On January 1, 2020, CA Assembly Bill 1482 went into effect, enacting the state’s first attempt at controlling rent hikes in an effort to protect tenants. The law caps rents at a 5% increase per year + the local rate of inflation.
The items I consider most important to be aware of are:
- Annual cap on rent increases.
- It doesn’t replace existing local rent control – the more restrictive rent control will apply when two or more are concurrent.
- While homes and condos are exempt – if there is a corporate entity in the ownership, the rent control will apply.
- If the unit goes vacant you can still raise rent to market rate.
- Tougher eviction requirements for tenants present in the unit more than a year.
- Relocation benefits for some evictions (fortunately only 1 month of rent).
This is just the first step. Even though there is a sunset provision in the law, I fully expect the liberal legislature to attempt to enact tighter and tighter rent control measures to be the most liberal state in the country. We will have to watch this legislation each year. Also, we have to stay on top of rent increases because this law takes effect Jan 1, 2020, it is retroactive to March 2019 for purposes of rent increases.
For more information, look over these two sites:
The National Law Review:
The California State Legislature: