Palo Alto Rent Ordinance

Palo Alto Rent OrdinanceThe Palo Alto Rent Ordinance

With the impacts of California’s housing crisis becoming particularly acute in Palo Alto in recent years, the City of Palo Alto passed the Palo Alto Rental Housing Stabilization Ordinance (“Palo Alto Rent Ordinance”) to provide heightened tenant protections supplementing the California Tenant Protection Act of 2019’s (“California Rent Control”) protections.  The offers increased tenant protections above those afforded through California Rent Control by enumerating its own just cause for eviction protections, requiring that landlords offer Palo Alto tenants one-year leases, increased relocation assistance for certain Palo Alto tenants, and imposing just cause after a Palo Alto tenant resides in their home for six (6) months, as opposed to the full year required under California Rent Control.  With these critical tenant protections in place, Palo Alto tenants gain stability, more fair rental terms, and fewer opportunities for displacement.

Are Property Managers Covered Under the Palo Alto Rent Ordinance?

Yes, property managers are covered under and must comply with the Palo Alto Rent Ordinance.  Palo Alto Municipal Code § 9.68.020(b).

Does the Palo Alto Rent Ordinance’s Just Cause for Eviction Protections Cover My Tenancy?

The Palo Alto Rent Ordinance’s just cause for eviction protections covers all residential rental units, except:

  1. Transient and tourist hotels as defined by California Civil Code section 1940(b);
  2. Accommodations in nonprofit hospital, religious facilities, extended care facilities, licensed residential care facilitates for the elderly, or adult residential facilities;
  3. Dormitories owned and operated by schools, including high education;
  4. Tenants in units where the tenant and landlord share bathroom or kitchen facilities with the owner who maintains their principal residence in the unit;
  5. Single-family owner-occupied residences;
  6. Properties containing two (2) separate dwelling units within a single structure in which the owner lives in one unit as their principal place throughout the tenant’s tenancy;
    1. This just cause for eviction protection is not available if one of the units is an accessory dwelling unit or a junior accessory dwelling unit;
  7. A residential rental unit that is alienable separate from the title to any other dwelling unit, provided that both:
    1. The owner is not:
      1. A real estate investment trust;
      2. A corporation; or,
      3. A limited liability company in which at least one (1) member is a corporation;
  8. The landlord provides the Palo Alto tenant with written notice that the residential property is exempt from this section, where:
    1. The notice contains the following statement:
      1. The landlord provides the Palo Alto tenant with written notice that the residential property is exempt from this section, where:
        1. “This property is not subject to the just cause eviction requirements of Chapter 9.68 of the Palo Alto Municipal Code. This property meets the requirements of Section 9.68.040(a)(7) of the Palo Alto Municipal Code and the owner is not any of the following: (1) a real estate investment trust, as defined by Section 856 of the California Internal Revenue Code; (2) a corporation; (3) a limited liability company in which at least one member is a corporation; or (4) management of a mobilehome park, as defined in Section 798.2 of the California Civil Code.”
      2. Please note that the landlord may insert this clause into the Palo Alto tenant’s written lease agreement, but is not required to do so; and,
  9. Affordable, government assisted, or government subsidized units for very low, low, or moderate income Palo Alto tenants. Palo Alto Municipal Code § 9.68.040(a).

How Long Must I Reside in my Rental Unit to Gain Palo Alto Rent Ordinance Just Cause for Eviction Protections?

A Palo Alto tenant must reside in their rental unit for six (6) months to gain Palo Alto Rent Ordinance just cause for eviction protections.  Palo Alto Municipal Code § 9.68.040(b).  After satisfying this requirement, the landlord must assert a just cause for eviction to terminate the Palo Alto tenant’s tenancy.  And, to terminate a tenancy, the landlord must serve the Palo Alto tenant a written termination of tenancy notice stating the just cause reason for the termination.

