Relocation and Evictions

From our experience, many rental property owners are conflict avoiders and would rather kick the can down the road in hopes that the dispute will resolve itself. We dissuade our clients against this wishful thinking and remind them that since an eviction action typically takes 6-8 weeks, a landlord can potentially be out of several months of rent if they don't take action now.

When you encounter problematic tenants, please don't let the situation enlarge.

Key provisions of the Tenant Protection Act of 2019 (AB-1482)

- For some residential properties, annual rent increases will be capped at 5% plus the rate of inflation, or 10 percent, whichever is lower.
o Landlords must show a “just cause” to evict tenants implanted for 12 months or more.
o Protections will be extended to housing stock previously exempted from rent control because of Costa-Hawkins.
o If the tenant is displaced because of a no-fault just cause eviction, relocation assistance in the form of a direct payment or rent waiver is normally required.

Are you prepped for statewide rent and eviction controls set to take effect January 2020?

Rental housing providers will be exposed to a new regulatory regime, to varying degrees, depending on whether the property is located and when the first Certificate of Occupancy was issued.

The newly minted state law calls for annual rent caps of 5 percent plus the local rate of inflation with an expiration date of 2030. Another highlight of the bill is the imposition of “just cause” eviction requirements that apply after tenants have resided in the unit for 12 months, or 24 months if a roommate moves in.

If it doesn’t apply, let it fly

The first algebraic equation to solve is whether your building is hamstrung by local rules more favorable to tenants when viewed in light of statewide protections.

For many of you who own rental properties in locales throughout Los Angeles County that are governed by pre-existing rules that are more “protective” than state law, there will be little impact because you are already handcuffed in your ability to raise rents and are bound by more restrictive regulations regarding evictions. In other words,if your rental business is subject to more confining ordinance, state law may be moot.

Here’s where it gets interesting

Although new state law does not override the local rent control measures that already have ensconced tenant protections on the books, AB 1482 does extend protections to homes and units previously exempt from current rent control laws.

Take, for instance, Redondo Beach, a locale that does not have its own rent control ordinance. Assuming the current rent is $1,550 per month, and the inflation rate is 3.8 percent, rent can only be raised to the tune of 8.8 percent, which translates to an extra $136.40 per month.

It doesn’t end there - a rolling 15-year rolling window applies

There are many properties located in rent-controlled jurisdictions that nonetheless escaped local protections because these buildings were exempt as “new construction” under Costa-Hawkins. For instance, rental properties in the city of Los Angeles built on or after October 1, 1978 were off-limits to the Rent Stabilization Ordinance (RSO).

As of January 2020, however, all such properties built between 1978 and 2005 will now be covered. When we say it is a rolling 15-year window, this means each year, new buildings will come out of the exemption window as they age past the 15-year threshold.

The law will not apply to most single-family homes and condominiums, unless owned by a corporation, real estate trust, or an LLC when at least one member is a corporation.

AB 1482 has a built-in mistrust of these ownership structures because it screams "greed-fueled speculators." The reasoning is, landlords who are sophisticated enough to have these ownership structures are most likely to exploit loopholes.

No-fault terminations will come with a price.

When a tenant is displaced through no fault of their own, the landlord must provide relocation assistance in one of two ways. The landlord can make a direct payment to the tune of one month's rent, or forgive the payment for the final month of the tenancy.

That according to the state of California, but this farewell gesture is not generous enough for several municipalities. Local ordinances tend to be much more favorable than state law, requiring more hefty payouts to uprooted tenants. Certain vulnerable groups may be entitled to still more money.

When it comes to relocation payments, there’s some time frame issues in terms of notice requirements and how the payments are dispersed, so please consult MT Evictions to make sure you can make a transition compliant with the rules surrounding a proper transition.
We note that unpaid rent cannot be subtracted from the relocation payments due - we have to pay those relocation payments.

Committed to educating rental housing providers how the new law will affect their business and bring you up to compliance.

