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  • Maximum Lawful Rent


    HOW IS THE MAXIMUM LAWFUL RENT DETERMINED?

    MAR

    There are three amounts that can be added together to make up the maximum lawful rent:

    • MAR (short for "Maximum Allowable Rent")
    • pass-through of the registration fee
    • allowable surcharges from the property tax bill

    + Registration Fee

    + Surcharges

    ______________________
    = Maximum Lawful Rent

    All of these items are identified on the Notice of Change in Terms of Tenancy form prepared by the Rent Control Agency each year.  This form is designed to make the calculation of the maximum lawful rent for any controlled unit as easy as possible.  The Agency has also prepared a video of a presentation used for one of its seminars that should assist you in preparing the form: video.

    WHAT IS AN MAR AND HOW IS IT DETERMINED?

    The MAR is really the basic amount of the rent, to which certain additional charges may be added to get the total maximum lawful rent.  For tenancies that started before January 1, 1999, the initial MAR was in most cases determined by the amount of rent in effect on April 10, 1978.  Adjustments to the MAR have since been based on increases or decreases authorized by the Rent Control Law.  Until January 1, 1999, the MAR remained controlled between tenancies.

    However, since January 1, 1999, property owners have had the right to set the initial rent for most new tenancies.  For tenancies that have started since January 1, 1999, the MAR and legal rent for each unit are likely to change with each new tenancy.  As long as property owners properly register each new tenancy with the Rent Control Agency, the Agency will have accurate information regarding the MAR for each unit.

     

    HOW CAN I LEARN WHAT THE MAR IS FOR A PARTICULAR UNIT?

    There are a number of ways you can learn the MAR for any controlled unit.  In the summer of each year, the Rent Control Agency sends an MAR report to all property owners.  That report can be used to see what the Agency's records show as the MAR for all units on a controlled property.

    You can also call or drop by the Rent Control office and ask an Information Analyst for assistance.  And finally, this website has a page where you can look up the MAR for a controlled unit: Look up a Rent

     

    WHAT IS THE REGISTRATION FEE?

    The Rent Control Board charges an annual Registration Fee for each rent-controlled unit to the owners of rent-controlled properties.  Owners may pass up to 50% of the annual registration fee through to each tenant in equal monthly installments.  To find information regarding the current amount of the registration fee and the current monthly pass-through amount that can be included in maximum lawful rents, use this link: Current Registration Fee

     

    WHAT ARE THE ALLOWABLE SURCHARGES?

    The final component in the determining how much the maximum lawful rent is for any controlled unit is the allowable surcharges.  Surcharges are based on some of the charges that are included in the Annual Property Tax Bill that property owners receive each year from the County Assessor's Office.  In general, each surcharge is calculated by taking these charges and dividing them by the total number of units on a property, and then dividing that result by twelve months to get the monthly surcharge.  For more information regarding this subject, see the section called "Calculating Allowable Surcharges" on the video mentioned above that the Agency prepared: video

     

    WHEN CAN A TENANT'S RENT BE INCREASED?

    Each year the Board announces an increase to the MAR, known as the General Adjustment (or GA).  The GA is primarily based on 75% of the percentage change in the Consumer Price Index for the Los Angeles area for the 12 months ending in March.  The annual GA increases the MAR for most controlled units, therefore increasing the maximum lawful rent for the units.  For more information regarding the current and past general adjustments, as well as the Rent Control regulations/resolutions and staff reports regarding annual general adjustments, go to this link: General Adjustments

    A rent may be increased based on the new MAR as of September 1st of each year only if:

    • The tenancy started before September 1 of the previous year.
    • All Rent Control registration fees and penalties for a property have been paid.
    • The tenancy for the subject unit is properly registered.
    • There are no uncorrected citations or notices of violation of health, safety, or housing laws for the property.
    • The owner is in compliance with the Rent Control Law.
    • The owner gives proper written notice to the tenant.

     

     

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