California has strict rent control laws to protect tenants, all outlined under the Tenant Protection Act (AB 1482). Here’s what you need to know if you’re a landlord.

Rent Increase Limits in California

California’s Tenant Protection Act caps 12-month rent increases at 10%, or 5%, plus the percentage change in the cost of living, whichever is lower. 

As a landlord, you’re also responsible for adhering to any local rent control laws that may be in place, such as from the city or county. 

Additionally, remember that, at times, a city or county may have a price gouging ordinance in effect, or there may be a proclamation made as the result of a local emergency. These can apply to rental housing and have an impact on rent increases.

Retaliation Is Against the Law

It’s important to understand that it’s illegal to retaliate against a tenant (such as threatening to evict them) if they inform you a rent increase is unlawful. 

How to Notify Your Tenants of a Rent Increase

You must provide tenants with a formal written notice (not an email, call, or text) of a rent increase that gives them 30 days’ notice. 

Other Important Laws to Take Note Of

New This Year: Security Deposit Cap

Starting July 1, 2024, a new cap on security deposits for leases that limits them to one (1) month’s rent will go into effect. 

There is one exception of note. Landlords who own up to two residential rental properties (including up to four dwelling units) are excluded. To get more details on the exclusion, read the article we published on the topic.

There Are Two Types of Evictions: At Fault and No Fault

Under California’s Tenant Protection Act, evictions are split into two categories, one where the tenant is allegedly “at fault” and another where the tenant is at “no fault.” Here’s the difference: 

At fault evictions can occur when a tenant:

• Fails to pay rent
• Breaches a term in the lease or refuses to sign a new lease
• Conducts criminal activity on the premises
• Refuses lawful entry

No fault evictions can occur if:

• The owner decides to move in or otherwise remove the unit from the rental market
• There’s going to be a substantial remodel (where the work cannot be done safely with the tenants inside) or demolition of the unit
• There’s a government order or local law that requires the tenant to leave

It’s important to note that locking a tenant out of a unit is illegal. You must go through the courts to properly evict a tenant.

You Must Keep Units Safe and Well Maintained

This hasn’t changed in 2024, but it’s important to revisit it. As a landlord, you’re legally required to ensure your units are habitable, which means they have things like:

• Safe and operational plumbing, heating, and electrical systems
• Working locks on doors and windows
• Effective waterproofing

Additionally, your property must be free from vermin, such as roaches. 

However, it’s important to note that tenants must legally follow standards themselves, such as keeping the unit sanitary and not damaging anything.

Need Legal Advice?

As a landlord, you must stay informed about California’s rent control laws, as well as your other legal obligations. If you need assistance understanding the laws or are in a dispute with a tenant, our attorneys can help. Book a consultation with us today.

In November Governor Newsome signed into law California legislation which limits security deposits to one (1) month’s rent for both furnished and unfurnished residential units. The new cap on security deposits for Leases takes effect July 1, 2024.

San Francisco Assembly person Matt Haney authored AB 12, which passed both the Senate and the Assembly houses in September. The legislation is a monumental shift from existing law, which allows up to two (2) months’ rent as security for an unfurnished unit and up to three (3) months’ rent for a furnished rental.

There is a major primary exception to AB 12. The law excludes landlords who own up to two (2) residential rental properties – which collectively include up to four (4) dwelling units offered for rent.  To qualify under the “limited number of units” exception, the owner must hold the property as (a) a natural person, (b) a limited liability company – in which all members are natural persons, or (c) under a family trust. If one satisfies these conditions, a “limited number of units” Owner is permitted to collect up to two (2) months’ rent as a security deposit.

As always, there is an exception – to the exception of every Rule. The “limited number of units” exception does not apply when the prospective tenant is a military service member.

Once again, the Law takes effect next Summer on July 1, 2024, which provides landlords time to make the necessary adjustments.

Contact one of our seasoned Landlord-Tenant Attorney’s to determine how California’s latest legislation impacts you.

Rentals can provide a good income stream but can become costly if improperly handled. Here are some of the most common mistakes landlords make that can lead to severe problems.

1. Poor Tenant Screening

Good tenants pay their rent on time, keep your property in good condition, and don’t cause you any trouble. Bad tenants do just the opposite, and they can make your life as a landlord miserable.

To avoid problems with unpaid rent, disputes, legal issues, or property damage, your best defense is to do a thorough tenant screening that includes a background check, and employment and income verification.

2. No Written Rental Agreements

Relying on a verbal agreement is one of the most common mistakes landlords make. Not having a written contract makes you highly vulnerable to serious disputes or costly legal issues.

Take the time to prepare a written agreement outlining both parties’ rights and responsibilities. You won’t regret it.

3. Not Keeping up With Laws That Have Changed

Letting your knowledge of rental laws and their ever-changing iterations lapse can land you in legal trouble.

Laws on rental properties can change quickly in California, and it’s up to you to ensure you’re keeping up with them and remaining in compliance.

4. Not Paying Attention to Local Rent Control Ordinances

Does your city have a local rent control ordinance that protects tenants from excessive rent increases? Many cities do, especially in California, and you could land in some serious hot water if you start charging too much rent.

Stay informed at all times to ensure you’re in compliance.

5. Lack of Good Property Maintenance

A deteriorating rental property with unaddressed repairs is more than unsightly; it can lead to potential legal issues.

Ensure you have a proactive maintenance plan and regular inspections to address problems promptly. Your tenants will be happy, and you’ll be protecting your investment.

6. Poor Communication With Tenants

Without a clear line of communication between a landlord and tenants, conflicts and legal disputes can quickly arise. 

Open and transparent communication can foster a positive relationship to prevent misunderstandings and proactively address issues. 

7. Mismanagement of Security Deposits

Disputes over security deposits can get costly and are a financial loss that can be easily avoided.

In California, there are specific guidelines that landlords must follow when they handle security deposits. This includes:

• Written notices to tenants about the amount being held
• Returning deposits within the required timeframe
• Documenting deductions

8. Not Complying With Habitability Requirements

If your rental has mold, pests, or other issues that make it inhabitable, you need to address these problems quickly. There are strict health and safety standards in California you must follow.

To avoid getting to the point where you’re facing legal consequences, ensure you are performing regular inspections and keeping up with California’s habitability laws.

9. Insufficient Insurance Coverage

Is standard insurance coverage enough for a rental property? It likely isn’t. You need to have enough coverage to protect you in property damage cases, personal injury claims, or loss of rental income.

Consult with an insurance expert. They can help you understand your options for coverage and assist you in selecting the right policy.

10. Discriminatory Practices

California’s fair housing laws strictly prohibit landlords from engaging in discriminatory practices. Protected characteristics include, among others, race, color, religion, sex, disability, and familial status.

As a landlord, you must know the fair housing laws and follow them accordingly.

11. Not Keeping Accurate Records

Poor recordkeeping isn’t just a mess. It can prevent you from collecting rent promptly, keeping up with maintenance and repairs, and ensuring legal compliance.

It’s critical to have an organized, systematic process for keeping records. 

12. Not Handling Evictions Correctly

Landlords must follow strict laws in California when evicting a tenant. You must:

• Give proper notice
• File the correct documents
• Go through appropriate court procedures

Noncompliance can result in costly legal complications that can quickly drain your money. Before going through with an eviction, it’s critical to consult with an attorney.

Need Legal Advice?

Avoiding these common mistakes will help ensure your rental remains a solid investment. For legal matters, if you’re struggling to understand the laws you need to comply with or are in the midst of a dispute with a tenant, our attorneys can help. Schedule a consultation today.

Short-term rentals, supported by online platforms such as Airbnb, have long been controversial. Travelers love them because they are often more affordable than hotels and give a sense of staying in a unique “home away from home.” However, they are not without their problems, and locals tend to look down on them. As their popularity has exploded, city governments have sought ways to rein them.

To this effect, the city of Chula Vista introduced a new set of regulations for short-term rentals that went into effect in 2022.

Background

City officials recognized that STRs bring some significant benefits to the community. They allow residents to earn supplemental income, generate tax revenue, and bring visitors to Chula Vista that might otherwise stay in other parts of the San Diego metropolitan area. Despite this, they identified several areas of concern.

