On October 8, 2019 Governor Gavin Newsom signed a statewide rent control bill, AB-1482 – Tenant Protection Act of 2019, creating stricter limitations on landlords in an effort to further protect California tenants. These changes can be confusing, but there here are the main components you need to understand regarding AB-1482 and what it means for you. You can view the entire text of the newly passed bill at: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1482
1. Rent control
This law limits landlords to an annual rent increase of 5% plus the rate of inflation (capped at 10%) Standard leases may already include an annual rent increase of 1-3% to adjust for inflation https://www.usinflationcalculator.com/inflation/current-inflation-rates/ https://www.bls.gov/cpi/. Generally, inflation in California sits around 2.5%. These rent control provisions apply to all rent increases occurring on or after March 15, 2019. The bill would provide that in the event that an owner increased the rent by more than the amount permitted by AB 1482 – between March 15, 2019, and January 1, 2020, the applicable rent on January 1, 2020, would be the rent as of March 15, 2019, plus the maximum permissible increase. The bill does state that the landlord is not be liable to the tenant for any corresponding rent over-payment during this time period.
2. Just cause for eviction
Once a tenant has lived in a unit for at least 12 months, landlords must provide just cause to evict a tenant from their property. To provide just cause, landlords must be able to show a specific reason such as nonpayment of rent, violation of lease, criminal activity, or refusing to allow the owner inside the property.
Landlords may also choose to evict for a no fault just cause, such as the owner planning to move back in or renovate the property. If they wish to evict a tenant for one of these reasons, they must contribute to the tenant’s relocation by directly paying them one month’s rent, or waiving payment for the final month of tenancy.
All landlord’s and property owners should be aware of the new requirements that must be followed in order to give proper notice to tenants when terminating for cause.
3. Single family homes
Single family homes are excluded from AB 1482, unless the home is owned by a corporation (or an LLC in which at least one member is a corporation). AB-1482 affects all properties with two or more units, unless the owner lives at the property.
4. New construction
Buildings constructed within the last 15 years are exempt from this law. Many people fear that rent control will discourage new housing in California, further contributing to the housing crisis. This exemption is an attempt to proactively address this concern.
5. Local laws take precedence
Some cities such as San Francisco, Berkeley, Oakland and Los Angeles already have local measures regarding rent control. These, as well as any new local restrictions, may continue to establish even stricter laws or rent caps.
6. Effective until 2030
The bill will go into effect on January 1, 2020, and rents will be rolled back to March 15, 2019. The bill will repeal these provisions as of January 1, 2030, at which point the issue of tenant protection during the housing crisis will be reevaluated.
California Governor Signs AB-1482 Statewide Rent Control Ordinance
Assembly Bill 1482 – was signed into law less than a year after California voters decisively rejected a ballot initiative that would have allowed cities and counties to impose much stricter versions of local rent controls. Opponents of AB 1482 said the bill’s primary author, Assemblyman David Chiu (D-San Francisco), was going against the will of the voters. “This bill is an end-run by the author because the proposition for rent control failed,” Assemblywoman Melissa Melendez (R-Lake Elsinore).
Whatever your feelings are with regard to rent control, one thing is for certain, all landlords and property owners need to be aware of the new requirements established by AB 1482 and have a plan to address them.
Tierney Law Group’s attorneys are experienced landlord-tenant litigators and are well versed with the new requirements of AB 1482. Contact us today for a consultation. Contact Us