Q: What to do about a tenant not paying rent increase

[Josh Caddick]

Hello BP Users,

I purchased a property in 2020 and inherited a tenant paying below market rent.  The situation with the tenant is a bit unconventional.  The tenant pays an amount (not sure what this amount is) to a local non-profit organization for low-income renters (not Section 8), who I receive monthly checks from.  They pay timely.  From what I hear, the tenant has lived at this property for eight years.  The inherited lease was month-to-month.

On 7/1/21, I had the tenant sign a brand new lease (not a renewal) to begin 9/1/21.  This would give the tenant a 60-day notice of rent increase.  The rent increase was 10%, plus an additional new charge of $35 for water.  The new rent amount is still below market.  I live in a different unit on the property and thus am an owner-occupant, so CA rent controls should not apply to me.

The Problem:  Come September I receive rent in the previous amount, not the new amount.  I reach out to the non-profit and send over the new lease.  October comes and the check has the old amount.  The non-profit says they need to receive a "change of terms" for the rent increase.  I told them its a new lease and there has been sufficient notice for the rent increase.  It's January 2022 and I have yet to receive the new rent amount.  

Should I issue a Pay or Quit?  If so, would this be problematic with any active eviction moratoriums?  At this point, I'd like the tenant to move out so the unit can be thoroughly renovated.  Any advice would be greatly appreciated.