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Statewide Rent Control Passed by California Legislature

As many people are aware, the California Legislature passed AB 1482 last week, commonly known as the statewide “rent cap bill.” The bill is expected to be signed into law by Governor Newsom in October. While parts could still change before then, we now have a good enough idea to know what to expect. Basically, the law will make it harder to evict a tenant after they have resided in the property for 12 months and it will cap rent increases between 5% and 10%.

However, not all residential properties will be subject to the law.

1. The bill currently excludes most single-family, duplex and new construction residencies

At present, the following residential circumstances are exempt from the bill:
Real property that has been issued a certificate of occupancy within the previous 15 years. So, most homes built after 2004 will not be subject to this law immediately. Duplexes in which an owner occupies one of the units as the owner’s principal place of residence is exempted for as long as the owner continues her occupancy. Any residential real property that is alienable separate from the title to any other dwelling unit (primarily single-family homes, townhouses, and condos) is exempted, provided that the owner is NOT a real estate investment trust, a corporation or an LLC in which at least one member is a corporation. 
2. Rent increase of non-exempt properties will be capped at 5% plus inflation, but not to exceed 10% total. 

For those properties that qualify under this bill, the upcoming rent control would prohibit a landlord from increasing the gross rental rate more than 5% plus the then current inflation rate (California CPI is approximately 2.8%), or 10%, whichever is lower for the immediately preceding 12 months. Further, the bill would prohibit the landlord from increasing the gross rental rate for the unit in more than two increments over any 12-month period. As stated above, the bill would generally exempt single-family dwellings, owner-occupied duplexes, and condos. The rent cap would retroactively apply to all rent increases occurring on or after March 15, 2019, but it will include a safe harbor for landlords who charge and collect rent outside these limitations prior to January 1, 2020.

3. Eviction from non-exempt rental properties can only happen with "Just Cause." 

The bill would prohibit an owner of non-exempt property from terminating a tenancy without “just cause” after the tenant has continuously and lawfully occupied the property for 12 months. Essentially, a “just cause” eviction would stem from a scenario where the tenant breached the rental agreement, or became a nuisance, giving cause for removal. The law would leave open the opportunity for a landlord to evict a tenant in the limited case where the landlord 1) planned to move into the property, 2) sell the property to someone who intends to live there, or 3) substantially remodel the property so that tenancy during construction is impossible. For these limited “no-fault” terminations, the owner will be required to assist with the tenant’s relocation cost by providing a direct payment of one month’s rent to the tenant or by waiving in writing the payment of rent for the final month of the tenancy, prior to that payment coming due. This requirement will not be affected by the tenant’s income. The bill would provide that if the owner fails to provide relocation assistance, their notice of termination is void.
Lastly, the law would leave in place any local ordinance that provides a higher level of protection to tenants than this state-wide law does. In those cases, the local ordinance would control.
For more information, please refer to AB 1482.
*Source Berkshire Hathaway HomeServices California Properties Legal Team 

.Mark Your Calendars 

October 3, 10, 17, 24, 31 - South Pasadena Farmers' Market - Corner of El Centro St. and Meridian Ave. @ 4pm - 8pm

October 4 - Maple Pop-Up Dinner - Descanso Gardens @ 6pm 

October 5, 12, 19, 26 Pasadena Farmers Market - Victory Park @ 8:30am - 12:30pm

October 7  - Wine Essentials: Classic World Wine Tour - Institute of Culinary Education @ 6:30 - 8:30pm 

October 9 - Pizza with a Purpose at California Pizza Kitchen - California PIzza Kitchen Pasadena @ 11am - 10pm

October 12 - Community Service Day at Descanso Gardens - Descanso Gardens @ 8am - 10:30am 

October 12 - Annual Teacher's Night Out - Vroman's Bookstore Old Town Pasadena @ 7pm 

October 13 - R.G. Canning Flea Market - Rose Bowl Stadium @ 5am - 3pm 

October 14 - Japanesse Teahouse Tour - The Huntington Library, Art Museum, and Botanical Gardens @ 11:30am - 3:30pm

October 15 - Free Tuesday at Descanso Gardens - Descanso Gardens @ 9am - 5pm

October 19, 20 - Pumpkin Festival - Kidspace Childern's Museum @ 9:30am - 5pm

October 24 - Caltech Campus History and Architectural Tour - Athenaeum Entrance @ 10:30am - 12pm 

October 25, 26, 27 - Fall Plant Sale - The Huntington Library, Art Museum, and Botanical Gardens @ 10am - 5pm

October 26, 27 - One Colorado's Annual PumpkinDecorating - One Colorado Courtyard @ 10am - 12pm

October 27- A Walk Through Pasadena's WILD Lower Arroyo - Desiderio Park @ 3:30pm - 5:30pm  

October 27 - 35th Annual Fall Food and Wine Festival - Parkway Grill @ 6pm - 10pm

October 31 - American Whiskey Tasting With Everson Royce - Armory Center For The Arts @ 6pm - 8pm

*Source: PasadenaNow.com

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