Half of all California renters, more than 3 million homes, spend more than a third of their income on rent. This means that half of all renters in California are “rent-burdened”, according to the federal government’s definition of such. To help alleviate the rent-burdened and the overall housing crisis in California, Assemblyman David Chiu introduced Assembly Bill 1482 (“AB 1482”) in February of 2019 to cap rent increases and prohibit evictions without cause. Governor Gavin Newsom signed
AB 1482 on October 7th, 2019 and the measure has now has become law in California. In 2020, landlords and tenants alike will see a major change in tenancies across the state. While AB 1482 doesn’t necessarily replace existing protections for tenants across the state regarding rent increases and evictions, it does provide protections in areas where tenants otherwise received limited to no protection.
AB 1482 applies to residential units universally across California, except for:
- housing built within the last 15 years
- single-family homes not owned by corporations or trusts, and
- duplexes where the owner lives in one of the units.
Civil Code 1946.2(e) provides a full list of exempted units to the restrictions provided by AB 1482.
AB 1482 places a cap on annual rent increases and requires landlords to have Just Cause prior to evicting a tenant.
Rent Increase Cap
AB 1482 imposes a cap on rent increases, capping the amount a landlord can increase the rent to 5% plus inflation (the percentage change in the cost of living), or 10%, whichever is lower, in any 12-month period, with certain exceptions.
Just Cause Eviction
AB 1482, with certain exceptions, prohibits a landlord from terminating a tenancy without just cause, when the tenant has continuously and lawfully occupied the unit for 12 months. AB 1482 breaks down the Just Causes into two categories: At-fault Causes and No-fault Causes. Some of the at-fault causes include, but are not limited to a default in payment of rent, breach of the lease, criminal activity, etc. No-fault causes include, but are not limited to landlord’s intent to occupy unit, withdrawal of the unit from rental market, intent to demolish or substantially remodel the unit, etc.
Under AB 1482, for no-fault cause evictions, the landlord must now either provide the tenant with one month’s rent for relocation assistance or waive the tenant’s last month of rent. The tenant’s income and financial health has no effect on this requirement.
AB 1482 also changed notice requirements for evictions, now requiring the landlord to specifically enumerate the cause. Previously, 30- and 60-day notices could be provided in many instances with no cause stated. Landlords and Property Managers must now renew their notices and be careful to abide by the requirements outlined in AB 1482.
Governor Newsom signed the bill into law on October 7th, 2019. AB 1482 shall remain in effect until January 1, 2030, unless otherwise modified or amended.
Any and all changes in local and statewide real estate laws have sparked heated debates among homeowners, tenants, real estate agents, and everyone in between. Considering AB 1482 is a statewide regulation that places restrictions both on rent and evictions, this new law has been hotly contested across the state. The California Legislative Information website bill analysis section provides some insightful feedback regarding the arguments in support and opposition, provided below:
Arguments in Support
According to the Silicon Valley Leadership Group, “The Leadership Group is deeply committed to advocating and supporting policies that reduce the rental burden on our region’s workforce. We recognize the need for production of new, high quality homes, but also note that it is vital we protect residents now. AB 1482 would provide the necessary protections to ease the housing crisis and prevent displacement for the large portion of rent-burdened California tenants. In the past 10 years, the median rent has increased by more than a third, while the median income has remained flat, and has decreased for many low-income Californians.”
Arguments in Opposition
According to the California Association of Realtors, “Recent amendments most noticeably reduce the rent cap from the agreed to 7% plus regional CPI to 5% plus regional CPI, and radically extend the agreed-upon sunset date from 3 to 10 years. Other amendments, which are mostly technical and clarifying in nature, do not C.A.R.’s concerns. AB 1482 will, among other things, impose onerous standards upon small property owners and, in turn, exacerbate the state’s housing crisis.”
AB 1482 changes the landscape of residential tenancies as we know them in California. Our firm exclusively practices real estate law and is well equipped to handle the challenges and changes that will come with this new law. If you have questions or need guidance concerning AB 1482, we would be happy to assist you.