Episode Transcript
[00:00:00] Speaker A: Imagine stepping out onto a balcony, maybe taking in the view, and then just without warning, it gives way.
[00:00:06] Speaker B: Yeah.
[00:00:06] Speaker A: It's a terrifying thought. Right. And it tragically, it's. Well, it's become a reality for some. We saw it in Berkeley, Gosh, back in 2015, that balcony collapse killed six young people, injured seven others. Awful. Then just recently, February 2025, another one, Silver Lake. This time, four people and a dog fell.
[00:00:25] Speaker B: Yeah. Thankfully, they were caught by a balcony below. But still, you know, injuries, a broken arm could have been much worse.
[00:00:31] Speaker A: Absolutely. And these events, well, they're not just random accidents, are they?
[00:00:35] Speaker B: No, not at all. They're really stark, devastating reminders of just how critical structural safety is. And, you know, legal compliance for property owners, too.
[00:00:43] Speaker A: Exactly. Which brings us to today's deep Dive. We're going deep into exactly that topic. We're unpacking the recent and the upcoming changes to California landlord laws, the ones taking effect well now and into 2025. Our source material for this comes straight from a recent webinar. Had experts who really live and breathe this stuff, specialists in balcony inspections, seasoned real estate attorneys.
[00:01:03] Speaker B: Right. People on the front lines.
[00:01:05] Speaker A: Definitely. So our goal here is to try and cut through all the complexity, pull out the absolute must know info. We want to help you understand what these updates mean for you, you know, as a property owner, and what you need to be doing, like right now.
[00:01:18] Speaker B: To stay compliant and protect your investment.
[00:01:20] Speaker A: And protect your investment. And most importantly, ensure safety.
[00:01:24] Speaker B: Yeah. And what those tragedies really highlight is the danger of hidden issues. That Berkeley building, it was only, what, nine years old?
[00:01:32] Speaker A: Nine years, yeah. Seems new.
[00:01:34] Speaker B: Right? But dry rot had just severely compromised the balcony structure. And the scary part, it wasn't visible, not from the outside.
The inspection expert on that webinar, they shared this really compelling example. A balcony looked completely fine, you know, to the naked eye, but once they actually opened it up, the wood support inside was almost entirely rotten.
[00:01:53] Speaker A: Wow.
[00:01:54] Speaker B: Yeah. It really drives home that you just, you can't rely on just looking at it. A visual assessment isn't enough.
[00:02:00] Speaker A: That's a powerful point. The risk you can't see is often the biggest one. So when we talk about these mandatory inspections, what exactly? What elements need this kind of close look?
[00:02:10] Speaker B: Okay. So the laws focus on what they call exterior elevated elements, EES for short. This basically includes things like, you know, outdoor walkways, balconies, naturally, stairways, decks. The key things are they're more than six feet off the ground, they have a walking surface people use, and they rely at least Partly, sometimes wholly on wood for their structure or stability.
[00:02:32] Speaker A: Got it. EEs above 6ft, walking surface, wood structure. And the laws driving this are SB721 and SB326.
[00:02:41] Speaker B: That's correct. Those are the two main state ordinances mandating these structural inspections.
[00:02:46] Speaker A: Do they both apply to, like, all rental properties?
[00:02:48] Speaker B: Well, they both apply to properties with three or more units, so not single family homes or duplexes. Usually the main difference is the type of property. SB721, that's for apartment buildings. SB326 covers condominiums and what they call common interest development. So basically, hoas.
[00:03:04] Speaker A: Okay, apartments versus hoas. Makes sense. What about the timing, the deadlines for getting these inspections done? I heard there was a bit of a mad dash recently.
[00:03:15] Speaker B: Oh, there absolutely was. Yeah. The deadline for SB326, the HOA one that just passed, December 31, 2024.
[00:03:21] Speaker A: Okay, so that's done.
[00:03:22] Speaker B: Right. But the deadline for apartment buildings under SB721, that one's coming up really fast. It's the end of this year, December 31, 2025. And the experts on the webinar, they really emphasize this. They saw a huge rush for SB326 right before that deadline.
[00:03:38] Speaker A: I bet.
