In October 2019, Gov. Gavin Newsom signed Assembly Bill 1482 to regulate and cap a landlord’s ability to increase rent statewide.

This law has been met with pushback from landlords as well as the California Rental Housing Association, as they believe capping rent will harm their businesses. However, the law went into effect as of January 1, 2020.

So, what must landlords know about this law?

What does the law require of landlords?

The Tenant Protection Act of 2019 includes many other rules landlords must know aside from the rent cap. For example, the law states that residential landlords:

  • Cannot raise the rent by 5% plus inflation in one year;
  • Must give tenants notice of a violation before terminating the lease;
  • Must prove there is just cause to terminate the lease; and
  • Either waive a month’s rent or pay the amount to the tenant to assist in finding new housing.

This act would only affect apartment complexes or multi-family housing. It also will not overrule local rent control statutes, if landlords are already operating under those laws.

We have yet to see how these laws will impact landlords across the state, but there are contrasting opinions on what could happen. Some say that the statute might not change much for landlords. Others say that the law could significantly impact a landlord’s profits and result in them leaving the rental business entirely. That could reduce available housing even more.

Landlords must be aware of the implications of this law

There are two additional elements of this law that landlords must understand:

  1. Landlords may not have to adjust their practices to this new statute for very long. This law is set to expire in ten years, on January 1, 2030, if state lawmakers do not decide to extend it.
  2. The statute does not establish a system for reporting violations of the law. Therefore, if landlords violate the rules of the new statute, they might not only face fines, but tenants might move directly to file lawsuits.

Landlords must understand all of the details of this new law to determine how they must adjust their business practices, if necessary, so they can protect their business and future ventures.