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As you know, the United States and the State of California ​are​ implementing certain restrictions to mitigate the spread of COVID-19/Coronavirus. In order to protect our clients and staff, our office is currently closed to the public and are not conducting meetings in our office.  We are still open and able to communicate with you via telephone and email. On March 16, 2020, Governor Newsom issued an Executive Order, which allows local governments to halt residential or commercial evictions caused by the COVID-19 pandemic.  This Executive Order remains in effect through May 31, 2020, unless extended.  This means that the local authorities may enact emergency legislation that restricts evictions for non-payment of rent when there is a documented decrease in household income caused by COVID-19.  No local ordinances have been issued, but we expect to see such laws enacted shortly.  This does not mean that tenants can stop paying rent or otherwise breach their rental agreement/lease. Currently, the San Diego Superior Court has rescheduled all hearings, including those for general civil matters, evictions, and small claims trials that are scheduled from March 17, 2020 to April 3, 2020.  It is unclear how the Court will handle rescheduling.  Additionally, the Court issued a General Order declaring March 17, 2020 to April 3, 2020 as court holidays.    At this time, the Court is not processing paperwork.  This information is subject to change and our office will make every effort to keep you up to date as more information is available to our office.

Q: Another Landlord I know told me that my rental property is exempt from California rent control known as the Tenant Protection Act of 2019. What types of rental properties are exempt from rent control?

A: Several types of rental properties are exempt from Tenants Protection Act of 2019 (the “Act”).

1. Housing built within the last 15 years;
2. A duplex in which the owner occupies one of the units at the commencement of and throughout the tenancy;
3. A single-family residential property (which includes condos) IF the owner is an individual, partnership, individual co-owners, trusts, and LLCs with no corporate owners.  (Properties owned by a corporation or a real estate investment trust (REIT) must adhere to the Act.)  

Finally, the above exemption ONLY applies if the owner gives the tenant a legally required notice of exemption.

Q: I own a condominium that is owned by my revocable trust and I have determined my rental property is exempt from the Tenant Protection Act of 2019. What information do I need to give my tenant to be able to claim the exemption?

A: Once you have determined that your rental property is exempt from the Tenant Protection Act of 2019 you must provide written notice for all current tenants by July 1, 2020. All new tenancies or tenancies that are renewed on or after July 1, 2020 must have the exemption notice in the rental agreement or lease. If you fail to give notice of the exemption your single-family house or condominium will not be exempt from the Tenant Protection Act of 2019. The exemption notice must read 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.”

Q: I have a tenant that is on a month to month agreement and rents one of my condominiums. I gave my tenant notice in writing that the condominium they rent from me is exempt from the Tenant Protection Act of 2019. I would like to increase the tenants rent 12%. Can I increase the rent more then 10% and what type of notice do I need to give?

A: Yes, if your property is exempt from the Tenant Protection Act of 2019 there is no current cap on rent increases for your rental property however, effective January 1, 2020, the notice requirements for rent increases of more than 10% changed. Landlords must provide tenants with 90 days’ notice if the rent increase is more than 10% in a 12-month period.  This applies if the rent increase is more than 10% by itself or when combined with any other rent increases during the preceding 12-year period.  Please note, this only applies to those exempt from the rent cap created by the Tenant Protection Act of 2019.  Rent increases of less than 10% remain subject to a 30 days’ notice. For example if you give your tenant a 5% increase you would be required to give the tenant a 30 days’ notice and then you decide to increase the rent again within the 12-month period by another 6% the second increase will need to be a 90 days’ notice.

Q:  I plan on increasing my tenant’s rent by less than 10% with a 30-day notice. Am I required to serve this notice personally or can I just serve him by standard U.S. mail?

A: Assuming your property is exempt from the Tenant Protection Act of 2019, a notice to increase rent can be served personally or by first class mail. If you decide to serve your tenant personally, it must be done 30 days before the increase becomes effective. The other option is to mail the notice to your tenant, however, an additional 5 days must be added. For instance, if you choose to mail the notice to your tenant, you must put it in the mail at least 35 days prior to the rent increase. Remember that if the increase is greater than 10% then you are required to mail the notice 95 days prior to the effective date.

