Attention owners of residential income property in California! – the world changed for you on January 1, 2020. That is when the Tenant Protection Act of 2019 (“TPA”) became law. The TPA dramatically changed the rental landscape in the following important ways:
- The TPA imposes statewide rent control and just cause eviction requirements
- The TPA applies to residential rental property statewide in CA, even if your rental location does not have a rent control ordinance
- The TPA caps the amount of rent increase a landlord can impose annually (general, 5% plus the regional CPI rate). This rental cap is retroactive to March 15, 2019
- The TPA requires that landlords provide various written notifications about the law to tenants
- Landlords cannot terminate a tenancy, without just cause, if the tenant has occupied the rental unit for the last 12 months – therefore, no evictions without a cause such as failure to pay rent
- Examples of no-fault just cause evictions are 1) owner or family intent to occupy the unit, 2) withdrawal of property from the rental market, 3) intent to demolish or substantially remodel the property
- A no-fault, without just cause eviction requires the landlord to pay the tenant relocation assistance through a direct payment or rent waiver. The amount of the relocation payment varies
- Local rent ordinances apply if your rental unit is in that jurisdiction, unless the local ordinance is less protective than the TPA, in which case the requirements of the TPA will apply
There are some exemptions from the TPA, such as property covered by a more restrictive local ordinance, new construction (15 years old or less, on a rolling basis), single family homes not owned by corporate entities, owner-occupied duplexes, and Section 8 or deed restricted properties. Check carefully to see if an exemption applies to your unit.
Advice on best practices for you:
- Consult with competent real estate attorneys to determine the impact of the TPA on your residential rental income property
- Review your rental agreements, and revise where necessary
- Be sure you are aware of the TPA’s provisions that apply to you – comply with all provisions, including those that mandate the notices you must give to your tenants
- Determine if your property is governed by a local rent control ordinance, which might supersede the provisions of the TPA – if there is a local ordinance but it is less restrictive than the TPA, the TPA will apply to you
- Be scrupulous in adhering to the provisions that pertain to you, as liability for landlord violations can be severe and costly.