[00:03:39] Speaker B: Yeah. And the clear takeaway for apartment owners under SB 721 is don't wait. Waiting till the last minute. It's almost certainly going to mean much higher costs and just real difficulty scheduling the inspectors.
[00:03:49] Speaker A: Right. And then getting repairs done, too, presumably.
[00:03:52] Speaker B: Exactly. Getting the repairs done. Think about increased demand, permit backlogs, even things like resources being stretched thin because of wildfires. It all adds up to delays and higher costs.
[00:04:02] Speaker A: So delaying isn't just kicking the can down the road. It actually makes the problem more expensive and harder to solve later.
[00:04:08] Speaker B: Precisely. That's the message. Are there other key differences between the two laws besides the deadlines and property types?
[00:04:15] Speaker A: Good question. Yes. The scope and how often you have to inspect are different.
[00:04:19] Speaker B: Okay, how so?
[00:04:21] Speaker A: So, under SB721, for apartments, you need to inspect a minimum sample size, 15% of each type of EE on the property. You know, 15% of the balconies, 15% of the stairs, etc.
[00:04:31] Speaker B: Okay, 15% sample.
[00:04:33] Speaker A: Right. But SB326 for HOAS, that generally requires a much wider look. Typically, they need to assess 100% of the elements to get what's called a 95% confidence rate in the overall structure.
[00:04:43] Speaker B: Wow. 100%. That's a big difference.
[00:04:45] Speaker A: It is. And the frequency differs, too. SB321 is every six years. SB326 is every nine years.
[00:04:50] Speaker B: Six versus nine. Okay.
[00:04:52] Speaker A: And one last thing. The inspectors. SB326 is a bit more restrictive. It's mainly licensed structural engineers or architects. SB701 allows those two, but also opens up slightly to certain qualified general contractors with specific experience.
[00:05:05] Speaker B: Got it. Different buildings, different deadlines, different scope, frequency, inspectors. Okay, so what are the real, like, teeth? What happens if a landlord or an HOA just doesn't do these inspections?
[00:05:20] Speaker A: Yeah, the consequences they laid out are pretty serious. First, there are the direct penalties, fines, you know, 100, $500 per day for non compliance a day.
[00:05:30] Speaker B: That adds up fast.
[00:05:31] Speaker A: It really does. But honestly, those fines might be the least of your worries. The biggest risk is massively increased liability. If someone gets hurt because an EE failed and you hadn't done the required inspection, you're looking at potentially devastating lawsuits.
[00:05:44] Speaker B: Makes sense. Negligence claims, I imagine.
[00:05:46] Speaker A: Exactly. And the experts also pointed out problems when you try to sell the property for HOAS under SB326. You have to provide that inspection report at the time of sale. If you haven't complied, it can completely stop a transaction.
[00:05:58] Speaker B: Oh, wow.
[00:05:59] Speaker A: Yeah. They mentioned seeing people scrambling at the end of 2020 just to get those SB 326 inspections done so they could close their sales.
[00:06:06] Speaker B: And I'm guessing insurance companies are watching this closely.
[00:06:08] Speaker A: Absolutely. That came up. Too many insurers are really scrutinizing compliance now. If you fail to meet these safety mandates, well, your risk profile goes way up, and there's a very real chance your insurance carrier could just drop your coverage.
[00:06:23] Speaker B: Ouch. That's huge.
[00:06:25] Speaker A: Yeah. Plus, local cities are starting to step up enforcement.
Apparently, that Silver Lake collapse really spurred several cities to plan more stringent checks.
[00:06:34] Speaker B: So pressure from multiple angles.
[00:06:36] Speaker A: Right. The bottom line is compliance isn't really optional. You'll be forced to deal with it eventually. And waiting just puts you in a much worse spot, facing penalties, higher costs because everyone's rushing for inspectors and construction. Plus all that increased liability hanging over you the whole time.
[00:06:52] Speaker B: So really no upside to waiting. Just compounding risk and cost.
[00:06:56] Speaker A: That's the clear message.
Plan ahead. Act now on those EE inspections.
[00:06:59] Speaker B: Okay, so that's a big one. The balconies and EEs. But the legal landscape for landlords in California, it's got other significant updates for 2025 too, right?
