AB 1482 Tenant Protection- Updated Guide for CA Landlords and Tenants
Are you familiar with the AB-1482 Tenant Protection Act of 2019?
It applies to the Statewide rent control Bill which was passed in September of 2019 also known as the Tenant Protection Act
It goes over how much you can increase the rent for a tenant, the reasons you can legally terminate a lease, and if a landlord will owe the tenant relocation fees.
In this post I’ll go over rent increases, lease terminations, which properties are subject to AB 1482 and which properties are exempt.
What is AB 1482?
AB 1482 went into effect on January 1st, 2020. Unfortunately, many landlords and renters are not aware of the new rules and regulations.
AB 1482 can be quite complex, but for the most part it has two main provisions.
One is related to rent caps, how much a landlord can increase rent on a rental unit, and the second provision is related to just cause evictions, specifically when a landlord can terminate a tenancy and whether relocation assistance is owed.
AB 1482 covers all residential properties in the state, but bear in mind that there may be local regulations that override AB 1482 if they’re more strict.
So be sure to check your local city for any rental restrictions or policies.
Evictions and Terminations:
The word eviction to some people may imply that your tenant did something wrong.
AB 1482 stimulates what reasons you can legally terminate a lease.
Under AB 1482 the reasons that you can legally terminate a lease are classified as a just cause eviction and then broken down into 2 categories: at-fault eviction or a no-fault eviction.
If a lease is terminated by an at-fault eviction the landlord will not be subject to relocation expenses.
If the reason is a no-fault eviction then the landlord will be subject to paying the relocation expenses of the tenant. Those relocation expenses would be equivalent to one month’s rent.
The landlord would either give you the equivalent of one month’s rent or waive one month’s rent.
So let me recap here. If your property is subject to AB 1482 you can only terminate a lease based on what is classified as At-Fault reasons or what is classified as No-Fault reasons.
The reason for the distinction between these two classification is At-Fault evictions will not require you to provide relocation expenses and No-Fault evictions will.
This post is not intended to provide you with specific legal advice, just to help you understand AB 1482 and how it may affect your rental property.
For a complete list of just cause eviction reasons, I recommend you review the actual Assembly bill which breaks all the reasons down and the conditions under which they apply. Or contact an attorney who you trust to provide you with legal advice.
Here is a link to the actual Assembly Bill.
If you need a recommendation for a legal expert please feel free to contact me and I can provide you the contact information for a good paralegal or attorney to answer your questions.
The first big question is whether a property is exempt from AB 1482 or whether a property is subject to AB 1482.
If your rental property is a single family home or a condo, or an owner occupied duplex, meaning an owner lives on one side of the duplex. That property will be exempt from AB 1482 as long as the owner is not a real estate investment trust, a corporation or an LLC that has a corporation involved.
The other exempt category would be properties that are 15 years old or newer.
This exempts newer apartments regardless of who owns this. And the reason is that California still wants to incentivize developers of housing.
So if you build an apartment building, you will be exempt from AB 1482 for 15 years.
An important point is that all tenants must be occupants of the rental unit for at least 12 months in order for the provisions of AB 1482 to be applied to the lease.
Another detail is that if your rental property qualifies for the exemption you still need to give the tenant the proper exemption language in a disclosure.
Failure to notify your tenant that the property is exempt from AB 1482 will make the property subject to AB 1482 even though the property meets the exemption criteria.
Which properties are subject to AB 1482?
- Any residential non-owner occupied duplex or bigger
- Any property that is owned by a LLC, REIT, or corporation
- Any property where the tenant has not been notified that the property is exempt from AB 1482
If you have unique circumstances and are unsure if your property is exempt or not exempt, then I encourage you to contact a lawyer who can counsel you on your unique situation.
If a property is exempt from AB 1482, a landlord isn’t restricted on increasing rents and theoretically can raise rent as much as they want to.
When a tenant moves out, the landlord can set the rent to the market rate and is not limited on what the new market rent will be.
If a unit is subject to AB 1482, then rent increases are capped at 5% plus the consumer price index but cannot exceed 10%.
Regardless if the property is subject to AB 1482 if a rental increase is 10% or less, that can go into effect on a month to month tenant with a 30 day notice.
If a rental increase is more than 10%, even 10.1%, the tenant must be given a 90 day notice before that rent increase can go into effect.
So if you’ve been paying attention, you know that a property subject to AB 1482 will be able to give a 30 day notice.
