Overview of California Self Storage Regulations
California Storage Rent Increase Laws and Regulations
In California, the main principle behind self storage laws is about clarity and mutual understanding. These statutes are put in place to protect consumers from arbitrary decisions by landlords and to create a fair playing field that both owners and tenants can understand. Depending on where you live, there may be different laws enforcing rental rules and rent increases at self storage units.
The California Self-Service Storage Facilities Act (Part 4.7 (commencing with Section 21700) of Division 8 of the Business and Professions Code). The good news here for tenants is that these statutes dictate that owners must follow exact requirements when it comes to rental agreements, notice requirements, and lien sales . Even with these tenant protections in place, it is a best practice to review the lease you sign at the time of rental. In California, the self storage operator has a duty to inform a tenant of increases when they rent the space. Self storage operators often include a clause in the agreement permitting them to raise the rent annually.
It is important to understand that your rights as a self storage unit tenant may vary depending on your location. When in doubt, look to your rental agreement or simply check the California legislative database to get more details on the store rent increase law.
Important Rental Increase Statutes
The regulations governing rent increases at self storage facilities in California are generally codified in the California Self-Service Storage Facility Act, which is codified in California Civil Code Section 21700 et seq. One of the fundamental tenets of the Act is that a lease under which rent is payable on a month-to-month basis may be changed by the facility owner upon not less than a 30-day prior written notice.
While California law generally allows for rent increases in a month-to-month lease, the rent increase must still be reasonable — something often subjected to interpretation and a source of contention between facility owners and their tenants. In referring to the California Civil Code, a written rental agreement for self-storage generally must include the following language pertaining to rent increases:
[T]he rental agreement shall contain the following statements in 10-point boldface type, in substantially the following form: "Your rent will be increased upon at least 30 days’ notice." "A fee will be charged to you for any check that is not paid upon its first presentation and for any charge to a credit or debit card that is reversed because the authorization given at the time of the transaction was unacceptable." In addition to the above requirements, some localities in California have enacted ordinances that require the facility owner to provide extended notice periods before a rent increase becomes effective. Examples of jurisdictions having such ordinances include: San Francisco (90-days order — S.F. Mun. Code § 49.297); San Diego (Non-divisible and tenant in unit 60 days/ divisible and tenant in unit 30 days — S.D.C.C. § 54.0206); Los Angeles County (60-day order — L.A.C. § 47.14); the City of Los Angeles (30 days for increase below 10%/40 days for increase above 10% — L.A.M.C. § 151.08.A); San Jose (30 days for increase…from 5% to 10% / 60 days for increase over 10% — S.J.C.C. § 13.96.045). While the above jurisdictions’ ordinances specifically require a 30 or 60 day notice period, regardless of the percentage increase, most facility owners generally provide 30 days’ notice, even for minimal increases.
Rights and Protections for Tenants
If a tenant feels that an increase in their self storage rent is unreasonable, they may request a reduction. They have the right to submit a written request to the landlord to reconsider the amount, or they can just refuse to pay for the unreasonable requested increase, but they should start with requesting it be reduced. Tenants who do not agree with the increase may challenge it as being illegal if the landlord hasn’t followed the state laws for rent increase.
In California, self storage companies must have a written rental agreement and make it available to tenants before they have them sign it. Tenants should ask for one and look it over carefully. It should not require them to waive any legal protections. Once the self storage unit is rented to them, they shouldn’t be charged more than is in the rental agreement.
A storage unit tenant does have to pay the agreed amount even if the manager accepts a lesser amount. Tenants cannot assume that they can get away with paying less than what is on the rental agreement just because the self storage facility manager accepts it. They still have to follow the rental agreement. Anytime the self storage facility manager does agree to accept less than the amount on the rental agreement, the tenant should immediately have the difference noted in writing on the rental agreement and both parties should initial it to show the savings.
Tenants should keep track of the amount due and pick up their bills if it is not received on time. If the storage facility is a large chain facility, bill pay might be done online. Tenants should contact the office or manager if they haven’t received a bill before rent is due. Forgetting to pay the rent can result in late fees being assessed and the risk of losing the property in auction.
