T & A Drolapas and Sons LP v SAN FRANCISCO RESIDENTIAL RENT STABILIZATION AND ARBITRATION BOARD et al., and GERALD BORJAS (2015) 238 Cal.App.4th 646) –> Costa Hawkins case against landlord
Landlord cannot increase rent after parent (named tenant) vacates leaving adult child occupant in apartment
Facts: The Laras moved into a nine-unit building in San Francisco in 1995. At that time, Borjas, their eldest child was six years old. In 2010, the Laras moved into a home in Daly City but Borjas remained. The Laras continued to make the rent payments on the San Francisco apartment. In 2011 the landlord served a notice increasing rent from about $1,171 per month to $2,000 a month. Borjas contested the increase at the Rent Board. The Board denied the rent increase. Landlord appealed to Superior Court and the court similarly denied the rent increase. Landlord appealed.
The Decision: The Appellate Court upheld the denial of the rent increase. According to the Costa-Hawkins Rental Housing Act (§ 1954.50 et seq.), a landlord may increase rent without restriction if the original occupant or occupants who took possession of the dwelling or unit pursuant to the rental agreement with the owner no longer permanently reside there. Occupant is different from lessee or tenant. Since Borjas was an original occupant he is entitled to the benefits of rent control. Another reason supporting the decision is that after the Loras moved out, Borjas would occasionally pay rent to the Laras. Accordingly he became a subtenant. The Act prohibits unlimited rent increases to a subtenant who was in possession prior to 1996. The court interpreted the statute so that subtenancy and possession did not have to occur at the same time.
The Implication: Rent control laws will be narrowly construed to provide protections to those deemed to be the beneficiaries under the laws, rental property occupants.