Rental Housing Legislation That May Impact California Landlords and Property Managers

The first quarter of 2019 has been exceptionally busy for California legislators drafting acts, bills, and ordinances intended that would have impacts on the rental housing industry. From the increasing congressional popularity of “Just Cause” evictions laws and rent control, to the implementation of a statewide rental registry – take a few moments to update yourself on what’s new and pending in California legislation.

California’s 2019 state legislative session has a projected end date of September 13, 2019. Keep in mind that this state has full-time legislators, allowing the legislature to meet throughout the year after adjourning their regularly scheduled sessions.

*Bills with an asterisk are technically still active, but were either held under submission in committee, are still in committee, or the author withdrew the bill from committee.

PASSED: Tenant Screening Fee for 2019

The total allowed applicant screening fee has increased by $1.81 since last year. Application processing fees cannot exceed $50.94. This adjustment is made based on the changes to the Consumer Price Index.

PENDING: “Just Cause” Eviction Bills

This year, there are two proposed “just cause” eviction bills. While both propose to limit evictions to specific causes (like failure to pay rent or a breach of the lease) and include some “no fault” eviction causes (like demolishing the unit or withdrawing from the rental market), there are a few differences between the two bills. AB 1697 would only apply to tenants residing for 10 months or more, while AB 1481 would apply to all tenants. AB 1481 also bans the owner’s right to terminate the tenancy to move into the unit if the tenant is 60 years or older unless the tenant grants permission or if the lease provides notice of this tenancy termination option.

Both bills were moved to inactive file by Assembly Member Tim Greyson (D-14th district).

PENDING: Keep Californians Housed Act

Existing law requires a tenant within a month-to-month lease at the time the rental property is sold in foreclosure to be provided 90 days’ written notice. Tenants within a fixed-term lease (like a 12-month lease) would have right to possession until the end of the lease term, unless in specified circumstances. This existing law expires on December 31, 2019, however, if SB 18 passes, these provisions would stay in effect indefinitely.

PENDING: Rent Control Bills

Surprise, surprise… rent control is back! As of writing, AB 1482 would cap annual rent increases by 5% plus the percentage change in the cost of living. Rental property owners would be prohibited from terminating a tenancy to avoid the rent increase cap. If passed, these provisions would be active until January 1, 2030.

As AB 36 stands now, this bill would allow local governments to cap rents on single-family rental properties (exempting landlords with 10 or fewer units) and on construction that’s at least 20 years old.

On April 10, 2019 Long Beach became the latest city to push for an ordinance that places a rent cap, plus a base relocation charge and “Just Cause” Eviction rules.

PENDING: Extended Notices for Rent Increases

For a month-to-month tenancy, existing law requires that if you increase the rent by 10% or less, the landlord has to provide at least 30 days’ notice. For rent increases of more than 10%, the landlord has to provide an additional 30 days, to a total of 60 days’ notice. AB 1110 would require 90 days’ notice for rent increases of more than 10% but no more than 15%. For increases of more than 15%, landlords would have to provide 120 days’ notice. This bill has moved on to the Senate.

PENDING: Criminal Records on Rental Applications

Similar to “Ban the Box” employment laws, this bill would prohibit the property owner from inquiring about, or requiring the tenant to disclose, any criminal records during the rental application process. After the initial rental application phase, landlords can request a criminal background check. If the owner considers denying an applicant based on their criminal record, they are required to provide the rental applicant a written statement as to the basis of their possible denial within 5 days of receiving the background report. The rental applicant will then have 2 days to provide evidence of record inaccuracy, evidence of rehabilitation, or other factors. The owner would then need to reconsider within a specified time, and if the decision to deny holds, the landlord would need to notify the rental applicant in writing. AB 53 also requires rental property owners to include, in the application, a notice of the use of criminal records as part of the screening process.

PENDING: Allowances for Tenants to Shelter those at Risk of Homelessness

This bill would permit a tenant to temporarily allow a person at risk of homelessness to live with them for up to 12 months, regardless of the lease (written consent by the property owner). Landlords can adjust the rent payable under the lease as compensation for the occupancy of the extra person, and which terms would need to be agreed upon in writing. AB 1188 allows owners to establish rights and obligations for the person at risk of homelessness, the tenants, and the owner. This includes making the tenant liable (to the extent of the terms of the lease) and requiring a written rental agreement.

PENDING: Requirements for the Homeless Coordinating and Financing Council

SB 333 would require the Homeless Coordinating Financing Council to develop and implement a strategic plan for addressing homelessness in California by July 1, 2021.

