AB 1482 and How it Affects Your Non-Rent Controlled Units

By Kali Lamarine

The state of California passed a law: Assembly Bill 1482 (AB 1482), also known as, the Tenant Protection Act of 2019, which went into effect on January 1, 2020 and applies to some properties that are 15 years or older. AB-1482 does not apply to units that are currently regulated under the city of Los Angeles Rent Stabilization Ordinance (RSO). Depending on various factors, it may apply to stand alone Single Family Dwellings or Condos.

This legislation provides state-wide tenant protections including:

• Limits on tenant rent increases

• Protections to tenants for evictions without cause

• Relocation Fees for no-fault evictions

AB 1482 limits how much a property owner or manager can increase a tenant’s rent in a 12-month period.   Rent increases in any 12-month period are limited to 5% + the change in inflation from April 1 of the prior year to April of the current year, as measured by the Consumer Price Index (CPI-U) for the area which the property is located. Some regions do not have a United States Bureau of Labor Statistics report, in which case the California CPI is used (i.e. Imperial County). These increases are capped at 10%. From August 1, 2021 to July 31, 2022, the allowable rent increase for Los Angeles was 8.6%.

Important items to note:

• An owner/manager may increase rent up to two times in a 12-month period, but are still limited to the annual cap

• Vacancy Decontrol remains intact. You will be able to reset your rents to market rate upon all original tenants vacating.

• The bill is scheduled to sunset in 10 years

• Just Cause termination is implemented statewide and kick in at 12 months of tenancy if all tenants have occupied the unit for 12 months or more. If there have been changes in occupancy, then Just Cause takes effect at 24 months.  

• Just Cause applies to month-to-month tenancies and fixed-term lease renewals

• At-Fault terminations include, but are not limited to: non-payment of rent, lease violations & criminal activity

• No-Fault terminations are defined as: owner move-in, withdrawal from rental market, a habitability order from a government agency & intent to demolish or substantially remodel. 

  • Substantially remodel is defined as: the replacement or substantial modification of any structural, electrical, plumbing, or mechanical system that requires a permit from a governmental agency, or the abatement of hazardous materials, including lead-based paint, mold, or asbestos, in accordance with applicable federal, state, and local laws, that cannot be reasonably accomplished in a safe manner with the tenant in place and that requires the tenant to vacate the residential real property for at least 30 days. Cosmetic improvements alone, including painting, decorating, and minor repairs, or other work that can be performed safely without having the residential real property vacated, do not qualify as substantial rehabilitation.

• No-Fault terminations will trigger a relocation payment of one-month's rent, regardless of the tenant's income, to be paid within 15 days of the notice being served. The last month's rent may also be waived. 

• Specific language and disclosures are required for exempt properties and when terminating tenancy. 

Exemptions 

• Single-Family Homes and Condos 

• This does not apply if they are owned by a Real Estate Investment Trust (REIT), Corporation or an LLC where one of the owners is a Corporation.  

• Properties containing two separate dwelling units within a single structure in which the owner occupied one of the units as the owner’s principal place of residence at the beginning of the tenancy, so long as the owner continues in occupancy, and neither unit is an accessory dwelling unit or a junior accessory dwelling unit.  

• Deed Restricted Housing 

• Housing built within the last 15 years (determined by Certificate of Occupancy date) 

• Housing subject to a local Rent Control Ordinance (RSO)

• Dormitories owned and operated by an institution of higher education or a kindergarten and grades 1 to 12 

• Housing accommodations in which the tenant shares bathroom or kitchen facilities with the owner who maintains their principal residence at the residential real property

• Single-family owner-occupied residences, including a residence in which the owner-occupant rents or leases no more than two units or bedrooms, including, but not limited to, an accessory dwelling unit or a junior accessory dwelling unit