With the new year comes new laws. Here is my annual review of some of the new real estate-related laws in California for 2020.
Significant impacts to the landlord/tenant relationship
We discussed in a previous article the Tenant Protection Act of 2019, created by Assembly Bill (AB) 1482. This law enacts some form of rent control and eviction protection for residential tenancies.
There are two main areas; first, it imposes a cap on rent increases of five percent plus inflation. Rent can only be increased twice a year below the cap, and the rent cap is retroactive, looking back to March 15, 2019.
Second, the law clarifies when a tenant can be evicted for “just cause” reasons. Previously, a landlord could give a tenant 60-days notice to vacate the premises for no reason after their lease term expires. The new law allows for 11 “at-fault” reasons and four “no-fault” reasons.
The at-fault reasons are basically for breaking any terms of the lease, not signing a new lease with the same conditions, or for any criminal activity on the property.
The no-fault reasons are the property is being removed from the rental market, compliance with a government order to vacate, the intent of the landlord to remodel, or the owner or an immediate family member will be occupying.
SB 329 expands the current law’s definition of discrimination based on the “source of income” of a tenant. It is discriminatory to consider derogatory the income source of a tenant from a public assistance program, subsidy, or Section 8 federal housing voucher in the selling, rent, leasing, or use of housing.
SB 222 makes it illegal to discriminate in any way on the basis of veteran or military status.
The housing crunch
Several laws work at addressing the housing crises. Accessory Dwelling Units (ADUs) are additional units on the same property as the main house, basically what we used to call a “granny unit.”
A Junior ADU is a small unit carved out of the main house with an outside entrance, kitchen, bathroom, and living space.
AB 670 addresses provisions in a CC&R (Covenant, Conditions, & Restrictions), a governing document of a common interest subdivision, that prohibits an ADU. The new law essentially makes void and unenforceable for any CC&R restricting ADUs.
Three bills were also introduced into law, which removes potential impediments to constructing ADUs imposed by local jurisdictions. Several cities and counties have barriers to ADU approval and construction, though many are working at streamlining the process.
SB 330 establishes the Housing Crisis Act of 2019 soon to be law prohibits cities and counties from “down zoning” land use. Down zoning effectively changes the land use designation to less intensive uses or reduces the intensity of the use, thereby reducing the number of residential units on a parcel.
The law also restricts the ability for a municipality to impose a moratorium on housing development, limiting the number of approvals and permits, capping the number of housing units that can be developed annually, and limiting the city population.
These highlights are just a snapshot of the many new laws for 2020.
Have a blessed and prosperous New Year.
Burt M. Polson is the CEO of ACRESinfo.com, a commercial real estate brokerage company and CEO of StoneMarkerInvestments.com, a private equity real estate fund. Call him at (707) 254-8000 or email [email protected] and [email protected]