Memo to resident managers in rental-control apartments: Read the fine print

1300 N. Curson Investors, LLC v. Drumea, 225 Cal.App.4th 325 (2014)

Rents were much lower twenty years ago, as the defendant in 1300 N. Carson Investors LLC v. Drumea learned abruptly when her employment as resident manager at her apartment complex ended in 2011. She had not paid any rent during the nearly eighteen years she managed the complex. During those years the annual rent increases at the complex, which were implemented in accordance with the city’s rent control ordinance, had nearly doubled the rent for her unit. When new owners terminated her employment in 2011, they began charging the current rate for her unit – more than $700 more than she paid in 1993 – which she refused to pay.

The new owners sued, arguing that the ordinance permitted landlords to charge the original rent plus annual adjustments authorized by the ordinance. The parties stipulated to judgment for the defendant at the trial court in order to facilitate appeal. The Court of Appeal found that although the defendant had not been notified annually of the rent increases on her unit, as would ordinarily be required under the ordinance, the provision for terminated resident managers that permitted original rent plus lawful accumulated increases and not specifically requiring annual notices made the increase valid.