In 2024, California’s landlord-tenant laws are changing. These changes, some of which have already come into effect, will impact both landlords and tenants. Key changes include eviction notices, security deposits, and tenants’ rights. All parties should be aware of these changes to remain compliant and foster good landlord-tenant relationships.
This guide will help landlords navigate these changes while upholding their tenants’ rights and contributing to a well-balanced rental environment in California.
Screening and Application Processes
Screening Fee Regulations: Landlords are permitted to charge a maximum of $59.67 per applicant for application fees, which is a number that undergoes annual adjustments based on the Consumer Price Index. Tenants must be given a written receipt itemizing the expenses related to the application fee. In the event that the fee surpasses the genuine cost of screening, landlords are obligated to refund the excess amount [1].
Beginning January 1, 2024, landlords and applicants will have the option to agree to the use of email for delivering screening fee receipts, providing a more streamlined and convenient digital alternative
Background and Credit Checks: Before conducting background checks, which may include credit reports, criminal history, and rental history, landlords must obtain prior consent from the prospective tenant [1]. Landlords are prohibited from utilizing arrest records that did not result in convictions as a basis for denying an application.
For tenants who receive government rental assistance, such as Section 8 vouchers, landlords are required to provide an “ability to pay” assessment as an alternative to traditional credit history checks. This measure safeguards renters relying on government aid from discrimination based on their credit background
Application Content: A thorough rental application should gather the applicant’s contact details, current and previous addresses, employment history, and income verification to facilitate a comprehensive assessment. Using standardized screening tools and services can help landlords in upholding a uniform and non-discriminatory tenant screening process.
These modifications emphasize California’s dedication to a just and equitable rental housing market. By adhering to these updated regulations, landlords can effectively navigate the application and screening processes while respecting the rights and dignity of all applicants.
Security Deposit Regulations
When it comes to security deposits, it’s important to fully understand California’s landlord-tenant law. There are significant changes that will take effect on July 1, 2024, under Assembly Bill 12 (AB 12), and both landlords and tenants will be impacted. Let’s break down these changes and explain what they mean.
Security Deposit Caps:
Current Limits: Until July 1, 2024, landlords have the right to charge a security deposit equal to two months’ rent for unfurnished units and up to three months’ rent for furnished units [9].
New Limits: AB 12 will take effect on July 1, 2024, and will limit security deposits to one month’s rent for both furnished and unfurnished units, creating a more uniform financial expectation for tenants at the beginning of their lease [1][8][13].
Exception for Small Landlords: Landlords who own two properties with a total of four rental units will be allowed to charge a security deposit of up to two months’ rent, giving some leeway to smaller property owners [8][9].
Use and Return of Security Deposits:
Acceptable Uses: Landlords have the authority to use the security deposit to cover unpaid rent, repair damages beyond normal wear and tear, clean the unit after the tenant moves out, and replace or restore the landlord’s personal property if it was altered without permission [8][9].
Return Process: Landlords are required to return the security deposit within 21 days after the tenant vacates, along with an itemized statement detailing any deductions. This guarantees transparency and accountability in the landlord-tenant relationship [8][9][15][16].
Legal Recourse for Tenants:
Inspection Rights: Tenants have the right to request an initial inspection before moving out to identify any potential issues that could lead to deductions from their security deposit. This proactive step allows tenants to address concerns before the final inspection [9].
Action Against Non-Compliance: If a landlord fails to return the security deposit within the required 21-day timeframe, tenants have the legal right to take action, which may include filing a lawsuit in small claims court. This safeguards tenants against the unlawful withholding of their security deposits [8].
The recent changes made to the security deposit regulations in California are intended to balance the interests of tenants and landlords. The goal is to help landlords protect their property while also protecting tenants financially.
Tenant Protection Act (TPA) Adjustments
Starting from April 1, 2024, there will be significant changes made to the Tenant Protection Act (TPA) in California. The goal of these changes is to improve the rights of tenants and ensure that landlords follow ethical practices. Let’s take a closer look at the major modifications:
Mobile Homes and No-Fault Just Cause Terminations:
Mobile Homes: The TPA now incorporates specific provisions that pertain to mobile homes, recognizing the unique characteristics of these living spaces and the necessity for tailored regulations [4].
