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Prepared By: Melissa C. Marsh, Los Angeles Landlord-Tenant Attorney
Written: September 2019 - Last Updated: August 2020  

California State Wide Rent Control and Relocation Assistance Enacted
California Tenant Protections & Relief Act

This September (2019), the California legislature approved a statewide rent-cap and relocation assistance bill (A.B. 1482) known as the Tenant Protections and Relief Act, and Governor Gavin Newsom has said he will sign it The new law in effect caps annual rental increases for all multi-unit dwellings built before 2005 at 5% plus the rate of inflation and prohibits California landlords from evicting a tenant without “just cause” absent the payment of relocation expenses.

The bill's limits on rent increases and required relocation assistance payments does NOT apply to residential properties subject to a local rent stabilization ordinance requiring just cause termination adopted on or before September 1, 2019 that is more protective than the provisions below such as West Hollywood’s Rent Stabilization Ordinance or Santa Monica’s Rent Stabilization Ordinance. The provisions of this bill will apply and/or amend the less stringent rules in effect for multi-unit dwellings in Beverly Hills, Glendale, Long Beach, Los Angeles, Inglewood, and Pasadena .

California Annual Rent Increase Limited to about 5% for 2020 (7.9% in 2019) on all California multi-unit dwellings built before 2005.

Effective as of March 15, 2019 (yes March 15, 2019), the owners of multi-unit residential dwellings built prior to 2005 that are NOT subject to a local rent control ordinance are prohibited from increasing a California tenant’s rent more than 5% plus the percentage change in the cost of living (CPI) in your city (presently 0.7% for 2020 in the City of Los Angeles), or 10%, whichever is lower, subject to specified conditions. The bill further prohibits an owner of residential multi-unit dwellings from increasing the rent more than 2 times in any 12-month period.

ANNUAL CAP ON RENT INCREASES FOR MULTI UNIT DWELLINGS IN LOS ANGELES COUNTY EXPLAINED

The California Tenant Protection Act (AB 1482) provides an annual rent cap of 5% plus the cost of consumer price inflation for the city in which the rental unit is located. In Los Angeles, the Consumer Price Inflation Index in September of 2020 was 0.7%.

Effective Jan. 1, 2020, the allowable rent increase depends not only on where the rental property is located, but also when it was built. Lets now look at the city of Los Angeles which has a rent control ordinance in effect. The Los Angeles Rent Stabilization Ordinance only applies to multi-unit dwellings that were built prior to October of 1978. So what is the allowable increase on a multi unit rental property built pre-1978 versus 1995 versus 2017 in the City of Los Angeles?

• If a multi unit rental property in the city of Los Angeles was built before October 1978, then the rent limits imposed by the Los Angeles Rent Stabilization Ordinance will control (Presently 4% for 2019);
• if a multi unit rental property in the city of Los Angeles was built in 1985, then AB 1482 controls and the rent will be capped at 5.7% for 2020 through March 1, 2020 (5%, plus the 0.7 increase in the consumer price inflation index for the city of Los Angeles);
• if the multi unit rental property in the city of Los Angeles was built in 2017, however, then there would be no rental cap until the building is 15 years old.
• It should also be noted that a California landlord not under a local city or county rent stabilization ordinance may raise the rent to fair market value if the rental unit is vacant.

Now the question becomes is your building subject to the California Tenant Protection Act? AB 1482 applies to all properties that are: (1) not under a local rent stabilization ordinance, (2) were built 15 or more years ago, and (3) have two (2) or more units on a parcel, with one exception... a duplex is excluded if the owner continuously occupies as the owner's primary residence one of the two sides of the duplex. AB 1482 also applies to single family homes and condominiums if they ae owned by a corporation, real estate investment trust, or limited liability corporation in which at least one member is a corporation.

The bill is retroactive. What does this mean? It means that this newly enacted law which did not pass until September of 2019 applies to all prior rent increases that went into effect after March 15, 2019. Thus, if a landlord increased a tenant’s rent by say 10% on April 1, 2019, the 10% rent increase will remain in effect through December 31, 2019, but will revert back to the maximum permissible increase (7.9%) on January 1, 2020. In effect, the Landlord will not be liable to the tenant for any corresponding rent over-payment through December 31, 2019, but the tenant will be receiving a rent decrease on January 1, 2020.