1. STRs can change the character of neighborhoods

STRs essentially turn houses and apartments into hotels, which can negatively affect neighbors. STR guests come and go at all hours, make more noise, generate more trash, and occasionally throw big parties on the property. Beyond this, significant portions of neighborhoods can be taken up with STRs to the point where permanent residents are in the minority.

2. Housing shortages

There is a severe shortage of housing in California cities. Renting out homes to short-term guests takes them off the market for residents. This squeezes the housing supply even more, driving up rental prices for everyone.

3. STR operators were not paying taxes

Existing law already required STR operators to register with the city and to collect and pay a Transient Occupancy Tax (TOT) based on their revenue. Reviewing the situation, the city determined that, of approximately 350 STR operating within Chula Vista in 2021, only 125 were registered and paying taxes to the city.

The New Rules

In response to these concerns, Chula Vista passed an ordinance to limit the proliferation of short-term rentals and bolster enforcement of existing provisions. Here are some of the most important new regulations.

• All STRs require a permit from the city
  On top of needing a business license, STR operators must receive a permit for each property. These permits must be renewed annually.

• The permit applicant must reside within Chula Vista
  STR operators must have their primary residence within the city limits. “Primary residence” means they live there at least 275 days a year.

• No more than two permits per operator
  Each person may get a permit to rent out their primary residence and one non-primary residence.

• Rules on operation
  The law has various regulations on how STRs must be operated. This includes a mandatory quiet time from 10:00 p.m. to 9:00 a.m., prominently displaying the operator’s business license, and promptly hauling away garbage.

• Special permits for large events
  Before allowing the STR to be used for a large event, the operator must get a Short-Term Rental Event Permit. A maximum of 12 such permits will be granted annually for each STR.

• Hosting platforms must collect taxes
  Platforms like Airbnb must automatically collect the Transient Occupancy Tax and remit it to the city.

• De-listing noncompliant STRs
  Upon notice from the city that the property does not have a permit, hosting platforms must take down listings.

Get Help with Your Short-Term Rental

The Chula Vista Short-Term Rentals Ordinance is a comprehensive law that sets out many new requirements for STR operators. To successfully obtain a permit and avoid costly fines, you will need to understand all of these rules and navigate a complicated bureaucracy. 

Our attorneys have years of experience in the fields of business and real estate, and can help you keep your short-term rental business on the right side of the law. To schedule a consultation, contact our office today.

It’s curious how something so innocuous-sounding as a homeowner association can be so provocative. Yet, mentioning an HOA is enough to throw some people into a frenzy. For them, the HOA is antithetical to the idea that people should be able to use their property however they see fit. Of course, HOA advocates would quickly point out that they are communal organizations that exist for the benefit of all the members, primarily by maintaining common areas and enforcing community standards that affect everyone’s property values.

With these contrasting positions, it’s easy to see how disputes can arise. Here are some of the most common issues that occur with HOAs and ways to resolve them.

Common Types of Disputes

1. Rejection of Architectural Plans

Depending on the Covenants, Conditions, and Restrictions (CCRs) of your HOA, new construction or renovations to the exterior of your home may be subject to the approval of the HOA. Having your carefully considered architecture plans rejected can be pretty frustrating, and it may seem as though the board is being inconsistent or over-controlling.

2. Imposition of Fines

HOA bylaws often allow the board to impose fines on members who fail to abide by the CCRs. On the one hand, the HOA does need to have teeth to enforce the community standards. On the other hand, some boards can get carried away with this, primarily when enforcement is managed by a private company that may have a financial incentive for collecting fines.

3. Failure of the Board to Perform Its Duties

HOA boards have several important duties. They may be responsible for maintaining public areas such as parks and playgrounds and paying property taxes for those lands. If the roads are privately owned, the HOA is likely responsible for their upkeep. Failure to do these things can create problems and even lead to legal action.

4. Misuse of HOA Funds

A homeowner association has a fiduciary duty to its members, and board members must, therefore, use the HOA’s money in a fiscally responsible way. Embezzling money would violate this duty, but things like granting HOA contracts to a board member’s family business or just being wasteful could also be violations.

