We aim to keep you up-to-date on the ever-changing legislative landscape. Earlier this year, Governor Gavin Newsom signed the bill into law California Bill AB 1482, also known as the Tenant Protection Act of 2019. This new law will limit rent increases across the state of California to 5% per year plus the local rate of inflation (CPI). The cities in California that already have rent-control laws on the books will be affected differently by AB 1482.
California Bill AB 1482will go into full effect as of January 1, 2020. The law is expected to affect 8 million tax payers.
If you have a residential property that serves as a rental property, you will be subject to follow this new law unless your property falls under another rent stabilization ordinance or if your property is exempt.
Properties that can find themselves exempt from this law are single family homes, townhomes and condominiums (the statue will apply though if title is held in a corporation or a real estate investment trust). LLC’s or property held in a trust are also exempt from the statute unless one of the managing members of the LLC is a corporation.
In general, if your property is subject to a local rent control ordinance, you would not be subject to the statewide statue. There is an exception which relates to “good cause” to evict. If the local rent control ordinance is less restrictive than the statewide statute, then the state law would control.
On the other hand, if you have always been exempt from your local rent stabilization ordinance, it does not automatically mean that you will also be exempt from this statewide law. The State Legislature did exempt property where a certificate of occupancy has been issued within the last 15 years.
Landlords need to be careful when determining if the property is subject to the statute. If your property received a certificate of occupancy 15 years ago, it would not be under rent control. However, in the following year it would be subject to the Tenant Welfare Statute.
Under AB-1482, property owners will still be able to evict tenants for the following reasons:
- Nonpayment of rent
- A breach of a material term of the lease
- Nuisance, waste, unlawful, or criminal activity
- Refusal to sign a written extension or renewal of the lease
- Assigning or subletting without the owner’s consent
- Refusal to allow the owner to enter the unit
- The owner moving themselves or family into a unit
- The owner plans to substantially renovate
- The owner is going out of business altogether
Read the complete bill here: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1482