Tenants find cost of plumbing repairs is in the pipeline

Question: I live in a 50-year-old, rent-controlled, six-unit, apartment building in L.A. The new owners bought this building at a bargain price knowing that it needed repiping. They now plan to do this expensive work but indicate that the tenants will be absorbing the cost for it through rent increases. Why are we paying for their property upgrade?

Answer: You are paying for some of the cost of the repiping because you will be the ones using it. Under the Los Angeles rent law, apartment owners are able to pass on to tenants one half of the costs of capital improvement work that they do on apartment units or buildings. They must pay for the other half themselves. Repiping is considered a capital improvement.

Capital improvement costs for a building improvement are divided among the tenants and amortized over five years (60 months). The L.A. rent law caps capital improvement rent increases at $55 per month, so no matter how much a job costs, your maximum rent increase is $55. It shouldn’t be that much.

According to Dave Scearce, the owner of Pacific Coast Copper Repipe, the price to replumb apartment units should range from $2,500 to $2,900 per unit, depending upon the number of bathrooms and other factors, meaning that your monthly rent increase should not hit the $55 cap even if the job costs $2,900 for your unit ($2,900 divided by 60 is $48.33 per month). Generally, you are not required to pay any of the costs of building maintenance, which are different from capital improvements. Building maintenance includes such things as patching the roof or unclogging a drain.

There are times when you are responsible for maintenance. If you put something down a drain that causes the clog, you are responsible to pay to get it unclogged. When your negligence or misuse causes the problem, you are required to pay to fix it.

Late fees can take effect the next day

Question: I live in Corona and I have a question about late fees. Are they a set amount or can they be a percentage of the monthly rent? Are they different in each city, county and state, or are they regulated federally? Also, what is the minimum amount of time the rent must be late before an owner can impose late fees?

Answer: Though it may be overdue, there is no local, state or federal law regulating the precise amounts or percentages of late fees. Federal law requires that they be reasonable. They should be reasonably tied to the expenses they generate for the owner, and they do vary depending upon the economy. For instance, during the ‘70s, when inflation was in the teens and interest rates were high, late fees that were 10% of the rent were not uncommon.

With today’s lower inflation and interest rates, 6% (on the high end) is more the norm. As for the minimum days the rent must be late before late fees are imposed, it is one day. Rent due on the first is late on the second.

The exception occurs when the rent due date falls on a weekend or holiday. Then the rent becomes due on the next business day.

The bright side of that rent increase

Question: I have been in my El Segundo apartment since 1996. The rent was $1,200 a month. For the first few years I got $50 annual rent increases. Then, the rent stayed at $1,350 for the next five years. Now the owner is increasing the rent by $200 per month to $1,550. Is this legal?

Answer: This is legal and you are ahead of the game. If the owner had increased the rent by $50 per year for the last five years, you would be paying $1,600 per month now. You also would have been paying higher rents for the last five years.

Postema is the editor of Apartment Age magazine, a publication of AAGLA, an apartment owners service group. E-mail your questions to aptlifeaagla@aol.com, c/o Kevin Postema, or mail to AAGLA, c/o Kevin Postema, 621 S. Westmoreland Ave., Los Angeles, CA 90005.