Los Angeles Homeowners - RENT CONTROL - Real Cap Daily #33

Do you own a home in the City of Los Angeles? Have you thought about renting your home if you could not sell? Congratulations, you are now subject to rent control. This means your rights as a homeowner have just been limited.

The Los Angeles City Council and Mayor Bass just passed a resolution limiting the rights of homeowners. This includes homes, townhomes, and condos.

This is a really big deal. Single family homes and condos were previously exempt from rent stabilization laws. No more. This specifically applies to homes in the city of LA, not the county or other cities in the county. 

Homeowners are now subject to just cause evictions outlined in California AB-1482. This means you cannot evict at tenant unless there is unpaid rent, documented violations, and nuisance. These are what we call at fault evictions.

What is a no fault eviction? Let’s say you might want to move back into your home after renting it out. For no fault evictions, you are now subject to

Relocation Fees. The City of LA made it a little complicated. If you are a mom and pop owner with the property in your name or trust, then you are only subject to 1 months rent for a no fault eviction. To qualify, you may not own more than 4 dwelling units and a single family home. For all others, you could owe anywhere from $9000 to $23,000 based on the type of tenant.

But wait, there’s more. Single family homes, townhomes, and condos cannot provide a 60 day notice to quit. Now the landlord would have to pay the tenant a relocation fee just mentioned provided they did not violate the lease. What would be a lease violation? Extra occupants, return of property at end of lease, nuisance, or refusing to sign a renewal.

Also, homes and condos are now subject to rental increase caps. This means you cannot increase your rental rates more than 5% + the current metropolitan CPI or 10%, whichever is less. Current CPI is 5.8%, therefore the maximum increase is 10% per annum.

Furthermore, if a landlord increases rent more than 10%, then the tenant will be owed 3 months rent plus $1,411 in moving expenses if they move out due to increases.

Last, landlords have a duty to provide notice of rights to tenants and to notify the City of termination of leases. I’ll post links to documents and websites in the blog post. It is specific on the requirements.

There are types of properties that are exempt from this ordinance. Generally this includes short term housing, room rentals, and transient occupancy.

I will post more information in the blog post. Please refer there for documentation.

The city of Los Angeles continues to encroach upon property owners rights. The LA Times article and other news reports completely skip over the impact to homeowners who are landlords. How does this affect you? Will this change your mind about leasing your home if you can’t sell? In my opinion, LA homeowners should be mad as hell about this. But I fear they just don’t know. Please leave your comments below. Or better yet, send a couple comments to the city council and the mayor who signed this ordinance. As always, if you need help buying, selling, or investing in real estate, please give me a call. My team is ready to help.

LA City Housing - Renter Protections Website

LA City Ordinance No. 187737

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