Also see our Rental Housing Committee Observer Reports.
Glossary of Terms
- Annual General Adjustment
- Base Rent
- Consumer Price Index
- Effective DateEffective Date of CSFRA is Dec. 23, 2016, the date Measure V was certified as approved by the voters, declared by the RHC on Sept. 11, 2017. Opponents had contended that the effective date was April 5, 2017, the date the court set aside the temporary injunction (sought by landlords/apartment owners) that prevented CSFRA from being enforced. It is important because the Base Rent is to be charged beginning on the effective date of CSFRA.
- EvictionEviction is the result of a court decision in an unlawful detainer case. An unlawful detainer case can be filed when there is just cause, or when there is no cause. In situations with no cause, the landlord needs to give the tenant a 30-day (or 60-day depending upon the length of the tenancy) notice to vacate without stating any cause or reason. If the tenant does not leave within that time, the landlord can then file an unlawful detainer, and, assuming the tenant has no legal defense, the court will order eviction of the tenant.
- Exempt Units
- Fair Rate of ReturnFair Rate of Return is a key term as landlords may petition for an upward adjustment to the rent, above the Annual General Adjustment (AGA), if they can show that the AGA does not give them a fair rate of return. CSFRA excludes many factors that can be considered in determining a fair rate of return, but the decison of how to calculate a fair rate of return was left to the Rental Housing Committee (RHC). Fair rate of return per the RHC uses the maintenance of net operating income (MNOI) methodology. This method identifies the net operating income (NOI) in the Base Year (i.e., 2015 gross income from the property, less 2015 operating expenses.) The second step adjusts the NOI based upon the CPI-Rent of Primary Residence.
- Just CauseJust Cause for eviction means the Landlord has a good reason for terminating a tenancy, generally either failure to pay rent, or breach of the lease by the tenant. Reasons are stated in California Code of Civil Procedure and detailed in Dept. of Fair Employment and Housing definition. Tenants in all rental units (unless exempted as described above) with an initial certificate of occupancy before the Effective Date of CSFRA, 12/23/16, are subject to Just Cause protection.
- Maintenance of Net Operating Income
- Net Operating Income
- Partially exempt unit
- Rental Housing Committee
- Rental Housing Fee
- Rollback date
- Vacancy DecontrolVacancy Decontrol refers to the situation that occurs when a tenant voluntarily vacates a unit; the landlord can then charge whatever the market rent is at that time.
- Vega AdjustmentVega Adjustment addresses situations where the base year NOI was unusually low, typically because the rent charged for 1 or more units was unreasonably low. Vega refers to a court case which required such adjustments when using the MNOI methodology for fair rate of return. The RHC adopted a Vega Adjustment methodology which allows the landlord, as part of a petition for a fair rate of return, to identify units that were rented for less than the HUD Fair Market Rents (FMR) for Santa Clara County. The Vega Adjustment assumes that the rent charged for such units would be the higher HUD FMR rent, rather than the lower rent actually charged, thereby raising the gross income for the base year, which then affects the MNOI for the base year and allows an additional increase in rent for the year for which the landlord is petitioning. The increase in rent allowed would then be spread across all the units in the apartment complex that were subject to the Vega petition.