[00:07:08] Speaker A: It sure does.
The webinar covered other important changes. Things impacting security, deposits, even the eviction process itself.
[00:07:16] Speaker B: Yeah, the regulatory environment is definitely active on multiple Fronts.
[00:07:20] Speaker A: Okay, let's shift gears then. Let's look at some of these other key legal updates.
The discussion touched on state emergency declarations and how they trigger specific rules.
[00:07:30] Speaker B: Right? Yeah. So when the governor declares a state of emergency, like often for wildfires in certain county, it kicks in the state's anti price gouging laws. That's in the penal code. This is really relevant with recent emergencies like the one declared in LA County.
[00:07:46] Speaker A: Okay, and what does that mean for rents?
[00:07:48] Speaker B: It means you're prohibited from increasing the price of essential things, including rental housing, by more than 10% during that emergency period. And here's a really critical detail.
This applies even if the unit is vacant.
[00:08:01] Speaker A: Oh really? Even for a vacant unit being re rented?
[00:08:03] Speaker B: Yes. You can't just massively hike the rent on an empty unit because say there's sudden high demand from people displaced by a fire. The cap is 10% over the pre emergency price.
[00:08:14] Speaker A: That's a really important limit for landlords to know during a crisis.
[00:08:17] Speaker B: Exactly. The idea is to prevent exploitation. And on top of that, the law also evict tenants just because they're temporarily housing fire victims, even if it technically breaks a lease rule about say occupancy limits or subletting.
[00:08:34] Speaker A: Makes sense during an emergency.
[00:08:35] Speaker B: Yeah. Those specific protections, they were extended at least through early March. And you know, local authorities might extend them further depending on the situation.
[00:08:44] Speaker A: Okay, now you mentioned security deposits are getting more complex.
[00:08:47] Speaker B: They are, yeah. The rules around security deposits have been tightening for years. Really? And this new law, AB 2801, it adds another layer, specifically about photos, documentation photos.
[00:08:59] Speaker A: What exactly do landlords have to take pictures of now?
[00:09:02] Speaker B: Okay, so two parts. Effective April 1, 2025, landlords have to take photos that document the unit's condition at the beginning of the tenancy before the tenant moves in. And you have to share those photos with the tenant. The experts did note, you know, this has always been good practice anyway, but now it's actually legally required.
[00:09:19] Speaker A: Okay, Photos at move in, share with tenant. What's the second part then?
[00:09:24] Speaker B: Effective July 1, 2025, you also have to take photos after the tenant moves out. Crucially, this is before you do any cleaning or repairs.
[00:09:31] Speaker A: Before cleaning, okay.
[00:09:32] Speaker B: Yes. And then you also have to take photos after the cleaning and repairs are done.
[00:09:36] Speaker A: Wow. So before move in, after move out, but before work, and then after the work is done, three sets of photos. What's the point? And what if you don't do it?
[00:09:45] Speaker B: Well, the main purpose is transparency.
Creating a clear objective record of the unit's Condition. It protects both sides, really? For landlords, though, if you don't comply with these photo requirements, it can seriously jeopardize your ability to legally withhold money from the security deposit for damages.
[00:10:02] Speaker A: How so?
[00:10:03] Speaker B: Because if you can't properly document that the damage was there after the tenant left, but before you fixed it, well, it becomes much harder to prove your deduction was justified.
[00:10:12] Speaker A: Right. Proof becomes key.
[00:10:13] Speaker B: Exactly. And the experts also warned if a court finds you violated these rules in bad faith, the penalties could potentially be more than the deposit itself. Yeah, they did mention some kind of free software tools apparently being developed to help landlords manage and store all these required photos. So maybe keep an eye out for that.
[00:10:31] Speaker A: That could be useful.
Okay, switching gears again. Tenant credit reporting. There's a new law, AB 2747.
[00:10:38] Speaker B: Yes. This one also kicks in April 1, 2025.
The idea here is to give tenants a way to build credit through their rent payments.
The law requires landlords to offer tenants, it has to be in writing, the option to have their positive rent payment history reported to credit agencies.
[00:10:55] Speaker A: So the landlord has to offer it, but the tenant doesn't have to accept?