Please note where a new adult rent moves into the unit before any existing rent has continuously and lawfully occupied the residential rental unit for twelve (12) months, the household will only gain just cause for eviction protections where:

  1. All of the adult renters have continuously and lawfully resided in the unit for six (6) or more months; and,
  2. One (1) or more adult renters have continuously and lawfully occupied the residential rental unit for twelve (12) months or more. Palo Alto Municipal Code § 9.68.040(b).

What Are the Just Cause Reasons a Landlord May Terminate a Palo Alto Tenant’s Tenancy Under the Palo Alto Rent Ordinance?

Under the Palo Alto Rent Ordinance, a landlord may only terminate a Palo Alto tenant’s tenancy for fifteen (15) enumerated reasons.  Palo Alto Municipal Code § 9.68.020.  The just cause reasons are:

  1. The Palo Alto tenant’s failure to pay rent;
  2. The Palo Alto tenant’s breach of a material lease term, after the landlord issues a written notice to correct the violation;
  3. The Palo Alto tenant maintaining, committing, or permitting a nuisance;
  4. The Palo Alto tenant committing waste;
  5. The Palo Alto tenant having a written lease terminating on or after July 20, 2023, and after the landlord’s written request, the Palo Alto tenant refuses to execute a similar lease extension or renewal for an additional term of similar duration;
  6. The Palo Alto tenant engages in or permits criminal activity to occur in the rental unit or common areas;
  7. The Palo Alto tenant assigns or sublets the premises in violation of the written lease agreement;
  8. The Palo Alto tenant refuses to allow the landlord lawful entry into the unit;
  9. The Palo Alto tenant uses the unit for an unlawful purpose;
  10. The Palo Alto tenant is an employee, agent, or licensee and fails to vacate after their business relationship with the landlord terminates;
  11. The Palo Alto tenant fails to vacate after providing the landlord written notice of their intention to terminate their tenancy, or enters into a written agreement with the landlord to vacate;
  12. An owner move-in or relative move-in eviction;
  13. An Ellis Act eviction;
  14. The landlord complying with a government agency or court order to vacate for general reasons, habitability issues that require a vacant unit, or a local ordinance requiring the Palo Alto tenant vacate the unit; or,
  15. A demolition eviction or substantial remodel eviction. Palo Alto Municipal Code § 9.68.020.

Must Landlords Provide Palo Alto Tenants With Notice Regarding Their Right to Just Cause for Eviction Protections?

Yes, under the Palo Alto Rent Ordinance, landlords must serve Palo Alto tenants with notice, in at least 12-point font, stating: “California law limits the amount your rent can be increased. See Section 1947.12 of the Civil Code for more information. Local law also provides that after all of the renters have continuously and lawfully occupied the property for 6 months or more or at least one of the renters has continuously and lawfully occupied the property for 12 months or more, a landlord must provide a statement of cause in any notice to terminate a tenancy. See Chapter 9.68 of the Palo Alto Municipal Code for more information.”  Palo Alto Municipal Code § 9.68.040(d).

What Requirements Must the Landlord Satisfy Before Filing an Eviction Action Based on the Palo Alto Tenant’s Alleged Breach of a Written Lease Agreement?

Before the landlord may initiate an unlawful detainer (eviction) action against a Palo Alto tenant for an alleged breach of the written lease agreement, they must satisfy certain requirements.  These include providing the Palo Alto tenant with notice of the alleged breach.  Palo Alto Municipal Code § 9.68.040(c).  If the Palo Alto tenant fails to cure the alleged breach within the timeframe specified in the written notice, the Palo Alto landlord may move forward with their eviction action.

Are Palo Alto Tenants Entitled to a One (1) Year Lease Renewal? 

Yes, if an existing or prospective Palo Alto tenant wishes to rent a residential rental unit from a landlord, and the landlord wishes to rent to them, the landlord must offer a written lease agreement containing a one (1) year term.  Palo Alto Municipal Code § 9.68.030.  This means that under the Palo Alto Municipal Code, all tenancies for covered units must be memorialized through the execution of a written lease agreement.  Additionally, all communications – including offers, acceptances, and rejections – to create the landlord-tenant relationship must be written.  Palo Alto Municipal Code § 9.68.030(a)-(c).

