CA lawmakers approve eviction protection to regulate landlords who circumvent rent increase laws

CALIFORNIA – The California Legislature approved SB 567 – Homelessness Prevention Act, Thursday, that will help to address loopholes in the Tenant Protection Act of 2019 that some landlords have used to raise rents.

Existing law allows landlords to evict tenants for “at fault” or “no fault” reasons. “At fault” reasons include failure to pay rent on time, violating the lease agreement and criminal activity.

“No fault” rules allow landlords who intend to occupy a unit, make repairs or take a unit off the market the ability to terminate a lease.

Circumventing rent increase caps

Senator and bill author Maria Elena Durazo says some landlords are using the “no fault” rule to circumvent rent increase caps.

“It is wrong for a landlord to say they are going to renovate a unit and use that as an excuse to evict and raise the rent,” said Durazo. “Too much of that is happening.”

Existing law prohibits landlords from increasing rents more than 5% plus the percentage change in the cost of living, or 10%, whichever is lower — over the course of any 12-month period.

However, landlords are allowed to raise rents beyond the annual rent cap if they make certain substantial rehabilitation improvements to the property. These improvements must meet specific criteria, including substantial renovation work that significantly enhances the property’s value, safety, or habitability.

Bill closes “no fault” loopholes

Durazo says SB 567 rules address loopholes in the “no fault” clause. These include:

A minimum of 12 continuous months as the person’s primary residence for owners or family members who intend to occupy the unit.
If the “no fault” clause is used to evict a tenant, the bill requires the unit be withdrawn from the market for 10 years.
Landlords have to provide a detailed description of the repairs being done, how long it will take, and why the tenant would have to leave while repairs are happening.
Landlords have to offer the tenant an opportunity to return to the unit with the same rental agreement and rental rate.

Opposition to SB 567

The California Apartment Association (CAA) representative Debra Carlton said, in April, that owners have lost millions of dollars and some owners are losing their homes due to the current tenant protection laws.

CAA has been working with Durazo to amend the bill and now feels that they secured pivotal changes to a bill that initially sought stricter eviction limitations and harsher rent caps under state law.

Governor Gavin Newsom has until October 14th to act on the bill.

To read the full bill visit https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB567