Introduction

The California Tenant Protection Act (CTPA), also known as Assembly Bill 1482, was signed into law by Governor Gavin Newsom in October 2019. This legislation took effect on January 1, 2020.  The California Tenant Protection Act has brought significant changes to the rental market in California. Property owners need to understand the implications of this legislation to navigate the rental landscape effectively.

Rent Control and Rent Increase Restrictions

One of the most significant changes introduced by the CTPA is the statewide rent control policy. Property owners can still increase rents; however, they are now subject to specific limitations. Under the CTPA, property owners can increase rent for most residential properties by up to 5% per year plus the local rate of inflation or 10% of the current rent, whichever is lower. This means that property owners need to be mindful of these limits when considering rent increases.

The CTPA also enforces “just cause” eviction protections, which restrict property owners’ ability to terminate a tenancy. This means you can only evict tenants for specific reasons, such as nonpayment of rent, violation of the lease agreement, or if you plan to occupy the property yourself. While this provides security for tenants, it also requires property owners to follow strict procedures when considering eviction, making it crucial to consult with legal professionals to ensure compliance with the law.

Understanding Exemptions in the California Tenant Protection Act

Tenant Rights and Protections

While the CTPA primarily focuses on rent control and eviction protections, it also grants tenants additional rights and protections. The CTPA mandates longer notice periods for certain actions, such as raising the rent or terminating a lease. This can impact your ability to make quick changes to your rental properties.

In certain circumstances, the CTPA requires property owners to provide relocation assistance to tenants who are forced to move due to a no-fault eviction. This can add to the financial burden of property owners, so it’s important to be aware of these requirements and plan accordingly.

Property owners are obligated to provide safe and habitable living conditions for tenants. Failing to maintain the property to these standards can result in legal consequences, including fines and penalties.

Single-Family Homes and Exemptions

It’s important to note that the CTPA doesn’t apply uniformly to all rental properties. Single-family homes and condos that meet specific criteria are generally exempt from rent control provisions. However, other protections, such as just cause eviction protections, may still apply. Property owners should carefully review the law’s exemptions to understand how it impacts their specific properties.

Conclusion

The California Tenant Protection Act introduces significant changes for property owners in the state. While it seeks to provide tenants with enhanced rights and protections, it’s imperative for property owners to understand how these changes impact their rental properties. Staying informed, consulting with legal experts, and adapting to the new regulations will be essential for property owners to successfully navigate the evolving rental landscape in California. By doing so, property owners can continue to provide quality housing while safeguarding their investments within the framework of the CTPA.

Voss Real Estate Advisors

September 20, 2023

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