In this article, the Tenant Protection Act of 2019 may be referred to as California Rent Control or the Act. The Act passed into law in 2019, which implemented statewide just-cause termination requirements and rent increase caps for many rental properties.
Q: I own two condominiums in San Diego County and a friend recently mentioned that the amount I can increase my tenant’s rent may be limited by California law. Does the California Rent Control law established in the Tenant Protection Act of 2019 apply to my property?
A: It depends. Several types of properties are exempt from the Tenant Protection Act of 2019. Determining whether your property is exempt from the rent caps and just-cause requirements depends on 1) what type of property it is and 2) how you own the property.
The Tenant Protection Act of 2019 does not apply to the following types of rental properties as long as title for the rental property is not held by 1) a real estate investment trust, 2) a corporation, or 3) a limited liability company in which at least one member is a corporation.
- Transient and tourist hotel occupancy,
- Housing accommodations in a nonprofit hospital, religious facility, extended care facility, licensed residential care facility for the elderly,
- Dormitories owned and operated by an institution of higher education or a kindergarten and grades 1 to 12, inclusive, school,
- Housing accommodations in which the tenant shares bathroom or kitchen facilities with the owner who maintains their principal residence at the residential real property,
- Single-family owner-occupied residences, including a residence in which the owner-occupant rents or leases no more than two units or bedrooms, including, but not limited to, an accessory dwelling unit or a junior accessory dwelling unit,
- A duplex in which the owner occupied one of the units as the owner’s principal place of residence at the beginning of the tenancy, so long as the owner continues in occupancy, and
- Housing that has been issued a certificate of occupancy within the previous 15 years.
- Residential real property that is alienable separate from the title to any other dwelling unit – i.e., condos and single-family homes
Q: I am a landlord and I own an 8-unit apartment building in Lakeside, CA, which is a city in San Diego County. Does the California Rent Control law established in the Tenant Protection Act of 2019 apply to my property?
A: Yes, all apartment buildings are subject to California Rent Control unless a more restrictive rent control law applies. After a tenant in a rental property that is subject to California Rent Control has occupied the property for 12 or more months, the rent increase caps and just-cause termination requirements will apply.
Q: I own an apartment building that is subject to the Tenant Protection Act of 2019. What is the maximum increase I can give to my tenants for 2021?
A: Under the Tenant Protection Act of 2019, an annual rent increase is limited to 5 percent, plus the percentage change in the local cost of living but not to exceed 10%. Under the Act, the “Percentage change in the local cost of living” or inflation is defined as the percentage change from March 1 of the prior year to March 1 of the current year in the regional Consumer Price Index (CPI) for the region where the residential rental property is located. This data is published by the United States Bureau of Labor Statistics. The San Diego Metropolitan Area’s annual inflation rate from March 2020 to March 2021 was 4.1%, so you can raise your tenant’s rent by 9.1% effective no earlier than August 1, 2021.
Q: A tenant just moved out of a unit in my apartment building. How much rent can I charge a new tenant for the unit?
A: If no tenants from the prior tenancy remain, you can establish an initial rent rate not subject to the rent cap (5% + CPI) restriction under the Act. Any subsequent rental increases for the new tenancy will, however, be subject to the rent cap provisions of the Act .
If you have not provided your tenant(s) with notice of whether rent control applies to their tenancy, you should do so immediately. Please contact an attorney’s office or the AOA to obtain the necessary forms to provide to your tenant.
Attorney Franco Simone, of Simone & Associates and The Landlords’ Legal Center, has been doing evictions for over 20 years. He is also an adjunct law professor at the University of San Diego. Mr. Simone’s office is open Monday – Friday from 9:00 AM to 5:00 PM. Tel: 619-235-6180, website: www.landlordslegalcenter.com or email [email protected]