It is a big deal but it is like pissing in the wind - nothing anyone can do about this.
AB 1482 (what you are talking about) coupled with the 2020 ballot measure to roll back prop 13 for commercial properties is a no-win for property investors and landlords in California. I am in the process of liquidating all my California holdings.
https://ballotpedia.org/California_Tax_on_Commercial_and_Industrial_Properties_for_Education_and_Local_Government_Funding_Initiative_(2020)
Heck LA County just approved a rent control ordinance. https://abc7.com/politics/los-angeles-county-rent-control-ordinance-approved/5529287/
In reality, your property taxes and could annually go up over the 5% rent cap and expenses will go far beyond that. Your ROI will be negative - not a good business model.
But the good people of California elected these fools, now everyone will pay the price.
I'd like to know how the new law is going to be enforced. The Department of Fair Employment and Housing (DFEH) was decimated by Gov. Brown and they couldn't handle fair housing complaints before this new law. They were already backed up by about a year and the system then basically just forced mediation if the tenant was still interested in pursuing a case.
Charging pet fees and rents and any non-refundable fees of any kind aren't legal in CA and yet they are charged on a regular basis without tenants knowing they could fight them, and even if they learned they were not legal, what are the odds they'd sue?
I'm not saying the law should be ignored, and I'm for the most part a tenant advocate, but I question the likelihood of any real enforcement or tenant lawsuits. Even the local fair housing clinics will probably be completely overwhelmed. But, let's say you get a complaint. What's the worst thing that could happen?
This law is just so stupid as far as it changing any homeless problems. Here in Silicon Valley, if you tell a homeless person that hey, good news! The rents that are now "only" at $2200/month for a studio apartment won't be raised by more than 5% a year! So, get yours today! All you need is perfect credit, $4400 to move in and income 3X the rent! Yeesh.
I am not a section 8 expert, but I have a friend who has a lot of section 8 units and he has advised me that the rent is set by the section 8. Some people have charged above that from the tenant. But my understanding is that that is illegal.
If someone doesn’t reach out with more info I will do some more digging around.
I'd like to know how the new law is going to be enforced. The Department of Fair Employment and Housing (DFEH) was decimated by Gov. Brown and they couldn't handle fair housing complaints before this new law. They were already backed up by about a year and the system then basically just forced mediation if the tenant was still interested in pursuing a case.
Charging pet fees and rents and any non-refundable fees of any kind aren't legal in CA and yet they are charged on a regular basis without tenants knowing they could fight them, and even if they learned they were not legal, what are the odds they'd sue?
I'm not saying the law should be ignored, and I'm for the most part a tenant advocate, but I question the likelihood of any real enforcement or tenant lawsuits. Even the local fair housing clinics will probably be completely overwhelmed. But, let's say you get a complaint. What's the worst thing that could happen?
This law is just so stupid as far as it changing any homeless problems. Here in Silicon Valley, if you tell a homeless person that hey, good news! The rents that are now "only" at $2200/month for a studio apartment won't be raised by more than 5% a year! So, get yours today! All you need is perfect credit, $4400 to move in and income 3X the rent! Yeesh.
I believe you are incorrect that charging pet rent is not allowed. Can you provide a reference?
I do agree that any pet fee at move in is in fact a pet deposit but there are many ways around this including stating that the pet deposit will be applied to duct/furnace cleaning to remove pet dander to place unit back into pre-pet condition. As long as you actually do the duct cleaning, keeping the deposit is allowed (I.e. you are allowed to collect charges related to placing unit in same condition as prior to the pet). Note without duct/furnace cleaning, the unit is not appropriate to rent to tenants with pet allergies. Our pet lease now explicitly informs the tenant that we will be deducting from the deposit to clean the duct/furnace to place unit into a pre-pet condition.
I'd like to know how the new law is going to be enforced. The Department of Fair Employment and Housing (DFEH) was decimated by Gov. Brown and they couldn't handle fair housing complaints before this new law. They were already backed up by about a year and the system then basically just forced mediation if the tenant was still interested in pursuing a case.
Charging pet fees and rents and any non-refundable fees of any kind aren't legal in CA and yet they are charged on a regular basis without tenants knowing they could fight them, and even if they learned they were not legal, what are the odds they'd sue?
I'm not saying the law should be ignored, and I'm for the most part a tenant advocate, but I question the likelihood of any real enforcement or tenant lawsuits. Even the local fair housing clinics will probably be completely overwhelmed. But, let's say you get a complaint. What's the worst thing that could happen?
