Rent Control is Coming

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On January 1, 2020 Assembly Bill 1482 Becomes Law

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What Does the Law Require?

AB 1482 limits annual rent increases at 5%, plus the rate of inflation (currently at about 8%), for much of California’s multifamily housing stock. The bill also applies “just-cause” eviction policies across qualified housing.
The law comes in two flavors—statewide rent cap under AB 1482, and locally administered rent control laws regulated under the Costa-Hawkins Rental Housing Act, which stopped cities and counties from imposing extreme forms of rent control at the local level.
The law will remain in effect until 2030 and affects 2.4 million California apartments.

What Properties Are Affected?

Properties that are 15 years or older, contain two units or more, and are not already subject to local rent control ordinances under Costa-Hawkins.

What Properties are Exempt?

  • Single-family homes, townhouses, and condos, except when owned by corporations or Real Estate Investment Trusts.
  • Duplexes, when one unit is occupied by the owner.

What About Local Rent Control Laws Like Costa-Hawkins?

There will be no interference from AB 1482. Costa-Hawkins will continue to limit their application to apartments built before 1995, or an earlier date in some cities.
Cities and counties can continue to pass rent control laws under Costa-Hawkins and set rent caps at any level they choose. However, they can’t touch the rent cap and buildings that fall under AB 1482.

What Does This Mean When a Tenant Moves Out?

If the unit is regulated under AB 1482, the owner can adjust the new rent to market and then resume conforming to the Consumer Price Index plus 5%.

How Does AB 1482 Impact Evictions?

Eviction reasons include:

Nonpayment of rent
Breach of material term of the lease
Nuisance, waste, unlawful, or criminal activity
Refusal to sign written lease extension or renewal
Assigning or subletting
Refusal to allow property owner from entering the unit
Owner moves themselves or family into unit
Substantial renovations
Owner goes out of business
The just-cause provision kicks in after 12 months of the tenancy. However, if the tenant takes a roommate within the first 24 months, the clock resets. Just-cause does not apply until all renters in the unit have been in place for a full year or at least one tenant has continually occupied the unit for 24 months or more.

How Can You Minimize AB 1482’s Impact on Your Units?

We’ve been preparing our property owners for AB 1482 ever since it was proposed. Schedule a call to learn more about our options to help protect your investments and stay compliant under the law.

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