If your leases are stale in the new era of statewide rent and eviction controls, do not worry - the landlord allies can fine tune them and add the requisite disclosures

Rent and eviction control guide

Rent and eviction control is creatures of ordinances enacted by local ordinances and while there are oftentimes similarities, the rules are vastly
different by municipality.

Rent control is creatures of ordinances enacted by local governments and in the narrowest sense refers to limits on how much rent landlords can charge, and spell out how often landlords can raise the rent.

Yet, many of these regulatory regimes have eviction control that enumerates reasons why a tenant can be evicted. Oftentimes, these ordinances afford tenants still more protections in the form of minimum lease terms, relocation payment assistance, special notice requirements, mediation services, buyout agreement regulations, and other safeguards.
In this Rent Control Guide, we take a trip around Southern California and summarize some of the ordinances, with links to additional resources.

Statewide rent control and “just cause” eviction policies steam forward

AB 1482 would impose statewide rent control and “just cause” eviction policies. To the elatement of tenants’ advocates, the measure has cleared many legislative hurdles to date.

Many inquisitive clients have asked us what the chatter was all about on statewide rent control and so an update is in order. We wish we could say your concerns are misplaced, but cannot.

Before we explore where the bill is now, let’s take examine what’s at stake. AB 1482 is loosely modeled after Oregon’s statewide rent control measure. If the bill is passed, annual rent increases would be capped at 7% plus the Consumer Price Index, so as a ballpark, let’s say 10%.

In our rent control guide, MT Evictions has surveyed tenant protections in many municipalities, some of them adopting rent control and others taking a more moderate approach. If AB 1482 is passed, those cities that rejected rent control would nonetheless be subject to the new law.

New construction less than ten years are exempt, as are detached single-family homes when the owner does not own more than 10 units in their name.

Now that we know what the proposal looks like, let’s see where it’s at now in the statehouse.

After sailing through several processes, AB 1482 now falls into the lap of the Appropriations Committee, a body that is known as a graveyard where difficult legislation can be quietly put to rest without forcing lawmakers to vote up or down on the bill, and we hope that this committee lives up to its grim reputation on this bill.

In this democratic process, the rental property industry will get no sympathy from Governor Newsom, who says the measure is “long overdue in the State of “We don’t want to scare off development …. We don’t want builders to go to other states. Unfortunately, we are seeing this now.

~ Debra Carlton, Senior Vice President of Public Affairs

At a time when new housing construction is sorely needed, developers have cancelled projects slated for Southern California and have flocked to less restrictive states like Texas, Utah, Colorado and Nevada.

From the LA Times: Newsom backs effort to cap rent increases in California

Tenant relocation assistance rules take shape in Long Beach

We said earlier that after tenants’ advocates have tried unsuccessfully for years to usher in eviction and rent controls, Long Beach finally softened their heart. In its April meeting, the city agreed in principle that amid rising rents, landlords should dole out relocation payments to tenants who are displaced from unaffordable rent increases, or no-fault evictions.

When proposed rent increases exceed 10% in a 12-month period and the tenant objects to the hike, the landlord must pay relocation payments. Owners also have to pay relocation payments when the tenant is transitioned through no fault of their own, such as a landlord’s substantial rehabilitation of the unit.
When proposed rent increases exceed 10% in a 12-month period and the tenant objects to the hike, the landlord must pay relocation payments. Owners also have to pay relocation payments when the tenant is transitioned through no fault of their own, such as a landlord’s substantial rehabilitation of the unit.

Exactly how much money dispensed in relocation payments?

When tenants are displaced by a rent increase or through a no-fault eviction, landlords are obligated to pay two months of rent, but the dollar amount is pegged to the “number of bedrooms averages across all Long Beach zip codes in the then-current Payment Standards/Small Area Fair Market Rents published by the Housing Authority of the City of Long Beach,” according to the city’s legal team. This number will fluctuate, but cannot exceed $4,500.