No-Fault Just Cause Terminations: The amendments introduce additional regulations that provide clearer guidelines for what constitutes a no-fault just cause termination. This encompasses scenarios such as owner move-in, the intention to demolish or substantially remodel the unit, and compliance with government orders
Private Right of Action:
Tenants now have the right to take private legal action in civil court against landlords who violate the TPA. This empowers tenants to seek legal remedies for violations, including attempts to exceed rent caps or wrongfully evict tenants [4].
Landlords who are found to have violated rent caps will be held liable for up to three times the amount they demanded or received that surpasses the TPA limits, underscoring the severe consequences of non-compliance [22].
Rent Caps and Eviction Protections:
Rent Increases: The TPA restricts rent increases to the lower of either 10% in total or 5% plus the percentage change in the cost of living over a 12-month period. This measure aims to prevent unreasonable rent hikes and maintain affordability for tenants [15][23][24].
Eviction Requirements: Landlords must have a valid reason to evict tenants who have lived in their unit for more than 12 months. This includes at-fault reasons, such as failure to pay rent or lease violations, as well as no-fault reasons, like owner move-in or removing the unit from the rental market [15].
Eviction Procedures and Just Cause Amendments
Eviction procedures are being amended and updated, starting April 1, 2024. These amendments are designed to provide greater clarity and fairness in the eviction process, introducing the need for just cause and offering specific guidelines for no-fault evictions. Let’s break down the updates:
Just Cause Requirements for Eviction:
Senate Bill 567 (SB 567) strengthens the requirements for no-fault evictions, landlords now need more detailed justifications for evictions due to owner move-ins or substantial remodels [4].
Landlords are required to provide documentation supporting their just cause for terminating a tenancy, promoting transparency and accountability in the eviction process [12].
Properties subject to these Just Cause eviction rules include most multi-unit residential real estate and certain single-family units owned by a REIT, a corporation, or an LLC with a corporate member, extending the scope of protection for tenants [22].
Owner Move-In and Remodels:
For evictions related to owner or relative move-ins, the property owner or their family member must occupy the property within 90 days and maintain it as their primary residence for at least 12 continuous months [11][22][26].
In cases of eviction for property withdrawal from the rental market, unfitness for habitation, or intent to demolish or substantially renovate, specific conditions outlined in the amendments must be met, preventing landlords from misusing these reasons [22].
Penalties and Enforcement:
Violations of the Just Cause eviction laws carry substantial penalties, including liability for up to three times the tenant’s moving costs, additional fines, and the potential for legal action by the Office of the Attorney General, city attorney, or county counsel [22].
To terminate the tenancy of a residential tenant who has resided on the property for 12 months or more, a 60-day Notice to Vacate is required, giving tenants sufficient time to find alternative housing [22].
These updates to the eviction procedures and just cause amendments are part of California’s ongoing efforts to balance the rights and responsibilities of landlords and tenants. By complying with these new regulations, landlords can manage the eviction process lawfully and ethically, while tenants are afforded greater protections and transparency.
Rent Control and Increase Restrictions
The introduction of Senate Bill 567 has brought about additional limitations for landlords. Those landlords who are found to demand, accept, receive, or keep any payment of rent that surpasses the maximum allowable rent increase may face legal consequences from their tenants.
If it is proven that the landlord acted deliberately, or with oppressive, fraudulent, or malicious intent, then they may be held accountable for damages up to three times the amount of the maximum allowable rent increase that they exceeded.
Statewide Rent Control Adjustments:
SB 567: Introduces a private right of action, allowing tenants to seek damages in civil court for violations of rent control laws, including three times the actual damages, punitive damages, and attorney’s fees [4].
California Rent Control Laws: Caps rent increases at 5% plus inflation or 10% of the lowest price paid in the last 12 months, whichever is lower [10].
Notice Requirements: Landlords must provide a 30-day written notice for rent increases of 10% or less and a 90-day written notice for increases over 10% [23].
Local Regulations and Exemptions:
San Francisco Proposition M: Taxes Bay Area property owners $2,500 – $5,000 for units vacant for more than six months, effective January 1, 2024
Los Angeles Rent Stabilization: Prohibits rent increases through January 31, 2024, followed by a 4% increase from February 1, 2024, to June 30, 2024.
Exemptions: Properties exempt from California rent control include condos, single-family homes not owned by REITs or corporations, mobile homes, and others.
Accessibility and Fairness:
Bay Area Rent Increase: Limited to 3.6% until February 29, 2024 [5].