PENDING: CalWORKs Extension & Payments

The California Work Opportunity and Responsibility to Kids (CalWORKs) program provides cash assistance and other benefits to qualified low-income families, which includes homeless assistance benefits to homeless families that have used “all available liquid resources in excess of $100”. This bill would allow the county to approve of additional days of temporary shelter assistance if necessary to prevent homelessness while the household is transitioning to receive permanent homeless assistance. The CalWORKs program currently provides permanent housing assistance to pay for the last month’s rent and security deposits, up to 2 months of rent arrearages, or utility deposits. This bill would also remove the requirement that rental property owners must have a history of renting properties in order to receive payments.

PENDING: Mandatory Acceptance of Section 8

The Fair Employment and Housing Act currently prohibits housing discrimination based on source of income. While Section 8 housing vouchers do not legally fall into the “source of income” category, this bill would change that. By expanding the definition of “source of income” to include section 8 housing vouchers, it would make it illegal for any property owner to deny a tenancy based on the applicant’s Section 8 enrollment.

PENDING: Use of Pesticides

This bill would expand the current prohibitions against the use of pesticide containing particular anticoagulants in wildlife habitat areas. Also known as the California Ecosystems Protection Act of 2019, if passed, this bill would prohibit the use of common types of rat poison.

PENDING: Long Beach’s Tenant Relocation Ordinance

On April 3rd, the Long Beach City Council voted in favor of an ordinance that would place relocation fee policies on rental properties. Since then, the city council has approved of an ordinance that would effectively cap rent increases at 10%, and limit the ability to terminate tenancies. The formal, second vote of this ordinance is scheduled for June 11th.

As it stands, this ordinance would require landlords with 4 or more units (in pre-1995 housing) to pay a tenant’s relocation fees (based on unit size) if they raise the rent by more than 10% in a year or require the tenant to move. While these amounts will periodically be revised, the ordinance currently lists fees as $2,706 for a studio, $3,235 for a one-bedroom, $4,185 for a two-bedroom, and $4,500 for a 3-bedroom or more.

FAILED: Housing Development Near Public Transportation

This bill would have allowed eligible neighborhood multifamily projects to submit an application for a streamlined, ministerial approval process that is not subject to a conditional use permit. The approval of a project (under these provisions) would have automatically expired after 3 years (with a 1-year extension available). SB 50 would have also revised the density bonus law by imposing additional requirements for developments located within a county with a population equal or less than 600,000. This bill was held in committee.

FAILED: Statewide Rental Registry

AB 724 would have created a rental housing registry for buildings within California. This would have included landlords or property owners with more than 15 units. If it would have passed, information like the name of ownership, the number and size of each unit, and the move-in dates would have been required. AB 724 was held under committee in May.

FAILED: Tenants Associations Withholding to Pay Rent

This bill would have given tenants the right to form, join, and participate in activities of a tenant association, subject to any restrictions as may be imposed by law, or to refuse to join/participate with a tenant association. Landlords under this bill would have been prohibited from terminating the lease or refusing to renew the lease of a unit occupied by a member of a tenant association. If SB 529 would have passed, Landlords seeking to terminate a tenancy would have been required to provide cause in writing, as well as a written notice to quit.

PASSED: City of Glendale’s “Right to Lease” Ordinance

This ordinance was revised in February to include relocation fees. Relocation fees apply to pre-1995 buildings with tenants choosing to vacate after a rent increase of over 7%. For buildings with 3-4 units, the fee is 3x the actual rent. For 5 and more units, the fee is 3x the amount of the rent after the rent increase. With tenants who have an overall household income equal or less than the median income for Los Angeles County (plus 30% of the AMI), the relocation fee will be based on the length of occupancy. It follows: 3-4 years of occupancy equals 4x the amount of the rent increase, 4-5 years equals 5x the rent increase, and 5+ years equals 6x the rent increase.

This ordinance also requires rental property owners to offer a 1-year lease to rental applicants (which an applicant can reject and enter into a shorter period as agreed upon). Current tenants in good standing are required a 90-day renewal notice that also includes the 1-year lease term. This too can be reduced to a shorter period at the tenant’s request.

PASSED: Inglewood’s Temporary Rent Caps and “Just Cause” Eviction Policy

In early March, the Inglewood City Council temporarily capped rent increases at 5% for pre-1995 apartments. It also imposed a “just cause” eviction measure. These temporary ordinances should last 45 days (expiring mid-April) but could be renewed by the council for up to a year.

FUTURE: Los Angeles Rent Controlled Housing Gets a 4% Allowable Increase

The City of Los Angeles’ annual allowable rent increase for rent controlled housing (properties subject to the Rent Stabilization Ordinance) has increased to 4%. This goes into effect from July 1, 2019 until June 30, 2020.

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Becky Bower is the Content Strategist here at the CIC Blog. She holds a degree in English, with a focus in creative writing, from CSU Channel Islands. Her biggest weakness is cake and favorite superhero is Batman.

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