California relocation assistance agreement

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Prepared By: Melissa C. Marsh, Los Angeles Landlord-Tenant Attorney
Written: September 2019 - Last Updated: May 2022

California State Rent Control and Relocation Assistance
California Tenant Protections & Relief Act (AB 1482)

Updated on May 25, 2022

In September of 2019, the California legislature enacted A.B. 1482 a..k.a the Tenant Protection Act of 2019, which created a statewide annual rent increase limit, "just cause" requirements for evictions, and required relocation assistance payments to tenants renting a ″covered″ rental unit. This law is commonly referred to as AB 1482 and California State Rent Control. AB 1482 prohibits California landlords with a ″covered″ rental property (all multi-unit dwellings built more than 15 years ago and some single family homes) from: (1) increasing the rent within a 12 month time period by more than 5% plus the rate of inflation of the local Consumer Price Index and from (2) evicting a tenant who has resided in a "covered" rental unit for one year or more without ″just cause″ absent the payment of relocation assistance fees.

CAUTION: The California state just cause eviction protections and rent increase limits DO APPLY to Single Family Homes, Condos and Townhomes IF the Owner failed to include the appropriate language in a rental agreement executed or renewed after July, 1 2020. Discussed further below.

• What is a "Covered" Rental Property Subject to California Rent Control?
• Required Notice that a rental is or is not Subject to California Rent Control
• What are the "Just Cause" grounds for Eviction in California?
• What is the Allowable Rent Increase For California Rental Property?

1. What is a "Covered" Rental Property?
AB 1482 (California state rent control) applies to ALL California residential properties except:

• a rental property that was built less than 15 years ago (June of 2007 when this article was updated); a rental property that is subject to a local rent control ordinance that is more restrictive than AB 1482, in which case the just cause provisions of the local rent control ordinance will apply;
• a duplex IF the owner is and has been continuously owner-occupying one of the two units on the property as the owner�s principal place of residence from the beginning of the tenancy and for the entire term of the tenancy;
• a single family home, condo, or townhome BUT ONLY IF: (a) the rental property can be sold separate from the title to any other dwelling unit on the property; (b) the owner is not a real estate investment trust, a corporation, or a limited liability company in which at least one member is a corporation; and (c) the owner properly notified the tenant (see Notice section below), that the rental property is not subject to California "just cause" eviction protections and rent increase limitations of AB 1482 by a written notice properly served on the tenant before June 30, 2020 (if the tenancy then existed), or by a clause in the lease, by a written addendum to the lease, or by a notice signed by the tenant;
• a single family home, townhome, or condo in which the owner in renting out less than two bedrooms and the owner himself lives in the same home/condo as his/her personal residence and shares a bathroom or kitchen facilities with the tenant(s);
• a dormitory constructed and maintained by a school or university;
• a rental property leased by a nonprofit hospital, church, extended care facility, licensed extended care facility for the elderly, or an adult residential facility; AND
• a property that is licensed as a hotel and is rented out only for transient occupancy (less than 30 days) as defined by Civil Code Section 1940(b).

CAUTION: These exemptions can be tricky and are a bit more complicated than can be explained in an article on the internet. For example, the limited exemption for single-family homes does not apply where there is more than one dwelling unit on the same lot, or any second residential unit in the building that cannot be sold separately from the subject rental unit.

Have some questions? You can schedule a same day low cost 30 minute telephone consultation with Ms. Marsh, a California attorney with 25+ years experience, and Ms. Marsh will contact you at the time you select. Please note that at least 30 minutes is required for Ms. Marsh to properly review your options pertaining to any landlord tenant matter due to the interplay of local, county, and state laws.

If a landlord has a "covered" rental property that is subject to the California Tenant Protection Act, then the Owner MUST provide the following written notice in 12 point type to the tenant in the Lease or Rental Agreement, in an addendum to the Lease or Rental Agreement, or as a formal written notice signed by both the owner and the tenant:

"California law limits the amount your rent can be increased. See Section 1947.12 of the Civil Code for more information. California law also provides that after all of the tenants have continuously and lawfully occupied the property for 12 months or more or at least one of the tenants has continuously and lawfully occupied the property for 24 months or more, a landlord must provide a statement of cause in any notice to terminate a tenancy. See Section 1946.2 of the Civil Code for more information."

