Many laws in California cover landlords. Some recently passed rent control laws governing rent increases, evictions and other issues should have a major impact on the rental real estate industry.
The Tenant Protection Act of 2019 was intended to address California’s homelessness and housing crisis. It took effect at the beginning of this year and will stay in effect until 2030.
Landlords cannot increase the property gross rental rate over a 12-month period by the lower amount of one of two formulas. These are more than five percent plus the consumer price index or a 10 percent increase.
The CPI average has been near 2.5 percent. This indicates that there should be, on average, a 7.5 percent cap on how much rent can be raised.
The rental rate may not be raised over two increments over 12 months if the tenant was there for 12 months. All tenants must receive 90-day notice for rent increases over 10 percent even if the property is exempt from control.
Evictions are limited to prevent landlords from evading these restrictions. Landlords must renew leases unless there is just cause for nonrenewal such as payment default, a lease violation, criminal activity, illegal subrental and stopping the landlord from entering when allowed.
If there is just cause for eviction, landlords must notify the tenant through an eviction notice and allow them to correct the violation within a specified time. When the violation is not corrected, landlords can go to court to legally terminate the tenancy.
Landlords may evict for tenants for reasons that fall within the no-fault category. These include an owner or their direct family members seeking to occupy the property, that the property will no longer be rented, the owner intends to demolish or remodel the property, or a government orders the vacating of the property. Landlords must provide relocation assistance equal to one month rent or its waiver.
Rent control does not cover property built within the last 15 years, duplexes where the owner occupies one of its units, property in cities with stricter laws and single family homes unless these are owned by a real estate investment trust, a corporation or a LLC where at least one member is a corporation.
Other laws govern tenants who are in the military, section 8 housing and homelessness. An attorney can help landlords comply with rental laws and protect their rights.