Pasadena Rental Housing Board to Consider Escrow Account Rules for Tenant Relocation Assistance

The Pasadena Rental Housing Board (PRHB) will consider establishing detailed escrow account instructions at a meeting Thursday.

The board will also review potential amendments to eviction and rental registration rules. The meeting addresses implementation challenges that emerged since voters approved the city’s rent control measure.

An Agenda Report showed the board is scheduled to review recommendations from the Rent Stabilization Department, which wants to clarify procedures for handling relocation assistance payments. These payments are required when landlords evict tenants under just cause eviction protections.

The rental housing regulations stem from Measure H, a charter amendment approved by Pasadena voters on Nov. 8, 2022. The measure imposed rent control and just-cause eviction protections. It took effect Dec. 22, 2022, after the City Council certified election results.

Current regulations require landlords to provide relocation assistance when removing tenants. Qualifying reasons include necessary repairs requiring temporary vacancy and owner move-ins. Other reasons include permanent withdrawal from rental market and government orders. Rent increases exceeding 5 percent plus annual general adjustment also qualify.

The assistance must be paid in two installments. Fifty percent is due within 10 days of serving a written termination notice. The remaining 50 percent is paid at specified times depending on notice length.

The Rent Stabilization Department identified several areas needing clarification in just-cause eviction regulations. These include what constitutes proof of tenant vacation. They also include procedures for escrow disbursements for actual relocation expenses. The role of voluntary escrow accounts also needs clarification.

Current regulations reference escrow accounts maintained by the Relocation Agency. The department said the relocation agency lacks the ability to maintain such accounts. It’s now seeking direction on whether the department should serve as sole escrow option.

The board will also consider amendments to rental registration penalties. Current regulations allow tenants to file petitions for rent withholding. This applies when landlords fail to register their units. A hearing officer may authorize tenants to withhold rent payments into escrow.

However, the department also expressed concerns about potential consequences. Landlords may still file unlawful detainer actions against tenants who withhold rent, which could lead to evictions if tenants’ defenses prove unsuccessful.

Staff recommends the board consider establishing fines as penalties for registration failures, replacing the rent withholding process. The department could return with the city’s existing penalty and fine schedule.

The board adopted just-cause eviction regulations in April 2024. Rental registration regulations were adopted on June 26 last year. Three tenant petitions for rent withholding have been filed, and one of these is scheduled for a pre-hearing settlement conference on June 24.

The PRHB meeting is set for 6 p.m. Thursday in the City Council Chamber at City Hall.