If a landlord has a rental property that is exempt from California's just cause eviction requirements because the property is a single family home, townhome, or condo, the landlord must provide the tenant with the below written notice that the rental property is exempt from California's just cause eviction protections and limits on rent increases. For a tenancy existing before July 1, 2020, this notice may, but is not required to, be provided in the rental agreement. For any tenancy that began or was renewed on or after July 1, 2020, this written notice must be in: (a) the signed rental agreement/lease, or (b) in a signed lease extension/renewal agreement. If the owner of a single family home, condo, or townhome entered into a new lease, or renewed an existing lease after July 1, 2020 and did not provide the required written notice to the tenant, then the single-family home or condo is NOT exempt from AB 1482's "just cause" eviction requirements or rent cap limits. The written notice that the rental property is exempt must read in at least 12-point type:

"This property is not subject to the rent limits imposed by Section 1947.12 of the Civil Code and is not subject to the just cause requirements of Section 1946.2 of the Civil Code. This property meets the requirements of Sections 1947.12 (d)(5) and 1946.2 (e)(8) of the Civil Code and the owner is not any of the following: (1) a real estate investment trust, as defined by Section 856 of the Internal Revenue Code; (2) a corporation; or (3) a limited liability company in which at least one member is a corporation."

For those California landlords who did not provide the proper notice in their written rental agreement or lease and failed to get their tenants to sign a lease addendum or acknowledgment of receipt of the Notice, there is a way out. AB 1482 provides that the tenant's refusal to sign a new lease with "similar provisions" or a lease renewal for the same term with similar provisions is grounds for eviction. Consequently, all California landlords with outdated leases should serve the tenant with either a new lease or lease renewal notice including any rental increase and the required language above with language that failure to accept or sign the new lease or lease renewal is grounds is eviction under California law. Unfortunately, this has become complicated by the local Covid moratoriums in some jurisdictions, and local tenant protection ordinances, as these ordinances may not acknowledge this as a valid basis to evict.

Until February 1, 2030, California landlords must give tenants in a "covered" rental property a just cause, or no-fault just cause, reason set forth in AB 1482 to evict a California tenant (unless further restricted by a local eviction moratorium, or tenant protection ordinance). The just cause eviction provisions under the California Tenant Protection Act only apply to "covered rental units" (as defined above) after all tenants have lived in the unit for 12 months or more, or at least one tenant has occupied the unit for 24 months.

What does this mean? It means that is a California landlord is seeking to evict a tenant from a "covered" rental unit, the standard 60 Day Notice to terminate a tenancy will not work. It means that a California landlord will need to state a valid reason to evict in any notice to terminate a tenancy, or to refuse to renewal of lease. In other words, a California landlord is prohibited from ending a tenancy unless the California landlord has one of the allowable "just cause" reasons, and it is properly set forth in the written notice to terminate the tenancy (e.g. 3 Day Notice to Cure or Quit, 30 Day Notice to Quit, or 60 Day Notice to Quit).

What is Just Cause? Under California�s Tenant Protection Act a landlord must have just cause to evict a tenant. The mere expiration of a lease or rental agreement is not a "just cause" to terminate a tenancy under the California Tenant Protection Act. "Just cause" reasons under California law are categorized as either "at-fault" reasons or "no-fault" reasons.

At-Fault Just Cause Evictions Allowed under California's Tenant Protection Act (AB 1482) include:

• Tenant has failed to pay the rent in a timely manner (may be restricted by AB 2179 or local moratoriums);
• Tenant has breached a material term of the Lease as defined in the California Code of Civil Procedure and failed to cure the violation after being properly served with a written 3 Day Notice to Cure or Quit;
• Tenant is maintaining, committing, or permitting the maintenance or commission of a nuisance as described in the California Code of Civil Procedure Section 1161(4);
• Tenant is committing waste as described in the California Code of Civil Procedure Section 1161(4)
• Failure to Renew Similar Lease � The tenant had a written lease that terminated on or after January 1, 2020, and after a written request or demand from the owner, the tenant has refused to execute a written extension or renewal of the lease for an additional term of similar duration with similar provisions, provided that those terms do not violate the California Tenant Protection Act or any other California law; ;
• Tenant engaged in criminal activity, or threatened criminal activity (as defined by Penal Code Section 422(a)) on the landlord's property, or in the rental unit, or directed at the owner or an agent of the owner;
• Tenant has assigned or sublet the premises in violation of the tenant's lease and without permission;
• Tenant refused to allow the owner to enter the rental property as permitted under California Civil Code Sections 1954 and 1101.5 and under California Health and Safety Code Sections 13113.7 and 17926.1;
• Tenant is using the Premises for an Unlawful Purpose;
• Tenant was not an actual tenant for a resident manager who is refusing to vacate after termination of employment; AND
• Tenant fails to deliver possession of the rental unit to the owner after giving the owner written notice of the Tenant�s intent to vacate as provided in Civil Code Section 1946, or after the Tenant made a written offer to surrender the Premises that was accepted in writing by the landlord as described in Code of Civil Procedure Section 1161;

In any of the above incidences, the Landlord will be required to properly serve the Tenant with a properly drafted Three Day Notice to Cure or Quit (10 or 15 days under certain local ordinances) and if there is a subsequent violation, or non-compliance, then the landlord will need to properly serve the Tenant with a final Three Day Notice to Quit.

