A new law providing statewide renter protections (Assembly Bill 1482) is expected to be signed by the governor and will go into effect on January 1, 2020. Two of the primary new protections are that annual rent increases will be limited to 5% plus the rate of inflation through January 1, 2030, and landlords will be required to have and provide written notice regarding just cause for termination in order to evict tenants who have continuously and lawfully occupied the premises for 12 months.
Just-cause evictions can be on an at-fault or no-fault basis. Examples of at-fault just-cause evictions include default in the payment of rent, breach of a material term of the lease, maintaining, committing, or permitting a nuisance, committing waste, criminal activity, failure to properly vacate, etc. Before the owner can terminate the tenancy for an at-fault just-cause violation that is curable, the owner must first provide notice to cure, giving the tenant an opportunity to cure the violation.
No-fault just-cause evictions include the intent by the owner of the property or their spouse, domestic partner, child, grandchild, parents, or grandparents to occupy the residential property, withdrawal of the property from the rental market, unsafe habitation as determined by a government agency that has issued an order to vacate the property or to comply with corrective action that necessitates vacating the property, or an intent to demolish or substantially remodel the property. A definition of “substantially remodel” is provided, and it does not include cosmetic improvements alone.
For no-fault just-cause evictions, a tenant must be notified and provided with payment relocation assistance equal to one month of the tenant’s rent in effect at the time of the termination, and that payment is to be provided within 15 calendar days of service of the notice. The landlord may also waive payment of rent for the final month of the tenancy prior to the rent becoming due in lieu of making that direct payment. Any notice must state the amount of rent that is being waived and state that no rent is due for the final month of the tenancy.
There are specific exemptions that apply to the just-cause eviction requirements and specific exemptions that apply to both the rent-cap and just-cause eviction requirements. Consultation with a qualified local landlord-tenant attorney is suggested on these subjects. Consultation with such an attorney is also appropriate because local jurisdictions can enact (at any time) ordinances and laws that are more restrictive than these minimum statewide standards.
C.A.R. has responded to the anticipated passage of this new law by creating a rent-cap and just-cause addendum to be made a part of any residential lease or month-to-month rental agreement. I understand that the anticipated release date is December of this year. C.A.R. is also issuing a Q&A on the new law. The PRDS Forms Committee will be looking into these issues in conjunction with its revisions to existing PRDS forms pertaining to residential leasing.
For those of you handling the listing or sale of residential property where there is an existing tenant or the purchaser anticipates renting the property, consultation with a qualified local landlord-tenant attorney is suggested. For sellers, I suggest that consultation take place prior to the listing of the property. I also suggest adding a specific contingency for the benefit of the seller as part of any purchase contract to provide for such a consultation. Likewise, a specific contingency for the benefit of the buyer on this subject is recommended where there is a tenant in possession or the buyer anticipates renting the property.
In conclusion, it bears repeating that a local jurisdiction can, at any time, enact ordinances and laws that are more restrictive than those standards set forth in the new state law. For that reason, consultation with a qualified local landlord-tenant attorney is suggested when listing or selling a property that has a tenant in possession or is to be used as rental property.