Q: I own an apartment building and I must comply with the Tenant Protection Act. I would like to increase my tenants rent what type of notice do I need to give my tenants?

A: After tenants who have lived in the unit for more than 12 months, landlords may increase the rent up to two times within that period, but the increase CANNOT exceed the rent cap. Since the rent increase pursuant to the rent cap cannot be more then 10% you will only be required to give your tenants 30-day notices of the rent increase.

Q:  I spoke with my tenant last week and told her that the rent will be increased by $50 beginning on the first of the month. Is an oral notice of rent increase sufficient?

A: No.  A rent increase notice must be in writing.   

On January 28, 2020, the U.S. Department of Housing and Urban Development (HUD) issued a notice to help housing providers assess a tenant’s request for an animal as a reasonable accommodation (service animal or emotion support animal).

The notice states “…FHA complaints concerning denial of reasonable accommodation and disability access comprises almost 60% of all FHA complaints and those involving request for reasonable accommodations for assistance animals are significantly increasing.” It is very important for Landlords to understand their obligation to review reasonable accommodations from Tenants and the below notice from HUD helps guide you through assessing these requests.

This notice includes a step by step method to assess these requests and our office highly suggest that all Landlords read through this notice and use it moving forward when assessing a tenant’s requests for an animal.

Read the HUD Notice – Assessing a Person’s Request to Have an Animal as a Reasonable Accommodation Under the Fair Housing Act

[slideshare id=228730925&doc=ab1482presentation-200220165620]

Apartment Owners Association Presentation February 20, 2020 – Tenant Protection Act of 2019 (AB 1482)

Download a PDF Version Here. https://landlordslegalcenter.com/wp-content/uploads/2020/02/Tenant-Protection-Act-of-2019-PDF-2.20.2020.pdf

Q: I own a 6-unit apartment building in San Diego County that was built in the 1980s and I would like to remodel the units next year. Am I allowed to ask my tenants to vacate under the new Tenant Protection Act of 2019?

A: Yes, under the new Tenant Protection Act of 2019 (the “Act”) you may give notice to your tenants to vacate if you intend to demolish or substantially remodel the units.  However, if you do so you will be required to pay your tenants relocation benefits of one month’s rent.  You can do this by either waiving the tenant’s last month’s rent in writing or pay the tenant one month rent within 15 days of the service of the notice terminating their tenancy.  If the apartment building is located in the City of San Diego, then you must also comply with the Tenant’s Right to Know Ordinance and obtain all necessary permits prior to terminating the tenancy.  

Q: I am going to remodel my 10-unit apartment building since the units have not been remodeled since the 1960s.  I plan on giving notice to my tenants at the beginning of 2020. What happens if I waive my tenants’ last month’s rent as their relocation benefits and they refuse to move out?

A: If a tenant fails to vacate after you give a proper notice, you can file an eviction against them based on your notice.  Further, you can recover the waived rent/relocation benefits as damages in your eviction lawsuit.

Q: I own a condo in my trust, and I want to remodel it. Do I have to pay relocation benefits to my tenant if I ask him to leave? 

A: No, you do not have to pay relocation benefits to a tenant that resides in your condo, so long as you own the condo in your name, or the name of your trust, and you provide your tenant with written notice as described in the Act.  If you fail to provide the proper notice under the Act, then you will not qualify for the exclusion and have to pay relocation benefits.  For any tenancy entered into before July 1, 2020, you can provide the written notice in a separate notice from the rental agreement/lease.  After July 1, 2020, the written notice must be included in the rental agreement/lease for the exclusion to apply.  The notice must state the following: “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”  

Q: I own 20 houses under a corporation for the past 20 years.  These homes are not located in a rent control city.  Do I have to pay relocation benefits to the tenants if I want to remodel all the homes? 

A: Yes, homes are not excluded from paying relocation benefits if they are owned by a corporation, a REIT or an LLC with a corporation as a member. 

Q: I built a home in 2010 and rented it out. I want to move back into the home. Do I have to pay relocation benefits if the home is currently not in a city that has rent control? 

A:  No, relocation benefits under the Act do not apply to properties that are less than 15 years old as long as you provide your tenant with proper written notice that your property is excluded under the Act. 