[00:10:59] Speaker B: Correct. It's the tenant's choice. They can say yes or no.
[00:11:01] Speaker A: Can landlords charge for this service?
[00:11:03] Speaker B: Yes, you can pass on the actual cost of the reporting service to the tenant, but there's a cap. It can't be more than $10.
[00:11:09] Speaker A: Okay, and how do landlords actually do this? Put it in the lease?
[00:11:12] Speaker B: Pretty much.
For new leases starting April 1st or later, you should include the offer language. Right. In the rental agreement. For tenants who are already living there, you need to give them this written offer by April 1st.
[00:11:23] Speaker A: Is this mandatory for every single landlord or are there exceptions?
[00:11:28] Speaker B: Ah, yes, there's a pretty significant exemption. This came up in the Q and a. Buildings with 15 or fewer units are exempt unless.
[00:11:37] Speaker A: Unless?
[00:11:38] Speaker B: Unless the owner owns more than one building and the owner's business structure is a corporation or a REIT or an LLC that has a corporation as one of its members.
[00:11:47] Speaker A: Okay, so the ownership structure matters a lot there.
[00:11:49] Speaker B: It does. So if you own, say, a few single family homes or maybe a couple of fourplexes, either as an individual or through a simple LLC with just individuals as members, and each property has less than 15 units, you're generally going to.
[00:12:03] Speaker A: Be exempt even if you own multiple properties. Total.
[00:12:05] Speaker B: Right. The total number of properties doesn't trigger it for the exemption. It's the corporate structure combined with owning more than one building.
[00:12:12] Speaker A: That's a really crucial distinction. For smaller mom and pop landlords to understand. Okay, now moving to a very serious and sensitive topic.
New requirements around domestic violence protections for tenants.
[00:12:24] Speaker B: Yes, and these are immediate, very urgent requirements for landlords.
If a tenant or someone living with them is a victim of domestic violence, sexual assault, stalking, or elder abuse, and they ask you to change the locks, you have to act fast.
[00:12:39] Speaker A: How fast? What's the time frame?
[00:12:41] Speaker B: It's extremely strict. The landlord must change the locks within 24 hours of getting that request.
[00:12:46] Speaker A: 24 hours.
[00:12:47] Speaker B: Okay.
[00:12:48] Speaker A: And who pays for that?
[00:12:49] Speaker B: The landlord pays. It has to be done at the landlord's own expense.
[00:12:53] Speaker A: What if the landlord, for whatever reason, doesn't meet that 24 hour deadline?
[00:12:57] Speaker B: Then the tenant has the legal right to change the locks themselves. And if the tenant does that, the landlord is required to reimburse the tenant for the reasonable cost within three weeks.
[00:13:07] Speaker A: And the tenant needs to give the landlord keys?
[00:13:09] Speaker B: Yes. The tenant has to notify the landlord and provide the new keys within 24 hours after they've changed the locks themselves.
[00:13:15] Speaker A: The expert you mentioned, they highlighted there's a history of lawsuits, even tragic outcomes, when landlords didn't respond quickly enough.
[00:13:23] Speaker B: They did. They really stressed the potential liability.
There have been cases where landlords were held responsible for not helping with safety measures fast enough. They referenced a particularly tragic case from the Bay Area where a victim was killed after the landlord allegedly didn't change the locks quickly following an abuse report.
[00:13:42] Speaker A: Oh, that's terrible.
[00:13:43] Speaker B: It really underscores why prioritizing speed and the tenant's safety is just paramount. You know, while documentation like a police report or restraining order is usually part of the process, the advice from the expert in the Q and A was basically safety first. Change the locks quickly, Sort out the paperwork right after.
[00:14:01] Speaker A: Got it. Safety first. What about screening? Can you deny someone just because they were a victim of domestic violence in the past?
[00:14:08] Speaker B: No, absolutely not. The law is very clear. You cannot take adverse action against an applicant solely because they have a history as a victim of these kinds of crimes.
[00:14:16] Speaker A: Okay, and what about that really tricky situation where the abuser is also on the lease?
[00:14:22] Speaker B: Yeah, that's very challenging.
