AB 1482 passed which limits statewide annual rent increases and puts in place just-cause eviction protections for tenants.
The bill takes effect January 1, 2020, with a retroactive provision and will be in place for 10 years.
Here’s a simple overview for landlords…
1. Single family properties are exempt unless they are owned by corporations or institutional investors such as a REIT.
2. Annual increases limited to 5% + CPI (comes to about 8% total) on apartments more than 15 years old.
3. Tenants who have been in place for more than one year can only be asked to vacate upon documented just-cause actions such as failure to pay rent or violation of lease terms. Allowable exceptions are if owner plans to move into the unit, demolish the building, or renovate it. In this instance, a tenant must be provided compensation equal to one month’s rent (about 8% of one years’ rental income).
4. The bill provides that these provisions apply to all rent increases occurring on or after March 15, 2019. In the event that an owner increased the rent by more than 8% between March 15, 2019, and January 1, 2020, the applicable rent on January 1, 2020, shall be the same rent as of March 15, 2019, plus 8%. The owner is not liable to the tenant for any corresponding rent over payment.
In summary, it’s kind of business-as-usual for us as our Orange County property management company now just has to follow more rules. For landlords, they get to enjoy yet another way California is creating an unfriendly investing environment.