Tenants should not let the bill get past due. Storing a tenant’s property is something that the self storage owner is providing for a fee. If the fee isn’t paid regularly, the self storage company has the legal right to sell the tenant’s property in order to recoup the money they are owed.
Exemptions and Unique Situations
While the general rule for self storage rent increase requirements involve a mandatory advance notice, there are some exceptions, such as:
-The Lockout Exception. When tenants don’t pay rent, under Section 2170, facilities can restrict access to units. Tenants have 15 days (plus grace period) to pay rent and avoid a lien sale, but if they can’t and the said limitation period expires, landlords can still impose a lockout without making a rent increase notice to tenants, even if the lockout occurs in the middle of the month. This exception does not apply in lien sales. Facilities can begin charging delinquent tenants’ monthly rent at the time they send out the rent due notice (also known as the 14-day pay or quit notice).
-The Partial Month Exception. This is the easiest one , because you can bypass all rent increase notice requirements by raising the rent in the middle of the month, as long as you raise it to the generally agreed-upon adjusted rent rate for that unit size. There’s no way to bypass the 5% rule or the $10 rule, but you can still avoid going through the hassle of notice requirements.
-Garage or Separate Lease Exception. Finally, if you’ve rented out space that doesn’t fall under the regular self storage law, you can circumvent the regular notice requirements. Per Sections 2173 and 2328.9, if you dispose of parts or full vehicles or if you rented out parking spaces, you don’t have to worry much about having specific notice requirements. Similarly, if you’ve signed a lease in which the facility or garage space is beyond the ordinary single storage facility agreement, the regular Section 2171 notice requirements will not apply either.
Process for Disputing Increase Notices
Should a dispute arise regarding the propriety of a rent increase, a number of avenues are available for resolution. Tenants seeking to challenge a rent increase may take the matter before a rent board, if one exists. For example, the city of San Francisco runs the Residential Rent Stabilization and Arbitration Board ("Rent Board"), a city agency that oversees rules and procedures for challenging rent increases and other disputes arising between landlords and tenants in the city. The Rent Board also provides a mediation service called SF Mediation, which mediates disagreements between landlords and tenants informally, generally free of charge.
From a practical standpoint, tenants should generally attempt to work out disagreements with their landlords through the Rent Board or through mediation. Resorting to court in the first instance may be on the expensive side, and often results in the kind of acrimony that makes reconciliation impossible.
Helpful Hints for Tenants
If you have a verbal or written lease that states the lease term and rent amount, the landlord cannot increase the rent during the lease term if the lease prohibits increases. An example of a prohibition would be language that states rent cannot be increased for the duration of the lease. Further, if a tenant has a written lease and the landlord increases the rent without the tenant’s consent, the landlord is violating the lease agreement even if there is no anti-increasement provision in the lease. The tenant does not have to pay more than what is called for in the lease and can sue in small claims court to avoid paying the increase.
If a tenant wants to negotiate a rent increase with the landlord, the tenant should have an idea of what a reasonable increase would be. Landlords typically use prevailing market rates, often obtained from various sources, as a metric to determine whether their increase is reasonable. If a tenant thinks that a tenant’s proposed increase is unreasonable, the tenant should shop around for storage facilities within the area to get a sense of current prevailing market rates . Having a list of storage facilities with a range of rates around the facility’s location would be more persuasive in my opinion than getting one other facility with a similar (even if higher) rate, because having many data points will give the tenant a better perspective on the going rate for the area.
Practically, a tenant can tell a landlord that a proposed increase is too high, let the landlord know what the local prevailing rates are and then offer a counteroffer using the same market rates. This starts negotiation and typically leads to the parties resorting to the local prevailing rates instead of making the facility’s rate the overriding factor. Ultimately, even if the tenant and landlord can’t reach an agreement on rent increases, the tenant can refuse to sign a new lease, move out of the facility and in some cases stay if allowed by the landlord.
If the tenant believes that the landlord unlawfully increased the rent, the tenant can do any of the following: (1) refuse to pay the increase and remain at the facility, or (2) pay the increase but get back the overpayment from the landlord. Either way, the tenant will have to sue the landlord in a civil action to get the overpayment.