Rent Control for Landlords - All You Need to Know.
AB 1482 has passed in the California legislature. It is not yet law, but Governor Newsom has signaled his approval of the bill and is expected to sign it. Take some time to review these important changes.
Quick Summary of the law and C.A.R.’s Lease Addendum Rent Cap
Rent increases are capped at 5 percent plus inflation, or up to a hard cap of 10 percent, whichever is lower. All rent increases since March 15, 2019 will count toward the rent cap, and if above the permissible rent cap, will have to be rolled back effective January 1, 2020.
Landlords may only evict for “just cause.” There is a list of 15 reasons. The just cause reasons are divided into two categories:
“At fault” termination of tenancy is generally based upon a tenant’s breach of the lease, among other reasons, and does not require the payment of relocation assistance.
“At fault” reasons include non-payment of rent, nuisance, criminal activity, refusal to allow entry, and breach of a material term of the lease.
“No fault” termination of tenancy is allowed when the tenant has not breached the lease and will require the landlord to pay one month’s rent in relocation assistance.
“No fault” reasons include owner occupancy, withdrawal from the rental market, substantial remodeling and compliance with government order to vacate the property,
Just cause eviction only applies to tenants who have been continuously and lawfully occupying the property for 12 months.
Exempts single family properties and condos if:
Notice of the exemption is provided to the tenants and;
The owner is not a REIT, a corporation, or an LLC where an owner is a corporation
Other exemptions include:
Housing that has been issued a certificate of occupancy within previous last 15 years
Owner occupied duplexes
Owner occupied single-family properties renting no more than two bedrooms including Accessory
Dwelling Units (“ADU”s). (This exemption applies only to just cause but not the rent cap).
CAR’s Rent Cap and Just Cause Addendum (Form RCJC)
What do I need to provide to my tenants?
CAR’s new “Rent Cap and Just Cause Addendum” (Form RCJC) – available in December pending approval of the Standard Forms Advisory Committee.
When do I provide it?
It needs to be provided by January 1, 2020.
My tenant is month to month. Does that matter?
Yes. For month to month tenants, the addendum should be incorporated into the rental agreement by providing the notice by a change in terms of tenancy. Use Form “Notice of Change in Terms of Tenancy” (Form CTT).
What about leases?
If your tenant is on a lease, then you’ll provide the addendum as a stand-alone notice.
What needs to be done for new or renewed tenants?
For all tenants signing a new lease or rental agreement or a renewed lease or rental agreement after January 1, 2020, the addendum must be included.
What if the tenant whose lease has expired refuses to sign a new rental agreement with the addendum?
If the lease has expired after January 1, 2020, the owner may choose to evict on this basis. Or the owner may simply allow the tenant to go month to month and then incorporate the addendum into the rental agreement by delivery of a notice to change terms of tenancy (Form CTT). Do not, however, sign a new or renewed lease of rental agreement without the addendum.