AB 1482 Prohibits No Fault Evictions in California.

With limited exceptions (discussed below), AB 1482 prohibits a California landlord from evicting a tenant who has resided in a multi-unit residential dwelling for 12 or more months from being evicted without “Just Cause.” What does this mean? It means that the current 60 Day Notice to terminate a tenancy is now null and void. It means that if an exception does exist, the California landlord will need to state a valid reason in a 60 day notice of termination of tenancy, or non-renewal of lease.

What is Just Cause?

Under the newly enacted legislation a landlord has just cause to evict a tenant for any of the following reasons:

1. Tenant has failed to pay the rent in a timely manner;
2. Tenant has breached a material term of the Lease as defined in the California Code of Civil Procedure and failed to cure the violation after being given a 3 Day Notice to Cure or Quit;
3. Tenant is maintaining, committing, or permitting the maintenance or commission of a nuisance as described in the California Code of Civil Procedure Section 1161(4);
4. Tenant is committing waste as described in the California Code of Civil Procedure Section 1161(4);
5. Tenant had a written lease that terminated on or after January 1, 2020, and after a written request or demand from the owner, the tenant has refused to execute a written extension or renewal of the lease for an additional term of similar duration with similar provisions, provided that those terms do not violate this section or any other provision of law;
6. Tenant engaged in criminal activity, or threatened criminal activity (as defined by Penal Code Section 422(a)) on the landlord’s property or in the rental unit;
7. Tenant has assigned or sublet the premises in violation of the tenant’s lease as described in California Code of Civil Procedure Section 1161(4);
8. Tenant refused to allow the owner to enter the rental property as permitted under California Civil Code Sections 1954 and 1101.5 and as permitted under California Health and Safety Code Sections 13113.7 and 17926.1;
9. Tenant is using the premises for an unlawful purpose as described in the California Code of Civil Procedure 1161(4);
10. The “Tenant” was an employee, agent, or licensee of the Owner and refuses to vacate after their termination as described in California Code of Civil Procedure 1161(1); OR
11. The Tenant fails to deliver possession of the rental unit after providing the owner written notice of the Tenant’s intent to vacate as provided in Civil Code Section 1946, or after the Tenant made a written offer to surrender the Premises that was accepted in writing by the landlord as described in 1161 of the Code of Civil Procedure Section 1161(5);

In any of the above incidences, the Landlord will be required to provide the Tenant with a properly drafter Three Day Notice to Cure or Quit and if there is a subsequent violation, or non-compliance, a Three Day Notice to Quit.

Just Cause is NOT required for the following types of California residential properties:

1. Transient or hotel occupancy as defined in California Civil Code Section 1940(b);
2. Housing accommodations in a nonprofit hospital, religious facility, extended care facility, licensed residential care facility for the elderly as defined in Health and Safety Code Section 1569.2, or an adult residential care facility, as defined in Chapter 6 of Division 6 of Title 22 of the Manual of Policies and Procedures published by the State Department of Social Services;
3. Dormitories owned and operated by a school;
4. A landlord’s primary/principal residence where the tenant is sharing either a bathroom or the kitchen facilities with the owner;
5. Single-family owner-occupied residences, including a residence in which the owner-occupant rents or leases no more than two rooms, including, but not limited to, an accessory dwelling unit or a junior accessory dwelling unit;
6. A duplex if the Owner owner-occupies one of the two units as the owner’s principal place of residence at the beginning of the tenancy, and remains in such owner occupancy;
7. Housing that has been issued a certificate of occupancy within the previous 15 years; and
8. Single family residences, condominiums, and townhomes IF: (1) the Owner is an individual and not a corporation or a limited liability company in which any member of the LLC is a corporation AND (2) The tenants have been provided written notice that the rental property is exempt from this section using the following statement in 12 Point Type:

"This property is not subject to the rent limits imposed by Section 1947.12 of the Civil Code and is not subject to the just cause requirements of Section 1946.2 of the Civil Code. This property meets the requirements of Sections 1947.12 (d)(5) and 1946.2 (e)(8) of the Civil Code and the owner is not any of the following: (1) a real estate investment trust, as defined by Section 856 of the Internal Revenue Code; (2) a corporation; or (3) a limited liability company in which at least one member is a corporation."