Resolving Problems with the HOA

The best place to start when resolving an HOA issue is to do so informally; that is, just talk to the board members and/or homeowner without escalating the situation. After all, these people are your neighbors, so it’s better to get along with them as much as possible. Bring up your concerns and try to find common ground.

If that doesn’t work, the next step may be mediation or alternative dispute resolution. Mediation can be quite effective and is usually much quicker and cheaper than going to court. If you are a homeowner in dispute with the HOA, it’s probably best to consult with an attorney; the HOA likely already has a lawyer on retainer that will be present for the proceedings. 

If mediation does not resolve the problem, the only remaining recourse is to go to court. To go this route, you will want an attorney, and you should be prepared for a process that can take months or even years to finish.

Talk to an HOA Attorney

HOA disputes can be complex to resolve and often quite emotional as well. Meeting with an experienced HOA attorney will help you better understand your situation and protect your rights as a homeowner.

Our residential real estate attorneys have a deep understanding of this area of law and know how to bring HOA disputes to a fair resolution. Contact our office to schedule a consultation.

At one time or another, most renters will consider whether breaking a lease is a good idea. There can be a lot of reasons to break a lease—a decrease in earnings, poor conditions on the rental property, or perhaps they just found a better deal. But people often stick it out because they’re worried about the potential fallout. Breaking a lease agreement can be done but it’s important to understand what happens if you do so and when it might be legally justified.

What Happens When You Break A Lease

When you move out of a rental property before the lease term has expired (i.e., “break the lease”), the primary consequences are financial. Simply put, you’ll probably owe the landlord money for the remainder of the lease.

For example, if you have a 12-month apartment lease with $2,000 in monthly rent, you’ve agreed to pay the landlord $24,000 in 12 monthly installments. If you move out after six months, you still owe them $12,000. If the lease is month-to-month and you leave without giving the landlord the required notice (usually 30 or 60 days), you would owe rent for that notice period.

The landlord does have a legal responsibility to “mitigate damages.” Rather than just leaving the property empty, they have to attempt to find another suitable tenant to take your place. If they do find another tenant, you would generally be responsible for paying rent for the time the property was sitting vacant, but not the period after someone else is paying rent.

Because breaking a lease is essentially like incurring debt and not paying it, it will also likely have a negative impact on your credit score and could make it difficult to find another rental.

Justifications for Breaking a Lease Agreement

The situation above may sound dire, but there are a number of legal justifications for breaking a lease, meaning that you could do so without paying the remainder of the rent due. Here are some of the justifications recognized in California:

1. The property is unsafe or uninhabitable

There’s a legal principle called “constructive eviction,” where conditions at the rental property are so poor that the tenant has no choice but to leave. These conditions have to be serious problems—e.g., no heat in cold winter, no lock on the front door, etc.—that are the landlord’s responsibility to fix. The landlord also must be given a reasonable amount of time to address the problem.

2. Harassment or violation of your rights

This is an extension of the constructive eviction principle described above. For example, suppose a landlord repeatedly enters the property without giving you at least 24-hour notice or performs deliberately harassing actions such as changing the locks. In that case, you may be able to break the lease without paying rent.

3. Active military duty

Under federal law, a member of uniformed services who is called to active duty may terminate their lease within 30 days of the next rent payment, regardless of how much time is left on the lease term.

4. Victim of domestic violence and other crimes

Under California law, if you or an immediate family member has been a victim of domestic violence, stalking, assault, or other crimes, this can justify terminating a lease early. In these cases, the tenant is only responsible for 14 days of rent following notice to the landlord.

If You Need to Break Your Lease

If you’re in a position where you need to break a lease agreement, advice from an experienced attorney can make the process much easier. An attorney can evaluate your situation to see if you have a legal justification for breaking the lease. Even if you don’t, they can negotiate with the landlord to minimize the negative consequences. Contact our office today for a consultation.

Rental Agreement Laws

California has some of the most complex landlord-tenant laws in the nation. There are extensive protections for tenants, as well as separate rent-control laws in a number of municipalities such as San Francisco, Los Angeles, Sacramento, and others. Residential rental agreements must clearly communicate the terms of the tenancy and abide by all applicable laws.

