New Year Brings New Laws for Rental Property Owners
Posted on Oct 31, byÂ Ryan GreenÂ CategoryÂ Property Management
This is a lot of information and it is abbreviated. Please spend some time and lookÂ up the new laws to discuss with your counsel. Update necessary forms. Be prepared for these realities:Â the current regulatory climate in the local jurisdictions throughout the state is gridlock; there is also a generally sympathetic attitude among California lawmakers toward renters; a growing frustration is apparent due to the inability to properly execute existing laws against consumer predators; finally, there exists a perceived notion that there are fees, taxes and other state revenue being left on the table. These realities make independent rental ownership a tougher business but in our view also increase the income producing and wealth accumulation opportunities as well.Â Â
At FBS we review all new and modified laws, regulations, etc. and make sure our forms, policies, procedures, routines, associate training, communication with rental owners, renters and the public are consistent with local, state and federal changes. This takes time and resources away from the business priorities of running our company and staying on top of the challenges of daily property management operations while we keep pace with the growing requests for advisory and management services as independent rental owners recognize that we can help. We generally schedule times during the month and months during the year to devote to these kinds of projects. In addition, we maintain valuable connections with important industry resources and retain the professional advice of specialists to prioritize these outside changes and focus our approach to them.Â Neil Fjellestad
January 1, 2013, there are new laws that go into effect in California which property owners andÂ managers must be aware of. The laws discussed here are not meant to be an all-inclusive list, should be viewed as a summary â€“ not a detailed explanation.
Senate Bill 1394Â Smoke Alarm Requirements for Home Improvers and Landlords: StartingÂ January 1, 2013, for properties rented or leased, an owner is generally responsible for testingÂ and maintaining smoke alarms in an apartment complex or other building. Beginning January 1,Â 2014, this also will apply to a single family residence. Also beginning January 1, 2014, the property owner will be responsible for installing additional smoke alarms as needed to comply with stricter building standards going into effect in January 2016. Owners should also prepare for January 2014 when all dwelling units intended for human occupancy for which a building permit is issued in excess of $1000; the issuer will not sign off on the completion of the work unless the owner demonstrates that all smoke alarms are approved by the State Fire Marshal. To be approved, a smoke alarm must display the date of manufacture, allow a place for the date of installation to be written, incorporate a â€œhushâ€ feature, incorporate an â€œend-of lifeâ€warning, and, for battery operated devices, contain a non-removable 10 year battery.
Note: Starting in January 2013, landlords will be responsible for the smoke alarms inÂ apartment complexes but not in single family homes until 2014 which is when the larger portion of this bill takes place. However, there is quite a bit involved in the 2014 requirements, so it would behoove a conscientious landlord to start early!
Senate Bill 1191Â Landlord must Disclose Notice of Default to Prospective Tenants: StartingÂ January 1, 2013 every landlord who offers to rent a residential property containing one to fourÂ units must disclose in writing to any prospective tenant the receipt of a notice of default whichÂ has not been rescinded. This disclosure must be made prior to executing a lease agreement.
The written notice must be made in English, Spanish, Chinese, Tagalong, Vietnamese and Korean. If a landlord violates this law, the tenant may elect to void the lease and recover oneÂ monthâ€™s rent or twice the amount of actual damages â€“ whichever is greater-Â in addition toall prepaid rent. If the lease is not voided and the foreclosure sale has not occurred, the tenantÂ may deduct one monthâ€™s rent from future amounts owed. Property managers will not be heldÂ liable for failing to provide the written disclosure unless the landlord has given them writtenÂ instructions to deliver the disclosure to the tenant.
Note: This law pertains to landlords operating single family homes or small properties onlyâ€“ not larger complexes â€“ yet. The law also applies to prospective tenants. There is no mentionÂ of a requirement to notify current tenants.
Assembly Bill 2610Â Tenant Entitled to a 90-Day Notice to Terminate After Foreclosure:
Starting January 1, 2013 a monthâ€“toâ€“month tenant in possession of a rental housing unit at theÂ time the property is foreclosed must be given a 90-day written notice to terminate. For tenantsÂ who have a fixed term lease, the tenant can generally remain until the end of the lease termÂ with all rights and obligations under the lease surviving the foreclosure, including the tenantâ€™sÂ responsibility to pay rent. There are, however a few conditions when a landlord may give aÂ tenant on a fixed term lease a 90-day written notice to terminate including (but not limited to)Â when the new owner will occupy the unit or when the tenant is the borrower, his spouse , childÂ or parent.
Assembly Bill 2303Â Landlord May Dispose of Abandoned Personal Property Less than $700:
Starting January 1, 2012, the total resale value of personal property abandoned by a tenantÂ after termination of a tenancy that a landlord must sell at public auction has been increasedÂ from $300 to $700 dollars â€“ if specific procedures are met. This law also prevents a landlordÂ from assessing storage fees if the property is recovered by the tenant within two days ofÂ vacating the premises. The landlordâ€™s notices of termination of tenancy and pre-move outÂ inspection must contain specific language that former tenants may reclaim abandoned personalÂ property left on the premises, subject to certain conditions.
Note: Personal property abandoned by tenants valued at the new $700 limit means thatÂ that property valued over $700 must be sold at public auction rather than disposed of orÂ retained at the property owner/managerâ€™s own use. As before, certain procedures must beÂ followed so be sure to contact your own counsel. Owners and property managers should review and update termination of tenancy notices and pre-move out inspection forms for 2013.
Senate Bill 1964 and Assembly Bill 2386Â Anti-Discrimination Protections for ReligiousÂ Grooming and Breastfeeding: Starting January 1, 2013 the California Fair Employment andÂ Housing Act (FEHA) has been expanded to require employersÂ and other covered entitiesÂ to make reasonable accommodations for an individualâ€™s religious grooming or dress practices.
Additionally, The FEHA protection against sex discrimination has been expanded â€“ not changedâ€“ to require reasonable accommodations for breastfeeding or medical conditions relating toÂ breastfeeding.
Â Note: Segregating an individual is not a reasonable accommodation!