Disclaimer: The information and document included below are presented only for informative reasons and are not meant to be used as legal advice. The author of this article is not a lawyer. This content should not be regarded as a replacement for professional legal counsel.
In 2023, Governor Gavin Newsom signed new laws as part of his priority projects, addressing the current homelessness crisis in California. One of these legislations is a set of new rental laws designed to relieve the ongoing state housing affordability crisis in 2024.
These updated laws attempt to balance landlords' demands for efficient property management and renters' needs for more stability and protection.
As a California landlord, you must be updated on these new rental laws to efficiently run your rental property business. This also ensures that you meet the rights of your tenants and the state's demands for the Tenant Protection Act (TPA), security deposits, eviction processes, and rental agreements.
For you to know how this will affect your role as a landlord and how this will affect your tenants' rights, we listed here the different laws that will be implemented:
New Rental Laws in California Effective January 1, 2024
Senate Bill 602: You Have Better Protection Against Illegal Occupancy
One of the scariest things that can happen to your rental home as a property owner, especially if you live in another state, is trespassers or squatters. Squatting means that someone is living on your rental properties without your permission.
In the past, California only had trespass notices valid for 30 days. With the implementation of SB 602, the trespass letter is now good for an entire year and can be sent online. Property owners also don't have to go to court to process the eviction of the person living illegally in their rental unit.
This is a great new law especially for California landlords who live away from their rental housing. You can quickly notify the law enforcers that your rental units are empty, which gives them the power to remove any trespassers who try to live there or say they are legal residents. Another way is for you to hire a trusted and reliable property manager in Tracy.
Senate Bill 267: No Credit History Discrimination During Tenant Screening
SB 267 states that California landlords can't use a person's credit information to applicants who receive government housing assistance like Section 8, unless they give them another way to prove they can pay their rent. These documents include a bank bill, a benefit statement, or a tax return. This law also states that you should give them enough time to provide you with this information and consider these documents instead of their credit history when deciding whether to accept their tenant applications.
As a landlord, you must update your tenant screening process to ensure you follow this new law. Or better yet, you can outsource your tenant screening for a more efficient process. On the other hand, this is good news for tenants, especially when they receive a government rental subsidy. They can present their proof of ability to pay rent through their income, savings or emergency fund records, and renting history.
New Rental Laws in California Effective April 1, 2024
Senate Bill 567: Move-In and Property Remodeling Must Follow the No-Fault Eviction Law
When you have a property in the California rental market, you must follow tenant protections for no-fault evictions. The TPA addresses four distinct forms of evictions that do not involve the tenant's fault:
You must meet the requirements of any applicable government order or municipal legislation mandating the tenant's eviction.
You plan to demolish or have significant renovations.
You or your close relative (spouse, parents, children, grandchildren) want to return to the unit.
You want to take the property off the rental market for at least ten years.
If you want to move back into your property, you must return to it within 90 days after your tenants move out. You must also stay in that home for at least 12 months before listing it in the rental market again. Meanwhile, when you want to renovate your rental property, you must provide information such as copies of the necessary licenses or contracts to your current residential tenants. Not completing the renovation will obligate you to contact the previous renters and offer them the chance to return to the property, so make sure you have their forwarding address.
Create an eviction protection plan for your rental properties.
New Rental Laws in California Effective July 1, 2024
Assembly Bill 12: One Month’s Rent Cap for Security Deposit
One of the most significant housing laws being implemented this year for rental properties to address California's housing crisis is the statewide rent caps for security deposits. This means you are now not allowed to require your tenants to pay more than one month's rent in advance if you own large properties, whether furnished or unfurnished units. This also applies to individuals with more than two rental homes and over four housing units.
You also cannot request a security deposit from renters who have a service animal or an emotional support animal. You are not required to return the security deposit you got before July 1, 2024, although you are encouraged to return it to your tenants if it won't affect your finances.
Meanwhile, the previous rule for security deposits will still apply to small property owners, such as families that live in one house and rent out the other:
Unfurnished homes: 2 months’ rent / Rented to a service member: 1 month’s rent
Furnished homes: 3 months’ rent / Rented to a service member: 2 months’ rent
Tenants with service or emotional support animals: No security deposit
New Rental Law Initial Deadline January 1, 2025
SB 271: Balcony Inspections for Multifamily Properties
The legislation mandates that all multi-unit properties with three or more units and any outdoor features like decks or stairways must undergo balcony inspections. January 1, 2025, is the deadline for this year, but you must adhere to the necessary follow-up inspections every six years to guarantee continuous compliance and safety.
Ensure you only hire qualified safety inspectors or general contractors with A, B, or C-5 licenses for your balcony inspections.
Other California Landlord-Tenant Laws You Must Know for Your Rental Property
Statewide Rent Control
On top of all these state laws is the statewide rent control law implemented by the California Tenant Protections Act of 2019. Initially enacted in reaction to the COVID-19 pandemic, this legislation will remain in force until January 1, 2030. The law sets a maximum annual rent rise of 10% (or 5% plus the local CPI).
As a landlord, you must also check with your local rent control laws since some cities have stricter regulations.
Adhere to State Laws with Top-Notch Property Management
Being constantly updated with the latest state and federal laws about rental properties can take much of your time and effort. This is aside from the complexities of the ever-changing local ordinances in your area.
However, as a rental property business owner and a landlord, you must adhere to all these rules to mitigate risks in your assets and finances. You can ensure compliance with all these laws in your Tracy rental property if you have an expert and trusted partner through HBR Rentals.
If you aim to have peak performance and want guaranteed protection for your business, feel free to contact us and schedule a free consultation!
