Several  laws taking effect this year will have a significant impact on the management of California apartment buildings.

  1. The State of California enacted statewide rent control that was effective January 1, 2020.

Most apartment owners who were previously exempt from local rent control are now under the rent restrictions of this new law (AB1482) AND its just cause eviction restrictions. The law has many provisions which will affect the operation of your apartments, too many to list here, but the three main points to know are:  (a) Annual rent increases will be limited to 5.00% plus the “regional CPI rate”. According to the Bureau of Labor Statistics, the regional CPI for our local West region provides for an increase of 2.9%, making the limit on rent increases 7.9% at this time.  (The author of the bill may clarify an error he made in the index by amendment.)  (b)  New disclosure forms and lease provisions will be required for your new and existing residents, and (c) The law also includes “at fault” and “no fault” just cause scenarios which will affect when and how landlords can evict residents for reasons other than failure to pay rent.

  1. This new law may also require landlords to roll back a resident’s current rent if the landlord increased the rent beyond 7.9% after March 15, 2019.
  2. The just cause eviction section under AB1482 lists specific scenarios where a tenant’s conduct is an acceptable reason to evict.  Landlords should seek professional guidance before initiating any eviction.
  3. In addition to Statewide rent control, the State is now prohibiting landlords from denying applications and residency to Section 8 participants.  Lots of rules here but the takeaway is that landlords should NOT be posting “No Section 8” in their rental advertising.

These changes are numerous and detailed so we strongly recommend apartment owners seek professional guidance on the changes that will affect their investments this year.

If you’re ready to transition the management of your apartment building to professional management, please give me a call or email today. I’d be happy to talk.