As we rang in the new year, new laws that affect real estate investments went into effect. The Tenant Protection Act of 2019, also known as AB 1482, was signed by Governor Gavin Newson on October 8, 2019. All landlords must notify their residents whether their property falls under or is exempt from the law. The notice must be in the form of an amendment to the agreement. Leases that begin in the new year, must have the law as part of the lease language.
The Tenant Protection Act affects rentals in two ways. It provides rent protection for tenants by capping the amount rent may be increased each year. The amount of increase can be no greater than 5% plus the Consumer Price Index. Landlords whose properties are subject to the law who increased rents in 2019 in excess of the cap after March 15, in anticipation of rent caps, must rollback the rent starting January 1, 2020.
AB 1482 also sets into motion Just Cause Eviction. With just cause eviction controls, landlords must prove a specified cause with the testimony of third-party witnesses. This burden of proof often makes it difficult, if not impossible, to end the tenancies of nuisance residents. The law prohibits the termination of month-to-month periodic tenancy on 30/60 days notice without “just cause” and it prohibits non-renewal of fixed term leases, unless there is “just cause”. Tenant fault causes include non-payment of rent, violation of lease terms, committing waste, refusing access to the unit and among other things assigning and subletting without permission. No fault causes for eviction include the sale of the property, owner moving into the home, intent to demolish or substantially remodeling the unit and government order.
No Fault Cause for eviction provides one more layer of protection for residents. If the eviction falls under the four listed causes, the landlord is then obligated to pay the tenants to move out. The payment must equal to one month’s rent. The landlord may waive the payment of the last month’s rent or pay the resident. Under either option, the landlord must give the resident notice of their intent of waiving the rent or paying it.