For a tenancy that began before July 1, 2020, the notice above may, but is not required to, be provided in the rental agreement, and if not in the rental agreement must be provided by written notice to the tenant no later than August 1, 2020, or as an addendum to the lease or rental agreement. For any tenancy that begins or renews on or after July 1, 2020, the notice must be provided in the rental agreement, or as an addendum to the rental agreement.

New Notice Required to Be Given to All California Tenants by August 1, 2020

If the California landlord has a rental property that is subject to this Ordinance, then the Owner MUST provide the following notice to new tenant in 12 point type in the Lease, and for existing tenants by a formal written notice signed by both the landlord and tenant, or as an addendum to the Lease, as follows:

"California law limits the amount your rent can be increased. See Section 1947.12 of the Civil Code for more information. California law also provides that after all of the tenants have continuously and lawfully occupied the property for 12 months or more or at least one of the tenants has continuously and lawfully occupied the property for 24 months or more, a landlord must provide a statement of cause in any notice to terminate a tenancy. See Section 1946.2 of the Civil Code for more information."

California Now Requires Relocation Assistance Payment to Tenants for Allowable No-Fault Evictions.

Although the new law essentially prohibits a California residential landlord from terminating a tenancy without just cause, as set forth above, there are some exceptions.

A Landlord may initiate a no-fault termination of tenancy with the payment of Relocation Assistance for any one of the following reasons:

1. The Owner seeks to owner-occupy the residential property, or have their spouse, domestic partner, children, grandchildren, parents or grandparents occupy the premises, but for leases entered into on or after July 1, 2020, owner occupancy shall only be allowed IF either: (a) the tenant agrees, in writing, to the termination, or (b) a provision in the lease allows the owner to terminate the lease if the owner, or their spouse, domestic partner, children, grandchildren, parents, or grandparents, unilaterally decides to occupy the Premises;
2. The Owner seeks to withdrawal of the residential property from the rental market;
3. The Owner is complying with any of the following: (a) a government order to comply that necessitates the tenant vacate the premises; (b) a government or court order; or (c) a local ordinance; OR
4. The Owner is seeking to demolish or substantially remodel the rental property (Note: substantial remodel is defined to mean upgrading structural, electrical, plumbing, or mechanical system that requires a permit from a governmental agency, or the abatement of hazardous materials, including lead-based paint, mold, or asbestos, in accordance with applicable federal, state, and local laws, that cannot be reasonably accomplished in a safe manner with the tenant in place and that requires the tenant to vacate the residential real property for at least 30 days. Cosmetic improvements alone, including painting, decorating, and minor repairs, or other work that can be performed safely without having the residential real property vacated, do not qualify as substantial rehabilitation.

The amount of relocation assistance, or rent waiver, required is one month's rent as in effect when the owner issued the notice to terminate the tenancy and must be paid to the Tenant within 15 calendar days of service of the Notice Terminating the Tenancy.

The newly enacted California Tenant Protections and Relief Act Also Changes the Requirements for Almost ALL 3 Day Notices to Cure or Quit, which now must be followed by a Three Day Notice to Quit as well as for all 30 and 60 Day Notices to Terminate Tenancy. In addition, the new law requires many landlords to either add additional language to their leases, and to provide existing tenants with a specific notice in 12 point type. California Landlords should immediately update their leases (especially for all buildings that are not subject to local rent control rules)!

If you would like to have Melissa Marsh, a Los Angeles, California Landlord and Tenant attorney with over 20 years experience, explain how these new state wide rental laws may impact you, please schedule a low cost 30 minute Telephone Consultation

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