Common use of Substantive Grounds For A Rent Increase Application Clause in Contracts

Substantive Grounds For A Rent Increase Application. A rent adjustment shall be approved in order to provide a just and reasonable return and maintain net operating income in accordance with the following criteria: 1. Fair Net Operating Income: Fair return applications shall be considered according to the following guidelines: a. Net Operating Income: Net operating income equals gross income minus operating expenses. x. Xxxxx Income: Gross income equals the following: (1) Gross rents, computed on the basis of one hundred percent (100%) occupancy, using current rent levels, including the current year annual general adjustment. To the extent that the annual general rent adjustment was not fully implemented or received during the entire current year, it shall be annualized to reflect the total annual gross rents to which the property owner is already entitled, plus (2) Interest from security and cleaning deposits (except to the extent that said interest is payable to the tenants), plus (3) Income from services, garage and parking fees, plus (4) All other income or consideration received or receivable for or in connection with the use or occupancy of rental units and housing services, minus (5) Uncollected rents due to vacancy and bad debts, to the extent that the same are beyond the landlord's control. Uncollected rents in excess of five percent (5%) of gross rents shall be presumed to be unreasonable and shall not be deducted from gross rents unless it is established that they result from circumstances that are likely to continue to exist in future years. c. Operating Expenses; Inclusions: Operating expenses shall include the following: (1) Rent increase application filing fees (if the application is found to be meritorious); (2) Annual registration fees to the extent that they cannot be passed through to tenants, pursuant to resolution of the city council; (3) License fees, real property taxes, utility costs, insurance; (4) Normal and reasonable repair and maintenance expenses for rental units and the building or complex of buildings of which the building is a part, including common areas, which shall include, but not be limited to, painting, normal cleaning, fumigation, landscaping, repair and replacement of all standard services, including electrical, plumbing, carpentry, furnished appliances, drapes, carpets and furniture. Owner performed labor shall be counted at reasonable rates established by the cost of obtaining similar services in and around the city, provided the applicant submits documentation showing the date, time, and nature of the work performed by the property owner; (5) Allowable legal expenses, and management expenses (contracted or owner performed), including necessary and reasonable advertising, accounting, other managerial expense. Management expenses are presumed to be six percent (6%) of gross income, unless established otherwise. Management expenses in excess of eight percent (8%) of gross income are presumed to be unreasonable and shall not be allowed unless it is established that such expenses do not exceed those ordinarily charged by commercial management firms for similar residential properties; (6) Attorney fees and costs incurred in connection with successful good faith attempts to recover rents owing and successful good faith unlawful detainer actions not in violation of applicable law, to the extent the same are not recovered from tenants; (7) Building improvements, the cost of any improvement mandated by any government statute, rule or regulation enacted after January 1, 2017, major repairs, replacement and maintenance, except to the extent such costs are compensated by insurance proceeds, subject to the condition that said improvements shall be amortized in years according to the schedule below, provided that the hearing officer may use seven (7) years for unlisted items, or such other period of time as is determined by the hearing officer to be reasonable. Air conditioner 10 Appliances, major (other than those specifically listed) 7 Cabinets 10 Dishwasher 7 Doors 10 Dryer 7 Drywall 10 Electric wiring 15 Elevator 20 Fencing 10 Fire alarm system 10 Fire escape 10 Flooring 7 Garbage disposal 7 Gates 10 Gutters 10 Heating 10 Insulation 10 Locks 7 Paving 10 Plumbing 10 Pumps 10 Refrigerator 10 Roofing 10 Security system 10 Stove 10 Washing machine 7 Water heater 7 (8) Reasonable expenses, fees and other costs for professional services reasonably incurred in the course of successfully pursuing or defending rights under or in relationship to this chapter.

Substantive Grounds For A Rent Increase Application. A rent adjustment shall be approved in order to provide a just and reasonable return and maintain net operating income in accordance with the following criteria: 1. Fair Net Operating Income: Fair return applications shall be considered according to the following guidelines: a. Net Operating Income: Net operating income equals gross income minus operating expenses. x. Xxxxx Income: Gross income equals the following: (1) Gross rents, computed on the basis of one hundred percent (100%) occupancy, using current rent levels, including the current year annual general adjustment. To the extent that the annual general rent adjustment was not fully implemented or received during the entire current year, it shall be annualized to reflect the total annual gross rents to which the property owner is already entitled, plus (2) Interest from security and cleaning deposits (except to the extent that said interest is payable to the tenants), plus (3) Income from services, garage and parking fees, plus (4) All other income or consideration received or receivable for or in connection with the use or occupancy of rental units and housing services, minus (5) Uncollected rents due to vacancy and bad debts, to the extent that the same are beyond the landlord's control. Uncollected rents in excess of five percent (5%) of gross rents shall be presumed to be unreasonable and shall not be deducted from gross rents unless it is established that they result from circumstances that are likely to continue to exist in future years. c. Operating Expenses; Expenses; Inclusions: Operating expenses shall include the following: (1) Rent increase application filing fees (if the application is found to be meritorious);meritorious); (2) Annual registration fees to the extent that they cannot be passed through to tenants, pursuant to resolution of the city council;council; (3) License fees, real property taxes, utility costs, insurance;insurance; (4) Normal and reasonable repair and maintenance expenses for rental units and the building or complex of buildings of which the building is a part, including common areas, which shall include, but not be limited to, painting, normal cleaning, fumigation, landscaping, repair and replacement of all standard services, including electrical, plumbing, carpentry, furnished appliances, drapes, carpets and furniture. Owner performed labor shall be counted at reasonable rates established by the cost of obtaining similar services in and around the city, provided the applicant submits documentation showing the date, time, and nature of the work performed by the property owner;owner; (5) Allowable legal expenses, and management expenses (contracted or owner performed), including necessary and reasonable advertising, accounting, other managerial expense. Management expenses are presumed to be six percent (6%) of gross income, unless established otherwise. Management expenses in excess of eight percent (8%) of gross income are presumed to be unreasonable and shall not be allowed unless it is established that such expenses do not exceed those ordinarily charged by commercial management firms for similar residential properties;properties; (6) Attorney fees and costs incurred in connection with successful good faith attempts to recover rents owing and successful good faith unlawful detainer actions not in violation of applicable law, to the extent the same are not recovered from tenants;tenants; (7) Building improvements, the cost of any improvement mandated by any government statute, rule or regulation enacted after January 1, 2017, major repairs, replacement and maintenance, except to the extent such costs are compensated by insurance proceeds, subject to the condition that said improvements shall be amortized in years according to the schedule below, provided that the hearing officer may use seven (7) years for unlisted items, or such other period of time as is determined by the hearing officer to be reasonable. Air conditioner 10 Appliances, major (other than those specifically listed) 7 Cabinets 10 Dishwasher 7 Doors 10 Dryer 7 Drywall 10 Electric wiring 15 Elevator 20 Fencing 10 Fire alarm system 10 Fire escape 10 Flooring 7 Garbage disposal 7 Gates 10 Gutters 10 Heating 10 Insulation 10 Locks 7 Paving 10 Plumbing 10 Pumps 10 Refrigerator 10 Roofing 10 Security system 10 Stove 10 Washing machine 7 Water heater 7 (8) Reasonable expenses, fees and other costs for professional services reasonably incurred in the course of successfully pursuing or defending rights under or in relationship to this chapter.