Governor Gavin Newsom signed Assembly Bill 1482 on Oct. 8, 2019, enacting statewide rent control legislation in California, which took effect on Jan. 1, 2020. Below is a summary of select key provisions.
- ANNUAL CAP ON RENT INCREASES EXPLAINED
AB 1482 Caps Annual Rent Increases at 5% Plus Inflation. Effective Jan. 1, 2020, AB 1482 caps rent increases statewide at 5% plus local inflation per year for the next 10 years, unless lawmakers vote to extend it.
- If you live in a city that does not already have a local rent control law, rent increases will be limited to 5%, plus local inflation, but can never exceed a total of 10%.
- For example, if the inflation rate is 3.8%, a landlord could raise rent by as much as 8.8%. If the inflation rate is 6%, a landlord could only raise rent by as much as 10%.
- The rate of inflation will be tied to the Consumer Price Index (CPI) in each metropolitan area. (The CPI increases about 2-3% each per year.)
- Rent may not be increased more than twice over a 12-month period (total sum of such increases not to exceed the annual rent cap).
- AB 1482 DOES NOT OVERRIDE LOCAL RENT CONTROL LAWS.
- BUILDINGS IMPACTED
AB 1482 Applies to Apartments and Other Multi-Family Buildings Containing Two Units or More. AB 1482 exempts single-family homes and condos, except when owned by a corporation, real estate investment trust, or limited liability corporation in which at least one member is a corporation. AB 1482 also exempts duplexes, when one of the units is occupied by the owner.
- AB 1482 Does Not Apply to Buildings Constructed Within the Past Fifteen (15) Years.
- This is a rolling date; units built in 2006 will be covered in 2021, units built in 2007 will be covered in 2022, etc.
- For example, apartments constructed in the future would not fall under the rent cap until fifteen (15) years after they’re built.
- “JUST CAUSE” EVICTIONS
For tenants that have lived in a unit for at least one year, AB 1482 prohibits evictions and non-renewals of leases without “just cause.”
- There are two types of “just cause”: (1) “At Fault,” and (2) “No-Fault.”
- “At Fault” includes failure to pay rent, criminal activity, or breach of a material term of the lease.
- “No Fault” includes if the owner/owner’s family intends to occupy the property, withdrawing the property from the rental market or an intent to demolish or substantially remodel the property, or compliance with a local ordinance or order issued by a governmental agency.
- Landlords must give the renter an opportunity to cure “curable lease violations.”
- If a landlord desires to convert the rentals to condos or “substantially” remodel the property, they will have to pay relocation fees equal to one month of rent.
- These rules will not apply to cities with their own local “just cause” laws.