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.