As discussed in the webinar Q and A, the expert's advice leaned towards prioritizing the victim's safety. Often that means letting the victim out of the lease without penalty. Even if technically you might have a claim for, say, 14 days rent.
[00:14:38] Speaker A: The liability risk outweighs the rent claim pretty much.
[00:14:41] Speaker B: The humanitarian concern and the potential liability usually make letting them go the wiser choice. Trying to actually lock out an abuser who is a legal tenant. That's generally not allowed without a specific court order, like a TRO that explicitly excludes them from the property.
[00:14:55] Speaker A: Yeah, you need a court order for that.
[00:14:57] Speaker B: Exactly. And they recommended things like smart locks, electronic access control as a practical way for landlords to handle lock change requests really quickly and efficiently.
[00:15:06] Speaker A: Makes sense.
[00:15:07] Speaker B: Yeah.
[00:15:07] Speaker A: Okay, let's move to the eviction process itself. Some changes to the timelines there.
[00:15:11] Speaker B: Yes. AB 2347. It changed how long a tenant has to respond when you file an eviction lawsuit. You know, serve them the summons and complaint. That response time increased. It went from five court days up to 10 court days.
[00:15:25] Speaker A: 10 court days. So that adds what, about a week, maybe more with weekends and holidays?
[00:15:29] Speaker B: Yeah, effectively adds about a week, potentially 14 or 15 calendar days for the tenant to file their initial response. Response like an answer or maybe a motion.
[00:15:38] Speaker A: That definitely sounds like it could slow down the start of the process for landlords. Is there like any silver lining in that law?
[00:15:44] Speaker B: There is actually kind of a balancing act within the same law. It speeds up how the court handles certain tenant filings, often seen as delay tactics. If a tenant files something like a demur, which basically challenges the legal basis of your lawsuit or a motion to strike parts of your complaint, the court hearing on that motion now has to be scheduled within seven days.
[00:16:05] Speaker A: Seven days. That sounds much faster than before.
[00:16:08] Speaker B: It is previously. Getting hearings on those could take weeks, sometimes months. Really bogging things down. So while the initial tenant response time is longer, getting through these specific court hurdles should theoretically be quicker. Well, the Q and A pointed out that while the law says seven days, actual court availability might mean it's closer to seven, 10 days in reality.
But still, it's a definite improvement over the old system. And landlords can always ask the court to move hearings up if delays seem unreasonable.
[00:16:38] Speaker A: Okay, so streamlining those specific motions is definitely a plus for landlords facing procedural fights.
Now, let's talk about this junk fee ban. SB611.
[00:16:47] Speaker B: Yes, SB611 took effect this year. Landlords are now flat out prohibited from charging tenants certain kinds of fees. For example, you cannot charge a tenant any fee just for serving, posting, or delivering any kind of eviction notice. Doesn't matter if it's a three day pay or quit 60 day notice, whatever. Any notice required by law.
[00:17:06] Speaker A: So no more charging $25 to tape a notice to the door.
[00:17:09] Speaker B: Exactly. That's illegal now. Also banned our fees based only on how the tenant pays their rent, like charging extra if they pay by check. Instead of using your online portal.
[00:17:18] Speaker A: But late fees are still okay if rent is actually late.
[00:17:22] Speaker B: Oh, yes. This doesn't affect legitimate late fees if rent isn't paid on time according to the lease. This is specifically about fees for notice delivery or payment method choice.
[00:17:32] Speaker A: Got it. What about application screening fees? Are those still allowed?
[00:17:35] Speaker B: They are still allowed, yes. But there are significant new strings attached that, as the expert noted, might make charging them less attractive for a lot of landlords.
[00:17:44] Speaker A: Okay, what are the strings?
[00:17:46] Speaker B: If you do charge an applicant a screening fee, and the maximum allowed for 2025 is $59.96, by the way, you now have to follow one of two paths regarding how you select tenants, or you have to give the feedback.
[00:17:58] Speaker A: Two paths.
[00:17:59] Speaker B: Path one, you must process applications strictly in the order you receive them, first come, first served. And D, you must accept the very first applicant who meets all your standard rental criteria.
