The California Assembly Bill 1482, also known as the Tenant Protection Act, was a significant piece of legislation passed to address the ongoing housing crisis in the state. Signed into law on January 1, 2020, AB 1482 aimed to provide renters with stronger protections against arbitrary rent increases and unjust evictions. This blog aims to shed light on the key provisions of AB 1482 and what it means for property owners in California. This blog is not meant as legal advice but for owners to gain knowledge of the bill.
California has long grappled with a severe housing affordability crisis, resulting in skyrocketing rents and a lack of available rental units due to a housing deficiency. Consequently, many tenants faced instability and displacement due to rental increases and no-cause evictions. In response to these challenges, lawmakers introduced AB 1482 to strike a balance between safeguarding tenants' rights and maintaining property owners' interests.
Key Provisions of AB 1482
1. Rent Control and Cap on Rent Increases: One of the critical aspects of AB 1482 is its establishment of statewide rent control measures. It caps annual rent increases at 5% plus the local rate of inflation (CPI), with a maximum limit of 10% in total. This limitation applies to buildings that are at least 15 years old, with some exceptions for certain housing types, such as single-family homes, condos, and duplexes, among others.
2. Just Cause Eviction Protection: The bill prohibits landlords from evicting tenants without a just cause, ensuring that renters cannot be removed from their homes without valid reasons, such as non-payment of rent, lease violations, or other legitimate causes specified in the legislation.
3. Tenant Relocation Assistance: In cases where a tenant is evicted due to no fault of their own, the bill requires landlords to provide relocation assistance as a form of compensation to help mitigate the financial burden on the tenant.
4. Exemptions: AB 1482 does not apply to properties built within the past 15 years or to single-family homes unless the owner is one of the non-exempt reasons. Additionally, certain affordable housing units and government-subsidized housing are exempt from rent control.
5. "Just Cause" Defined: The legislation outlines specific reasons that qualify as "just cause" for eviction, which include non-payment of rent, violation of lease terms, criminal activity on the property, and other legally permissible reasons.
Impact on Property Owners
For property owners in California, AB 1482 has implications:
1. Stability and Predictability: AB 1482 provides stability and predictability for landlords as it sets a reasonable limit on rent increases, helping them plan for their property's financial future more effectively. However, if you rent is not at market, you cannot have the unit vacated for that reason.
2. Tenant Retention: By establishing just cause eviction protections, the bill encourages long-term tenant retention, reducing vacancies and turnover costs for landlords. On the other hand, if you want to sell a unit that is 2 or more units where the owner was not the first one living in the dwelling, the tenant becomes a tenant for life after one year. Selling a multiplex dwelling is not a reason that tenants must vacate unless the entire building is coming off the rental market. Costa Hawkins will also kick in.
3. Limitations on Income Potential: The 5% plus CPI cap on rent increases may limit the income potential for some landlords, especially if their expenses increase beyond the allowed rent hike percentage. This may stop owners from renovating units if there is no increased rent to offset the renovations.
4. Compliance and Awareness: Property owners must familiarize themselves with the provisions of AB 1482 to ensure they remain compliant with the law and avoid potential legal issues.
California Assembly Bill 1482, the Tenant Protection Act, was a crucial step towards addressing the housing crisis and providing much-needed security for renters in the state. This is a very complex bill, and this article is not considered legal information, it is to inform owners of AB1482 and to be aware that all California tenants have rights. California is starting to levy fines for those circumventing the bill. We highly suggest consulting a real estate attorney prior to giving notice. Also keep in mind if your city has its own rent control, whichever bill or ordinance is the most stringent must be followed by the landlord, which at times means puzzle piecing bills together.
