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Statewide Rent Cap Bill -- Amended To Include "Just Cause" Eviction Req'ts And Landlord Payment Of Tenant Relocation Sum Added -- Passes Senate Committee With "Yes" Vote Of Newly Elected LB-Area State Senator Lena Gonzalez


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(July 10, 2019, 4:10 p.m.) -- A Sacramento bill that would place a statewide cap of 7% plus the percentage change in cost of living, or 10% (whichever is lower) AND includes new amendments (added after it narrowly cleared the Assembly) that would require landlords to have specified "just cause" for evicting tenants and would require landlords to pay tenants one month's rent for "no fault" just-cause terminations has cleared the state Senate Judiciary Committee with the "yes" vote of newly elected LB area state Senator Lena Gonzalez (D, LB-SE L.A. County). (Another LB-area Democratic, State Senator Tom Umberg who represents SE LB and western OC was recorded as "no vote recorded.")

The bill exempts residential properties owned by "a real person" [apparently not other legal forms of ownership] "who owns and leases no more than 10 units and doesn't have an ownership interest in other rental property.

The Committee's July 9 vote advances the AB 1482 to the state Senate Appropriations Committee (serves as a de facto gatekeeper for current state Senate Democrat majority leadership) which could advance it to the state Senate floor. If approved by the full state Senate (currently a Dem super majority), it would return to the Assembly (currently a Dem super majority) for concurrence in the state Senate amendments and then goes to Governor Gavin Newsom (D) who could sign it into law or veto it.

As amended June 28, AB 1482 would [legislative counsel's digest] "prohibit an owner of residential property from terminating the lease of a tenant that has occupied the property for at least 12 months without just cause, as defined. The bill would require, for certain just cause terminations that are curable, that the owner give a notice of violation and an opportunity to cure the violation prior to issuing the notice of termination. The bill would require, for no-fault just cause terminations, as specified, that the owner assist certain tenants to relocate, regardless of the tenantís income, by providing a direct payment of one month's rent to the tenant, as specified.

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AB 1482 as amended would add the following to CA Civil Code Section 1946.2 in pertinent parts:

Detailed legislative coverage

1946.2. (a) Notwithstanding any other law, an owner of residential real property, in which the tenant has occupied the residential real property for 12 months or more, with or without a written lease, shall not terminate the lease without just cause, which shall be stated in the written notice to terminate tenancy set forth in Section 1946.1.

(b) For purposes of this section, "just cause" includes either of the following:

(1) At-fault just cause, which is any of the following:

(A) Default in the payment of rent.

(B) A breach of a material term of the lease, as described in paragraph (3) of Section 1161 of the Code of Civil Procedure, including, but not limited to, violation of a provision of the lease after being issued a written notice to correct the violation.

(C) Maintaining, committing, or permitting the maintenance or commission of a nuisance as described in paragraph (4) of Section 1161 of the Code of Civil Procedure.

(D) Committing waste as described in paragraph (4) of Section 1161 of the Code of Civil Procedure.

(E) The tenant had a written lease that terminated on or after January 1, 2020, and after a written request or demand from the owner, the tenant has refused to execute a written extension or renewal of the lease for an additional term of similar duration with similar provisions, provided that those terms do not violate this section or any other provision of law.

(F) Criminal activity by the tenant on the premises, including any common areas, or any criminal threat, as defined in subdivision (a) of Section 422 of the Penal Code, directed at any owner or agent of the owner of the premises.

(G) Assigning or subletting the premises in violation of the tenantís lease.

(H) The tenantís refusal to allow the owner to enter the dwelling pursuant to a request consistent with Section 1954 of the Civil Code.

(I) Using the premises for an unlawful purpose as described in paragraph (4) of Section 1161 of the Code of Civil Procedure.

(2) No-fault just cause, which includes any of the following:

(A) (i) Intent to occupy the residential real property by the owner or their spouse, children, grandchildren, parents, or grandparents.