The only way you would need to give a 90 day notice would mean that you raised the rent above 10% and your property is exempt from AB 1482.
Evictions and Terminations:
The word eviction to some people may imply that your tenant did something wrong.
AB 1482 stimulates what reasons you can legally terminate a lease.
Under AB 1482 the reasons that you can legally terminate a lease are classified as a just cause eviction and then broken down into 2 categories: at-fault eviction or a no-fault eviction.
If a lease is terminated by an at-fault eviction the landlord will not be subject to relocation expenses.
If the reason is a no-fault eviction then the landlord will be subject to paying the relocation expenses of the tenant. Those relocation expenses would be equivalent to one month’s rent.
The landlord would either give you the equivalent of one month’s rent or waive one month’s rent.
So let me recap here. If your property is subject to AB 1482 you can only terminate a lease based on what is classified as At-Fault reasons or what is classified as No-Fault reasons.
The reason for the distinction between these two classification is At-Fault evictions will not require you to provide relocation expenses and No-Fault evictions will.
This post is not intended to provide you with specific legal advice, just to help you understand AB 1482 and how it may affect your rental property.
For a complete list of just cause eviction reasons, I recommend you review the actual Assembly bill which breaks all the reasons down and the conditions under which they apply. Or contact an attorney who you trust to provide you with legal advice.
Here is a link to the actual Assembly Bill.
If you need a recommendation for a legal expert please feel free to contact me and I can provide you the contact information for a good paralegal or attorney to answer your questions.
At-Fault vs. No-Fault Evictions:
The reasons for an At-Fault eviction or termination would be failure of a tenant to pay rent, a breach of a term in the lease agreement, creating a nuisance on the property, criminal activity, illegally subletting in violation to the terms of the lease, or failing to deliver possession to the property after providing written notice to the owner of the tenants intent to terminate the lease.
This gives you a general idea of what constitutes an At-Fault eviction. The reality is there are many conditions relating to when the lease was originally created, or other specific definitions so I would encourage you to read the actual bill directly or contact an attorney to ensure your situation complies with any of the At-Fault conditions.
The reasons for No-Fault evictions or terminations would be if you or a family member intend to occupy the property. It can’t be a cousin or distant relative, but must be a direct member of your family such as children, parents or grandparents.
A No-Fault eviction would apply if you intend to take the property off the rental market and not rent it out. Or if the government issues an order that prohibits the property from being habitable.
If you plan to “substantially” remodel the home and would require someone to move out during the remodel. Things like cosmetic improvements like painting, minor repairs, or flooring would not qualify.
It is the responsibility of the landlord to issue the notice to the tenant for the just cause eviction with the reason for the termination. If it is deemed a curable offense the tenant should be given the opportunity to cure the violation within a specified time.
If it is a no-fault eviction or termination it is the landlords responsibility to inform the tenant of their right to received relocation assistance. Failure to do so and failure of the tenant to request does not relieve the landlord of their responsibility to compensate the tenant.
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What if I didn’t know about AB 1482:
One of the most common questions I get is, what if I didn’t know about AB 1482 and I haven’t disclosed to my tenant the the property is exempt?
What do I do as a landlord? Well, it’s very important that you consult with an attorney.
For properties that are exempt, they will need to make sure that for any tendency before July 1st, 2020, It isn’t required to be provided in the rental agreement so you can likely get the disclosure to your tenant, but I would still consult with an attorney.
That’s for any tenant that started before July 1st, 2020.
Now, if the tenancy commenced or was renewed after July 1st, 2020, the notice was required to be provided in the rental agreement.
And if you miss that, you may not be able to give the tenant the appropriate exemption language, and that’s why you need to discuss with an attorney.
So if you have leased out a property after July 1st, 2020, or renewed a lease after July 1st, 2020, and did not include the exemption language for an exempt property you should discuss your situation with an attorney asap.
As for the exemption language that’s required for AB 1482, if your property’s exempt, it must state this in the lease.
There are various disclosures available online for AB 1482. I can not tell you if they comply or have the necessary language required to communicate the AB 1482 exemption.
You would have to consult with legal expert to see, but if you are using an old lease its time to update your your lease.
If its time for your tenants to renew their lease or month to month agreement, you should really get your leases updated and provide then with an updated lease that with language that covers AB 1482.
As you can see there is a lot to AB 1482. I encourage you to review it directly so you can understand all the conditions and nuances of the bill.
Here is the link again.
If you have any questions about your rental property or the current local real estate market, please feel free to contact me or set up an appointment.
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