Pre-1996 tenants' rents are calculated based on whether they are paying more or less than the MAR that existed on 8/31/96, the last MAR level that was "banked." If a tenant moved into a unit before 1996, the Maximum Allowable Rent may have been raised by 10% during vacancy, if there had been no other vacancy increase in the last 5 years and only if an application was submitted to RSHD at the time the tenant moved in. The resulting MAR remained a basis for calculating all increases and decreases for the dwelling unit, whether the landlord charged it to the tenant or not. It was until the landlord chose to charge it to the tenant.
Annual increases in the Maximum Allowable Rent were also banked. A tenant's actual rent might have been many dollars below the MAR that a landlord could legally charge them. The landlord may still keep this difference "banked" until they choose to bring the pre-1996 tenant's actual rent up to the MAR.
The Maximum Allowable Rent in effect on 8/31/96 is the last amount that could be banked. It is still banked for those tenants who moved in before 1996 and whose actual monthly rent payments have not yet reached its level.
The MAR and Annual Increases
The annual increase for pre-1996 tenants depends on whether they are paying more or less than the 8/31/96 MAR:
- If a pre-1996 tenant is paying a rent equal to or more than this 8/31/96 MAR then their rent is the same as the Maximum Allowable Rent. Their rent can only be raised once a year by the general adjustment determined by the Rent Stabilization Commission. If they have received more frequent or higher increases than this, they may be paying more than the MAR and should contact the department about a possible rent overcharge. (More information about Annual General Adjustments in the MAR)
- If a pre-1996 tenant is paying less than the 8/31/96 MAR, then this last banked amount is still the Maximum Allowable Rent for the rental unit. In this case, the rent that the tenant actually pays may be raised to catch up with the 8/31/96 MAR. These increases are limited to 10% or to the MAR, whichever is less, in a 12-month period. The MAR itself remains unchanged until the actual monthly rent reaches its level.
The rent may not be increased by 10% or to the MAR for these tenants unless:
- The rental unit is in compliance with all applicable Fire, Building, Housing, and Health codes, and applicable housing maintenance standards;
- All appliances provided to the unit by the landlord are in good working order;
- The rental unit is provided with all of the housing services and amenities applicable to that particular unit;
- The landlord is in substantial compliance with all other provisions of the Rent Stabilization Ordinance and Regulations.
After the tenant's monthly rent reaches the level of the last banked MAR, the MAR can only be increased once a year by the general adjustment determined by the Rent Stabilization Commission.
If you want to check whether a pre-1996 tenant's rent is the same as or below the MAR, you may contact the Department. To do this, you must be able to answer the following questions:
- What date did the current tenant move-in?
- What rent is the tenant currently paying?
- When and how much was the last rent increase?
If you have this information, you may contact an Information Coordinator at (323) 848-6450.
The MAR and Decrease Cases for pre-1996 Tenants
The Maximum Allowable Rent for all pre-1996 tenants is based on the first rent charged on or after April 30, 1984 (the "base date"), and all the accumulated decreases and increases in the MAR since then. The MAR's level is also based on the landlord maintaining the housing services provided by the landlord on or after the base date.
The MAR may be decreased in a hearing if the landlord failed to perform maintenance or removed a housing service (more info about decrease cases). If the landlord performs the work or restores the housing service, the rent decrease may be restored and added to a current pre-1996 tenant's MAR, even if the hearing occurred before this tenant moved in.
Decreases enforced by RSHD are decreases of the Maximum Allowable Rent, not of the rent actually paid by the tenant. In most cases the MAR and the actual rent are the same amount. However, if a pre-1996 tenant is not paying the last banked MAR (the 8/31/96 MAR) yet, then they may not experience an actual rent decrease following a hearing.
A pre-1996 tenant may apply for a decrease hearing if the landlord does not replace window or floor coverings when they're seven years old, paint the unit after 4 years or replace/repair an appliance that isn't in good working condition. The tenant may also request a hearing for violations of health, fire, safety or property maintenance codes for which an authorized inspection agency has issued notices or citations.
However, for other housing services, the Department may only enforce the maintenance of the services' condition on April 30, 1984 or the first time the landlord provided them after that. If the landlord won't repair or restore such a service (for instance, a gate's latch doesn't close; the pool isn't heated), the tenant must show that the service is substantially reduced in comparison to the service's condition on April 30, 1984, or the first date it was offered after that. (If the latch didn't work or the pool wasn't heated back then, the Department may not grant a rent decrease).