Category Archives: CA Legislative Update

AB 1482: Statewide Eviction and Rent Increase Regulations Signed Into Law

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AB 1482 is California’s statewide eviction and rental price cap law, introduced by Assemblymember Chiu and signed into law by Governor Newsom. It is estimated to “extend tenant protections to roughly 4.9 million households that are not currently covered by local rent control policies”. It takes effect January 1, 2020 (although some of its provisions grandfather rental rates from 2019).

Read a detailed analysis here.

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AB 1399 (2019): Heightened Regulations for Returning to the Rental Market Following Ellis Act Withdrawal

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AB 1399 is the product of Assemblymember Bloom’s efforts to prevent the perceived exploitation of the Ellis Act’s re-rental provisions by infamous landlord Anne Kihagi. (A 2017 Appellate decision found that she was not prohibited from re-renting in compliance with the Ellis Act by a stipulated settlement with the City of West Hollywood, and it condoned her re-rentals, to the extent they conformed to the law.)

AB 1399 amends the Ellis Act in three ways. First, a landlord was previously required to give a displaced-tenant the first right of refusal on re-renting a unit returned to the market within ten years of withdrawal. The existing penalty was punitive damages equal to six months of the contract rent. AB 1399 amends this to say that paying the penalty does not extinguish the owner’s obligation to honor the tenant’s rights.

Second, it aligns the dates of withdrawal for all units. The Ellis Act requires a 120-day notice period before the units are withdrawn. Qualified tenants are entitled to an extension. For other tenants, the landlord was permitted to grant an extension (to maintain rental income for each unit until all were withdrawn). This could result in two different categories of withdrawal dates, if the owner did not elect to extend non-qualified tenancies. Under AB 1399, the “date of withdrawal” (for purposes of tracking the post-withdrawal constraints) is the latest date of withdrawal of any unit.

Finally, it allows cities to require that a landlord returning any unit to the rental market during the period of constraints to return each unit, unless it was the principal place of residence to an owner or family member before withdrawal or it is the principal place of residence of an owner when the accommodations are returned to the market.

Even when these changes become effective on January 1, 2020, they will not immediately affect owners who have withdrawn from the residential rental market. Authorized provisions of the Ellis Act may be implemented by local governments but are not required. It is also currently unclear whether this will apply to re-rentals for properties withdrawn prior to AB 1399.

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AB 1795 (2019): Assemblymember Kamlager-Dove’s Amendment to the Unlawful Detainer Statutes Would Maintain “Public Records Mask” for Tenants Who Choose To Fight Ellis Evictions

Information about lawsuits is generally available to the public. And for tenants who have been evicted, this information is often used in credit checks for rental applications. (A landlord would understandably be interested in knowing if her applicant had just been evicted for non-payment of rent.) The unlawful detainer statutes have a specific provision governing the masking of eviction lawsuits from the public record. (Formerly, a limited civil eviction lawsuit would unmask automatically, unless a defendant prevailed in 60 days. A 2016 amendment inverted the rule, maintaining the mask unless the landlord prevailed in 60 days.)

AB 1795, however, would prevent the court clerk from allowing access to information about Ellis Act evictions, regardless of whether the landlord prevails in 60 days. Ellis Act evictions often feature a fight about wealth; the tenant has a non-transferable, valuable property interest in their rent-controlled tenancy, while the landlord wants possession of her valuable asset. In San Francisco, for instance, the City actively encourages tenants to hold over and fight Ellis Act evictions. (After all, there’s no better affordable housing than the exiting unit that already has a rent-controlled tenant in it.) But it is difficult to read this amendment as anything other than tacit encouragement from Sacramento for tenants to violate the law and fight an eviction with fewer consequences. A landlord would understandably be interested in knowing that her prospective tenant is likely to violate obligations other than paying rent, as well.

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AB 1399 (2019): Assemblymember Bloom’s Latest Attempt To Police Re-Rentals following Ellis withdrawal

Provoked by infamous landlord Anne Kihagi (whose aggressive reading of re-rental timing for withdrawn units was actually vindicated in the Court of Appeals), Assemblymember Bloom had introduced last year’s unsuccessful AB 2364 – seeking to require that landlords return to the market all at once or not at all. (By comparison, Kihagi was able to return units to the market that were unoccupied at the time she began the Ellis withdrawal, and was thus able to do so without price constraints.)

Gov. Newsom recently challenged the legislature at his “state of the State” address: “get me a good package on rent stability this year and I will sign it”. While many fresh ideas have already been advanced, AB 1399 appears to be another attempt at AB 2364.