Faulty or poorly drafted rental agreements can create all kinds of headaches for landlords and possibly provide an eviction defense for tenants. To minimize problems in the future, we highly recommend that property owners consult with a real estate attorney when creating their rental agreements.

Basic Terms of a Rental Agreement

Every rental agreement for a residential property should include these key terms at the very least:

• Names of All the Tenants – It’s also a good idea to include an occupancy limit and identify what happens if additional people come to live on the property without notifying the landlord.

• Physical Address of the Property

• Rental Period – Identify the time period the lease will last (commonly 6, 12, or 24 months). Also state whether it will become a month-to-month agreement after the initial period expires. Note that, under California law, the tenancy will automatically continue month-to-month if the landlord accepts rental payment.

• Rent Amount

• Rent Payment Details – Identify when the rent is due, where and to whom it should be paid, the method of payment, and late fees.

• Security Deposit Information – In California, the security deposit may not exceed the value of two months’ rent (three months if the property is furnished).

• Utilities Payment – Identify which party is responsible for the payment of utilities such as electricity and gas.

• Maintenance and Repairs – Identify which party is responsible for maintaining and repairing the property.

• Pet Policy – Clearly communicate the policy on pets, including what types of pets are allowed and the responsibilities of the tenant.

Tenant Protection Act

Passed in 2019, the Tenant Protection Act made significant statewide changes to California landlord-tenant law, including adding just-cause termination requirements and restrictions on rent increases. Here is a brief summary of the major changes.

Once a tenant has occupied a property for 12 months or more, the landlord may only terminate the tenancy for “just cause.” Just cause can include failure to pay rent, material breach of rental agreement terms, criminal activity, and more. There also “no-fault” causes to terminate, such as when the owner or the owner’s immediate family wishes to occupy the property.

Under the rent-increase provisions, in any 12-month period a landlord may not increase the rent by more than the rate of inflation (defined by the Consumer Price Index) plus 5%, or a total of 10%, whichever is lower. A number of dwelling types are excluded, such as single-family homes and buildings that are less than 15 years old.

Landlords must disclose these changes in the law to existing and new tenants by written notice or in an addendum to the rental agreement.

Consult a Landlord-Tenant Attorney

In this complex and always-changing legal landscape, it is crucial to have expert advice. Our team of Southern California real estate attorneys can help you draft a rental agreement that makes sure your interests and property are protected. Schedule an appointment today.

2020 has brought with it a range of legal issues in the commercial real estate space. Commercial tenant conflicts, while common, have become more prevalent and can take many different forms. That’s why more than ever, connecting with a top-of-the-line commercial tenant attorney in San Diego has never been more important. Savvy clients can prevent conflict before it occurs, or reach mutual agreement with proper legal counsel. Here’s what to expect from a good commercial tenant attorney.

Experience With A Range of Situations

An experienced commercial tenant attorney is able to represent tenants in all kinds of important ways. Whether they’re facing unlawful evictions, rent payment problems, or claims of breach of lease agreement issues, this kind of attorney can navigate nuances with skill. They should also be able to help with drafting leases and working through safety and health issues, code compliance, rental discrimination, and more.

Knowledge of California Laws Helps Businesses

Every state has its own commercial tenant laws. That’s why California business owners need local legal counsel with the knowhow to navigate these laws. When rent increases without warning, eviction looms, or there are issues with maintaining the space, businesses could fall into some unfavorable situations if they aren’t careful. A good San Diego commercial tenant attorney can help before signing a lease and after.

Foresight and Resolve

A good commercial tenant attorney can offer legal counsel at the first sign of trouble to avoid litigation. However, they can also be aggressive when needed and won’t hesitate to go to court if necessary. These attorneys look out for their client’s best interest at all times.

Choose Our Commercial Tenant Attorneys 

At Hoffman & Forde, we know that not all cases are the same. But we’re experienced and knowledgeable when it comes to California laws for business owners. We put clients first and provide creative solutions that best fit your case. As a boutique lawyer, you get the specialized skills of our commercial tenant attorneys and legal counsel across related disciplines. Our five-star reviews also attest to our firm’s professionalism and dedication to our clients’ success. Call us today to find out more about our comprehensive legal services and how we can help.