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Upcoming Changes to California Housing Laws – AB 1482 Tenant Protection Act

October 28, 2019 Articles

The Governor recently signed into law several housing-related bills adopted during the 2019-2020 state legislative session. At the start of the session, approximately 200 housing-related bills were introduced, mostly from Bay Area legislators. Many of these proposals were part of the “CASA Compact,” a multi-year, multi-stakeholder effort to address the housing crisis from a Bay Area regional standpoint. The CASA Compact framework is based around three principal outcomes: (1) production of housing at all levels of affordability; (2) preserving existing affordable housing; and (3) protecting vulnerable households from housing instability and displacement. At the end of the legislation session, about a dozen housing bills survived the process and ended up on the Governor’s desk. Ahead of the January 1, 2020 effective date for these bills, we will share you with the details behind some of the upcoming changes in housing law through a series of updates, with this first one focused on tenant protections.

Tenant Protection Act (AB 1482)

Assembly Bill 1482, introduced by Assemblyman David Chiu (D-San Francisco), will put two notable statewide tenant protections in place until the bill automatically sunsets on January 1, 2030: (1) extend just cause eviction protections to tenants living in residential properties not currently covered by just cause eviction laws; and (2) prohibit owners from increasing rent by more than 5%, plus the rate of inflation, or 10% (whichever is less) more than once per 12-month period for tenants who have occupied the same unit for more than 12 months.

Just Cause Eviction Protections

Currently, fewer than 20 jurisdictions within California have just cause eviction laws in place. In the absence of a local rent control ordinance or a fixed-term lease, landlords are permitted to terminate a tenancy unilaterally without stating a reason, and are only subject to advanced notice (30 days for tenants who have occupied the premises for less than one year, or 60 days for tenants who have occupied the premises for one year or more).

AB 1482 will prohibit landlords from terminating a residential tenancy without just cause and providing written notice of the just cause if a tenant has occupied the property for at least 12 months. “Just cause” includes either “at-fault just cause” or “no-fault just cause.”

At-fault just causes include, but are not limited to:

  • default in payment of rent;
  • a breach of a material term of the lease;
  • criminal activity by the tenant on the residential real property;
  • assigning or subletting the premises in violation of the tenant’s lease; or
  • using the premises for an unlawful purpose.

No-fault just causes include, but are not limited to:

  • intent by the property owner (or the owner’s spouse, domestic partner, children, grandchildren, parents, or grandparents) to occupy the residential property (owner move-in eviction);
  • withdrawal of the residential real property from the rental market; or
  • intent to demolish or to substantially remodel the residential real property.

Prior to terminating a tenancy for just cause that is curable, AB 1482 requires that the landlord first gives notice to the tenant with an opportunity to cure. Additionally, the new law requires under a no-fault just cause termination that the property owner do either one of two things: (A) assist the tenant with relocation by providing a direct payment to the tenant; or (B) waive in writing the payment of rent for the final month of the tenancy. The amount of the relocation assistance or rent waiver shall be equal to one month of the tenant’s rent that was in effect when the owner issued the tenancy termination notice.

It should also be noted that residential real property subject to a local ordinance requiring just cause for termination, whether the ordinance has already been adopted or is adopted in the future, will only be subject to either the requirements under AB 1482, or the local ordinance if it is “more protective,” but will not be subject to both state and local law regarding just cause evictions concurrently.

Rent Increases

Under AB 1482, a landlord is not permitted to, over the course of any 12-month period, increase the rental rate for a dwelling or a unit by more than 5%, plus the rate of inflation, or 10%, whichever is lower, of the lowest rental rate charged for that dwelling or unit at any time during the 12 months prior to the effective date of the increase. Additionally, landlords are not permitted to increase rent in more than two increments over that 12-month period.

AB 1482 does not institute any rent restrictions on vacant units. For any new tenancy, landlords can establish the initial rent. The rent increase restriction under AB 1482 applies only after the initial rental rate has been established.

Exemptions

AB 1482 provides several exemptions from the new law, including:

  • *single-family owner-occupied residences and condominiums, including a residence in which the owner-occupant rents or leases no more than two units or bedrooms (including, but not limited to, an accessory dwelling unit or a junior accessory dwelling unit);
    • *single-family homes are not listed as an exemption under the rent increase portion of the bill. However, single-family homes and condominiums are exempted from rent control restrictions under existing state law (the Costa-Hawkins Act).
  • a duplex in which the owner occupied one of the units as the owner’s principal place of residency at the beginning of the tenancy, so long as the owner continues in occupancy;
  • new housing that has been issued a certificate of occupancy within the last 15 years;
  • transient and tourist hotels;
  • housing accommodations in a nonprofit hospital, religious facility, extended care facility, licensed residential care facility for the elderly;
  • dormitories owned and operated by an institution of higher education or a kindergarten and grades 1 to 12, inclusive, school; and
  • housing restricted by deed, regulatory restriction, or other recorded document as affordable housing for households of very low, low, or moderate income.

For more on AB 1482, click here. Stay tuned, as we will next cover the Housing Crisis Act of 2019 (Senate Bill 330).

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