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California Rental Laws Are Changing in 2024: What Landlords Need To Know

January 3, 2024

California Rental Laws Are Changing in 2024: What Landlords Need To Know

The office of California’s Governor Newsom had a busy 2023! A raft of new housing bills were recently passed in California that will impact owners of rental properties as the laws begin to come into effect during the 2024 calendar year.

Landlords, especially those who self-manage a rental home, need to stay across legal changes to avoid being on the wrong side of tenant-landlord laws in their local jurisdiction. From new rules on security deposits and evictions to tenant screening, here are 5 major changes that Californian landlords need to be aware of in 2024.

5 changes to California tenancy laws that landlords should know about in 2024

1. Changes to no-fault eviction rules will affect owner move-ins and remodels

Legislation: Senate Bill 567

Changes come into effect: 1 April, 2024

The California Tenant Protection Act of 2019 has been amended, altering rules around “no-fault” evictions or termination of a residential lease agreement. As of April 2024, more details will be required if a homeowner wants to end a tenancy due to moving in or undergoing a major remodel of the property.

If you wish to reoccupy the home as an owner-occupier, you must move in within 90 days of your residents moving out. You must also remain in the home for at least 12 months before the home can go back on the rental market. The same goes for the close family of the homeowner (e.g., spouse, parents, children, grandchildren). Their names and your relationship will need to be disclosed in the termination notice, and the same rules will apply. If you or your family already occupies a rental unit on the property, or if there is a similar unit available on the property, you may not use this as grounds for termination of a lease.

For remodels, owners of the rental home must provide more details of the planned work, such as giving the existing residents copies of permits or signed contracts for the planned works. If the work isn’t carried out, you will legally be required to contact the former tenants and allow them to move back in. Ensure you get a forwarding address if you remodel your rental home!

Read More: Understanding the California Eviction Process: A Guide for Homeowners

2. Security deposits are now capped at one month’s rent

Legislation: Assembly Bill 12

Changes come into effect: July 1, 2024

As of July 2024, security bonds will be capped at an amount equal to one month’s rent. Previous laws allowed up to three months’ rent to be collected in bond on top of the standard first month paid before occupancy. With rents skyrocketing across the states, move-in costs were becoming unaffordable for renters, especially for furnished properties. Going forward, if you charge a monthly rent of $2,500 p/m, the move in cost will be capped at $5,000 inclusive of security deposit and first month rent. This cap applies to both furnished and unfurnished homes.

What happens if you already hold a hefty security deposit of more than one month’s rent? Don’t stress; there’s no need to return the difference. If you (or your property manager) hold a security deposit or collect one more than one month’s rent prior to July 1, 2024, you may hold on to this amount even if it exceeds the new caps.

Pro Tip: Take the hassle out of collecting rent and security deposits by letting Belong PRO take care of it (and everything else!). With guaranteed rent and the easy option for residents to pay their security bond in installments, find out why homeowners are ditching outdated property management in Los Angeles, San Diego, San Francisco, Sacramento and more to Belong instead.

3. Homeowners will be better protected from illegal occupancy

Legislation: Senate Bill 602

Changes come into effect: January 1, 2024

Trespassing and ‘squatting’ can be a real concern to homeowners with vacant properties. From 2024, a homeowner can alert local law enforcement that their property is uninhabited, allowing law enforcement officials to remove any trespasser who attempts to take up residence or claims to be a legal occupant. Previously a trespass notice was only valid for a period of 30 days. The amendment to SB 602 extends trespass letter validity to a full 12 months and it can be submitted electronically (if your local jurisdiction allows). When a valid letter is on file, homeowners won’t need to go to court to evict anyone living illegally on their property.

Pro Tip: When it comes to vacant homes, prevention is often better than the cure! Read 10 Proven Ways To Reduce Vacancies & Keep Great Rental Tenants Long-Term

4. New screening laws will prevent credit history discrimination

Legislation: Senate Bill 267

Changes come into effect: January 1, 2024

If you manage your own tenant screening, make sure you update your process for 2024.

If an applicant is receiving a government rental subsidy, you will need to revise how you consider their credit history and application to rent your home. To avoid discrimination, amendments to SB 267 prohibits landlords from using a person’s credit history unless they are given the option to provide alternative evidence of their ability to pay their portion of the rent. This could be benefit statements, pay records or bank statements. You must also give them a reasonable amount of time to provide this information and reasonably consider it instead of their credit history when deciding whether to offer them a lease agreement.

Read More: Understanding Fair Housing Laws When Renting Your Home

5. San Francisco introduced an “empty home” tax

Legislation: Proposition M

Changes come into effect: January 1, 2024

From 2024, Bay Area property owners with at least three units that have been vacant for more than six months will be taxed $2,500 – $5,000 per empty unit. Penalties will increase yearly to up to $20,000. Money collected will be invested in subsidizing affordable housing in the city, including for people over the age of 60.

Individual investors, like those that Belong supports, are less likely to be financially impacted by the measures at this stage, with single-family homes and duplexes exempt. That said, it’s a timely reminder that many counties are actively taking steps to reduce empty homes while the homelessness crisis continues to bite and more families are priced out of home ownership.

It’s not uncommon for homeowners to sit on a vacant home for a variety of reasons. Some have inherited a family home and aren’t sure if they’re cut out for property management. Others move for work and plan to return to the home and feel unsure about renting the home out. If this is the case, Belong has a solution. We find people that will love and respect your home as much as you do, while also doing all the work to ensure it’s looked after and maintained. Learn more about Belong’s unique residential network and homeowner services here.

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