CAUTION: Despite California state's allowable at fault just cause reasons a landlord may use to evict a tenant, many local moratoriums and some local tenant protection ordinances may further limit a California landlord's ability to evict.

Have some questions? You can schedule a same day low cost 30 minute telephone consultation with Ms. Marsh, a California attorney with 25+ years experience, and Ms. Marsh will contact you at the time you select. Please note that at least 30 minutes is required for Ms. Marsh to properly review your options pertaining to any landlord tenant matter due to the interplay of local, county, and state laws.

Although California's Tenant Protection Act essentially prohibits a California residential landlord from terminating a tenancy without just cause, as set forth above, there are some no-fault just cause exceptions.

No fault Just Cause Evictions Permitted under California's Tenant Protection Act (AB 1482)

• Owner/Family Move-In. The Owner seeks to owner-occupy the rental unit, or have their spouse, domestic partner, children, grandchildren, parents or grandparents occupy the rental unit. For leases entered into on or after July 1, 2020, owner occupancy is only allowed IF either: (a) the tenant agrees in writing to the termination, or (b) a provision in the lease allows the owner to terminate the lease if the owner, or their spouse, domestic partner, children, grandchildren, parents, or grandparents, unilaterally decide to occupy the rental unit;
• Government Order to Comply. The Owner is seeking to comply with a court or government order to comply that necessitates the tenant vacate the rental unit due to habitability issues or illegal conversions;
• Withdrawal. The Owner seeks to permanently withdraw the residential property from the rental market (Ellis Act Removal); and
• Demolition or Substantial Remodel. The Owner is seeking to demolish or substantially remodel the rental property (Note: substantial remodel is defined to mean upgrading 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

Please be aware that various local ordinances prohibit the above no fault just cause evictions thru December 31, 2022. If allowed, California's Tenant Protection Act requires the owner not only to properly serve a properly drafted written Notice to terminate the tenancy with the stated reason for the termination and the manner in which the owner will be providing the tenant with the required one month�s rent as relocation assistance.

If the no fault just cause termination of tenancy is allowed, the owner is also required to provide the tenant with relocation assistance, in the form of a direct payment, or a rent waiver, equivalent to one month's rent as in effect when the owner issued the notice to terminate the tenancy. The owner must pay the relocation assistance to the tenant within 15 calendar days of service of the Notice terminating the tenancy. If the owner is opting to provide a rent waiver it must be included in the written notice to terminate the tenancy and the owner must not thereafter accept payment of the last month�s rent from the tenant.

The California Tenant Protections Act (AB 1482) limits the annual rent increase a California landlord may impose on a tenant residing in a "covered" rental unit to the lesser of 10% or 5% plus the local increase in the Consumer Price Index (CPI) for or All Urban Consumers as established each year in the month of April. In 2020, the allowable rent increase for a "covered" unit in Los Angeles was 5.7%. For August 1, 2021 through July 31, 2022, the allowable rent increase for a "covered" rental unit in Los Angeles was 8.6%. For August 1, 2022 through July 31, 2023, the annual change in the CPI for Los Angeles was 7.9%, so the allowable rent increase will be 10%.

For rent increases that take effect before August 1st of any calendar year, the percentage change is calculated using the amount published for April (or March, if no amount is published for April) of the immediately preceding calendar year and April (or March) of the year before that.

For rent increases that take effect on or after August 1st of any calendar year, the percentage change is calculated using the amount published for April (or March, if no amount is published for April) of that calendar year and April (or March) of the immediately preceding calendar year.

The California Tenant Protections Act further prohibits an owner of residential multi-unit dwellings from increasing the rent more than 2 times in any 12-month period. For example, if a landlord increased the rent 5% in January of 2021, but was allowed to increase the rent 8.6%, the landlord is allowed to issue a second 30 Day Notice of a Rent Increase for 3.6% in that same year for the difference.