This law is just so stupid as far as it changing any homeless problems. Here in Silicon Valley, if you tell a homeless person that hey, good news! The rents that are now "only" at $2200/month for a studio apartment won't be raised by more than 5% a year! So, get yours today! All you need is perfect credit, $4400 to move in and income 3X the rent! Yeesh.
I believe you are incorrect that charging pet rent is not allowed. Can you provide a reference?
I do agree that any pet fee at move in is in fact a pet deposit but there are many ways around this including stating that the pet deposit will be applied to duct/furnace cleaning to remove pet dander to place unit back into pre-pet condition. As long as you actually do the duct cleaning, keeping the deposit is allowed (I.e. you are allowed to collect charges related to placing unit in same condition as prior to the pet). Note without duct/furnace cleaning, the unit is not appropriate to rent to tenants with pet allergies. Our pet lease now explicitly informs the tenant that we will be deducting from the deposit to clean the duct/furnace to place unit into a pre-pet condition.
Hi Dan, Sure, I can give you the codes. First California Civil code 1950.5 (b) says no matter what you call any money you collect other than rent, and the application fee - it is considered a security deposit and under the security deposit laws. So, calling something a pet fee or a cleaning fee or a flea treatment fee, the law says they're all included into the security deposit.
And California Civil code 1950.5 (m) says: No lease or rental agreement may contain a provision characterizing any security as “nonrefundable.”
So, there is no legal way around any charges that are non-refundable. California law wants tenants to be able to get their full deposits back and anything you collect, no matter what you call it, is under the security deposit laws and must be refundable.
Here's a link to the codes: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=1950.5
Your best bet is to just charge a higher security deposit up to the max security deposits allowed, which is 2x the rent for unfurnished and 3x the rent for furnished.
What a landlord could legally do is simply tell applicants with dogs that you charge a higher security deposit for tenants with dogs, and instead of a non-refundable pet rent, you charge a refundable pet rent that they can pay monthly until they hit the max security deposit allowed by law. It's perfectly legal to discriminate against tenants with dogs or other pets. Unless they are service animals, owners of pets are not a protected class.
But, if you get a savvy tenant, and you're charging non-refundable pet rents, they can just say sure to your contracts, knowing that under the law, your contracts can't be contrary to the law, so they're not bound by your pet rent clause. They could just sign the lease, pay your pet rents until they wanted to leave, so you will let them move in - and then sue you to get all of the money back and they would win, as long as they were within the statute of limitations. And if they could convince the judge you collect pet fees in bad faith, they could also get two or three times the amount you withheld (I forget if it's 2 or 3 times, but it's one or the other).
You could "sell" your refundable pet rent to applicants saying that you don't charge non-refundable pet rents - you allow payments towards a larger legal security deposit that they can get back in full if they leave the place undamaged when they move out. Yes, you'd have to return it, if they don't damage the place, but it would be legal and you'd have more money towards any damage, and not be scaring off applicants who can't afford a higher security deposit up front.
@Account Closed I dont think you are interpreting California Civil code 1950.5 (b) correctly. It is essentially saying any "security" must be returned back. However a pet rent is not a security. It is collected with intention of being kept each month and called "rent". The key here is to make sure you are calling it rent in any language used on leasing. You are not required to return rent
An article discussing this; https://www.latimes.com/archives/la-xpm-2000-mar-12-re-7992-story.html
I am not a section 8 expert, but I have a friend who has a lot of section 8 units and he has advised me that the rent is set by the section 8. Some people have charged above that from the tenant. But my understanding is that that is illegal.
If someone doesn’t reach out with more info I will do some more digging around.
The landlord can negotiate a higher rent with the housing authority sometimes if they can show the market rents have increased, but yes, you're right that the housing authority will set the max rent allowed for a tenant.
A housing authority can allow a tenant to pay over that amount, after the tenant has successfully completed a one-year lease, as I recall. Then, the housing authority will allow the tenant to pay out of pocket over the allowed rent amount, up to 40% total of their income. So, if they normally pay 30% of their income toward the allowed rent amount, the tenant would be allowed to pay out of pocket another 10% of their income towards rent. More than that would not be legal, as I understand it.