Correction:  In last month column the annual inflation rate for San Diego Metropolitan Area’s for the purpose of the Tenant Protection Act of 2019 was improperly stated as 1.4%. It is actually 2.2%. We regret the error.  

Q: I own a rental property in San Diego where there is currently no rent control and my tenant’s rent is $1,200.  I want to raise the rent to $1,500. Can I raise my tenant’s rent by 25%?

A: No, under the new Tenant Protection Act of 2019 (the “Act”) an annual rent increase is limited to 5 percent, plus the percentage change in the local cost of living but not to exceed 10%. Under the Act the “Percentage change in the local cost living” or inflation is defined as the percentage change from April 1 of the prior year to April 1 of the current year in the regional Consumer Price Index (CPI) for the region where the residential rental property is located. This data is published by the United States Bureau of Labor Statistics.

The San Diego Metropolitan Area’s annual inflation rate was 1.4%, so you can raise your tenant’s rent by 6.4%. If the tenant’s rent was $1,200 as of March 15, 2019, you could raise monthly rent by as much as $76.80.

All buildings constructed in the last 15 years are exempt from this rent cap provision. However, this exemption is also a rolling exemption which means that the rental cap will apply to buildings 15 years after the date of construction.

Q: My tenants are on a month-to-month agreement and they have lived at my property under one-year. Do I have to give my tenant just cause? 

A: No, just cause requirements under the Act apply to tenants who have continuously and lawfully occupied a property for 12 months.

Q: I have a tenant that has been renting my property for 15 months. I have been having some issues with the tenants and I want them to terminate their tenancy. Do I have to give my tenant just cause to terminate their tenancy? 

A: Yes, once a tenant has continuously and lawfully occupied a rental property for at least 12 months you can only terminate the tenancy with just cause.  Which means you will be required to provide a 60-day notice with just cause.  However, if your issues with the tenant deal with a curable lease violation then, you must first give the tenant notice of the violation and allow them an opportunity to cure it. If the tenant fails to cure the violation within the time period set forth in your notice, you may terminate the tenancy by serving a three-day notice to quit without an opportunity to cure.

Q: I am a homeowner that rents one of my rooms out to a tenant. I want to terminate their tenancy. Do I have to give just cause? Are there any types of tenancies that are exempt from giving just cause?

A: No, you do not have to give just cause. The just cause requirements do not apply to single-family owner-occupied residences where the owner rents or leases no more than two bedrooms.

Q: I gave my tenant a 60 day notice with just cause and the tenant is telling me that I must pay them relocation benefits. What are relocation benefits and when does a landlord have to pay them?

A: A landlord is only required to pay relocation benefits if they terminate the tenancy based on a no-fault just cause reason such as intention to have the owner or owner’s relative occupy the unit, withdrawal from the rental market, a government order, or intent to demolish or substantially remodel the unit. Regardless of tenant’s income, a landlord who terminates a tenancy for no-fault just case, must provide relocation benefits to the tenant. The relocation benefit can be in the form of either a direct payment equal to one month’s rent, or a waiver of the last month’s rental payment, prior to the rent becoming due.

Q: I own a rental property in the City of San Diego and I know that I am already required to give tenants that have lived in the property over two years just cause pursuant to the Tenant’s Right to Know Ordinance. How does the new Act affect me?

A: In general, this new rent cap/just cause Act does not apply to properties that are subject to local just cause ordinances that are more protective than the Act. The Tenant’s Right to Know Ordinance protects tenants that have lived in a property for 2 or more years. Since the Act applies to tenants that have lived in a property for 1 or more years, the Act is more protective and will apply to your property.

Q: A tenant just moved out of a unit in my apartment building.  How much rent can I charge a new tenant for the unit?

A: If no tenants from the prior tenancy remain, you can establish an initial rent rate not subject to the 5% + CPI restriction under the Act. Any subsequent rental increases for the new tenancy will, however, be subject to rent cap provisions of the Act.

Q:  If I have more questions about the new Act what should I do? 

A:  Review the Tenant Protection Act of 2019 (the “Act”) and contact your attorney if you are unsure how to proceed.