[00:18:10] Speaker A: Okay, strict. First come, first served if you charge a fee. What's path two?
[00:18:14] Speaker B: Path two, if you don't select an applicant, maybe you review multiple applications before deciding. You must return their entire screening fee. And you have to do it quickly, within seven days of making your decision not to rent to them.
[00:18:26] Speaker A: Wow. So either commit to that rigid first in line process or be ready to issue fast refunds to everyone you turn down.
[00:18:34] Speaker B: Pretty much. And there's one more thing. On top of that, if you charge a fee, you also have to give the applicant a copy of their consumer credit report. Again within seven days.
[00:18:44] Speaker A: Okay, so the first come rule, or quick refunds for everyone else, plus mandatory report sharing.
[00:18:50] Speaker B: Right.
The expert suggested that the combined effect of these rules makes the common practice of, you know, collecting several applications, reviewing them all, and then picking the best fit. Well, it makes that process much more administratively burdensome and maybe less practical if you're charging a screening fee.
[00:19:07] Speaker A: Yeah, sounds like a lot of extra steps and potential costs with refunds.
[00:19:10] Speaker B: Exactly. And the Q and A clarified. This applies even if you use a third party service like Zillow that charges the fee and gives both parties the report, the rules still apply to the landlord.
[00:19:20] Speaker A: What if a tenant just gives you their own report?
[00:19:23] Speaker B: If they provide their own report, you haven't charged them a fee for that specific report.
So the rules wouldn't trigger in that exact instance. But the experts still strongly recommended landlords always pull their own reports anyway for verification.
[00:19:37] Speaker A: Good advice. Okay, let's move to a really big one. The tenant Protection Act.
TPA AB 1482. Sounds like it's getting some serious teeth. New enforcement power.
[00:19:50] Speaker B: It really Is? Yeah. The tpa. You know the law that provides statewide rent caps and requires just cause for evictions in most multi unit properties and even some single family homes, it's been significantly strengthened. The recent changes definitely give it substantial enforcement teeth.
[00:20:04] Speaker A: Okay, what are the key changes around evictions? Specifically things like owner move ins or substantial remodels.
[00:20:11] Speaker B: Right. Critical updates. There's for an owner move in, the owner or their qualified relative now has to actually intend to live in the unit for at least one year. That's new.
[00:20:19] Speaker A: One year minimum occupancy.
[00:20:21] Speaker B: Yes. And they have to physically move in within 90 days after the tenant vacates. That's also a new specific time frame.
[00:20:27] Speaker A: 90 days to move in. Got it. What about substantial remodels?
[00:20:32] Speaker B: Big changes there too. Evictions for substantial remodels are now legally considered temporary.
[00:20:37] Speaker A: Temporary, meaning the tenant can come back?
[00:20:39] Speaker B: Exactly. The tenant now has a statutory right to return to the unit once the remodel work is finished. This is a major shift.
[00:20:46] Speaker A: Wow. Okay. Right to return. What else?
[00:20:49] Speaker B: And crucially, landlords now have to get all the necessary permits for the substantial remodel work before they even serve the eviction notice.
[00:20:57] Speaker A: Permits first, then notice.
[00:20:58] Speaker B: Yeah.
[00:20:59] Speaker A: Not the other way around.
[00:21:00] Speaker B: Correct. Plus there are a whole bunch of new very specific disclosure requirements that have to be in the notice itself to details about the work, the tenant's right to return, relocation assistance, etc.
[00:21:11] Speaker A: So remodels are temporary, tenant has a right to come back, and you need permits in hand before you even start the notice process.
What happens if a landlord doesn't follow these TPA rules? Exactly.
[00:21:21] Speaker B: This is where those teeth really bite.
The experts could not have been clearer. Meticulous. Strict compliance with all the TPA notice requirements and procedures is now absolutely essential. Any mistake, any failure, any error in the notice or how you follow the steps, it can invalidate the whole eviction notice. It gives the tenant a solid defense in court.
[00:21:42] Speaker A: Okay, so the notice can be thrown out. But you mentioned bigger penalties too.
[00:21:45] Speaker B: Yes, that's the really significant change. The new penalties if a landlord is found to have violated the tpa, especially in a wrongful eviction case.
