New California Laws, 2019 & 2020

The following is a partial list of laws recently signed, in the state of California, that take effect as of January 1, 2019, and also AB 1482, which takes effect January 1, 2020 with some retroactive elements.

These laws can be found on the state government site at http://leginfo.legislature.ca.gov/faces/codes.xhtml

AB 2219 Third Party Payments: This bill amends Civil Code §1947.3 to require a landlord accept rent payments through a third party, if the pay or provides the landlord a signed acknowledgement stating that they are not currently a tenant of the premises for which the rent payment is being made and that the acceptance of the rent payment does not create a new tenancy with the third party. The landlord may, but is not required to, provide a form for this purpose. The law specifies that this provision is not meant to require a landlord or his/her agent to enter into a contract with a federal, state, or local housing assistance program (such as Section 8).

AB 2343 Calculations of 3-Day Notices and Summons: This bill amends Code of Civil Procedure Sections 1161 and 1167 to extend the waiting periods for summons and some notices, effective September 1, 2019.

California Landlord/Tenant Law previously allowed weekends and holidays to count towards the three (3) day notice period, but prohibited a notice from expiring on a weekend or holiday. Code of Civil Procedure §1161 has been amended to specifically exclude “Saturdays and Sundays and other judicial holidays” when calculating the notice period for notices to pay rent or quit or notices to perform covenant or quit. It does not exclude these days when calculating expiration periods for 30, and 60 day termination notices and notices to quit based on unauthorized assignment, subletting, nuisance, and waste.

Similarly, Code of Civil Procedure §1167 is amended so that the five day period an unlawful detainer defendant has to respond to a notice of summons will notinclude judicial holidays, including Saturday and Sunday.

Bill SB 721 requires the inspection of decks, balconies and elevated walkways of more than 6 feet above ground level in a building containing 3 or more multifamily units by a licensed person to perform these inspections by the Department of Consumer Affairs. All of these inspections and any necessary testing are required to be completed by January 1st, 2025.

Bill AB 1919 amends an existing law that makes it a misdemeanor to raise rent more than 10% after a state emergency is declared. This clarifies the confusion over how and when California’s existing ban on price gouging is to be applied. The bill extends the prohibition with regards to housing for any period that the proclamation or declaration is extended. The bill would additionally make it a misdemeanor for a person, business, or entity to evict a housing tenant after the proclamation of a state of emergency and then rent or offer to rent to another person at a rental price higher than the evicted tenant could be charged.

Please take note that due to the Camp, Butte County, Hills and Woolsey fires, we are currently under a state of emergency order that is still in effect. This means that any rent increases given at this time must not exceed 10%. This state of emergency is extended in 30 day intervals as needed. We will be monitoring the situation as the year proceeds. Please call our offices if you have any questions.

EXCEPTIONS

 There are exceptions to the 10% cap if the landlord can prove that the increase:

  • “is directly attributable to additional costs for repairs or additions beyond normal maintenance that were amortized over the rental term that cause the rent to be increased greater than 10 percent”; or
  • the increase was contractually agreed to by the tenant before the state of emergency was declared.

Bill AB 2164 would have allowed local governments to impose a fine or penalty on a property owner if the tenant is involved in the illegal cultivation of cannabis at the property even if the property owner has no knowledge of the activity; the bill removed the right (currently allowed under existing law) for a property owner to appeal that fine.

This bill has been amended to provide that if a local government adopts an ordinance that provides for the immediate Imposition of administrative fines or penalties, that ordinance must provide for a reasonable period of time for the correction or remedy of the violation prior to the imposition of administrative fines or penalties if there is a tenant in possession of the unit; if the owner had no actual knowledge that the tenant was cultivating cannabis; and if the owner has a lease agreement that prohibits the illegal activity.

AB 1796 would allow tenants in rent control jurisdictions to work with the property owner to install an electric vehicle charging station. Current law prohibits a property owner from denying a tenant the ability to install a charging station if the tenant is willing to pay for all expenses related to the installation and operation of the station and comply with other provisions under the law.