As introduced, its language would allow cities to require Ellis-invoking property owners to return all units to the market at the same time. Many different configurations of properties are withdrawn under the Ellis Act, but for those where the owner (or their family) moves into a tenant-occupied unit, this change would either prevent rental of other units or force property owners to leave their own homes to rent units. One wonders how this bill would aid in easing the housing crisis, where it makes the process of putting existing units back on the market more onerous. (The language will likely need to be changed before the statute can advance.)

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California Legislative Update (2018): AB 2219: New Requirements for Non-Cash/EFT Rent Payments and Mandated Rent-Acceptance from Third Parties

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AB 2219 adds Section 1947.3 to the Civil Code to create new requirements for the form of tender of rent payments, landlord’s rights when tenants bounce checks, and the ability of tenants to pay via third parties. This last change is a rent-control red flag, but Section 1947.3 includes requirements to protect landlords from creating new rent controlled tenancies at the historic rental rate of another tenant.

First, a landlord must accept rent in at least one form that is neither cash nor EFT. Second, if the tenant bounces a check, a landlord can require payment in cash for up to three months (provided that they change the terms of tenancy formally, if this is not already in the lease).

Ostensibly to allow greater flexibility for tenants (but with little legislative history to suggest this is a significant concern), a landlord must now accept rent from a third party, at the tenant’s election. The mechanics of this call to mind the classic waiver trap of a subsequent occupant trying to pay rent to her master tenant’s landlord to directly establish a rent controlled tenancy. However, the landlord is only required to accept payment from a third party who is not a “tenant”. The landlord may (and really should) have the third party sign an acknowledgement that includes the following:

I, [insert name of third party], state as follows:
I am not currently a tenant of the premises located at [insert address of premises].
I acknowledge that acceptance of the rent payment I am offering for the premises does not create a new tenancy.
(signature of third party) _____
(date)

These new rules do not require a landlord to accept rent after a “three-day notice to pay or quit” has expired. They also do not require a landlord to enter a public housing contact with a Section 8 tenant. However, San Francisco landlords should be cautioned that explicitly refusing to enter such an agreement may now be actionable.

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California Legislative Update (2018): AB 721: Enhanced Safety Regulations for Residential Balconies

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Following the tragic 2015 balcony collapse in Berkeley, which killed six students, California addressed concerns over similar safety issues in other buildings, adopting amendments to the Health and Safety Code requiring owners to inspect for structural soundness, no later than January 1, 2025, and every six years thereafter. AB 721 applies to buildings with 3 or more multifamily dwelling units.

The bill also amends Civil Code §1954 to include inspection of balconies among the reasons a landlord is permitted to inspect a rental unit.

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California Legislative Update (2018) – Cities with Rent Control No Longer Exempt from State Mandate on Authorizing EV Charging Stations for Existing Tenancies

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Effective January 1, 2019, AB 1796 amends California’s existing law on mandating electrical vehicle charging stations for existing tenancies, upon tenant request.

The revised Civil Code §1947.6 will require a landlord’s consent, but with some helpful conditions: The tenant must provide a written request, along with their consent to a written amendment to the lease. This amendment must include your requirements for the “installation, use, maintenance, and removal” of the charging station, as well as their obligation “to pay as part of rent for the costs associated with the electrical usage of the charging station”. The tenant must also maintain general liability insurance with the landlord as an additional insured.

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California Proposition 10 (2018): Voters Reject Repeal of Costa-Hawkins

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SF Gate reports on the defeat of Prop. 10 at the ballot. The measure to repeal the Costa-Hawkins Rental Housing Act “fell behind early and continued to trail by a margin of about 65 percent to 35 percent throughout the night”.

Proposition 10 followed AB 1506 (2017), a legislative attempt at repeal, which failed to get out of committee.

For now, cities remain capable of implementing new rent control ordinances. However, Costa-Hawkins will continue to limit the extent of local price controls (as cities cannot impose price ceilings on “new construction”, apply “strict” vacancy control to empty units, or extend rent control to new tenancies in single family homes and condominiums).

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San Francisco Chronicle Recommends No on Prop. 10

Citing a nearly universal rejection of rent control by economists, the San Francisco Chronicle recommends voting “no” on Proposition 10, the ballot measure aimed at repealing the Costa-Hawkins Rental Housing Act – a state law limiting and defining cities’ ability to impose rent control.

As the Chronicle describes it, “Prop. 10 would repeal the 1995 Costa-Hawkins Rental Housing Act, which protects properties built that year or later from rent control. The law also prevents cities with preexisting rent control laws from extending them to newer units; San Francisco’s ordinance, for example, remains limited to housing built before 1980. And Costa-Hawkins exempts single-family homes from rent control while guaranteeing property owners the right to raise rents to market value when units are vacated.”

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