEP fee to their resident in the form of a $3.85 monthly surcharge.

Rent Increases Under RSO

You can’t raise rent higher than what is allowed under LARSO. This is very important. You must make sure all rent increases are in compliance even if you want to round up to the nearest whole number. You  can be penalized even if you’re off by pennies.

You are only allowed to make one rent increase per year.

You may only increase rent if your resident is month to month and is not a fixed term lease.

You are allowed to increase rent if an additional resident moves into your rental unit within 60 days of learning about this additional resident.

Rent increases to market value can only be made if the resident

  • moves out on their own

  • fails to pay rent and gets evicted

  • violates terms of your lease agreement and gets evicted

  • is evicted for failure to comply with Tenant Habitability Plan

  • is evicted per a City Attorney order

  • or accepts a Tenant Buyout Agreement

What rental units are considered susceptible to SCEP fees?

Any rental unit that meets the following criteria must pay SCEP fees.

  • Property that has two or more residential units on a parcel of land and you rent at least one of these units.

  • You are required to register your rental unit for periodic inspections and must maintain your property in accordance to specific codes and standards.

What rental units are considered susceptible to RSO fees?

Any rental property that was built before 10/01/1978 as well as replacement buildings built within 5 years and is

  • within the City of Los Angeles, which includes San Pedro and San Fernando Valley

  • An apartment

  • A condominium

  • A townhome

  • A duplex

  • Two or more single family dwellings on the same parcel

  • Rooms in a hotel that has been occupied by the same resident for more than 30 consecutive days

  • Residential units attached to a commercial building

Also remember to consider Relocation Fees under LARSO.

Late Rent Fees

Owners are now allowed to deduct late fees from money received from a resident. All money must be applied towards any amount of unpaid rent. In other words, owners cannot charge late rent fees as part of rent.

If your resident owes you rent of $1,000 and pays you, you cannot say you received $950 for rent, and the resident still owes you $50 for rent. Late rent fees must be a separate fee that is unrelated to rent and only charged if mentioned in your lease.

Another thing to keep in mind is that you may not add late rent fees to Three (3) Day Notice to Pay Rent or Quit.

Change of Ownership/Management

If you become a new owner or are the new management company of an RSO rental property, you must notify all of your residents of the change. You must also make sure you are complying with all of the RSO rules such as fees, rent increases, etc.

The notice you provide the resident must include:

  • The name, contact phone number and address of every person who is

    • Allowed to manage the rental property

    • Authorized to receive all notices and demands

Note: This must be a physical person, not a name of a company or LLC and you must provide a physical address.

  • Provide the name, contact phone number and address of the person or persons authorized to receive rent payments.

  • If rent is to be received in person, you must also provide the usual times that a resident may do so.