(ii) For leases entered into on or after January 1, 2020, clause (i) shall apply only if the tenant agrees, in writing, to the termination, or if a provision of the lease allows the owner to terminate the lease if the owner, or their spouse, children, grandchildren, parents, or grandparents, unilaterally decides to occupy the residential property.

(B) Withdrawal of the residential property from the rental market.

(C) Unsafe habitation, as determined by a government agency that has issued an order to vacate, order to comply, or other order that necessitates vacating the residential property.

(D) Intent to demolish or to substantially remodel.

(c) Before an owner of residential real property issues a tenant a notice to terminate tenancy for just cause that is a curable lease violation, the owner shall first give notice of the violation to the tenant with an opportunity to cure the violation pursuant to paragraph (3) of Section 1161 of the Code of Civil Procedure.

(d) (1) If an owner of residential real property issues a no-fault just cause notice to terminate a tenancy to a tenant who has resided on the residential real property for 12 months or more, the owner shall assist the tenant, regardless of the tenantís income, to relocate by providing a direct payment to the tenant as described in paragraph (3).

(2) If an owner issues a notice to terminate tenancy for no-fault just cause, the owner shall notify the tenant of the tenantís right to relocation assistance pursuant to this section.

(3) The amount of relocation assistance shall be equal to one month of the tenantís rent that was in effect when the owner issued the notice to terminate the tenancy. The owner and tenant may also agree, in lieu of direct payment, to waive the payment of rent for the month after the notice is given.

(e) This section shall not apply to the following types of residential real properties or residential circumstances:

(1) Transient and tourist hotel occupancy as defined in subdivision (b) of Section 1940.

(2) Housing accommodations in a nonprofit hospital, religious facility, or extended care facility.

(3) Dormitories owned and operated by an institution of higher education or a kindergarten and grades 1 to 12, inclusive, school.

(4) Housing accommodations in which the tenant shares bathroom or kitchen facilities with the owner who maintains their principal residence at the residential real property.

(5) Single-family owner-occupied residences, including a residence in which the owner-occupant rents or leases two units or bedrooms, including, but not limited to, an accessory dwelling unit or a junior accessory dwelling unit.

(6) Housing that has been issued a certificate of occupancy within the previous 10 years.

(7) Housing that is a detached single-family residential dwelling unit that meets both of the following requirements:

(A) The owner is a natural person who owns and leases no more than 10 units and does not have an ownership interest in any other rental residential real property through any other entity.

(B) There is a written lease for the dwelling that includes a provision certifying that the owner meets the provisions of subparagraph

(A) and notifying the tenant that the dwelling is not subject to this section.

(f) An owner of residential real property subject to this section shall provide notice to a tenant of the tenantís rights under this section at the beginning of the tenancy by providing an addendum to the lease which shall be signed by the tenant when the lease is signed.

(g) This section does not prevent the enforcement of an existing local rule or ordinance, or the adoption of a local rule or ordinance that is consistent with Chapter 2.7 (commencing with Section 1954.50), that requires just cause for termination of a residential tenancy that further limits or specifies the allowable reasons for eviction, requires longer notice or additional procedures for evicting tenants, provides for higher relocation assistance amounts, or is determined to provide a higher level of tenant protections than this section. (h)Any waiver of the rights under this section shall be void as contrary to public policy.

For AB 1482's full text as most recently amended June 28 and advanced by the state Senate Judiciary Committee on July 9, click here.

Sponsor

Sponsor

In late May, AB 1482 narrowly passed the Assembly (needed 41 votes, received 43) only after its author agreed to allow property owners a larger annual rent increase than the bill initially proposed (annual 7% rent increase plus inflation [the latter currently a little over 2% statewide] with no "just cause" eviction provision (On the Assembly vote, LB area Assemblyman O'Donnell was recorded as "no vote recorded.") A companion measure, AB 1481 that would have required "just cause" for tenant evictions didn't advance from the Assembly and was considered dead for the year. But in a quiet June 28 maneuver, AB 1482's author inserted a "just cause" provision into his AB 1482 in the state Senate...and with the "just cause" eviction provision added. By its terms, AB 1482 would apply to all rent increases on or after March 15, 2019. It also exempts local ordinances that impose a more restrictive rent increase cap than the bill.

