Landlords: know your rights.
Your most important right under rent control is a fair return. It’s a constitutional right.
Rent control limits how fast your rents can rise. But it also gives you rights — ways to address the financial strain those caps have put on your building. The most important is the right to a fair return, guaranteed by the U.S. and California Constitutions. When your building’s income falls short, a fair return petition is how you get it back — and we prepare and file them.
Your right to a fair return
Why every rent control law includes a fair return guarantee
California courts have held for decades that rent control is constitutional only if it allows owners a fair return on their investment (Birkenfeld v. City of Berkeley, 1976; Kavanau v. Santa Monica Rent Control Board, 1997). That’s why rent-controlled cities in California — including Pasadena and Los Angeles — provide a fair return petition process.
The petition isn’t a loophole. It’s the part of the law that makes the rent cap legal. It’s the process for seeking the increase needed to restore a fair return.
Signs you may be owed an increase
Has your building fallen behind?
- Insurance jumped — repriced or non-renewed after the 2025 fires
- You replaced a roof, plumbing, windows, water heaters or electrical — qualifying capital work may be recoverable under your city’s rules, including applicable interest
- Operating costs outran the annual cap — water, sewer, trash, repairs and labor
How it works
Fair return isn’t a feeling. It’s a number.
Fair return isn’t based on what your building is worth or what the market would pay in rent. It’s based on your building’s net operating income — rent minus operating costs.
Each city uses a starting year and its own formula to assess a fair return, including how inflation is taken into account. If your income hasn’t kept pace under that formula, the calculation identifies the increase needed to close the gap. It’s an objective test: it turns on what your income and expenses actually did — not on opinions or politics.
What a successful petition does
Higher rents. Higher cash flow. A more valuable building.
A permanent rent increase.
It becomes part of each unit’s rent, and every future annual increase builds on it.
Higher cash flow.
The increase goes straight to net operating income — and for owners with a mortgage, the percentage gain in cash flow after debt is even larger.
Higher building value.
Buildings are valued on net operating income. At the same cap rate, a 14% increase in net operating income means about a 14% increase in value.
How we work
Three steps. No cost to find out.
Book a call.
A short, no-obligation conversation about your building.
Get a free Summary of Findings.
We analyze your rent rolls, expenses and capital work, then show you what a petition could yield before you decide anything.
We build and file your petition.
We organize your records, prepare the petition, serve tenants, file with the city and represent you through the hearing. Our fee is contingent on success, with a small upfront fee for hard costs like printing and mailing.
Paragon Advisory Partners
Who we are
Anthony Edson, Partner
Anthony Edson brings a Wall Street and private equity background to Paragon Advisory Partners. He has extensive experience helping property owners understand financial challenges, evaluate opportunities and make informed decisions about their investments.
Wes Nichols, Partner
Wes Nichols is the founder of Paramount Property Tax Appeal. He has extensive experience helping property owners navigate complex property-related matters, with a practical focus on understanding their options and protecting the long-term value of their assets.
Paragon Advisory Partners
Where we work
We prepare fair return petitions for owners of rent-stabilized properties under Pasadena’s rent control law (Measure H) and Los Angeles’s Rent Stabilization Ordinance (RSO), and can advise on other California jurisdictions. Each city’s rules, starting year and deadlines are different — we’ll tell you exactly what applies to your building.
Download our Pasadena briefing
The full PDF explains fair return under Pasadena’s rent control law (Measure H), includes every Pasadena ZIP code, and walks through the calculation and an illustrative ruling.
A few common questions
Before we talk
What should I send for the free Summary of Findings?
To get started, email these three things to info@pgnfr.com:
- Rent rolls for 2021 and 2025, with the bedroom count for each unit
- Operating expenses for 2021 and 2025; a P&L or expense summary is fine
- Capital work from 2021 through 2025: what was done, when, what it cost, and which units benefited
That’s all we need for your free Summary of Findings. Missing something? Send what you have. If you decide to file, we’ll then gather the bills, invoices and proof of payment the city requires and organize them into your petition’s verification folder.
I bought the building after 2021, or didn’t own it then. Can I still file?
Yes. Fair return looks at the building’s numbers, not who owned it. What you paid and your loan do not enter the calculation. We help reconstruct the 2021 figures from the prior owner, the city’s rental registry and other records; estimates are allowed. In Pasadena, the May 17, 2021 rollback rents are a good starting point.
When is the verification folder assembled?
The verification folder is assembled after you engage us, not for the free review. Once you engage us, we work with you to collect the supporting documentation required for your petition.
Does my mortgage count?
No. The test measures how the building operates, not how it’s financed.
What does it cost?
The analysis is free. If you file, our fee is contingent on success, with a small upfront fee for hard costs like printing and mailing.
How long does it take?
It varies by city. In Pasadena, expect several months from filing to a decision.
Know your rights.
See your numbers.
Book your free analysis. A short conversation about your building, with no obligation.
Anthony Edson, Partner Wes Nichols, Partner (888) 804-4223 info@pgnfr.com