At lease renewal, the landlord shall offer a new written lease agreement containing a term that is at least one (1) year.  Palo Alto Municipal Code § 9.68.030(e).

Does the Palo Alto Rent Ordinance’s One (1) Year Written Lease Requirement Cover My Tenancy?

The Palo Alto Rent Ordinance’s one (1) year written lease requirements covers all units, except:

  1. A residential rental unit rented on September 12, 2023 where the tenancy is subject to a written lease agreement, provided that at the expiration of the written lease, the Palo Alto Rent Ordinance applies, or, for rental units leased without a written lease agreement, on or before October 13, 2023, the landlord shall offer a written lease to the Palo Alto tenant that complies with the Palo Alto Rent Ordinance;
  2. An owner-occupied unit where the tenant leases the unit for less than one (1) year;
  3. A residential rental unit occupied by a Palo Alto tenant that subleases the unit to another tenant for less than one (1) year;
  4. A single-family dwelling;
  5. Palo Alto rooms or accommodations in hotels, boarding houses, or lodging houses that are rented to transient guests for a period of less than thirty (30) days;
  6. Palo Alto dwelling units in a condominium, community apartment, planned development, stock cooperative, or a limited equity stock cooperative;
  7. Palo Alto dwelling units where the landlord and Palo Alto tenant share housing accommodations;
  8. Palo Alto housing accommodations in any hospital, extended care facility, asylum, nonprofit home for the aged, or in dormitories owned and operated by school, including higher education;
  9. Palo Alto housing accommodations rented by a medical institution which they sublease to a patient or the patient’s family;
  10. Palo Alto dwelling units with rents controlled by a government unit, agency, or authority, or government subsidized units;
  11. Palo Alto dwelling units acquired by Palo Alto, or any other government unit, agency, or authority and intended for public purpose use; or,
  12. A residential rental unit where the tenancy is an express condition of employment under a written rental agreement. Palo Alto Municipal Code § 9.68.030.

What Relocation Assistance are Palo Alto Tenants Entitled to Under the Fairfax Rent Ordinance?

For owner move-in evictions, relative move-in evictions, Ellis Act evictions, government, or court orders to vacate evictions, or demolition/substantial remodel evictions, Palo Alto tenants are entitled to relocation assistance.  The Palo Alto Rent Ordinance provides differing relocation assistance based on whether the property has ten (10) or more units.

How Much Relocation Assistance Are Palo Alto Tenants Entitled for Units on Parcels With Fewer Than Ten (10) Rental Units?

For Palo Alto tenants residing on lots with fewer than ten (10) units, Palo Alto tenants are entitled to one month’s rent paid as relocation assistance.  Palo Alto Municipal Code § 9.68.050(b)(3).  The landlord must provide the relocation assistance within fifteen (15) days of serving the written termination of tenancy notice requiring the payment of relocation payments.  Id.  Please note that the landlord may waive the Palo Alto tenant’s final month of rent in lieu of directly paying relocation assistance to the Palo Alto tenant.  Palo Alto Municipal Code § 9.68.050.  Finally, where the landlord fails to strictly comply with the Palo Alto Rent Ordinance’s relocation assistance payment, the written termination of tenancy notice is void.  Id.

How Much Relocation Assistance Are Palo Alto Tenants Entitled for Units on Parcels With More Than Ten (10) Rental Units?

For Palo Alto tenants residing on lots with ten (10) or more units, Palo Alto tenants are entitled to relocation assistance as follows:

  • Studio: $7,000;
  • 1-Bedroom: $9,000;
  • 2-Bedroom: $13,000; and,
  • 3-Bedroom: $17,000.

