On Tuesday, October 8, Governor Gavin Newsom signed Assembly Bill 1482, making California the third state in the nation to pass rent control legislation.  The new laws, collectively known as the “Tenant Protection Act of 2019” limits rent increases to 5% per year, plus inflation, until January 1, 2030 and prevents landlords from evicting tenants without just cause.

“The bills signed into law today are among the strongest in the nation to protect tenants and support working families,” said Governor Newson.  The law does not take effect until January 1, 2020 but retroactively applies to rent increases on or after March 15, 2019 to prevent landlords from raising rents before the cap goes into effect.

 

Rent Caps

Unlike rent control, which restricts the amount a landlord can charge a long-time tenant, California’s new law establishes a rent increase cap, a form of rent stabilization.  Under AB 1482, landlords must limit yearly rent increases on apartments built more than 15 years ago to no more than 5% plus annual inflation, or 10%, whichever is lower.

 

Just Cause Eviction

AB 1482 requires landlords to provide a “just cause” when evicting tenants.  The new law bans landlords from evicting residents for no reason, preventing them from removing tenants and filling the vacancy with a tenant willing to pay an increased rental rate.

 

Exceptions

There are numerous exceptions to California’s new rent control laws.  The rent cap does not apply to:

  • Properties less than 15 years old.
  • Properties regulated by the Costa-Hawkins Rental Housing Act.
  • Single-family owner-occupied homes, including a residence in which the owner-occupant rents or leases no more than two units or bedrooms, except when owned by a corporation or Real Estate Investment Trust.
  • A duplex in which the owner occupies one of the units.
  • Subsidized housing for persons and families of very low, low, or moderate income.

 

How Landlords Can Prepare New Rent Control Laws

Capping the amount that a landlord can increase rent is not a new concept, but its rapid rise in popularity among activists nationwide has put political pressures on states to take action.

 

It’s up to landlords and owners to prepare for these changes by ensuring an effective plan is in place to manage tenants and streamline your landlord duties.  You don’t have to do it all by yourself! Click Notices helps landlords automate and manage delinquent rent by providing a customized process that will save you time and money.