I'd like to know how the new law is going to be enforced. The Department of Fair Employment and Housing (DFEH) was decimated by Gov. Brown and they couldn't handle fair housing complaints before this new law. They were already backed up by about a year and the system then basically just forced mediation if the tenant was still interested in pursuing a case.
Charging pet fees and rents and any non-refundable fees of any kind aren't legal in CA and yet they are charged on a regular basis without tenants knowing they could fight them, and even if they learned they were not legal, what are the odds they'd sue?
I'm not saying the law should be ignored, and I'm for the most part a tenant advocate, but I question the likelihood of any real enforcement or tenant lawsuits. Even the local fair housing clinics will probably be completely overwhelmed. But, let's say you get a complaint. What's the worst thing that could happen?
This law is just so stupid as far as it changing any homeless problems. Here in Silicon Valley, if you tell a homeless person that hey, good news! The rents that are now "only" at $2200/month for a studio apartment won't be raised by more than 5% a year! So, get yours today! All you need is perfect credit, $4400 to move in and income 3X the rent! Yeesh.
I believe you are incorrect that charging pet rent is not allowed. Can you provide a reference?
I do agree that any pet fee at move in is in fact a pet deposit but there are many ways around this including stating that the pet deposit will be applied to duct/furnace cleaning to remove pet dander to place unit back into pre-pet condition. As long as you actually do the duct cleaning, keeping the deposit is allowed (I.e. you are allowed to collect charges related to placing unit in same condition as prior to the pet). Note without duct/furnace cleaning, the unit is not appropriate to rent to tenants with pet allergies. Our pet lease now explicitly informs the tenant that we will be deducting from the deposit to clean the duct/furnace to place unit into a pre-pet condition.
Hi Dan, Sure, I can give you the codes. First California Civil code 1950.5 (b) says no matter what you call any money you collect other than rent, and the application fee - it is considered a security deposit and under the security deposit laws. So, calling something a pet fee or a cleaning fee or a flea treatment fee, the law says they're all included into the security deposit.
And California Civil code 1950.5 (m) says: No lease or rental agreement may contain a provision characterizing any security as “nonrefundable.”
So, there is no legal way around any charges that are non-refundable. California law wants tenants to be able to get their full deposits back and anything you collect, no matter what you call it, is under the security deposit laws and must be refundable.
Here's a link to the codes: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=1950.5
Your best bet is to just charge a higher security deposit up to the max security deposits allowed, which is 2x the rent for unfurnished and 3x the rent for furnished.
What a landlord could legally do is simply tell applicants with dogs that you charge a higher security deposit for tenants with dogs, and instead of a non-refundable pet rent, you charge a refundable pet rent that they can pay monthly until they hit the max security deposit allowed by law. It's perfectly legal to discriminate against tenants with dogs or other pets. Unless they are service animals, owners of pets are not a protected class.
But, if you get a savvy tenant, and you're charging non-refundable pet rents, they can just say sure to your contracts, knowing that under the law, your contracts can't be contrary to the law, so they're not bound by your pet rent clause. They could just sign the lease, pay your pet rents until they wanted to leave, so you will let them move in - and then sue you to get all of the money back and they would win, as long as they were within the statute of limitations. And if they could convince the judge you collect pet fees in bad faith, they could also get two or three times the amount you withheld (I forget if it's 2 or 3 times, but it's one or the other).
You could "sell" your refundable pet rent to applicants saying that you don't charge non-refundable pet rents - you allow payments towards a larger legal security deposit that they can get back in full if they leave the place undamaged when they move out. Yes, you'd have to return it, if they don't damage the place, but it would be legal and you'd have more money towards any damage, and not be scaring off applicants who can't afford a higher security deposit up front.
I agree with @Edit B. that there is a difference between a monthly Pet Rent and a non-refundable security fee. A pet rent is a monthly charge versus security fees are one time charges.
I believe pet rent is allowed and have never seen otherwise (we are long time landlords). My initial pet agreement was written by a California RE attorney (we have made modifications to it over time including explicitly stating pet deposit will be used to place unit in a pre-pet state including cleaning of duct work and furnace). Our pet agreement has always included a pet rent (so our RE attorney believed that pet rent was legal).
I also believe collecting a pet deposit that is virtually certain to be used to place the unit in a pre-pet state (as long as it is used) is allowed (i.e. for duct/furnace cleaning to remove pet dander). It may be semantics but it amounts to a Pet Deposit that is not going to be returned because it is a necessary cost to place the unit in a pre-pet state. A pet fee is not allowed and would allow the LL to keep the pet fee without spending the money to place the unit in a pre-pet state (this is not allowed in CA). The difference is that to not return the pet deposit you must incur the expense which is not a requirement of a pet fee.
