Having been so caught up in the COVID Eviction Moratorium drama, you may have missed complying with AB 1482 – (California State Rent Control), which went into effect in 2020.   However, now that moratoriums and rent freezes are beginning to expire (in some areas), it’s important that we revisit this law. 

California State Rent Control – AB 1482

If you say, “My property has NEVER had rent control, please read on.  In brief, this law covers all California rental properties EXCEPT:

  • Homes that are NOT owned by a corporation, real estate investment trust (REIT), or an LLC where one member is a corporation, AND tenants have received notice that the unit is exempt from AB 1482 in the form required by the bill.
  • Rental property built within the past 15 years, including accessory dwelling units.
  • A duplex in which the owner occupies one of the units (as the owner’s principal place of residence) before the other unit’s tenancy, and the owner continues to occupy the unit.
  • Housing that is restricted by a deed, regulatory restrictions, or other recorded document limiting the affordability to low or moderate-income households.
  • Single-family homes, condos, or townhomes where the owner occupies and rents at least 2 bedrooms or units (ADUs and JADUs) (Just cause exemption only)
  • Rental property that is subject to local ordinances that restrict rent increases to less than 5% plus CPI. (rent cap exemption only)
  • Owner-occupied rental properties where the tenant shares bathroom or kitchen facilities with the owner. (just cause exemption only)
  • Hotels.
  • Rental property provided by non-profit hospitals, organizations such as churches, extended care for the elderly, adult care facilities, etc. (just cause exemption only)
  • Mobile homes.

Did You Serve the State Notice?

Now that you know if your property is or is not covered by state rent control, and if you haven’t already – you need to serve your tenants the proper notice. The forms are available to members on AOA’s website.  

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  • SUBJECT TO State Rent Control –(AOA Form 201S) or 
  • EXEMPT FROM State Rent Control (AOA Form 201E

If you failed to serve these notices, there are serious penalties that can be imposed. If your property is exempt, you can lose your exemption.  If your property is subject to, your tenants can refuse to pay a rent increase. If you never mailed these notices to your tenants – DO IT NOW!

Ok, You’ve Served Your Notices, Now What?

If your property is EXEMPT, you are done, and you can go back to business as usual, monitoring any COVID-related restrictions that might still be in effect for your property. If your property is SUBJECT TO AB 1482, you have restrictions on how much you can raise your rent.  It is tied to the Consumer Price Index and is updated each year in April and May.  Below are the limits for rent increases effective 8/1/22 – 7/31/23

 

AREA Maximum Allowable Increase
Alameda, Marin, Contra Costa, San Francisco, & San Mateo Counties 10%
Los Angeles & Orange Counties  10%
Riverside & San Bernardino Counties 10%
San Diego County 10%
California (any area not listed above) 10%

 

New Tenants 

For any new tenant, notice. In the AOA lease, be sure your lease contains the language necessary for this notice. In the AOA lease, it’s contained in Paragraph 39. If you use a different lease, AOA also offers lease addendums you can use. They are forms 202 S (Addendum for property SUBJECT to AB 1482) and 202 E (Addendum for property EXEMPT from AB 1482). If your property is EXEMPT, you are done, and you can go back to business as usual, monitoring any temporary restrictions that might be in effect for your property (a Declaration of Emergency for a local natural disaster, for example).

Rent Increases

You are allowed to raise the rent a maximum of five percent plus the Consumer Price Index (CPI) for your area each year, up to a maximum of ten percent. You can raise the rent a maximum of two times a year, but the total increase cannot exceed the 5% + CPI (which this year is 10%).  Before you go any further, make sure there isn’t a COVID-related rent freeze in your area. It could be your city or county, so you should confirm both by visiting the official websites for each.  Next, prepare the rent increase notice.  Since these increases are always less than 10%, a 30-day notice is required. Members can download and use Form 102 from www.aoausa.com for FREE. If you are a member and  need any assistance completing the form, call one of our membership advisors at 800-82704262 and they can help. 

 

What is Just Cause Eviction?

Under AB 1482, after your tenant has lived in your property for one year, you can only evict for “Just Cause” reasons (or at least one roommate/tenant that has occupied the unit for 24 months). These are limited to situations like moving a family member into the rental, major renovations, or removing the unit from the rental market.  This is a thorny area right now with all the COVID regulations.  The safest bet is to consult an attorney before asking a tenant to move out so you avoid any expensive legal entanglements. 

 

Melody Scott is AOA’s Membership and Operations Manager. She and her husband have managed family-owned residential properties for over 25 years in different parts of California.  She also works with a homeowners’ association and oversees a manager caring for a property too far away to manage herself. Melody has been very active in her local community and is a member of the Pasadena Tournament of Roses.     

Read more articles from the March edition of the AOA Magazine