The new year brought several new laws for landlords and property management companies. As a property management company, it’s our job to ensure you are made aware of these new laws and how they may affect your rental property. *Please note Management One is not an attorney and we recommend that you consult an attorney if you have specific questions regarding your property or properties.
This bill increases the amount of time required to notify a month-to-month resident of a rent increase if more than 10%. Before January 1st, 2020, a 60-day notice was required. AB 1110 changes that to a 90-day notice.
This bill changes some of the stipulations of the 3-Day Notice to Perform Or Quit (Typically issued when a resident fails to pay rent on time) from calendar days to business days. At Management One, the resident is allowed a five day grace period. Typically we post notices on the 6th of the month. Should the 6th fall on a Friday, this would be day one. We could count Friday as day one, skip Saturday and Sunday, Monday would be day two and Tuesday would be day three.
Click the image below to download a guide outlining all the new laws.
This new bill adds Veterans and military personnel as a protected class. The current law states that housing discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability or genetic information is against public policy. Additionally, a voucher from the Department of Housing and Urban Development Veterans Affairs supportive Housing is classified as an acceptable income.
Also known as the Tenant Protection Act of 2019, it was passed in October 2019 and applies rent control to a specific group of properties in California.
The new law applies to rent increases and just cause evictions and has several exemptions which many single-family homeowners who have ownership as a sole proprietor will fall under. Meaning some of the new laws will not affect that type of ownership of the property.
Multi-family properties that are 15 years old or older and properties that are wholly or partially owned by a corporation, LLC or Real Estate Investment Trust (REIT) are affected. There are many exemptions to this new law, so be sure to consult your attorney on whether your property is affected or not.
Let’s breakdown these two items:
1. Rental Increase- This law limits the amount that rent can be increased each year.
Increases cannot exceed 5% plus the percentage change in the cost of living according to the Consumer Price index and cannot exceed 10% total.
For example, if the consumer index rate is 1.6% for 2019. Add that to the 5%, and we can raise rents by as much as 6.6% if the local rental market affords this increase. Not all markets support this type of increase at this time.
2. Just Cause Evictions
Beginning January 1st., 2020, California Civil Code 1946.2 states that after 12 months, a tenancy can only be terminated for a specific reason. The reasons are divided into two categories: At Fault and No-Fault.
1. Default in the payment of rent
2. Breach of Material terms of the lease (lease violation)
3. Nuisance activity
5. Criminal Activity
6. Assigning or subletting
7. Refusal to provide access
8. Failure to Vacate and Deliver possession
9. Failure to sign a lease under similar provisions
10. Unlawful purpose
1. Intent to demolish or substantially remodel
2. Withdrawal from the rental market
3. An owner or relative occupancy
4. Government Order
Additionally, we are required to advise the residents of their rights under this new law. Management One has taken steps to be in compliance with the new law by adding the required verbiage to all new leases and lease renewals as they come up in 2020.
In summary, if you own your property in your name most of the laws will not pertain to you, but if you have your properties in an LLC, Corp or Trust almost all of the new laws will affect you and it does limit your options. It will also affect how we deal with the residents. We will be writing more on this in the coming months.
*Please note Management One is not an attorney and we recommend that you consult an attorney if you have specific questions regarding your property or properties.