Assembly Bill 1620: Allows tenants with permanent physical disabilities in rent-controlled units to move to an accessible unit within the same property at the same rental rate [2].
Costa-Hawkins Rental Housing Act Updates
The California Prohibit State Limitations on Local Rent Control Initiative is set to appear on the ballot on November 5, 2024, marking a pivotal moment for both landlords and tenants across the state. This initiative, if passed, would bring about a significant shift in the area of rent control in California, with far-reaching implications:
Repeal of Costa-Hawkins Rental Housing Act:
A ‘yes’ vote supports the initiative to repeal the Costa-Hawkins Rental Housing Act of 1995, which currently restricts rent control on single-family homes and properties built after February 1, 1995 .
The initiative proposes to empower cities and counties to apply rent control to any housing unit, regardless of its date of completion, and to limit rent for first-time tenants.
This would also prevent the state from imposing limitations on the ability of local governments to maintain, enact, or expand residential rent control policies.
Campaigns and Opposition:
Proponents: The campaign in support of the initiative, led by Justice for Renters and sponsored by the AIDS Healthcare Foundation, argues that repealing Costa-Hawkins will enable local laws, currently rendered inoperative by Costa-Hawkins, to take effect, potentially offering greater protections for tenants.
Opponents: The California Apartment Association (CAA), leading the opposition under the banner of Californians for Responsible Housing, warns of the potential negative impacts on the rental housing market. These include a reduction in the availability and quality of rental units and a deterrent to the development of new rental housing. CAA is mobilizing rental property owners and industry stakeholders to join the effort to protect Costa-Hawkins.
Potential Outcomes:
The initiative, dubbed the “Justice for Renters Act,” aims for a full repeal of Costa-Hawkins, thereby allowing local governments to apply rent control universally, eliminating vacancy decontrol, and potentially leading to a resurgence of stringent rent control policies.
The CAA is actively working to educate voters about the perceived drawbacks of repealing Costa-Hawkins, emphasizing the potential ramifications for rental housing providers, renters, and the broader California economy. They urge stakeholders to contribute to the campaign to uphold Costa-Hawkins, directing those interested to SaveCostaHawkins.com for more information.
This initiative represents a critical juncture for California’s rental market, with both sides presenting compelling arguments for and against the repeal of Costa-Hawkins. As the 2024 ballot approaches, the debate is likely to intensify, underscoring the importance for landlords and tenants alike to stay informed and engaged in the discussion.
Summary
As a landlord in California, it is imperative to recognize the significance of staying compliant with the latest updates to the state’s rental laws. The 2024 changes, which include updates to eviction procedures, security deposit regulations, screening processes, etc. are designed to promote a more balanced and equitable rental market.
Embracing these updates and integrating them into your rental practices demonstrates a commitment to responsible property management. By adhering to these laws, you are not only mitigating the risk of potential legal disputes but also cultivating a reputation as a landlord who prioritizes ethical conduct. Such a reputation can prove invaluable in attracting and retaining quality tenants, ultimately contributing to the long-term success of your rental business.
Disclaimer:
This article is intended for informational purposes only and does not constitute legal advice. While every effort has been made to ensure the accuracy and reliability of the information provided, the complexities of California’s landlord-tenant laws and the unique circumstances of individual cases necessitate personalized legal guidance.
The information presented here is a general overview of the 2024 updates to California’s landlord-tenant law and should not be relied upon as a substitute for professional legal counsel. Landlords and tenants are strongly encouraged to consult with qualified attorneys specializing in landlord-tenant law to assess their specific situations and ensure compliance with all applicable laws and regulations.
Please note that landlord-tenant law is subject to change, and the information contained in this article may not reflect the most recent updates or amendments. It is the responsibility of the reader to verify the current state of the law and seek appropriate legal advice before making any decisions or taking any actions related to their rental properties or tenancies.
The author and publisher of this article disclaim any liability for loss or damage incurred as a result of relying on the information provided herein. By reading this article, you acknowledge that you understand and agree to the terms of this disclaimer and that any reliance on the information contained within is at your own risk.
Sources: The following publications have been used as sources and references for this article.
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[10] – https://www.doorloop.com/laws/california-landlord-tenant-rights
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[15] – https://oag.ca.gov/consumers/general/landlord-tenant-issues
[16] – https://oag.ca.gov/system/files/media/Know-Your-Rights-Tenants-English.pdf
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[23] – https://dcba.lacounty.gov/portfolio/rent-increases/
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