Facts: A residential tenant of an apartment complex was appointed resident manager by the landlord. The manager’s monthly rental fee was waived as compensation for their managerial services. During the manager’s employment, the rental fees for all other tenants in the complex increased annually. Several years later, the landlord relieved the manager of their management duties but the former manager continued to occupy their unit as a tenant. The apartment complex was later purchased by a new landlord. The new landlord served the former manager with a notice of rent increase, adjusting the rental fee to include all of the past annual adjustments during the manager’s former employment. The former manager refused to pay the adjusted rental fee, intending to limit their monthly rental payment to the amount they were charged prior to their employment.
Claim: The new landlord sought the former manager’s payment of the increased rental fee, claiming they were entitled to collect the higher rental fee based on all previous adjustments since the local Rent Stabilization Ordinance (RSO) permits a landlord to set the rate for a previous resident manager who continues to rent a dwelling after their employment by adding all annual adjustments accrued during their employment.
Counter claim: The former manager claimed the landlord was not permitted to calculate the new rental amount based on all annual adjustments which occurred during their employment since the increased rental fee violates the RSO, which does not permit retroactive or cumulative annual adjustments.
Holding: The Supreme Court of California held the landlord was entitled to base the rental fee increase on all past annual adjustments since the RSO permits a landlord to adjust a former resident manager’s rental fee to include any annual adjustments implemented during the manager’s employment. [1300 N. Curson Investors, LLC v. Drumea (April 4, 2014)_C4th_]