California just passed its first statewide rent control (or rent cap) measure: owners of two units or more will not be able to increase rents annually more than 5% over the Consumer Price Index (CPI).  AB1482 also requires properties that fall under its definition to pay the tenant a relocation fee equal to one month’s rent unless they need to be removed for “just cause”.

This is not the end of tenants receiving more protections so let’s be clear: this is just the start of additional tenant protections and every year going forward there will be a push to limit rent increases, make it harder to remove a tenant and include more properties to which these laws apply.

Here is our solution: give your tenants control over their rent increases and the ability to stay in their property now.  But here is the difference from these state measures: you control the terms.  We now offer a Renewal Option Program that must be agreed to by owners and accepted by tenants.  This gives the tenant what they want: control.  You get a happy tenant who must abide by our strict guidelines to exercise their annual option.  Here is how the program works:

For a monthly fee of $15 included in monthly rent, the tenant shall have the right to exercise an automatic 1-year extension at the end of the negotiated lease and the rent shall not increase more than 2% over the annual Consumer Price Index (CPI) as of December of the previous year.  This option may be voided if the tenant commits any of the following acts during the tenancy:

• One late payment on monthly rent during lease period
• Has more than 1 HOA violation in the 12-month period
• Does not pay a vendor bill caused by tenant
• Does not keep renter’s insurance in force
• At the annual inspection, causes more than $500 in damage
• Violates the terms of the lease such as having unauthorized pets on the property or additional tenants.
• Any material breach of contract

  We retain the fee to monitor the tenant and implement the program.  Our owner has the option to offer every year thereafter, and if they do, the same terms will remain in effect.

Most tenants do not want to move annually and want the security of knowing what their future rent will be.  With this program, your tenant receives both.

Officially known as the “California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative”, this would be the first real change to Proposition 13 in 40 years.

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It only took 169 years, but California finally passed statewide rent control that should be effective January 1, 2020 once signed by the Governor.  AB 1482, formally titled “The Tenant Protection Act of 2019” marks a turning point for tenant rights in the history of this state.

AB 1482 – Governor Newsom asked the legislature to put on his desk a pro-tenant bill that has real “teeth” and they were up to the task.  This bill, approved by the Assembly and Senate and now awaiting the Governor’s signature, would do the following:
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At Progressive Property Management, we believe it’s important to keep the owners and investors we work with up to date on the new laws and regulations that impact their investments. Today, we are speaking about a new local requirement; a tenant assistance policy. If you aren’t already familiar with this policy and what it requires, you’ll need to get up to speed quickly so that you understand how you’ll need to handle moving tenants out of your rental home.

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At Progressive Property Management, we expertly manage properties in the city of Tustin and the surrounding areas. Landlords often ask us about security deposits, and there are a couple of best practices that we’d like to share with you.

The security deposit law in California has a lot of details that landlords and property owners need to follow. There are limits to the amount you can collect, and there are deep penalties if you violate the timeframe that’s in place for returning the security deposit. Before you withhold any money from that deposit, you need to conclusively determine whether your property has been damaged by the tenant or is simply experiencing normal wear and tear.

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One of the biggest concerns that the owners we work with have is the threat of eviction. They worry about the time, the expense, and the potential for a messy battle with a tenant who isn’t paying the rent of following the lease terms. This is an understandable concern; you’re worried about the damage that could be done to your property and the money you could potentially lose.

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At Progressive Property Management, we provide full-service management in Orange, California to landlords and investors with rental homes in the area.

Today, we are talking about a subject that is on the minds of every property owner in California. That subject is the upcoming renter’s state. We know you have questions and we know there will be some implications for your rental property, and we want to know that we’re happy to be a resource for you as new laws and regulations go into effect.

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Priority Owner Program

We have some owners who need the current month’s rent to pay that month’s bills.  We also have owners who don’t want to wait for the rent to become available to them.  Even if the tenant pays on the first of the month, our owner may not be able to access these funds for a week or two.  Let me explain.  Let’s say the first of the month falls on a Friday and the tenant pays rent with a check.

• Friday the 1^st: Banks require a five business day hold on this type of payment.
• Friday the 8^th: The funds would be considered “good” on the 8^th of the month (Friday).
• Monday the 11^th: If it takes us another business day to process the payment, we would send out the rent proceeds.
• Thursday the 14^th: The bank puts a two day hold on electronic funds transfer, so this owner would finally be able to have access to these funds.

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Tenant Assistance as Tenant Retention

The Long Beach City Council recently directed city staff to craft an ordinance that would force owners of properties with 4 units or more, to pay 2 month’s rent to a tenant.   The tenant is considered displaced through “no fault of their own” or if the landlord increases the rent 10% or more in any 12-month period.  This ordinance is a way to implement “no fault eviction” without calling it that.

Under current law, an owner only needs to give a tenant a 60-day notice to vacate. And does not have to provide any cause or payment to the tenant to have it vacated.  It’s the owner’s property, and they can do with it as they see fit.  The tenant is entitled to their security deposit at move out (less any damage caused by the tenant) and that is it.  With this ordinance, if the rent were $2,000 a month, the landlord would need to pay the tenant $4,000 as a relocation fee and return the security deposit.

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To most of the pundits’ surprise, Donald Trump won the presidential election and at least some of the policies and promises of his campaign will come to fruition.  More importantly for California, the democrats have won a super majority in both the Assembly and Senate (along with holding the Governorship) and can pass any tax or ballot proposition without a single republican vote.  What does this election mean for real estate and property management?
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We have quite a few current owners who bought a property in 2005 or 2006 just before the real estate crash, and rather than sell the home at a discount in the years following, kept the property as a rental.  Continue Reading