Navigating Recent Tenant-Landlord Law Changes in Sacramento and El Dorado Counties
As the legal landscape for tenant-landlord relationships evolves, staying informed and compliant with new regulations is crucial for real estate investors. Just in 2024, several significant changes have been implemented in California’s tenant-landlord laws, specifically impacting Sacramento and El Dorado Counties. Understanding these changes and how to stay compliant, while minimizing investor risk, is a key factor to maintaining profitable and effective rentals properties.
To fully understand the most recent changes to California’s rental laws, it is important to know about a critical law that was passed in 2019. This assembly bill, AB 1482, gives context to California’s changes in the last 8 months.
Background Information on AB 1482
AB 1482, also known as the Tenant Protection Act of 2019, is a significant piece of legislation in California that has far-reaching implications for property management, especially for landlords in regions like Folsom, El Dorado Hills, and Sacramento. This law was enacted to provide greater stability and protections for tenants across the state, addressing key issues related to rent control and just cause evictions.
Key Provisions of AB 1482
1. Rent Control
AB 1482 introduces statewide rent control, limiting the amount landlords can increase rent annually. Specifically, it caps rent increases at 5% plus the local rate of inflation, or 10% of the lowest gross rental rate charged for the unit during any 12-month period in the prior two calendar years, whichever is lower. This provision applies to most rental properties that are over 15 years old, thereby exempting newer construction in order to encourage the development of additional housing units. For landlords in Folsom and El Dorado Hills, this means that rent increases must be carefully calculated to comply with these limits, ensuring that rental rates remain within the permissible range for properties that are not exempt.
2. Just Cause Evictions
Another critical aspect of AB 1482 is the introduction of ‘just cause’ eviction requirements. Under this law, landlords cannot terminate a tenancy without a valid reason, which falls into two categories: ‘at-fault’ and ‘no-fault’ just causes. At-fault just causes include non-payment of rent, breach of lease terms, and engaging in criminal activity on the property. No-fault just causes encompass owner move-ins, substantial renovations, and withdrawal of the property from the rental market. For no-fault evictions, landlords are required to provide relocation assistance or waive the last month’s rent. This is particularly relevant for property management in Sacramento and surrounding areas, as landlords must ensure they have a legitimate and documented reason for ending a tenancy.
3. Exemptions to AB 1482
AB 1482 does not apply universally to all rental properties. Exemptions include:
- single-family homes or condos (provided the owner is not a corporate entity, real estate trust, or LLC with at least one corporate member. The owner must also have given proper notice of the exemption to tenants).
- multi-family housing built in the last 15 years.
- owner-occupied duplexes.
In the exemption cases listed above, the rent caps and eviction protection laws do not apply. Understanding these exemptions is crucial for rental home management in Folsom and similar areas, where property types can vary widely.
Implications for Landlords
For landlords in Folsom, El Dorado Hills, and Sacramento, compliance with AB 1482 requires diligent property management practices. Landlords must keep detailed records of rent increases and justifications for evictions, provide proper notices, and stay informed about the specific regulations that apply to their properties. This may involve updating lease agreements, enhancing communication with tenants, and seeking legal advice to navigate the complexities of the law.
Key Changes to California Tenant-Landlord Law in 2024
SB 567: No-Fault Evictions and Owner Move-Ins
Starting April 2024, Senate Bill 567 introduces stricter requirements for no-fault evictions. SB 567 can be viewed as a reinforcement of the formerly adopted AB 1482. Landlords must provide detailed information when ending a tenancy for reasons such as owner move-ins or substantial remodels. Specifically, owners or their family members must move into the property within 90 days and reside there for at least 12 months. For remodels, landlords must furnish tenants with detailed plans and permits and offer the right to return if the work is not completed. Besides requiring additional information, SB 567 gives “teeth” to Ab 1482 by outlining civil actions for damages that can be collected by tenants for up to three times actual damages if their rights are breached.
