Early in October of 2019, Governor Gavin Newsom signed into law several bills that will have an impact on the residential landlord industry in California. One of those bills, The Tenant Protection Act of 2019 (AB 1482), is truly a “game changer.”
AB 1482 has two main components – a rent control component and an eviction control component. The rent control component limits the amount a landlord can increase the rent on existing tenants to 5% per year plus the regional percentage change in the cost of living or 10% per year – whichever is less.
The eviction control component provides that landlords can only evict a tenant for the reasons specified in the ordinance – so called “just cause” eviction. Some of those reasons are based on the actions or omissions of the tenant, such as a tenant default in payment of rent or breach of the lease. The others apply when the tenant has done nothing wrong, but the landlord wishes to recover possession for reasons such as an intention to have a family member occupy the rental unit or to perform substantial remodeling. With respect to these “no fault” reasons, landlords must provide the tenant with a relocation payment or rent waiver in the amount specified in the statute.
Most rental units in the state will now be subject to The Tenant Protection Act of 2019, but there are exceptions. Exceptions include rental units built within the last 15 years, properties already subject to more tenant-friendly local ordinances, and properties eligible to opt-out where the landlord has provided a specified disclosure to the tenant.
Implementation of this bill will involve significant changes for most California landlords. It is therefore important that they seek appropriate legal counseling about whether the new law applies to them and, if so, what is newly required or prohibited.
Beyond The Tenant Protection Act of 2019, new state laws were enacted banning discrimination against Section 8 voucher holders, requiring longer advance notice of rent increases, lowering the limits on the amount of security deposits that can be demanded from active military, requiring that landlords accept Veterans Affairs housing vouchers, and barring discrimination against veterans or military personnel.
Whenever we have the opportunity to do so, we like to inform our residential landlord clients that they are participants in a heavily regulated industry. These new laws are merely an example of that; there are a host of laws and regulations that affect how residential landlords operate their businesses. Violations of some of the applicable laws or regulations can have severe legal and economic consequences for residential landlords and property managers. That is why it is imperative for residential landlords and property managers to establish an ongoing relationship with a competent California landlord-tenant lawyer.