Master tenants must also beware. The California Tenant Protections Act prohibits master tenants with subtenants from collecting rent from the subtenants that exceed the total amount of rent paid by the master tenant to the owner / landlord. In other words, the total rent paid by subtenants to a master tenant cannot exceed the rent charged by the landlord.

What happens if the landlord overcharged the tenant? If the rent was increased by more than 5% + CPI between March 15, 2019 and January 1, 2020, then on January 1, 2020 the rent must revert back to the rent paid on March 15, 2019, plus the allowable increase of 5% + CPI (0.7% in Los Angeles). While California landlords do not have to return overpayments of rent made between March 15, 2019 and January 1, 2020, they must return overpayments made after January 1, 2020. If the landlord fails to return the overpaid rent collected, the tenant can bring an action in either small claims, or state, court and if the court finds in the favor of the tenant, the court may additionally award the tenant their reasonable attorneys fees and costs (the attorneys fees and costs will likely exceed the amount the landlord was required to refund).

What about local rent control rent limits? The allowable rent increase for any rental unit depends not only on where the rental property is located, but when it was built. Lets look at the city of Los Angeles which has a rent control ordinance in effect. The Los Angeles Rent Stabilization Ordinance only applies to multi-unit dwellings that were built prior to October of 1978. So what is the allowable increase on a multi unit rental property built pre-1978 versus 1995 versus 2017 in the City of Los Angeles?

• If a multi unit rental property in the city of Los Angeles was built before October 1978, then the rent limits imposed by the Los Angeles Rent Stabilization Ordinance will control (Presently 0% for 2022 as there is a Rent Freeze still in effect);
• if a multi unit rental property in the city of Los Angeles was built in 1985, then AB 1482 controls and the rent increase will be capped at 8.6% through August 1, 2022 (5%, plus the 3.6% increase in the consumer price inflation index for the City of Los Angeles);
• if the multi unit rental property in the city of Los Angeles was built in 2017, however, then there would be no rental cap until the building is 15 years old.

CAUTION: The overlapping laws are not only complex but they also keep changing, Even this relatively new law enacted in 2019 has already been amended in 2021. In addition to the changes, each landlord must be mindful of overlapping local laws. For example, Culver City enacted its Tenant Protection Ordinance which applies to ALL rentals within the city limits and further restricts the "just cause" eviction reasons a landlord may consider to evict. West Hollywood is presently considering requiring ALL single family residences to register their units and to put them under their local eviction controls. And the list goes on.

The California Tenant Protections Act also changes the requirements for almost ALL 3 Day Notices to Cure or Quit, which now must be followed by a Three Day Notice to Quit as well as for all 30 and 60 Day Notices to Terminate Tenancy. In addition, the new law requires many landlords to either add additional language to their leases, and to provide existing tenants with a specific notice in 12 point type. California Landlords should immediately update their leases (especially for all buildings that are not subject to local rent control rules).

If you would like to have Melissa Marsh, a Los Angeles, California Landlord and Tenant attorney with over 25 years' experience, to assess your rental and your rights or obligations in light of the new California Tenant Protections Act and the ever changing and expanding local rent control and tenant protection ordinances popping up in a multitude of cities throughout Los Angeles County, please do not hesitate to schedule a low cost SAME DAY 30 minute or 1 hour TELEPHONE CONSULTATION. Ms. Marsh can also prepare a custom master lease, or any needed notice, for your rental property to help mitigate against many of the liabilities emanating from a rental property.

Melissa Marsh appeared on CBS 2 On Your Side with Kristine Lazar in both June 2020 to Discuss Removing an Unwanted Guest from your home and again in February of 2021 to Discuss Removing an Unwanted Tenant From your Home During the Covid 19 moratoriums.

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Located in Los Angeles, California, the Law Office of Melissa C. Marsh handles business law and corporation law matters as a lawyer for clients throughout Los Angeles including Burbank, Sherman Oaks, Studio City, Valley Village, North Hollywood, Woodland Hills, Hollywood, West LA as well as Riverside County, San Fernando, Ventura County, and Santa Clarita. Attorney Melissa C. Marsh has considerable experience handling business matters both nationally and internationally. We routinely assist our clients with incorporation, forming a California corporation, forming a California llc, partnership, annual minutes, shareholder meetings, director meetings, getting a taxpayer ID number (EIN), buying a business, selling a business, commercial lease review, employee disputes, independent contractors, construction, and personal matters such as preparing a will, living trust, power of attorney, health care directive, and more.