Cal. Code Regs. tit. 25 § 7858

Current through Register 2024 Notice Reg. No. 50, December 13, 2024

Section 7858 - Lease and Occupancy Procedures

(a) Each household selected to occupy a unit in the rental housing development shall enter into a lease with the sponsor of the rental housing development. Such a lease shall be a standard form approved by the Department, including but not limited to the following terms:

(1) a tenancy from year to year, with a provision allowing the tenant to terminate the tenancy on thirty (30) days written notice to the sponsor or, in the case of cooperatives, terms to be approved by the Department,

(2) termination provisions in compliance with Section 7860,

(3) provisions relating to the annual recertification of the income of the tenant in an assisted unit in accordance with this section,

(4) provisions relating to security, cleaning and other deposits in accordance with law, and in the case of cooperatives, the downpayment,

(5) provisions requiring notice of approved rent increases pursuant to Section 7864.

(b) In the case of cooperative ownership, the sponsor shall have provisions for downpayments in accordance with the following:

(1) Downpayments as applicable to very low income households shall not exceed 2.5 percent of the prorated development cost for the unit, plus the equity appreciation at a rate approved by the Department.

(2) Downpayments as applicable to other lower income households shall not exceed 3.5 percent of the prorated development cost for the unit, plus the equity appreciation at a rate approved by the Department.

(3) The required cash contribution to be paid by an eligible household toward the downpayment at or before occupancy shall not exceed ten percent (10%) of the household's income over the preceding twelve (12) months.

(4) The cooperative may issue the tenant a loan equal to the difference between the downpayment and the cash contribution. The terms for such loan shall be approved by the Department, but in no case shall the total payments made during the year exceed the greater of ten percent (10%) of the original loan amount or one month's carrying charge determined at the most recent income recertification.

(c) The sponsor may establish reasonable rules of conduct and occupancy which shall be in writing, and given to each tenant.

(d) With respect to tenants of assisted units, the tenant's income shall be recertified once each year in accordance with the following procedure:

(1) The sponsor shall notify the tenant in writing thirty (30) days in advance of the impending recertification, requiring the tenant to submit to the sponsor a declaration of income within 30 days in a form approved by the Department; and

(2) The sponsor shall verify the accuracy of the declaration, certify the tenant's income accordingly and notify the tenant in writing of the certification and any resultant changes in the tenant's rent and right to occupy an assisted unit pursuant to subsections (e), (f), (g) and (h), and the tenant's right to appeal such determinations pursuant to Section 7862.

(e) Where the tenant in an assisted unit was a very low income household and on recertification the tenant's income exceeds:

(1) fifty percent (50%) of the area median income adjusted for family size but not the upper limit for lower income households, the tenant's rent shall be set no higher than twenty-five percent (25%) of the tenant's income including an allowance for utility costs in accordance with section 7806,

(2) the upper limit for lower income households, the tenant

(A) shall from the date of recertification pay rent equal to twenty-five percent (25%) of the tenant's income including an allowance for utilities, and

(B) shall have a right of first refusal where provided for in the regulatory agreement for any appropriate-sized, non- assisted unit in the rental housing development which becomes vacant within six (6) months of the date of recertification or their own unit if an appropriate-sized, non-assisted unit becomes occupied by an eligible household within six months. Where more than one tenant has such a right of first refusal the priority of each tenant's right of refusal shall be determined by lot, and

(C) shall be required to vacate the assisted unit no later than six (6) months from the date of recertification if the tenant's continued residency would cause a reduction in the number of assisted units occupied by eligible households in the development.

(f) Where the tenant in an assisted unit was a lower income household but not a very low income household and on recertification the tenant's income:

(1) falls below fifty-one percent (51%) of the area median income adjusted for family size the tenant shall pay rent pursuant to Section 7806(c)(1). When a vacancy occurs in an assisted unit in the rental housing development occupied until such vacancy by a household, with an income equal to or less than fifty percent (50%) of the area median income adjusted for family size, the tenant's rent shall be reduced to the amount set forth in Section 7806(b).

(2) exceeds the upper limit for lower income households, the provisions of subdivision (d)(2) shall apply.

(g) In case of cooperatives where the tenant in an assisted unit was a very low income household and on recertification the tenant's income exceeds:

(1) fifty percent (50%) of the area median income adjusted for family size but not the upper limit for lower income households, the provisions of 7858(e)(1) shall apply.

(2) the upper limit for lower income households but not in excess of ninety percent (90%) of the area median income adjusted for family size, the tenant shall from the date of recertification pay carrying charges equal to thirty-five percent (35%) of the tenant's income including an allowance for utilities.

(3) ninety percent (90%) of the area median income, adjusted for family size, the tenant:

(A) shall from the date of recertification pay a carrying charge equal to thirty-five percent (35%) of the tenant's income including an allowance for utilities but not to exceed the carrying charges of a nonassisted unit.

(B) shall have a right of first refusal where provided for in the regulatory agreement for any appropriate-sized, nonassisted unit in the cooperative which becomes vacant within twelve months of the date of recertification or their own unit.

(C) shall after twelve months pay carrying charges equal to the carrying charges for a equivalent nonassisted unit.

(h) In the case of cooperatives where the tenant in an assisted unit was a lower income household and on recertification the tenant's income:

(1) falls below fifty-one percent (51%) of the area median income adjusted for family size, the provisions of Section 7858(f)(1) shall apply.

(2) exceeds the upper limit for lower income households but is less than ninety percent (90%) of the area median adjusted for family size, the provisions of Section 7858(g)(2) shall apply.

(3) exceeds ninety percent (90%) of area median adjusted for family size, the provisions of Section 7858(g)(3) shall apply.

(i) In the case of cooperatives where the income of an existing member occupying an assisted unit exceeds ninety percent of the median income, the next comparable available unit shall be deemed an assisted unit.

(j) Except as specifically set forth in this subchapter, leases and landlord-tenant relationships shall be subject to California law.

Cal. Code Regs. Tit. 25, § 7858

1. Amendment filed 11-13-80 as an emergency; effective upon filing (Register 80, No. 46). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 3-13-81.
2. Certificate of Compliance transmitted to OAL 3-13-81 and filed 4-14-81 (Register 81, No. 16).
3. Amendment filed 10-25-82; effective upon filing pursuant to Government Code Section 11346.2(d) (Register 82, No. 44).
4. Editorial correction of subsection (d)(2) filed 11-2-82 (Register 82, No. 44).

Note: Authority cited: Section 50737, Health and Safety Code. Reference: Sections 50746, 50749, 50756 and 50767, Health and Safety Code.