California was in the spotlight recently as news on the approval of Rent Cap Bill or Assembly Bill 1482 took the media by storm. The bill, which was authored by San Francisco Assemblyman David Chiu, was met with a mixture of support and opposition.

Those who support the new bill believe that the government has taken a positive step in protecting tenants. While those who disapprove of it, including economists, think that this may worsen the current issues on rentals and housing by possibly driving landlords to convert rental properties into condominiums.

Nonetheless, Assemblyman David Chiu and Gov. Gavin Newsom believe that this bill will help keep families in homes, address growing concerns on affordable housing and the rise in homelessness rate.

California is second to Oregon to impose a statewide rent control law, while there are large cities that have their laws in effect such as New York City, Los Angeles, San Francisco, and Oakland, to name a few. Washington, D.C., on the other hand, has a district-wide implementation. 

What’s in a rent control law?

 It differs on the state or city, but in general, rent control laws limit the landlord’s power to increase rent. It prevents excessive rent increase that’s beyond what’s affordable to most. In California, the limit is 5% after inflation. 

There are a few exemptions to the coverage of the law. New buildings (in some, less than 15 years old), single-family homes (except corporate-owned), condominiums, townhouses, and luxury units and owner-occupied buildings with no more than two to four rental units are exempted.

There are two types of rent control. One is Vacancy Decontrol where restrictions end once the tenant leaves. It protects current tenants. While the other is Vacancy Control where the rent is locked even when a new tenant moves in. This protects future tenants, although the base rent can be raised under certain circumstances.

The law also includes clauses on security deposits, notices on raise or termination of contract and eviction. An eviction must be done under legitimate reasons.

Now, let’s talk about eviction… 

Rent control laws are generally stricter when it comes to eviction.

If a landlord wants to convert the property into a condominium or they want to terminate the contract so they can move-in, relocation assistance must be provided. In some places, it’s money equivalent to a month’s rent and in some, it may be thousands of dollars, even. 

What accounts as a just cause for eviction? 

Depending on the city, district or state, just causes are as follows, but are not limited to:

• Failure to pay the rent. This can be nonpayment or even habitual late payment or bounced checks.
• Breach of contract. This is wide depending on what’s initially stipulated and agreed to in the contract, but in essence, a breach may be a nuisance, violence, illegal activity and failure to give proper access for the landlord to inspect or make repairs. The last one is necessary because there is also a law surrounding the landlord’s responsibility to provide a habitable living space.
• A sublease to a new tenant not approved by the landlord or even just allowing additional people to live in the property without the landlord’s knowledge.
• The owner or an immediate family member wants to use the unit as their primary residence.
• Repairs are to be made requires the property to be vacant.
• The property will no longer be for rent. It may be up for sale or demolition.

Landlords who evict tenants without legitimate reasons may be subjected to civil and criminal penalties. It will be best to check with your locality on governing just causes for eviction to be sure that you’re not missing out on anything.

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