Real Estate:

On the governor’s desk ... statewide rent control

By Al Ricci

Assembly Bill 1482 has passed the California State Assembly and the Senate, and by the time you read this article, it will be signed into law. If you are a landlord or a tenant, this may have an impact on your budget.

The bill prohibits landlords from raising rents more than five percent, plus local inflation, in a 12-month period. Most landlords raise their rents about 2.5 percent per year as an average in California, so the bill, designed to prevent rent gouging and egregious increases, sounds like it will not affect many people. Single-family homes, condos and owner-occupied rental units, and any property built within the past 15 years, are exempt from this bill. Sound fair? Read on.

If you are a landlord and you have not raised your rent for years, it is too late to raise it more than the five percent, plus inflation. (Let’s say seven percent now, because the bill makes a rent increase over that amount retroactive back to March 2019.) Any rent increase over the cap will be rolled back effective Jan. 1, 2020.

Landlords may only evict tenants based on “just cause.” There is a list of 15 reasons, either “at fault” evictions, including nonpayment of rent, criminal activity, refusal to allow entry, or a material breach of a term of the lease. “Just cause” can also be “no fault,” which means that the tenant has not breached the lease, but is asked to vacate for various reasons, including withdrawing the property from the rental market or substantial remodeling. A just cause eviction only applies to tenants that have been in a property for 12 months or more, and requires the landlord to pay at least one month’s rent, or more, depending on the circumstances. 

The law goes into effect Jan. 1, 2020, and expires after 10 years. City rent control rules supersede the state law.

There are many other details of this legislation not addressed in this article, and I would encourage landlords to contact your realtor, property manager or the Apartment Owners Association for further details. The bill applies if the property has two or more units, unless the landlord lives on the property. Take the time to understand and comply with this rent control bill. It is referred to as the Tenant Protection Act of 2019.         

October 2019