New Requirements under Statewide Rent Control
As you might be aware, certain residential income property is exempt under AB 1482. This includes properties which received a Certificate of Occupancy within the last 15 years. In addition, Single Family Residences, Townhomes and Condominiums are exempt unless title is held in a corporation or a real estate investment (REIT). If your property is exempt, you still have to comply with certain provisions of AB 1482. This requires that certain language be contained in your rental agreement. If you have a tenant already in possession, this language must be included in a notice which is served on your tenant. This is the required language:
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.
As a member, you may obtain this form from the Apartment Owners Association.
Party Refuses to Leave After the Sale of Property
It is surprising, but in many instances a person who has sold property refuses to vacate after the close of escrow. Even though the purchaser is the rightful owner, “self-help” cannot be used to obtain possession of the property. The buyer will need to go through an unlawful detainer process. This requires serving a 3 Day Notice to Quit and then filing the eviction lawsuit. It should be noted that the seller will be liable for all losses suffered by the buyer, as a result of not being able to obtain possession at the close of escrow.
Many times landlords and tenants want to cancel a lease after all parties have signed the contract. There is no “cooling off” period in regard to a lease agreement. Even if the parties have not taken possession and money has not been exchanged, the lease is still a valid contract imposing both rights and obligations. Landlords should be 100% certain that the applicant will make a good tenant, prior to signing any lease agreement.
Serving a Notice to Pay Rent or Quit
Most landlords are aware that if the tenant is not home, it is permissible to serve a notice by posting it on the door and mailing one by first class mail. Sometimes, while attempting to serve the tenant, another person answers the door. What should you do in this situation? Under the law, you are allowed to serve a 3 Day Notice to Pay Rent or Quit by substituted service. You are permitted to serve the notice by leaving a copy with some person of suitable age and discretion. The law then requires that you mail a copy by first class mail to your tenant.
Agreement to Accept Higher Rent
If your property is subject to Statewide Rent Control (AB 1482) you are limited to yearly increases of 5% plus the CPI. Currently the CPI is 2.9%. The question has been asked whether you can exceed this amount, if an existing tenant signs a new rental agreement. The answer is clear that the signing of a lease will not legitimize this rent increase. You are obligated to stay within the maximum allowable percentage.
Electrical Charging Stations
With the popularity of electric vehicles, many tenants are attempting to charge vehicles from their parking space. Under California law a tenant has the right to install an EV charging station, solely at the tenant’s cost. The landlord can require the tenant to maintain a liability policy for $1,000,000, naming the landlord as an additional insured. In addition, the tenant can be required to maintain a property insurance policy. Lastly, the tenant is required to pay for the cost of electricity. In California, the cost is approximately $2 per day.
Terminating an Expiring Lease Under Rent Control
If your property is subject to Statewide Rent Control, you will need good cause to evict. Good cause is not required during the first year of the tenancy. If you have a tenant on a one-year lease, you will be forced to continue with the tenancy, unless you can evict for good cause. On this basis, do not issue a one-year lease to a new tenant. Either have the tenant sign a month to month agreement or a 6 month lease. In this way you will be able to terminate the tenancy, without cause, within the first year.
New Rules Regarding a 3 Day Notice to Perform or Quit
Under AB 1482 if a Notice to Perform or Quit is served, a tenant will have 3 days to comply. If the tenant does not comply timely, the law requires a landlord to serve a 3 Day Notice to Quit before proceeding with an unlawful detainer. This additional requirement does not extend to a Notice to Pay Rent or Quit or property not subject to Statewide Rent Control.
Law Firm Update: I am proud to announce that Attorney HG Long, formally with Fast Eviction, has joined our law firm. By adding Attorney Long to our team, we continue to make our firm the strongest for representing income property owners.
Dennis Block, of Dennis P. Block & Associates can be reached for information on landlord/tenant law or evictions at any of the following offices: Los Angeles: 323.938.2868, Encino: 818.986.3147, Inglewood: 310.673.2996, Long Beach: 310.434.5000, Ventura: 805.653.7264, Pasadena: 626.798.1014, Orange: 714.634.8232, San Diego: 619.481.5423 or by visiting www.evict123.com. Now, you can also read Dennis Block on Twitter, www.twitter.com/dennisblock or text him at (818) 570-1557. “Landlord Tenant Radio Weekly Podcasts can be heard at any time at www.EVICT123.com or download the app “EVICT123”.