LB impacts

LB has no explicit rent increase cap, but in contentious series of April-May-June Council votes, a Council majority -- with Councilwoman Gonzalez casting her final Council vote on June 11 with the support of Mayor Robert Garcia -- to enact a tenant relocation ordinance requiring the landlords to pay two months rent to tenants who choose to leave rather than pay annual rent increase of 10% or more. (LBREPORT.com coverage here, here, and here).

Some LB property owners denounced the LB "tenant relocation assistance" ordinance as de facto "rent control" and "just cause eviction" by another name, but if AB 1482 becomes law, they'll have the real thing as a matter of state law.

Sponsor


Among LB incumbents endorsing Gonzalez's state Senate run were Long Beach Mayor Robert Garcia and Councilmembers Pearce, Price, Mungo, Uranga, Austin and Richardson [Andrews didn't formally endorse but contributed a sum to her campaign.] While corporate, special interest and labor interests and Dem Party organizations combined to give Gonzalez a massive six figure campaign warchest, LB's business community, development community and the leadership of the LB Area Republican Party and CA Republican Party all failed to provide Jack Guerrero (a CPA, Cudahy Councilmember, Harvard/Stanford degreed economist and staunch opponent of rent control) with financial resources that would have enabled him to at minimum wage a competitive campaign.

[Comment: Some in LB's "business community" told LBREPORT.com on condition of anonymity that if Guerrero lost, it would open up a Council seat that might be filled by a new Councilmember more centrist in their votes. This reasoning helped elect state Senator Gonzalez who is now empowered to cast votes for statewide laws that go beyond what she voted to enact in Long Beach. And of course Senator Gonzalez will help elect a Council successor to her 1st dist. Council seat consistent with her views.]

Sponsor

Sponsor

Although candidate Guerrero chose not to raise Councilwoman Gonzalez's LB voting record in his financially contained campaign, Guerrero outpolled Gonzalez in nearly all of ELB's 5th Council district County election precincts in the June runoff. Gonzalez trounced Guerrero in the remaining western, central and northern portions of LB [where he lacked resources to raise her record on multiple LB issues] and outpolled him in the overall 33rd state Senate district roughly 69% to 31%.

Gonzalez now faces re-election to a full four year term in March 2020 and has an ample campaign warchest (unspent from her 2019 special election campaign) to use against any challenger(s)..


What's next?

Following an April 23 Assembly committee vote that advanced AB 1482 as a rent cap [without its just cause and tenant relocation provisions], Gov. Gavin Newsom issued the following statement:

[Gov. Newsom statement] "The California Dream is in peril if our state doesn't act to address the housing affordability crisis. The cost of housing -- both for homeowners and renters -- is the defining quality-of-life concern for people across this state. Housing costs and rising rents threaten to erode our state's long-term prosperity. Families shouldn't be forced to live hours from where they work. Vulnerable residents -- seniors, families with small children and people on a fixed income -- shouldn't have to live in constant fear of eviction. And people across this state shouldn't be forced to spend their whole paycheck to keep a roof overhead. But that's increasingly the case throughout California. I am grateful that members of the Assembly voted today to continue moving forward on one piece of the housing affordability solution -- creating a renter protection package. I look forward to continuing this important conversation as proposals move through the legislative process.

It's currently unclear if Gov. Newsom supports the "just cause eviction" and tenant relocation amendments added to AB 1482. If the bill clears the state Senate with those amendments, and clears the Assembly in a concurrence on the state Senate amendments, Gov. Newsom could sign the bill into law or veto it.

On another front, supporters of a failed petition-initiated ballot measure that would have repealed the Costa-Hawkins Act (that prevents additional cities from enacting local rent control measures) have now advanced a more limited petition initiative for the November 2020 ballot.

Sponsor

Sponsor


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