[00:21:55] Speaker A: What are they?
[00:21:56] Speaker B: Okay, if a tenant successfully sues you for violating the tpa, like for an illegal eviction, they can now recover their actual damages.
[00:22:03] Speaker A: Actual damages meaning things like their moving.
[00:22:06] Speaker B: Costs, maybe the difference in rent if they had to find a more expensive place, storage fees, that kind of thing.
[00:22:11] Speaker A: Okay.
[00:22:11] Speaker B: Plus, and this is huge, there are reasonable attorney's fees and costs.
[00:22:15] Speaker A: Attorney's fees. Ouch.
[00:22:16] Speaker B: Yeah, the webinar really highlighted this. Often the attorney's fees can end up being way more than the tenant's actual damages. It's a massive driver for litigation.
[00:22:25] Speaker A: Okay, actual damages plus attorney fees. Anything else?
[00:22:29] Speaker B: Yes. There's a brand new penalty provision. On top of all that, tenants can potentially recover three times their actual damages.
[00:22:38] Speaker A: Treble damages, triple damages. When would that apply?
[00:22:41] Speaker B: If the tenant can prove the landlord acted willfully, like intentionally disregarded the law, or oppressively, fraudulently or maliciously.
[00:22:50] Speaker A: So for really bad behavior?
[00:22:52] Speaker B: Essentially, yes. But this possibility of trouble damages, which used to be mostly just in certain local rent control cities, is now a statewide potential penalty under the tpa.
[00:23:02] Speaker A: Wow. Okay, so not only can tenants get back their losses and have their legal fees paid, but really intentional violations could lead to triple damages.
That dramatically raises the stakes for landlords. Yeah, need to be absolutely sure you're following the TPA to the letter.
[00:23:17] Speaker B: It's a fundamental change in how the TPA is enforced. Compliance isn't just about avoiding, you know, a notice getting tossed anymore. It's about avoiding potentially crippling litigation costs and these major penalties.
[00:23:28] Speaker A: Okay, heavy stuff. Let's. Let's maybe finish this section with something the webinar participants framed as a pretty significant win for property owners.
The survival of the Costa Hawkins Rental Housing Act.
[00:23:42] Speaker B: Ah, yes, Costa Hawkins.
[00:23:44] Speaker A: What exactly is Costa Hawkins, and why is keeping it considered such a victory?
[00:23:49] Speaker B: Okay, so Costa Hawkins is a key state law. It provides some really important protections for property owners against certain types of local rent control rules.
Probably its most well known feature is that it prevents cities and counties from imposing vacancy control.
[00:24:04] Speaker A: Vacancy control meaning?
[00:24:05] Speaker B: Meaning when a tenant moves out and a unit becomes vacant, the landlord has the right to set the initial rent for the next tenant at whatever the market rate is. Local governments can't cap that initial rent under Costa Hawkins.
[00:24:17] Speaker A: Okay, so freedom to set rent on turnover. What else?
[00:24:19] Speaker B: It also generally exempts single family homes and condominiums from local rent control ordinances.
Now, it's really important to remember this doesn't exempt them from state laws like the TPA's rent caps or from local eviction controls. Just local rent control.
[00:24:33] Speaker A: Got it.
Exempts most SFHs and condos from local rent caps, but not necessarily eviction rules or state caps. And the victory part?
[00:24:43] Speaker B: The victory was that Proposition 33, which was a ballot measure in the last November election, aimed to basically repeal or severely gut Costa Hawkins, and it failed decisively.
[00:24:54] Speaker A: This wasn't the first time they tried that, was it?
[00:24:56] Speaker B: No, it was the third attempt in recent years to get rid of Costa Hawkins.
So its defeat was seen by property owner groups as a really major win. Preserving those key protections. Vacancy deed control and the general exemption for single family homes and condors from local rent control.
[00:25:11] Speaker A: Are there any common situations where that single family home or condo exemption doesn't apply under Costa Hawkins? Like loopholes?
[00:25:19] Speaker B: Yes, there are some specific exceptions written into the law. A single family home or condo might still be subject to local rent control if, for example, it's been rented pretty much continuously since before 1996, or if the landlord forced a previous tenant out using a retaliatory rent hike or eviction. Or if there's an outstanding uncorrected health or safety violation notice on the property. Or another one is if you're renting out individual rooms within the house rather than the whole dwelling.
