California Lawmakers Pass Statewide Rent Control
November 16, 2019
When our last newsletter went out in August, we wrote about the probability of seeing a renewed rent control battle in California for the 2020 election. The stage was being set, as the sponsor of 2018’s failed Prop 10 rent control measure had just been cleared to begin collecting the signatures needed to place a similar measure on the 2020 ballot. However, to the surprise of many, CA lawmakers beat voters to the punch and managed to pass a state-wide rent control bill on their own, leaving no need for another expensive and protracted political campaign.
AB 1482, which narrowly passed through the Assembly floor just before the May legislative deadline, eventually cleared both houses and was signed into law by Governor Newsom in October. The bill , which will take effect Jan. 1, 2020, will limit rent increases in California to 5% plus the local rate of inflation. Also included in the bill is a provision that will require landlords to show “just cause” – such as failure to pay rent – when evicting tenants who have lived in their units for at least a year. These tenants will also be entitled to the opportunity to “cure” their violation prior to eviction. And if a landlord wants to evict a tenant in order to convert their rentals to condos or “substantially” remodel the property, they will have to pay relocation fees equal to one month of rent.
The bill will apply to all multifamily housing in the state that is at least 15 years old, as well as to rental houses and condos owned by corporations or real estate investment trusts. To further complicate things, the 15 year marker is a rolling date, so units built in 2006 will be exempt when the bill takes effect in 2020, but will be subject to rent control in 2021 when they turn 15 years old. The bill will not apply to any owner-occupied duplexes.
PLEASE NOTE: if you are a landlord or tenant in Redwood City, AB 1482 has essentially already taken effect. Redwood City has joined a small group of California cities in passing an “urgency ordinance”, providing renter protections similar to those laid out in AB 1482 from now until the bill takes over in the new year. This was done to keep landlords from preemptively evicting tenants or imposing steep rent increases knowing they wouldn’t be able to do so after this year. To my knowledge, Redwood City is the only Bay Area city to pass an urgency ordinance at the time of this writing.
While our stance on rent control remains the same, the law is the law. We will do our best to inform our clients of the new regulations, and can assure that all of our tenants will receive proper notification as well. If you are a rental property owner and are unsure how this bill will affect you, feel free to give us a call and we will provide you with the appropriate resources.