I am a tenant, just like you. In 2016, my landlord served each tenant in my building with a notice of inspection related to an appraisal. Usually, an appraisal signals either a property sale or an appraisal to secure a loan for a property improvement. Subsequent to the actual appraisal, we received a notice that the exterior of the building would be repainted. Since the exterior paint was a very unattractive pink, the new Malibu beige and contrasting brown trim was welcome from an aesthetic perspective. But, then, I wondered would there also a petition from the landlord to the rent board to pass along the capital improvement costs to the tenants. Indeed, was painting the building exterior a "benefit" to the tenants or to the landlord (e.g. increases the marketability of the building)?
We waited and heard nothing. But today, each tenant listed on each lease for every unit in our building received a notice from the rent board by mail concerning our landlord's petition to pass the capital improvement costs along to the tenants. There is a two-year time period dating from the date of the capital improvement in which a landlord can petition the board to pass along the improvement costs as a rent increase to the tenants.
See: http://www2.oaklandnet.com/oakca1/groups/ceda/documents/agenda/oak063313.pdf
A tenant or a landlord can download (click here) an Excel file that the landlord is required to use in calculating the rent increase based on capital improvements.
In Oakland, only 70% of the capital improvement costs for the ENTIRE building can be passed on to the tenants. So, for instance, if the capital improvement cost was $10,000, only $7,000 can be passed along to the tenants. To this $7,000, there is an "amortization interest" that is added which is currently about 3.8%. The amortization period is different for different capital improvements. In our case, exterior building paint is amortized over 5 years. Thus, when I entered the numbers, the monthly rent increase per unit spread out over 5 years (or 60 months) was $15.40 per unit. Of course, this amount is on top of annual rent increases (if any) and/or banked rent increases.
Our landlord's petition was filed in mid-January 2018 and received on April 21, 2018, a testament to how backlogged the Oakland Rent Adjustment Board really is. The hearing on the petition is scheduled for July 2018. My landlord has been fair to me, thus far. And, I hope that this will continue but I wondered why, when I saw him in February 2018, he asked me how I liked the new colors to the building exterior. Whether the building is pink or a more fashionable Malibu beige, there are no direct benefits to me (at least how I see it.) I am more concerned about the safe functioning of the gas furnace, the plumbing leaks, and the recent burglary of my neighbor's apartment when she was (thankfully) away.
