A ballot initiative on California rent control was rejected by California voters just last year. But that didn’t stop the California legislature from deciding to pass AB 1482 two weeks ago on September 11, 2019. Whether or not you agree with the politics of it all, we can be pretty confident on one thing: that statewide rent control is coming soon. The bill was presented to Governor Newsom yesterday at 3:30 PM, and it is my prediction that he will sign the bill within the next 3 weeks, which would then go into effect on January 1, 2020. If you are a landlord, you should be worried about rent control because it will create some major obstacles for landlords and may affect your investing strategy.
Here is what every landlord needs to know about AB 1482:
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Your rent can only be increased 5% a year
The backbone of AB 1482 is, of course, enacting regulations on how much a landlord can increase rents. It will limit the amount rent can increase every year to 5% plus inflation. So now there will be a ceiling set on your rental income.
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Your tenant must live there for a year before rent can be increased
In order to increase your rents, a tenant must live in the property for a year. So the timing of when you increase your rent will be controlled as well.
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You can’t increase rents beyond the limits even if you do major capital improvements
Sighting improvements as the reason why you are increasing rents will not work if you are increasing your rents by more than the 5% limit.
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You must adhere to greater eviction protections with California Rent Control AB 1482.
AB 1482 will also enact greater tenant protections in the area of evictions. Landlords must have a documented “just cause” to evict a tenant. And with AB 1482, evicting a tenant so that it can be occupied by your family member is no longer a just cause.
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You must pay relocation assistance if you remove a tenant for renovations/conversions
If you decide to do renovations or conversions to your property that requires evicting the tenant, you must pay the tenant one month’s rent for relocation assistance.
About the Author:
Ethan Alexander runs a house buying company called Wisemount Property that buys houses in San Diego and Riverside County. He has developed a home purchasing program for landlords who want to sell quickly to escape the negative effects of California rent control. He is not a real estate agent, he simply buys houses. This program has helped landlords sell their property easily and quickly without the need of an agent. If this interests you, Ethan can be reached at 760-970-8236.
