In September of 2019, California became the second state in the country after Oregon to pass a statewide rent cap when California Governor Gavin Newsom signed Assembly Bill 1482 into law. The bill came into law on January 1, 2020, and will remain in effect until 2030. During this time, it is expected to affect almost 2.4 million properties.
AB-1482: An Introduction
AB-1482 limits rent increase across California by 5 percent plus inflation(computed according to the local inflation rate). The bill also places certain restrictions on tenant evictions. Landlords in California cannot increase rent by more than 5 percent, with the combined total being below 10 percent.
The bill also makes it mandatory for a landlord to provide a just reason for evicting a tenant who has been residing on their property for the last 12 months or more (24 months or more in case of two or more tenants). Examples of just reasons for eviction are – nonpayment of rent, refusal to sign a lease renewal agreement, unauthorized subletting, and using the property for criminal activities.
Some other grounds on which a landlord can evict a tenant are a material breach of a rental agreement (typical examples are creating nuisance or failure to properly maintain the property) and refusal to allow the landlord to perform an inspection.
AB-1482 also states that if a landlord evicts their tenant without a just reason, they will have to pay the evicted tenant a month’s rent in advance as relocation expenses. Eviction without a cause is permissible if:
● The property owner is getting out of the rental business
● The landlord or a relative is moving into the unit
● The owner intends to remodel the home or change it into a condo
Rental Properties Covered by the New Law
AB-1482 covers buildings that are more than 15 years old and contain at least a couple of rental units that are not occupied by the landlord. AB-1482 will impact buildings that are within communities that have rent control; however, it does not cover buildings that are less than 15 years old.
AB-1482 will primarily apply to apartments and multi-family buildings. Single-family homes, duplexes, and condos will be exempt(if at least one unit is occupied by the owner), however, properties owned by corporations or real estate investment trusts will be covered.
The Impact of AB-1482 on Property Values
The extent of impact that AB-1482 will have on a property will depend on multiple factors, including whether it is located in an urban or rural area. While urban areas typically experience a high rental increase every year, rural areas usually do not experience a rise of more than 5 percent.
Rent control reduces the incentive to invest in a new property. In the long run, rental property values will become dependent upon tenant turnover.
Need legal help in an eviction matter? The Law Office of Stephen M. Beckwith has you covered. Stephen Beckwith is one of the most trusted landlord tenant attorneys in Santa Rosa and has 27 years of legal experience. Call (707) 526-5454 or fill out this form for your free, no-obligation case evaluation.