California is known for being one of the most tenant-friendly states in the U.S., with a complex set of regulations that landlords must follow. Failing to comply with these laws can result in severe penalties for landlords, making it crucial to stay informed. Among the most significant regulations is the Tenant Protection Act (TPA), a law that landlords in Riverside, and across California, must be particularly mindful of to avoid costly mistakes.
What is the Tenant Protection Act?
The Tenant Protection Act (TPA) of 2019 is “a statewide law that limits rent increases and eviction policies for many residential rental properties in California. The law went into effect on January 1, 2020 and expires on January 1, 2030.”. It has a vast amount of different rules and regulations, such as:
Rent Increase Cap: Under the TPA, annual rent increases are capped at 5% plus the local rate of inflation, or 10% of the existing rent, whichever is lower. This prevents landlords from imposing excessive rent hikes.
Just Cause Evictions: The TPA requires that landlords provide a "just cause" for evicting tenants who have lived in the property for 12 months or longer. Just causes include non-payment of rent, breach of lease terms, and criminal activity. If the eviction is for "no-fault" reasons (e.g., the owner moving back into the property), relocation assistance or rent forgiveness may be required.
Relocation Assistance: For no-fault evictions, landlords must either provide financial relocation assistance or waive the last month’s rent for tenants who have lived in the property for more than a year. This ensures tenants aren’t left in a difficult financial position due to circumstances beyond their control.
Lease Renewal Requirements: Landlords must follow specific procedures when choosing not to renew a lease, particularly in cases where no-fault evictions or other tenant protections apply.
Tenant Rights Notifications: Landlords are required to inform tenants of their rights under the TPA, either through a lease addendum or a separate written notice, ensuring that tenants are aware of the protections in place.
The TPA is one of the most important laws for California landlords to understand, especially in cities like Riverside, where the rental market is competitive. Complying with the TPA is essential for avoiding legal penalties and fostering positive tenant relationships.
How does the Tenant Protection Act Impacts Riverside Landlords?
The TPA affects landlords very heavily in vastly different ways, the biggest one of all being the rent increase cap. It is incredibly important to research the market value of your rental property thoroughly before and during the time of tenancy. When it comes time for the yearly increase (if applicable), it is always important to complete a rental analysis of your property, and attach that to the notice of rent being raised.
The next way that TPA impacts Riverside Landlords would be through the new eviction process that comes with it. “Just Cause” and “No Cause” evictions have changed the way that people go about business as landlords. These two changes can not only increase the cost of being a landlord, but also increase the stress and headaches you get from having bad tenants.
Who is Exempt From the Tenant Protection Act?
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According to the California Association of Realtors, the people exempt from the TPA are as follows:
“Housing that has been issued a certificate of occupancy within the previous 15 years (new housing);
A duplex (defined as a single structure divided into two dwelling units) in which the owner occupies one of the units at the commencement of and throughout the tenancy;
A single-family residential property (including condominiums) so long as: (1) The owner is not a corporation, not an LLC with at least one owner who is a corporation, and not a real estate investment trust (REIT) AND (2) The owner gives the tenant a legally required notice of this exemption. Ownership by individuals, partnerships, individual co-owners, trusts, and LLCs with no corporate owners, all qualify for the exemption. For most properties, this notice should be integrated into the lease (see below).”
How to Stay Compliant with the Tenant Protection Act:
Knowing how to stay compliant with the TPA is incredibly important especially when you are a new landlord. The best way to stay compliant is by researching the TPA extensively and making sure you understand the law before you make a decision involving the property.
If that sounds like way too much work for you… I totally understand, which is why I would also recommend considering using the services of a property management company. Every single company manages an extensive amount of properties that are not exempt from the Tenant Protection Act, meaning we have to know this regulation inside and out. If you would like to learn more about how a property management company can keep you compliant, schedule a consultation with me here.
If you would like to learn more about property management companies and how they can help, here are a few links that can help you come to a decision:
