Make Your Voice Heard on Onerous Fee Ban

City of San Diego Residential Rental Price Gouging, Fee Exploitation, and Cost Transparency Ordinance 

On Tuesday, June 30, the San Diego City Council will be presented with a draft ordinance regarding fees and transparency. While it will be presented as an Information Item only (they will not be voting to adopt the ordinance), the councilmembers will be asked to provide their thoughts on the draft provided. It is vital that housing providers make their voice heard so crucial improvements can be made to the ordinance over the next few months. 

Despite SCRHA having expressed concerns since the idea originally came to fruition, not much has changed from the original proposal. As written, it would not only change the way you do business, it would increase fraud in the application phase, limit your ability to charge fees, cap late fees, and much more. Read on for more information. Click here to access the agenda (scroll to Item 330). 

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Charges to Applicants

Mandatory acceptance of Reusable Screening Reports paving the way for more fraudulent applications - A landlord shall accept an applicant’s screening report and not charge the applicant for landlord to separately obtain any information included in the applicant’s screening report. 

Limitations on Holding Deposits - A landlord may charge an applicant a holding deposit in an amount not to exceed 5% of monthly rent for the residential rental property being held. If the landlord and applicant finalize a lease, the landlord shall refund the holding deposit to the applicant or apply the holding deposit to rent or the security deposit. If the landlord and applicant fail to finalize a lease at no fault of the applicant, the landlord shall refund the holding deposit within five business days from the date the hold on the residential rental property expires. 

Charges to Tenants

5% Cap on ALL Fees (not including rent, utilities, late fees or security deposits) - A landlord shall not charge a tenant recurring fees in a cumulative amount greater than 5% of monthly rent. If a fee is recurring at intervals other than monthly, the landlord shall prorate the fee to a monthly rate. 

2% Cap on Late Fees & Can Only be Charged Once Rent is 7 Days Late or More - A landlord shall not charge a tenant a late fee in an amount greater than 2% of monthly rent. A landlord shall not charge a tenant a late fee unless rent is overdue by seven days or greater. A landlord shall apply any payments made by or on behalf of the tenant first to rent due and then to any unpaid late fees. 

Cost-Recovery Only on Pass-Thru Processing Fees - A landlord shall not charge a tenant an amount greater than the processing fee imposed on the landlord.  

Prohibition on Pest Control, Trash Valet Fees, and More - A landlord shall not charge a tenant a fee for services solicited by a landlord to maintain the residential rental property in a habitable condition, for example fees for pest control and trash valet. 

No Pet Fees or Pet Rent - A landlord shall not charge a tenant a fee for a tenant to own or maintain a common household pet at the residential rental property. 

Limitations on New Fees/Tenant Must Agree to Fee - A landlord shall not charge a tenant a fee that is not specified in the lease. A tenant may agree in writing to a proposed fee not specified in the lease after the landlord provides written notice to the tenant not less than 30 days before the fee is intended to go into effect. 

Documentation and Computations

Mandatory Disclosure of All Charges and Fees in Advertising, Websites, and More - A landlord shall disclose, in a clear and conspicuous manner, the following information on any website, advertisement, and document that lists a residential rental property available for rent:  

(1) the total amount of charges for submission and consideration of an application to lease a residential rental property and itemized as to each charge, 

(2) the total monthly rent,  

(3) the total amount of fees, 

(4) whether the fees are optional or required, 

(5) the nature and purpose of the fees, 

(6) the timing and frequency the fees will be charged, and 

(7) whether the amount of the fees is variable and the manner in which any variable amount is calculated. 

A landlord shall itemize all fees distinct from rent in the lease and on any bill or invoice to the tenant. Each fee must be intelligible and distinct from other fees. 

Within 10 calendar days of a tenant’s written request, a landlord shall provide the tenant a copy of the bill or invoice for services which comprise the fee the landlord has charged the tenant. If the landlord receives a single bill for services provided to multiple tenants, the landlord shall provide a copy of the single bill and the calculations used to determine the allocation to the individual tenants. 

Enforcement and Remedies

Penalties & Lawsuits - A tenant or applicant claiming a violation of this Division may file an action against a landlord in a court of competent jurisdiction. A tenant or applicant may seek injunctive
relief, equitable relief, and money damages, including punitive damages, in a civil action against a landlord for a violation.