50% Rent Hike in 12 Years Not a Bad Deal

QUESTION: I rent a townhouse in Pasadena and I need to know what constitutes a valid reason for the landlord to increase the rent.

I’ve been a tenant here for over 12 years. In all that time the landlord has not made any property improvements to the building or to my unit, including my repeated requests for painting, which I have wound up doing myself.

At the same time, my rent has increased more than 50%. I have paid the rent increases but I believe there should be a limit. Is there one? If yes, what is it?

ANSWER: The market forces of the economy limit rental adjustments in Pasadena, and it would appear as if these forces have done a pretty good job of it in your situation.

According to the U.S. Bureau of Labor Statistics, the Consumer Price Index (CPI), or inflation, for all urban consumers in the Los Angeles-Anaheim-Riverside area has risen 61.2% from June, 1980, to June, 1992.

If the rent is 50% higher now than it was when you moved in 12 years ago, it has increased by 3.44% a year. Inflation has averaged 4% to 5% for the past 12 years.

As hard as it may be to believe, you are actually paying less rent now, in inflation adjusted dollars, than you were in 1980.

Code May Offer Way to Quiet Noisy Neighbor

Q: I live in Los Angeles and I’m hoping you can help me with a problem I’m having with the owner of the duplex in which I rent the downstairs apartment. My boyfriend and I have lived here for three years and had no problems until about a year ago, when a noisy neighbor moved into the upstairs apartment.

We have always requested that the owner install carpet, or some other kind of soundproofing, upstairs. Now we really need it. He is unwilling to install it.

Is there a state law that requires apartment and condo owners to install carpet on at least the bedroom floors of upstairs units?

A: There may be a solution to your problem.

Since 1972, the City of Los Angeles has written into its building code a requirement for sound insulation in residential buildings, including apartments.

Normal conversation yields a sound intensity of about 65 decibels. Under Los Angeles’ soundproofing code, the sound level in the unit would have to be reduced to about 15 decibels, which is about the sound level of rustling leaves. A freight train, by way of example, generates a sound level of about 1,120 decibels.

Start at the city’s Department of Building & Safety (B&S;) to determine whether the structure complies with the city’s soundproofing requirements.

According to Hank Hinman of Park Pacific Noise Control, the best way to proceed is to “write a letter to the B&S; Dept., Fourth Floor, City Hall, 200 N. Spring St., L.A. 90012, or phone (213) 485-3431. Indicate in the letter that you do not believe the structure meets the city code, Division 35, Sound Transmission Control.”

Most California cities other than Los Angeles rely upon the Uniform Building Code, which is similar to the Los Angeles code, for noise control.

Room Rentals Must Be Reported for Taxes

Q: We own a four-bedroom home in Pico Rivera. Since there are just the two of us, we have been renting out two of the bedrooms to tenants. We are wondering about the reporting of the rental income to the IRS and Franchise Tax Board. Do we report such income?

When they move out, we have to paint the rooms, which costs plenty. One man had an air conditioner in the bedroom and the room was full of water by the time he moved out. It took two months for the floor to dry.

Also, we have had lamps, blankets and pillow cases stolen from us, among other things. How do we handle that?

A: You must report the income from these rentals to the tax authorities. You should also report the expenses from them, which will adjust the income to a gain or a loss for the year.

According to Peter Kaplanis, an attorney who specializes in real estate law, “The IRS and FTB (Franchise Tax Board) provide special forms (called schedules) for reporting both the income and expenses from these rentals, both of which are classified as ‘passive’ (income and expenses), and receive special offsetting treatment as highlighted under the Tax Reform Act of 1986.”

Kaplanis said that the stolen possessions may also be categorized as another type of business loss and may be deductible as such. However, he said, you must first report and establish the business that suffered the loss.

As with any tax issues, you should check with your tax attorney or accountant for the specifics of your situation. “That’s particularly true because there is a host of new rules that apply to real estate income and losses under the TRA,” Kaplanis said.