As of January 1, 2025, several new laws have come into effect in California that significantly impact both property owners and tenants. It's essential to stay informed about these changes to ensure compliance and to understand the rights and responsibilities of all parties involved.
1. Security Deposit Documentation (AB 2801):
Landlords are now required to take photographs of rental units at specific times to provide clear evidence of the property's condition. The requirements are as follows:
- Before or at the Start of Tenancy: Photographs must be taken to document the unit's initial condition.
- After Tenant Move-Out (Before Repairs/Cleaning): Once a tenant vacates, landlords must photograph the unit before conducting any repairs or cleaning intended to be deducted from the security deposit.
- After Repairs/Cleaning: Following any maintenance or cleaning, additional photographs should be taken to document the completed work.
These photographs, along with an itemized statement of deductions, must be provided to the departing tenant. This law aims to promote transparency and reduce disputes over security deposit deductions.
2. Positive Rental Payment Reporting (SB 971):
To assist tenants in building their credit profiles, landlords are now mandated to offer tenants the option to have their positive rental payment history reported to at least one nationwide consumer reporting agency. The implementation schedule is:
- Existing Leases (as of January 1, 2025): Landlords must extend this offer by April 1, 2025, and continue to do so at least once annually thereafter.
- New Leases (entered into on or after April 1, 2025): The offer should be made at the time of lease signing and at least once annually thereafter.
Tenants can choose to opt-in or opt-out of this reporting. If a tenant decides to discontinue the reporting after opting in, they must wait at least six months before they can opt-in again. This initiative is designed to help tenants establish or improve their credit scores through consistent rent payments.
3. Rent Increase Limitations:
Under California's statewide rent control laws, landlords are restricted in how much they can increase rent annually. The permissible increase is capped at 5% plus the local rate of inflation or 10%, whichever is lower. Proper notice must be provided to tenants regarding any rent increases, typically requiring a 30 or 60-day notice, depending on the specific circumstances.
4. Enhanced Penalties for Rent Gouging:
In response to housing shortages exacerbated by events such as wildfires, Los Angeles County has increased penalties for rent gouging. Landlords found guilty of exploiting such situations by imposing exorbitant rent increases can now face fines up to $50,000 per violation, a significant increase from the previous $10,000 penalty. This measure aims to protect displaced residents from unfair rental practices during crises.
Conclusion:
Staying updated with these legislative changes is crucial for both landlords and tenants. For landlords, compliance ensures the avoidance of legal pitfalls and fosters trust with tenants. Tenants, on the other hand, should be aware of their rights and the new opportunities available to them, such as credit reporting of rental payments. Both parties are encouraged to seek legal advice or consult with a property management professional to navigate these changes effectively.