Are Low-Income, Senior, Disabled, and Minor Tenants Entitled to Additional Relocation Assistance Under the Palo Alto Rent Ordinance?

Yes, low-income tenants, tenants that are sixty (60) years of age or older, disabled tenants, and minor tenants are entitled to a single additional payment of $3,000 in relocation assistance.  Palo Alto Municipal Code § 9.68.060(b)(2).  This amount shall be divided equally between the qualifying Palo Alto tenants.  The qualifying Palo Alto tenant must provide written notice to the landlord of their eligibility along with supporting evidence within fifteen (15) days of receiving the termination of tenancy notice.  And, the landlord has fifteen (15) days after receiving the Palo Alto tenant’s notice of eligibility to provide the additional $3,000.

When Must Palo Alto Tenants Residing on Parcels With More Than Ten (10) Rental Units Receive Relocation Assistance?

The landlord must provide half of the relocation assistance at the time they serve the written termination of tenancy notice.  Palo Alto Municipal Code § 9.68.060.  The landlord must provide the remainder after the Palo Alto tenant vacates their Palo Alto unit.  Id.

Are Palo Alto Tenants Displaced For Fewer Than Thirty-One (31) Days Entitled to Relocation Assistance?

Please note that Palo Alto tenants are not entitled to receive this relocation assistance payment where their displacement is temporary and for fewer than thirty-one (31) days.  Palo Alto Municipal Code § 9.68.060(b).

Are Any Palo Alto Tenants Residing on Parcels With More Than Ten (10) Units Exempt From Receiving Relocation Assistance?

Yes, certain Palo Alto tenants residing on lots with more than ten (10) residential rental units may not be entitled to relocation assistance.  The Palo Alto Rent Ordinance’s relocation assistance law for lots with ten (10) or more units does not apply to the following rental units:

  1. Palo Alto single-family homes;
  2. Palo Alto rental units or accommodations in hotels, boardinghouses, or lodging houses rented to transient guests for fewer than thirty (30) days;
  3. Palo Alto rental units in a condominium, community apartment, planned development, stock cooperative, or a limited equity stock cooperative;
  4. Palo Alto rental units shared by landlord and Palo Alto tenant;
  5. Palo Alto housing accommodations in any hospital, extended care facility, asylum, nonprofit home for the aged, or in dormitories owned and operated by a school, including higher education;
  6. Palo Alto housing accommodations rented by a medical institution and subleased to a patient or patient’s family;
  7. Palo Alto dwelling units with rents controlled by a government unit, agency, or authority, or subsidized by the government; and,
  8. Palo Alto dwelling units acquired by Palo Alto or any other government agency for public purpose use.

Must the Landlord Satisfy Any Notice Requirements Relating to a Palo Alto Tenant’s Right to Relocation Assistance?

Yes, the landlord must serve the Palo Alto tenant written notice describing the Palo Alto tenant’s right to relocation assistance.  Palo Alto Municipal Code § 9.68.060(c).

Does the Palo Alto Rent Ordinance Regulate Security Deposits?

Yes, the Palo Alto Rent Ordinance Regulates Security Deposits.  Palo Alto Municipal Code § 9.68.070.  A landlord may not collect a security deposit that is greater than one and a half month’s rent for unfurnished Palo Alto rental units.  However, please note that California law is more protective here, and, to the extent it conflicts with the Palo Alto Municipal Code, is controlling.  Click here to read Astanehe Law’s article on California’s affordable security deposit law.

May Palo Alto Tenants Waive Their Rights Under the Palo Alto Rent Ordinance?

No, Palo Alto tenants cannot be forced to waive their rights under the Palo Alto Rent Ordinance.  Palo Alto Municipal Code § 9.69.090.

To discuss the Palo Alto Rent Ordinance, Palo Alto Ellis Act Evictions, Palo Alto Owner Move-In Evictions, Palo Alto wrongful evictions, or California Rent Control (AB 1482) with a tenant attorney, contact Astanehe Law.