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Soft Story Retrofit Financing & Cost Recovery Program

If you’re a property owner in Los Angeles, chances are you have heard about the mandatory seismic retrofits that need to be done on certain properties with soft story structures. In fact, all property owners should have received a notice to comply by now if your property needs to be retrofitted. If you have not, you should probably check the LADBS Permits & Inspection Report to confirm that your property doesn’t fall under the new ordinance.

The cost of completing the soft story retrofit is often a huge financial burden on property owners. Below are two ways to pay for the retrofitting.


In Los Angeles, the Seismic Retrofit Cost Recovery Program allows landlords to pass a maximum of 50% of the total seismic retrofit costs to the tenants. The increase is capped at $38 per month for 120 months. If the monthly amount approved exceeds $38, the time frame may be adjusted accordingly.

The work may begin no sooner than sixty (60) days after the landlord has served the tenant with: • Copy of the Plan • Notice of Primary Renovation Work • Summary of the provisions of the Tenant Habitability Plan • Permanent relocation form if the work will last thirty (30) days or more

Keep in mind that tenants have fifteen days from receipt of the notice to file an appeal. Within twelve months after finishing construction, the landlord may file an application for rent increase with the HCIDLA.


Recently, many property owners have turned to a new type of financing called Property Assessed Clean Energy (PACE). Established in 2008, this program has financed over $4 billion dollars worth of property improvement projects, including seismic retrofitting, energy efficiency changes, HVAC improvements, etc.

It is important to note that PACE Financing is not a loan. In fact, it is a non-ad valorem tax assessment that will show up on your property tax bill, which simplifies the repayment process. In order to qualify, the property must be evaluated by its current financial position, using the debt to coverage ratio. PACE financing is affected by the owner’s personal credit or finances. Not only can property owners use PACE to financing retrofitting, they can also use it to make other improvements around the property. The PACE website has a full list of items that may qualify.

For more information about both of these methods, please visit HCIDLA website and PACE website. As always, if you are interested in a FREE market evaluation of your property, please contact us at 818-915-9118 or send us an email.

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