Exemptions to SB 567
Exemptions to SB 567 are the same as the exemptions to AB 1482. This includes single-family homes, owner-occupied duplexes, and multi-family buildings not older than 15 years from when the certificate of occupancy was received. Keeping these exemptions in mind is key for investors to successfully navigate the laws in El Dorado Hills and the surrounding areas.
AB 12: Security Deposits
Assembly Bill 12, effective July 2024, caps security deposits at one month’s rent for both furnished and unfurnished properties. This change aims to alleviate the financial burden on tenants by reducing upfront move-in costs, which can be particularly high in areas with skyrocketing rents.
Exemptions to AB 12
Landlords that own no more than two separate properties, which in total include no more than four rental units (ie. two duplexes) are exempt from security deposit caps imposed by AB 12. For these exempted properties, the security deposit is limited to two month’s rent for unfurnished properties, and three month’s rent for furnished properties. That said, for these exemptions to apply the owner of the properties must be a natural person and not a corporate entity. If the tenant is a military service member, the exemptions also do not apply.
SB 267: Tenant Screening and Credit History
Senate Bill 267, effective January 2024, prohibits landlords from using credit history as the sole criterion for rental decisions for applicants receiving government rental assistance. Landlords must consider alternative evidence of the applicant’s ability to pay rent, such as benefit statements or bank records.
SB 602: Illegal Occupancy Protections
Senate Bill 602, starting January 2024, allows homeowners to file a 12-month trespass notice with local law enforcement to protect against illegal occupancy. This eliminates the need for a court order in such cases and simplifies the process of reclaiming vacant properties.
Micromobility Device Storage
Beginning in 2024, California law prohibits landlords from restricting tenants from storing at least one micromobility device (e.g., electric scooters, bicycles) on the premises. Alternatively, landlords can provide secure, long-term storage options with charging facilities.
Staying Compliant and Profitable
1. Understand and Implement New Laws: Regularly review updates to landlord-tenant laws from reliable sources. Make sure to adjust lease agreements, eviction notices, and screening processes to comply with the new regulations.
2. Maintain Detailed Records: Keep meticulous records of all tenant communications, maintenance requests, and financial transactions. Documentation is key in defending against potential disputes and ensuring compliance with legal requirements.
3. Seek Legal Advice: Consult with a legal expert specializing in tenant-landlord law to review and update your rental agreements and practices.
4. Hire a Professional Property Manager: Property managers are local experts on multiple subjects related to maintaining a profitable and low-risk real estate investment. Beyond changes in tenant-landlord law, a property management company also understand the changes in market rents, vacancy rates, average time on market, and best practices for marketing and screening to the ideal tenant. Remember, proper marketing and screening is your first protection against ever needing to evict a resident. Keyrenter’s 21-point screening process continues to set an industry-low eviction rate for our clients.
How Keyrenter Folsom Property Management Can Help
At Keyrenter Folsom Property Management, we understand the complexities and challenges of managing rental properties in light of changing laws. Our full-service property management solutions are designed to help landlords stay compliant, reduce stress, and maximize the value of their properties.
Services We Offer:
– Comprehensive Property Management: From tenant screening and lease agreements to rent collection and maintenance, we handle all aspects of property management, including compliance with the latest laws.
– Maintenance and Repairs: We offer prompt and reliable maintenance services to keep your property in top condition, thereby enhancing tenant satisfaction and retention.
– Financial Management: We provide detailed financial reporting and transparent accounting practices to help you keep track of your investment’s performance.
– Marketing and Tenant Placement: Our effective marketing strategies and thorough tenant screening process ensure high occupancy rates and quality tenants.
Navigating the recent changes in California tenant-landlord laws, particularly in Sacramento and El Dorado Counties, requires diligence and proactive management. By understanding these changes, staying compliant, and leveraging the services of a reliable property management company like Keyrenter Folsom, landlords can continue to operate profitable and effective rentals. Visit Keyrenter Folsom Property Management to learn more about how we can help you stay compliant, and maximize the value of your rental properties.
*Disclaimer: This document and any information contained herein are provided for informational purposes only and do not constitute legal advice. The author of this document is not an attorney, and the information presented should not be considered as a substitute for professional legal advice.