Our team at Progressive Property Management has been diligently working with owners and investors to ensure their properties are compliant with AB 1482. In the past, we have talked to you about the new rental laws that are now in effect in California, and we want to take some time to really discuss – in detail – what the Tenant Protection Act means for landlords and their properties.
In this blog, we’re shining the light a little brighter on evictions and what the just cause eviction section of this new law means for your property and your right to remove your tenants.
First, you’ll need to determine whether your rental property is included in this law or exempt from it. If you’re not sure, we’ve discussed exempt categories previously, and we have additional information on our website. Generally, the new laws apply to apartment buildings and multi-family properties where the owner is not occupying one of the units in a duplex or tri-plex. Single-family homes, condos, and any properties built within the last 15 years are not currently required to follow the restrictions in this law unless they are owned by corporations or REITs (real estate trusts).
If you find yourself included in the properties that must now follow AB 1482, we’re discussing what you need to know about evictions.
Just Cause Evictions in California: When your Tenant is At Fault
The just cause eviction section of AB 1482 has a lot of landlords nervous because it makes removing your tenant a little more difficult. But, you can still evict tenants for nonpayment of rent or bad behavior. You won’t be required to continue housing a tenant who is ignoring the rental due date or damaging your home.
More important than ever is documentation. You really have to be able to prove that you are evicting your tenant for a valid and defensible reason.
There are several good reasons to begin a just cause eviction. They include:
- Nonpayment of rent. If your tenant defaults on his or her rental payment obligations, you can begin an eviction just like you did previously. Start with the Notice to Pay or Vacate, and then move forward with the eviction filing at court if a tenant does not catch up and make the rental payment and also refuses to leave the property. Make sure you have a copy of your lease, where you indicate how much rent is due, when it’s due, and how it’s to be paid. Prepare to provide copies of your ledger that show rent hasn’t been paid, and always retain copies of any tenant communication. Defaulting on rent will always be a good reason to evict a tenant.
- Your tenant has not renewed your lease after the end of the tenancy, but also has not given notice of their intent to move out. If a lease has ended after January 1, 2020, but your tenant refuses to renew or move, you can start eviction proceedings.
- Your tenant violates the lease agreement. Perhaps you have a tenant who has several Pit Bulls running around even though the lease specifically prohibits dangerous breeds including that one, and they moved in claiming to own only a cat. Or, maybe your tenant will not allow you to enter the residence for maintenance or repair issues, even after you provide the required written notice. When a tenant violates the lease agreement and refuses to comply with the written contract that was agreed upon and signed, you can evict.
- If there is any criminal activity or acts committed in your property, either in the tenant’s private residence or in the communal areas of an apartment building. Make sure you have evidence and can support your claim before you evict your tenant. If any part of your property is used for an unlawful purpose, you will have a just cause eviction.
Before you effectively remove your tenant, you’ll need to issue a Three Day Notice to Pay or Quit or a Three Day Notice to Cure or Quit. You do not have to provide this notice if the behavior is doing something extreme like running a drug lab or subletting your home on Airbnb. Talk to your property manager or attorney in these situations.
No Fault Evictions in California: When you Must Compensate your Tenant
Perhaps your tenant has been paying rent on time and following the terms of your lease, but you still want to remove the tenant. This is possible, but if you are terminating a tenancy without just cause, you will be required to compensate the tenant. The amount you pay will depend on the amount of rent. Compensation must be at least equal to the monthly rent. This means that if rent is $2,300 per month, you have to pay your tenant $2,300 in order to remove them from the property and take possession back.
This is usually done when a property owner wants to move back into the home or allow a family member to live in the property. Make sure your lease agreement reflects that you have this option and that you understand your responsibility to compensate the tenant.
There are other reasons you may want to take the property back, and you’ll still have to pay the tenant if they haven’t done anything to warrant a just cause eviction. Perhaps you’re going to sell the property and you won’t be renting it out further. Or, you could intend to substantially remodel the home, taking it off the market for a long period of time. Maybe there’s a habitability or a safety issue.
You have two choices when you decide to remove your tenant from your property and compensate them for the relocation. You can make a direct payment, in which you’ll write a check or make a deposit for the amount that’s equivalent to one month’s rent. Or, you can allow your tenants to not pay the last month of rent before moving out.
We recommend waiving the rent. Put your intention in writing that the tenant will not have to pay the last month’s rent, and include the dollar amount that it covers. The tenants will know that no rent is due for the last month of the lease period. If you decide not to do this and instead choose to collect the final month’s rental payment and then send your tenant the compensation, you’ll have to do so within 15 calendar days of instructing them to vacate.
There’s no way to avoid paying the relocation compensation when you’re evicting a tenant for a reason that is not their fault.
The new laws in AB 1482 are complex and confusing, and we understand all the questions that are coming up as landlord begin complying with the fresh legal requirements in 2020. This is an excellent time to hire a professional property manager if you don’t already have one. Effectively managing a rental property in California is difficult enough. With the Tenant Protection Act in place, things can get even trickier. Tenants have a lot of support and resources when it comes to navigating this law and understanding their rights. As a property owner, you need the same protections.
Contact us at Progressive Property Management to learn more about what this law means to you and your properties, particularly as it pertains to either just cause evictions or no fault evictions.