If you’re having trouble understanding the new California rent control laws, you’re not alone. There are exceptions and nuances that even the most experienced real estate investors find challenging to decipher. We’ve been following the legal changes closely, and we can help. RentSimpli is a full-service San Diego property management company specializing in single family homes, townhouses, condos, mobile homes, small commercial buildings and small apartments. We also specialize in the Temecula, Murrieta, and Menifee areas.
In today’s blog, we’re taking a clear and simplified look at the new tenant protections that have been enacted this year in California. Keep in mind that these new rent control laws have been in effect since January 1, 2020, and they’ll remain in place until 2030, at which point California voters will have to decide whether or not to extend them.
Scope of the Tenant Protection Act
These new laws were enacted with the intention of protecting tenants from unreasonable and unaffordable rent increases and to eliminate the threat of unjust evictions. As a rental property owner in San Diego, you need to understand these basic objectives of the law.
- Just Cause Evictions. Landlords need a reason to evict a tenant who has been in place for a year or longer. Just cause evictions include eviction for nonpayment of rent, lease violations, and criminal activity. Any other reason for eviction may result in the owner paying a relocation fee to the tenant.
- Rent Control. Rental increases cannot exceed cost of living and are capped at five percent per year on top of the inflation rate, with a maximum increase of 10 percent.
This doesn’t mean you have to limit what you charge a new tenant. You can set your rental rate at whatever you want when you’re renting out a vacant property.
Exclusions to the Rent Control Laws
Not every rental home will have to follow these laws. You may be exempt if you’re renting out a single-family home, for example. To make things even more confusing, some properties will be subject to rent control but not just cause laws. Some rental homes will be exempt from rent control but required to follow just cause eviction laws. Others will be required to follow both parts of the law.
The high-level summary of who is impacted can be broken down like this:
- If you are renting out a multi-family unit or an apartment building that’s at least 15 years old and you don’t have pre-existing rent control laws in place, this law applies to you.
- Single-family homes will be impacted by rent control laws if they are owned by an investment company. Owners who are not corporate entities and renting out single-family homes will likely not be impacted.
- Single-family homes are exempt if a corporation owns them, and duplexes and condos are exempt if the owner lives in one of the units.
Benefits of San Diego Property Management
Even the summary of these laws seems over-complicated.
This illustrates the importance of professional San Diego property management. It’s too risky to rent out your own home, especially if you don’t know these new laws inside and out. We can take a look at your unique property or portfolio of properties and help you navigate what the new laws means to each of your investments.
Contact us at RentSimpli to protect your properties and your financial interests. Making an expensive mistake has become too easy.
RentSimpli is a full-service property management company serving landlords, investors, and property owners in San Diego and Riverside Counties, including La Mesa, El Cajon, Chula Vista, Santee, Rancho Bernardo, Escondido, Fallbrook, Temecula, Murrieta, Menifee and more. If you have questions related to property investments or San Diego property management, please contact us.