AB 1482 was passed in 2019, officially becoming effective Jan 1st, 2020, with some retroactive effects.

AB 1482, officially the Tenant Protection Act of 2019, marks the most significant policy change for California’s rental housing owners and tenants in a quarter century.

The bill, which comes from Assemblyman David Chiu, D-San Francisco, will limit annual rent increases at 5% plus the rate of inflation — which at present comes to about 8% — for much of the state’s multifamily housing stock. The bill also will apply “just cause” eviction policies to qualified housing across California.

When the law takes effect Jan. 1, California will become the second state in the nation to pass a statewide rent cap. Oregon passed a similar law earlier this year.

AB 1482 will remain in effect until 2030 and will affect an estimated 2.4 million apartments.

It accounts for the most sweeping policy change California’s rental housing industry since 1995, when the Costa-Hawkins Rental Housing Act stopped cities and counties from imposing extreme forms of rent control at the local level.

With AB 1482 on the books, rent control in California will come in two flavors – the statewide rent cap under AB 1482, and locally administered rent control laws regulated under Costa-Hawkins.

For the most part, AB 1482’s rent cap will affect properties that are 15 years of age or older, contain two units or more, and are not already subject to local rent control ordinances under Costa-Hawkins.

AB 1482 will exempt single-family homes, townhouses and condos, except when owned by corporations or Real Estate Investment Trusts. It also will exempt duplexes when one unit is occupied by the owner.

Local rent control laws will carry on as usual, without interference from AB 1482, and Costa-Hawkins will continue to limit their application to apartments built before 1995 or an earlier date in some cities.

In such jurisdictions, AB 1482 will apply only to housing that both qualifies for the statewide rent cap and has been excluded from local rent control under Costa-Hawkins.

In San Francisco, for example, the city’s rent control ordinance will continue to cover multifamily housing built before June 1979, a date regulated under Costa-Hawkins. Apartments and corporate owned single-family homes built between June 1979 and 2005 will fall under AB 1482’s rent cap. Apartments and corporate owned single-family homes built after 2005 will have no rent cap until they turn 15 years old and qualify for AB 1482.

The California Apartment Association negotiated for a number of amendments to make AB 1482 less problematic to the industry. Amendments include:

WHO’LL BE AFFECTED

Housing exempted for 15 years: Thanks to a CAA amendment, housing will be exempt from the bill’s rent cap and “just cause” eviction provisions until they are 15 years old. The bill previously was set to exempt buildings for only 10 years. With the longer exemption, CAA has helped to mitigate the bill’s impact on future development of rental housing.

Cities can’t lower AB 1482’s cap: CAA ensured that local governments cannot lower AB 1482’s rent cap, 5% plus CPI, for housing covered by the state legislation. Note, however, that AB 1482 does not apply to housing regulated by local rent control ordinances and the Costa-Hawkins Rental Housing Act. Cities and counties can continue to pass local rent control laws under Costa-Hawkins and set rent caps at any level they choose; they just cannot touch the rent cap and buildings that fall under AB 1482.

Vacancy decontrol strengthened: When a tenant moves out of a unit regulated by AB 1482, the owner will be allowed to adjust the new rent to market and then resume conforming to CPI plus 5%.

“Just cause” provisions improved: Under AB 1482, owners would still be able to evict tenants for:

  • Nonpayment of rent
  • A breach of the material term of the lease
  • Nuisance, waste, unlawful, or criminal activity
  • Refusal to sign a written extension or renewal of the lease
  • Assigning or subletting
  • Refusal to allow the owner to enter the unit
  • The owner moving themselves or family into a unit
  • To substantially renovate
  • To go out of business altogether.

The just-cause provisions will kick in after 12 months of the tenancy, however, if the renter takes a roommate within the first 24 months, the clock will reset. Just cause then will 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. The just-cause provisions would apply to all housing covered by AB 1482.

If you’re self managing, or not being well represented and need help navigating the new rules, get in touch with us at Bell Properties Los Angeles.

Read the article on Statewide Rent Control.

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