AB 1482: CA price control and just cause
As of January 1, 2020 and until 2030, California will have price control and just cause protections on all multi-unit buildings as well as some single family homes constructed more than 15 years ago. Below is a guide to this new law (AB 1482) and how it affects San Francisco. This does not apply to other cities or counties in California. If you live outside SF, you should contact Tenants Together (888-495-8020), a statewide organization, for info on your locale. This is also a work in progress and will be updated as we learn more about how the law will be implemented. For more info or to ask questions, please call our counseling or drop into our office Monday through Thursday, 1-5pm, (415) 703-8644, 1663 Mission, suite 504.
NOTE: Tenants already under the SF rent control ordinance (buildings built before 79), are not under 1482, so everything remains the same for them.
WHO’S COVERED UNDER 1482’S PRICE CONTROL?
For tenants who are not under the 79 rent control but live in a multi-unit building built after 79 with a certificate of occupancy older than 15 years, they’re now under 1482. That means that in 2020 when 1482 goes into effect, buildings built for first occupancy in 2005 will be covered.
Tenants in a single family home (SFH) or condo owned by an LLC (Limited Liability Company) or a real estate trust or a corporation are also covered under 1482. If the owner of the SFH is a person, then the unit is exempt from 1482, but the owner must notify the tenant(s) of this exemption in writing. If the landlord does not notify the tenants of this exemption, she loses it, so, in that case, a person who owns a single-family unit would come under this law even though she would have been exempt, had she properly notified her tenants.
An SFH is exempt if the owner lives with the tenant (lodger). A duplex may be exempt from the law if the owner continually occupies one of the units as the owner’s principal place of residence and has lived there since the beginning of the tenant’s tenancy. Another situation in which the unit may be exempt is if the owner/occupant rents or leases no more than two units or bedrooms, including, but not limited to, an accessory dwelling unit.
The notice the landlord must give to be exempt from 1482 in the case of an SFH is as follows: “This property is not subject to the rent limits imposed by Section 1947.12 of the Civil Code and is not subject to the just cause requirements of Section 1946.2 of the Civil Code. This property meets the requirements of Sections 1947.12 (d)(5) and 1946.2 (e)(8) of the Civil Code and the owner is not any of the following: (1) a real estate investment trust, as defined by Section 856 of the Internal Revenue Code; (2) a corporation; or (3) a limited liability company in which at least one member is a corporation.”
For all existing rental agreements, the notice must be given in writing before August 1, 2020. For all rental agreements entered into or renewed after July 1, 2020, this notice must be in the rental agreement.
UNITS NOT COVERED
1. Hotels or hostels or other short-term stay housing;
2. Non-profit hospital, religious facility, extended care facility, licensed elderly care facility, or adult residential facilities provided by State social services;
3. Student dormitories;
4. Single Family Home or Duplex where the landlord lives on the property. (This includes Accessory Dwelling Units and in-law units);
5. Affordable housing, subsidized housing, (including THC, TNDC, CHP, Mercy, etc.) HUD housing, or deed-restricted housing;
6. mobile homes.
AB 1482 limits rent increases to 5% + CPI (Consumer Price Index) for SF, but caps them at 10%. The CPI at this writing (it may change in January 2020) is 2.7% which means that at this moment the SF allowable rent increase for 1482 tenants would be 7.7%. Again, that could change in January and we will update this info, as warranted. Find the CPI here: www.dir.ca.gov/OPRL/CAPriceIndex.htm. After going to that site, use the Consumer Price Index calculator.
Note that a landlord could give up to two rent increases a year, but the total of both added together cannot exceed 10% or 5% plus the CPI, whichever is less. So, for example, if the lesser of those two is 10%, a landlord could give a 4% and a 6% in a year’s time.
If a tenant received a rent increase of over 10% after March 15, 2019 and that increase went into effect before January 1, 2020 and the tenant paid it, then on January 1, 2020 the rent automatically rolls back to what it was on March 15, 2019. The landlord does NOT have to reimburse the tenant for the overage paid before January 1, 2020, however.
A landlord cannot bank on back rent increases under 1482. When the last tenant moves out, the landlord can raise the rent up to market.
Just cause only applies to all apartments covered by AB 1482 where the tenants have lived for 12 months or more. If a tenant moves in and then moves in a roommate during that first year, all the tenants have to live there for 12 months in order to be covered under just cause, or one of the tenants has to have lived there for 24 months.
THE 15 JUST CAUSES
1. Failure to pay rent.
2. Breach of a material term of a lease that continues after a written notice of the right to cure. The written notice must provide at least three days to cure. If the tenant does not cure, then a non-curable notice of termination may be served.
3. Maintaining, committing, or permitting a nuisance.
4. Destruction of property or creating a nuisance.
5. Failure to sign a lease with similar terms after the expiration of a lease.
6. Criminal activity on the property, or criminal activity or criminal threat directed at an owner or manager of the property.
7. Assigning and subletting in violation of the lease.
8. Refusal to provide the owner access to the unit.
9. Using the premises for an illegal purpose.
10. Failure of a licensee, agent or employee of the landlord to vacate after termination of the relationship.
11. Failure of a tenant to deliver possession after the tenant gives a notice to move out or after the landlord and tenant agree in writing that the tenant will vacate.
12. Owner or relative move in only where the original lease or a new lease allows for an owner or relative to move in. The eviction must be done by an owner or the owner’s spouse, domestic partner, children, grandchildren, parents, or grandparents. The original lease or new lease must reserve the right to move in an owner or the owner’s spouse, domestic partner, children, grandchildren, parents, or grandparents.
13. Withdrawal of the unit from the rental market.
14. Where a city or county agency requires the unit to be vacated due to uninhabitable conditions.
15. Intent to demolish or substantially remodel a unit. “Substantially remodel” means the replacement or substantial modification of any structural, electrical, plumbing or mechanical system that requires a permit, or the abatement of hazardous material, including lead, mold or asbestos that cannot be reasonably accomplished in a safe manner with the tenant in the unit and that requires the tenant to vacate for more than thirty days. Cosmetic improvements alone, including painting, decorating, and minor repairs, do not qualify, nor does any work that can be done safely with the tenant in the unit.
For no fault evictions, a landlord must provide relocation money equivalent to one month’s rent at the time the notice was issued. It can either be in the form of a rent waiver for the final month or an actual payment. That money must be provided within 15 days of the notice.
The no-fault evictions reasons are as follows:
1. Owner or relative move in (OMI).
2. Removal from rental market (Ellis Act).
3. Where a government agency requires that the unit be vacated because it’s uninhabitable.
4. Intent to demolish or substantially modify the structure.
GOVERNOR’S ORDER ON RENT INCREASES
The governor has issued an order prohibiting rent increases over 10% until December 31, 2019. As far as we understand it, that means any rent increase any tenant receives that’s over 10%. Please contact our office if you receive one before December 31, 2019.
Unfortunately, there is no enforcement mechanism in AB 1482, so the default would be going to court. If a tenant has a complaint that’s under $10,000, he or she can go to Small Claims. At this point, we’re not sure whether the Rent Board will become an option in January. We will post updates as they become available.