[00:25:45] Speaker A: Right. Renting rooms can change things.
[00:25:46] Speaker B: Exactly. And the Q and A specifically tackled whether Costa Hawkins applies somewhere like Oakland with its own strong rent control. The expert confirmed yes, state law like Costa Hawkins generally overrides local laws on these specific points, like the SFH condo exempt, unless one of those specific exceptions applies.
[00:26:06] Speaker A: Good clarification. Okay. Finally, the expert touched on a couple of maybe rare but interesting local court rulings where landlords actually won against local ordinances.
[00:26:17] Speaker B: Yeah, just a few examples showing that legal challenges can sometimes succeed against some of these local rules. In San Francisco, for instance, a court struck down a city ordinance that required landlords to give a 10 day warning notice before they could even serve a standard three day notice to pay rent.
[00:26:32] Speaker A: Or quit for non payment a notice before the natus.
[00:26:35] Speaker B: Pretty much. The court said that extra step violated state law procedures. Now, it's important to note this is separate from the TPA's rule about giving a 10 day notice to cure for other types of lease violations. That TPA rule still applies. This was specific to non payment notices and sf.
[00:26:52] Speaker A: Okay. And the Alameda county ruling, that was an interesting one.
[00:26:55] Speaker B: An appellate court in Alameda county overturned a lower court ruling that had kind of strangely required landlords to list an actual person's name, a natural person, as the payee on a three day pay or quit notice. Even if the property owner was an LLC or a corporation.
[00:27:13] Speaker A: That sounds odd.
[00:27:14] Speaker B: It was. The appellate court basically said no listing the legal entity name the LLC or the corporation is perfectly fine, always has been. It corrected what seemed like a really unusual local interpretation.
[00:27:25] Speaker A: Right. Aligns standard practice and the San Francisco empty homes tax.
[00:27:28] Speaker B: Yeah. The SF Superior Court initially struck down the City's tax on vacant residential units. The judge basically said it was an illegal attempt to force people into the rental business.
[00:27:37] Speaker A: But that was not final.
[00:27:39] Speaker B: No, that ruling is being appealed. So the final chapter isn't written yet, but it was seen as a positive sign for owners challenging those kinds of vacancy taxes. So yeah, while these wins are specific to their locations and circumstances, they do show that pushback through the courts is happening and sometimes succeeding.
[00:27:56] Speaker A: Well, whew. We have certainly covered an incredible amount of ground today from, you know, the critical importance of balcony safety all the way through eviction rules, fee structures.
[00:28:07] Speaker B: We really have. It just, it underscores how incredibly complex and frankly, constantly changing the legal environment is for California landlords. You've got state laws, local rules, court decisions, all interacting.
[00:28:20] Speaker A: It absolutely highlights why staying informed isn't just a good idea. It's. Well, it's non negotiable, isn't it?
[00:28:26] Speaker B: Totally.
[00:28:26] Speaker A: Understanding all these updates is just essential for safety, obviously.
[00:28:31] Speaker B: Yeah.
[00:28:31] Speaker A: But also for protecting your property investment and avoiding those really significant penalties and.
[00:28:36] Speaker B: Liabilities we talked about, especially those attorney fees and the potential for trouble damages.
[00:28:40] Speaker A: Right. Knowledge isn't just power here, it's probably your best defense. Well said. Yeah, absolutely. So, thinking about everything we've discussed, the stepped up inspection requirements, the need for really strict compliance, those much higher penalties for getting things wrong, the shifts in tenant protections, eviction procedures. What does this whole evolving legal landscape really mean for the, I guess the fundamental nature of owning and operating rental property in California moving forward?
[00:29:10] Speaker B: That's a big question.
[00:29:11] Speaker A: Yeah. And maybe what are the potential long term ripple effects for things like housing availability, affordability across the state?
[00:29:18] Speaker B: Definitely something to think about.
[00:29:20] Speaker A: It is something for you, the listener, to consider as you navigate all these new rules and complexities.
