Warning About Rent Incentives

A recent ruling by the San Francisco Rent Board held that a rent reduction granted by a landlord to a tenant will be amortized over a twelve month period and will permanently reduce that tenant’s base rent. The upshot of this ruling is that:

LANDLORDS CAN NO LONGER GIVE ANY TYPE OF RENT CONCESSION FOR TO DO SO WILL HAVE THE EFFECT OF PERMENTLY REDUCING BASE RENT AND ANY RENT INCREASE IMPOSED ON ANYTHING OTHER THAN THAT REDUCED BASE RENT WILL BE UNLAWFUL.

THIS INCLUDES GIVING ONE OR MULTIPLE MONTHS FREE AT THE INCEPTION OF THE LEASE OR DURING THE LEASE TERM AS WELL AS GRANTING A REDUCTION IN RENT AT THE REQUEST OF A TENANT WHO IS EXPERIENCING FINANCIAL HARDSHIP AND CANNOT PAY FULL RENT.