The California Legislature recently approved Assembly Bill 1482 — a statewide rent control and just cause eviction bill. Although not yet law, Governor Newsome is expected to sign the bill. Some of its major provisions include:
- Rent Cap. A cap on annual rent increases set at 5% plus inflation, up to a maximum of 10% per year.This cap applies retroactively to all rent increases since March 15, 2019.Any rent increases initiated on or after that date will count toward the rent cap, and if over the maximum, will have to be rolled back effective January 1, 2020.
- Just Cause. A prohibition on evictions without “just cause.”Landlords can no longer terminate month-to-month tenancies at will and may now only evict tenants for one of 15 specific reasons. The permissible reasons are divided into two categories: “at fault” and “no fault.”
- “At fault” termination is generally allowed when tenants have breached their lease and does not require the payment of relocation assistance. “At fault” reasons include non-payment of rent, nuisance, criminal activity, refusal to allow entry, and breach of a material term of the lease.
- “No fault” termination is allowed even when the tenant has not breached the lease and will require the landlord to pay one month’s rent in relocation assistance. “No fault” reasons include an owner or family member intending to occupy the property, withdrawal from the rental market, substantial remodeling and compliance with a government order to vacate the property,
- Exemptions. The bill’s just cause eviction provisions only protect tenants who have been in possession for a year or more. Certain types of housing are exempt including:
- Single family homes and condos if:
- Tenants have received notice of the exemption and,
- The owner is not a REIT, corporation, or LLC owned wholly or in part by a corporation
- Homes built within the last 15 years
- Owner-occupied duplexes
- Owner-occupied single-family homes where two or fewer rooms are rented out (exempt from just cause but not rent cap)
- Government assisted housing
CAR’s new Rent Cap and Just Cause Addendum (RCJC)
What do I need to provide to my tenants?
CAR’s new “Rent Cap and Just Cause Addendum” (Form RCJC) – available in December pending approval of the Standard Forms Advisory Committee.
When do I provide it?
It needs to be provided by January 1, 2020.
My tenant is month to month. Does that matter?
Yes. For month to month tenants, the addendum should be incorporated into the rental agreement by providing a notice in change in terms of tenancy. Use Form “Notice of Change in Terms of Tenancy” (Form CTT).
What about leases?
If your tenant is on a lease, then you’ll provide the addendum as a stand-alone notice.
What needs to be done for new or renewed tenants?
For all tenants signing a new lease or rental agreement or a renewed lease or rental agreement after January 1, 2020, the addendum must be included.
Where can I find more information?
A Q&A explaining all aspects of the new law will be available soon.