Gavin Newsom's Update on Rent Caps and Just Cause for Eviction Law

Calling all landlords who own multi family properties and condos!!! There are changes to what and how you can operate with your tenant.

Here's what you need to know about the rent cap portion:

1. Rent increases are capped at 5 percent plus inflation, or up to a hard cap of 10 percent, whichever is lower

2. All rent increases since March 15, 2019 will count toward the rent cap, and if above the permissible rent cap, will have to be rolled back effective January 1, 2020

3. For month to month tenants, the addendum should be incorporated into the rental agreement by providing the notice by a change in terms of tenancy. Use Form “Notice of Change in Terms of Tenancy” (Form CTT)

4. If your tenant is on a lease, then you’ll provide the addendum as a stand- alone notice

5. For all tenants signing a new lease or rental agreement or a renewed lease or rental agreement after January 1, 2020, the addendum must be included

6. The law went into effect January 1, 2020

7. All rent increases beginning from March 15, 2019 count toward the maximum rental rate. A landlord who increased the rent on or after March 15, 2019, but prior to January 1, 2020, cannot increase the rent beyond the maximum rental rate within any 12-month period

8. A landlord who increased the rent on or after March 15, 2019, but prior to January 1, 2020, beyond the maximum rental rate would be required to roll back the rent. The rent reduction would be effective January 1, 2020.

9. This law sunsets after ten years (January 1, 2030).

10. It covers only residential property. It does not apply to commercial property

11. A landlord can increase rent 5% of the lowest gross rent charged during the previous 12-month period plus cost of living, or 10%, whichever is lower.

12. All rent increases beginning from March 15, 2019 count toward the rent cap. A landlord who increased the rent on or after March 15, 2019, but prior to January 1, 2020, cannot increase the rent beyond the maximum rental rate within any 12-month period.

13. The regional Consumer Price Index published by the United States Bureau of Labor Statistics (using the 12-month period from April to April) is the utilized cost of living index See this link: https://www.bls.gov/regions/subjects/consumer-price-indexes.htm#CA

14. A landlord can increase the rent no more than two times during any 12-month period.

15. As long as a previous tenant continues to occupy the property, adding a tenant does not permit a rent increase beyond the maximum.

16. For a new tenancy in which no tenant from the prior tenancy remains in lawful possession of the residential real property, the owner may establish the initial rental rate.

17. Neither the rent cap nor just cause eviction portions of the law arewaivable. This type of rental agreement would be “void as contrary to public policy.”

"For more information, please visit my website or contact me at kheimstaedt@villarealestate.com or (949)-514-5245"