Most residential tenancies in California are now covered by some form of rent and eviction control. The Tenant Protection Act of 2019 (Protection Act) extended a rent “cap” (on rent increases but not initial base rents) and eviction controls to anywhere in the state where rent control didn't already exist. When the law took effect on January 1, 2020, about 47 cities and counties already had strict rent control and eviction protections - many with more safeguards than the new state law. Those pre-existing local laws remain unaffected by the Protection Act, and whenever one applies the landlord must follow the rule that best protects the tenant.
This article explains the basic provisions of the Protection Act—who it affects, how it works, and how it affects both the advice and forms in current editions of The California Landlord’s Law Book: Rights & Responsibilities, The California Landlord’s Law Book: Evictions, and California Tenants’ Rights. On each book’s companion page, you’ll find links to updated forms, as well.
A few types of housing are exempt from just cause limitations, rent control, or both (an exempt unit is one that isn’t covered by the law). They are described below.
These properties and situations are exempt from rent control and just cause restrictions.
It’s unclear whether a local exemption continues to cover a rental property when the Protection Act does not exempt that property. Unfortunately, based on two provisions in the Protection Act, which we will not discuss, two possible answers (yes and no) exist for that question. We’ll have to wait for a court (or the Legislature in “clean-up legislation”) to provide the answer.
In view of the Protection Act's overall intent, though, we think the Provision Act should prevail over the local exemption. In those limited cases where the local law completely exempts the property, the better operating assumption is the Provision Act applies and exempts only those properties where the state law specifically provides the exemption.
Some properties are exempt from rent control but not just cause requirements, and vice versa. These piecemeal exemptions turn on technical factors, such as who owns the property, whether the owner lives in the unit in which the tenant also lives, and whether the owner lives in a self-contained dwelling unit but shares the property with tenants who live in their own self-contained units.
In some situations, the property is free of rent control but subject to just cause eviction controls. Landlords need to give notice to their tenants of the exemption.
Properties in this situation include non-owner occupied condominiums, single family homes, and other properties that are "separately alienable from title" (that’s a standalone property that can be sold on its own). In order to take advantage of the exemption, the title must be held by a natural person, a partnership or limited liability company owned by natural persons, or another form of natural person, such as a revocable trust for individuals. The exemption does not apply to corporately held property, such as a real estate investment trust (“REIT”), a corporation, or a limited liability company with corporation members. In order to claim the exemption, landlords must include a specific notice to the tenants in the lease of the exemption.
Let’s explain this exemption a bit. The exemption’s purpose is to limit the exemption to so-called "natural persons", not corporate entities. In other words, only landlords who are real people get relief from the just cause restraints.
So, suppose an owner has made a revocable (“living”) trust and has transferred title of the property to the trust. Because the owner (the trustor) is still the owner (albeit under a different legal umbrella), the property will continue to enjoy the exemption from just cause. The same will be true for a limited liability company or partnership, as long as all the members and partners are people, not entities.
The just cause limitations of the Protection Act apply to fully rented (non-owner occupied) duplexes and houses run as boarding houses or dormitories. The single family dwelling exemption applies only to owner occupied properties.
Now let’s look at the other situation—where properties are exempt from just cause restrictions, but subject to rent controls. This partial exemption applies to owner-occupied shared housing with common bathroom or kitchen facilities for use by the tenants or owner-occupied properties with no more than two in-law units. Under this partial exemption, the owner can terminate the tenancy without just cause but cannot raise the rent on the tenants more than the maximum permitted amounts.
This partial exemption does not apply, however, between tenants and subtenants (where the tenant, known as the “master tenant,” is also a landlord to a subtenant). The reason is because the master tenant is not an “owner” under the law.
California Civil Code Section 1946.2 limits the reasons for terminating tenancies where all tenants have occupied the unit continuously for 12 months. When the tenants have changed over time, just cause protections attach when at least one of the tenants has occupied for 24 months or more.
The main "at fault" causes do not differ from the termination reasons set out in the standard lease in Nolo’s books. Failure to perform the terms of the lease still constitutes cause to terminate and, if necessary, evict a tenant. Tenants must still pay the rent, uphold their obligations under the lease, and not cause problems for the landlord or neighbors.
The causes listed in the Protection Act therefore include the usual suspects:
Additional "at fault" causes involve tenant behavior that is at odds with California’s laws for tenant behavior (known as “statutory causes”):
In addition to the usual just causes and the statutory ones, the Protection Act added one very important just cause of its own: refusing to sign a new lease that is similar to the old lease.
Landlords can also terminate the lease for certain "no-fault" reasons (when the tenant has done nothing wrong), but must compensate the tenant with one month's rent for relocation expenses. The compensation is one month’s rent, and can be in the form of waiving the last month's rent or making a payment to the tenant.
No–fault termination causes include:
The Protection Act addresses one potential loophole concerning notice of the possibility of an owner (or relative) move-in. As explained above, the landlord can terminate an otherwise just-cause protected tenancy if the tenant refuses to sign a new lease that is “similar” to the old lease. But suppose the landlord’s proffered new lease includes the move-in notice, as it must if the landlord wants to preserve its right to take advantage of this ground for termination? Does the notice, not present in the tenant’s old lease, render the new one not “similar,” thus excusing the tenant’s refusal to sign it (and preventing the at-fault termination)?
The answer is no. Merely adding the move-in warning, without more additions or changes, will not make the new lease dissimilar to the old one, and the tenant who refuses to sign it can be terminated for cause.
All termination notices for no-fault terminations must include a statement of the cause that forms the basis for termination, as well as the tenant's rights to relocation assistance. If the tenant fails to vacate, the landlord can recover the relocation assistance if the landlord sues and lists that assistance as damages in an unlawful detainer action. We have updated the forms on our webpage to reflect these notice requirements.
California Civil Code Section 1947.12 limits annual rent increases as well as total rents charged by a master tenant (someone who rents all or part of the leased premises to a subtenant).
The Protection Act does not regulate the amount of rent the landlord may charge for new tenancies. The landlord can establish the initial rental rate with no maximum, and only the future increase amounts are limited.
As happens with most legislation, negotiations with interest groups greatly affected the final version of the Protection Act (a situation almost guaranteed to introduce confusion). How the Protection Act plays out in real-life is difficult to predict, and we the uncertainties will likely last over the next few years (during this time, lawmakers will probably pass clean-up legislation, and trial court decisions will be appealed and decided by appellate courts). Many challenges confront landlords, tenants, and judges. Among them are:
The COVID-19 Pandemic has naturally effected rent control and just cause law-at least temporarily. Click here to read about COVID-19, California Eviction Moratoriums (Bans) and Tenant Protections.