Berkeley Group Living Accommodations and Mini-Dorms

There is a special place in our hearts for Berkeley. We love the open space and the wonderful ethnic diversity and culture of this college town. As a bit of trivia, it is also our founding attorney’s alma mater.

Berkeley also presents enormous opportunity for property owners, given the burgeoning demand for rental housing and not enough units to accommodate the demand. With opportunity comes legal risks, and many landlords are renting to students without a clear understanding of the legal issues that may arise.

An emerging trend we see is a “rent-by-the-bed” scenario in which owners may have two or three leases per bedroom. This business model maximizes the revenue stream per unit while offering a variety of co-living arrangements that typically result in more affordable housing for students. Essentially, landlords will pack as many students as possible into the property.

Before taking all of that rent to the bank, the first question housing providers have to ask is whether the building has proper zoning for these types of hybrid living quarters. 

Berkeley’s zoning code restricts how many unrelated individuals can live together in a single dwelling unit, depending on the zoning district.

Every September of each year, owners of group accommodations, mini-dorms, and co-ops are required to register with the city with the contact information of the owner, the responsible resident overseeing the property, and the property manager, if applicable. If the contact information changes, the city must be apprised of the update.

Group living accommodations (GLAs): Buildings or units occupied by individuals of separate households, characterized by separate sleeping rooms without individual kitchen facilities, and containing congregate dining facilities or rooms. Some buildings may be exempt, including owner-occupied properties, fraternities and sororities, and operatives under the same protocols outlined by the Berkeley Municipal Code Chapter 13.42.

Mini-Dorms: These are buildings in residential districts that are occupied by six or more adults. Owners are required to designate a “responsible resident” tasked with a host of responsibilities outlined in a Compliance Agreement.

If the owner has more than 15 residents, or if they own more than one mini-dorm, a property manager must be hired. The property manager need not live on site, but they do have to be authorized to respond to complaints about the property at all times.

Action items for owners of GLAs and Mini-Dorms

Be transparent: Owners of GLA units must get in good graces with the city by obtaining an issuance of use permit from the Planning Department. Any exempt units are required to be registered with the Neighborhood Services Code Enforcement Unit (NSCEU).

Hiring a property manager: If the owner of a GLA/Mini-Dorm has more than 15 students residing in the premises, or if the owner owns multiple such parcels, a property manager must be retained. Some of you may or may not know that Daniel Bornstein is the broker of record for Bay Property Group, a full-service property management company that is dedicated to protecting and optimizing the real estate investments of clients while also taking great care of renters. Our property management arm is happy to assist in all aspects of renting to Berkeley students.

Renting out beds? There can be potential downfalls to filling a unit to capacity. 

Those Berkeley housing providers who are looking to pack in students like a can of sardines should recognize that there are challenges when encountering problematic tenants. 

Let’s say a landlord has a single flat with four bedrooms. Thereafter, it is converted to a boarding house, and the landlord now has 4 separate tenancies. If the rental relationships sour, the landlord has four separate evictions, each having its own time, aggravation, and costs to evict bad actors. Also, recognize that the Rent Board requires housing providers to register each bed as a rental unit. Whereas landlords have one registration fee on a 3-bedroom unit, they now have six registration fees if each of those rooms are occupied by two individuals. 

We would normally frown upon these types of co-living arrangements and prefer that tenants have a single lease, but in Berkeley, it may be an attractive option for owners to ignore this conventional wisdom because of the sheer demand of students who need a place to lay their head. 

Just understand that this may come with risks when there are undesirable tenants. Many exuberant landlords are happy to welcome in new student tenants with no inkling of how to remove them when the rental relationship fails. Keep in mind the “just cause" reasons to evict.

More issues abound.

With a steady flow of Berkeley students, rentals are not likely to sit vacant for long, but this consistent tenant pool is a double-edged sword. With the ebb and flow of tenants, there are concerns about subletting and swapping out roommates. Whenever there are co-living arrangements, rental relationships can be muddled, with some questions as to who is responsible for what. Owners can find themselves in a game of “musical chairs,” where they do not know who is living in the rental unit.

We’ll also have to respond to any parties that interfere with the quiet enjoyment of neighbors or result in property damage that exceeds normal wear and tear. Our office is well-acclimated to the rules surrounding nuisances.

With tenants typically unable to produce evidence of a stellar credit or rent history, it is commonplace for their parents to become a guarantor to ensure timely rent payments. There are specialized notice requirements to avoid the possibility that the co-signer claims that he or she is entitled to possession of the unit.

Add in security deposit accounting, rent control regulations that limit how much rents can be raised, fair housing laws, along with parking and trash issues, and you can see why it makes sense to be tethered to a law firm that practices landlord-tenant law on a daily basis. We are not discouraging landlords from group-living arrangements, but we want them to know that it is not a panacea that comes with legal risks best journeyed with proper counsel.