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AB 1482 (Statewide Rent Control) Information
The California State Assembly passed AB 1482 and the bill has been signed into law by Governor Gavin Newsom. SAMCAR and the Coalition for Housing Equality, with the support of the California Association of REALTORS® (C.A.R.), is providing information to REALTORS® and property owners about the implications of this new state law and how to comply.
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C.A.R. Quick Summary of the Statewide Rent Cap and Just Cause Eviction Law
Rent Cap
Rent increases are capped at 5 percent plus inflation, or up to a hard cap of 10 percent, whichever is lower. SEC. 3. Section 1947.12 (a)(1)(b)
Just Cause
Property owners may only evict for "just cause." There is a list of 15 reasons which are divided into two categories:
"At fault" termination of tenancy is generally based upon a tenant's breach of the lease, among other reasons, and does not require the payment of relocation assistance or rent waiver (see Section VII below.) "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 of tenancy is allowed when the tenant has not breached the lease and will require the landlord to pay one month's rent in relocation assistance or grant the tenant a rent waiver. "No fault" reasons include owner occupancy, withdrawal from the rental market, substantial remodeling/demolition and compliance with government order to vacate the property,
The just cause eviction rules only apply to tenants who have been continuously and lawfully occupying the property for 12 months.
Exemptions from rent cap and just cause
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Single family properties and condos are exempted if:
- Notice of the exemption is provided to the tenants and;
- The owner is not a REIT,
- A corporation, or
- An LLC in which at least one member is a corporation
- To obtain this exemption, the RCJC form must typically be made a part of the lease or rental agreement. (See the section entitled CAR's Rent Cap and Just Cause Addendum (Form RCJC) on how this may be done).
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Housing that has been issued a certificate of occupancy within previous 15 years.
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A property containing two separate dwelling units within a single structure (a traditional duplex) in which the owner occupied one of the units as the owner's principal place of residence at the beginning of the tenancy, so long as the owner continues in occupancy, and neither unit is an accessory dwelling unit or a junior accessory dwelling unit.
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Dormitories constructed and maintained in connection with any institution of higher education or a kindergarten and grades 1 to 12, inclusive school.
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Owner occupied single-family properties renting no more than two bedrooms including Accessory Dwelling Units ("ADU"s). (This exemption applies only to just cause but not the rent cap).
AB 1482 (Statewide Rent Control) Information
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The AB 1482 (Statewide Rent Control) information packet contains material from the following sources:
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C.A.R. The Tenant Protection Act of 2019 (Statewide Rent Cap and Just Cause Eviction Law) (requires C.A.R. log-in)
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Bureau of Labor Statistics: Consumer Price Index, San Francisco Area — August 2019
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CALegInfo: AB-1482 Tenant Protection Act of 2019: tenancy: rent caps.
Exempt Properties
The statewide rent cap and just cause eviction law (AB 1482) comes into effect on January 1, 2020. If you are the owner of a single-family property or condo, you may qualify for an exemption from both the rent cap and just cause portions of the law. However, you are not automatically exempt. To claim the exemption, you will need to:
1. Provide the tenant(s) with an official form notifying them that you are exempt. (Until June 30, 2020, it may be provided as a notice. After that date it must be provided in the rental agreement).
a. If you have raised the rent in excess of 5% + CPI (for a total of 9% in the Counties of San Francisco, San Mateo, Marin, Alameda, and Contra Costa) since March 15 of this year, tenants must receive the official form by December 31, 2019 for exemption to AB 1482 to apply.
b. The official form that notifies tenants of exemption can be given to tenants until June 30, 2020 if you have no intention of raising rents in excess of 9% or serving a "no cause" eviction.
c. By July 1, 2020, all notices of exemption must be included in the lease agreement or "Notice of Change in Terms of Tenancy"
2. Indicate that the property is not owned by any of the following:
Real estate investment trust;
Corporation; or
Limited liability company in which at least one member is a corporation.
CAR's new "Rent Cap and Just Cause Addendum" (Form RCJC) may also be used and will be available through zipForm.
If you have any questions or need clarity, please contact a real estate attorney.
Assembly Bill No. 1482 Tenant Protection Act of 2019: tenancy: rent caps.
[Excerpt regarding exemptions]
(e) This section shall not apply to the following types of residential real properties or residential circumstances:
(1) Transient and tourist hotel occupancy as defined in subdivision (b) of Section 1940.
(2) Housing accommodations in a nonprofit hospital, religious facility, extended care facility, licensed residential care facility for the elderly, as defined in Section 1569.2 of the Health and Safety Code, or an adult residential facility, as defined in Chapter 6 of Division 6 of Title 22 of the Manual of Policies and Procedures published by the State Department of Social Services.
(3) Dormitories owned and operated by an institution of higher education or a kindergarten and grades 1 to 12, inclusive, school.
(4) Housing accommodations in which the tenant shares bathroom or kitchen facilities with the owner who maintains their principal residence at the residential real property.
(5) Single-family owner-occupied residences, including a residence in which the owner-occupant rents or leases no more than two units or bedrooms, including, but not limited to, an accessory dwelling unit or a junior accessory dwelling unit.
(6) A duplex in which the owner occupied one of the units as the owner's principal place of residence at the beginning of the tenancy, so long as the owner continues in occupancy.
(7) Housing that has been issued a certificate of occupancy within the previous 15 years.
(8) Residential real property that is alienable separate from the title to any other dwelling unit, provided that both of the following apply:
(A) The owner is not any of the following:
(i) A real estate investment trust, as defined in Section 856 of the Internal Revenue Code.
(ii) A corporation.
(iii) A limited liability company in which at least one member is a corporation.
(B) (i) The tenants have been provided written notice that the residential property is exempt from this section using the following statement:
"This property is not subject to the rent limits imposed by Section 1947.12 of the Civil Code and is not subject to the just cause requirements of Section 1946.2 of the Civil Code. This property meets the requirements of Sections 1947.12 (d)(5) and 1946.2 (e)(8) of the Civil Code and the owner is not any of the following: (1) a real estate investment trust, as defined by Section 856 of the Internal Revenue Code; (2) a corporation; or (3) a limited liability company in which at least one member is a corporation."
(ii) For a tenancy existing before July 1, 2020, the notice required under clause (i) may, but is not required to, be provided in the rental agreement.
(iii) For any tenancy commenced or renewed on or after July 1, 2020, the notice required under clause (i) must be provided in the rental agreement.
(iv) Addition of a provision containing the notice required under clause (i) to any new or renewed rental agreement or fixed-term lease constitutes a similar provision for the purposes of subparagraph (E) of paragraph (1) of subdivision (b).
