All Forum Posts by: Stephanie W.

So they are stating because structure is older than 15 years old and it is now more than 1 unit, the rent control applies. I have seen jurisdictions do the same thing on the primary unit when an ADU is added. They do not use the date of when property became Mf but when the primary was constructed.

I have head senator Weinkowski speak on this subject and the rationale of the 15 year exemption.   It is to not discourage new units from being added.   So the jurisdictions that are applying the rent control to units that just became MF are not abiding by the intent.   Having said this, this is an issue that I have been aware of for over 2 years.  No one that I am aware of has been able to convince anyone that matters that the interpretation they use is against the rationale of the 15 year exemption and therefore a poor interpretation.  This should have come up in your fact finding when choosing to add the JADU (as well as their poor valuations)

Note if the unit is only 2 units and you are abiding by the owner occupied rules of a JADU, AB1482 (statewide rent control) does not apply.   That may leave localized rent control. 

If you have 3 units, the local jurisdiction’s interpretation will mean the primary unit and the JADU are rent controlled per AB1482.  

One thing that would be cheap is to see if HCD would take a stance that jurisdiction’s interpretation is incorrect.  What I have seen is Hcd has no means to enforce squat against jurisdictions that ignore hcd’s direction but maybe the jurisdiction will voluntarily concede to the Hcd interpretation. 

As indicated, I believe it is misinterpretation of the 15 year exemption, but unfortunately I suspect there is not going to be anything you can do about if jurisdiction maintains their interpretation (I know it sucks). I do not usually avoid this type of confrontation but I would not take on this fight and I have had on-going cases for 3 years (new one started before previous is settled). If I would not consider fighting this, it means few people would.

I hope you knew this could happen as part of your due diligence when adding the JADU  

Good luck

 I believe the span is 15 years so date should be 2005. 

My view is neither your primary unit or the ADU should be rent controlled until 15 years after the ADU received certificate of occupancy. This derives from the rationale of the 15 year exemption. However many jurisdictions apply rent control to the primary if it is older than 15 years old. I believe this to be contrary to the rationale of the 15 year exemption.

To summarize, your JADU should not be rent controlled due to 15 year exemption.  Many jurisdictions will rent control the primary if it is older than 15 years older.  

Ideally this is research you perform as part of your underwriting when deciding to build the JADU.   Between the owner occupancy requirement of JADU, the lack of value added by a JADU, and it often making primary unit rent controlled, the JADU typically is a poor investment.  

Good luck.