By the way duct/furnace cleaning for pet dander is legit expense. There are many people with pet allergies. Even without pet allergies, some pets result in much quicker build up in the ducts and furnace. I am sure many LL have seen the furnace filter of one unit that lasts 4 months when the same unit filter lasted 12 months with a prior tenant. One big factor in this additional build up is pets. About half our units we allow dogs, but we return the unit to a pre-pet state between tenants and use the pet deposit to do this.
We have dogs and cats (and too many other animals to list) and love our pets. In our home we are responsible for all pet related expenses. We expect the same from our tenants.
@Account Closed I dont think you are interpreting California Civil code 1950.5 (b) correctly. It is essentially saying any "security" must be returned back. However a pet rent is not a security. It is collected with intention of being kept each month and called "rent". The key here is to make sure you are calling it rent in any language used on leasing. You are not required to return rent
An article discussing this; https://www.latimes.com/archives/la-xpm-2000-mar-12-re-7992-story.html
I respectfully disagree. I think judges are smart people and know that a rose by any other name is a rose, and that the law intended to keep landlords from calling disallowed non-refundable charges something else. But, you could always argue it in front of a judge and you might get lucky.
I'd rather be safe than sorry. Instead of having a separate pet rent, just charge a higher regular rent to pet owners, then. But, I think you're opening yourself up to a losing lawsuit by charging a separate pet rent.
If you look at section 1950.5(c)1, it includes the phrase "however denominated" when talking about the max security deposit you can collect - in other words, whatever you want to call your fees, they're part of the security deposit. The law just really makes the intent clear, in my opinion, that non-refundable fees, no matter what name you put on them, must be refundable and part of the security deposit.
As I say, you certainly could try to argue it, but why take the chance, when it's definitely not a slam dunk win.
Just to show how the law is worded for anyone else interested, this is the first part of the code we're discussing, from here: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=1950.5
1950.5.(a) This section applies to security for a rental agreement for residential property that is used as the dwelling of the tenant.
(b) As used in this section, “security” means any payment, fee, deposit, or charge, including, but not limited to, any payment, fee, deposit, or charge, except as provided in Section 1950.6, that is imposed at the beginning of the tenancy to be used to reimburse the landlord for costs associated with processing a new tenant or that is imposed as an advance payment of rent, used or to be used for any purpose, including, but not limited to, any of the following:
(1) The compensation of a landlord for a tenant’s default in the payment of rent.
(2) The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant.
(3) The cleaning of the premises upon termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy. The amendments to this paragraph enacted by the act adding this sentence shall apply only to tenancies for which the tenant’s right to occupy begins after January 1, 2003.
(4) To remedy future defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement.
(c) (1) Except as provided in paragraph (2), (3), or (4), a landlord may not demand or receive security, however denominated, in an amount or value in excess of an amount equal to two months’ rent, in the case of unfurnished residential property, and an amount equal to three months’ rent, in the case of furnished residential property, in addition to any rent for the first month paid on or before initial occupancy.
Another thing most are not addressing is the potential https://www.housingwire.com/ar...
“This is absolutely going to happen,” Mills said. “It’s just a matter of
the scale and timing. The lesson I’ve had through observing the Trump
administration is: They tell you in advance what they are going to do
and they more often than not follow through.”
This all but neuters investors looking at investing in Opportunity Zones with some forms of lending.
I am not a section 8 expert, but I have a friend who has a lot of section 8 units and he has advised me that the rent is set by the section 8. Some people have charged above that from the tenant. But my understanding is that that is illegal.
If someone doesn’t reach out with more info I will do some more digging around.
I recall reading a story where someone was charging something like $50 more/ month in addition to the section 8 rent. This deal was agreed to by the renter.. and they ended up having to pay years of rent back. Sounded like a big no-no
I set my rents outside the range allowed by section 8 but if I rented to section 8 …
Market rent is a range. Lets define top of market rent (TMR) as the rent I could collect from a non-section 8 tenant if I list the unit for a few months I would get a qualified applicant. This is a type of rent charged by an apartment complex that has a low vacancy rate that is willing to have a small percentage of units empty to achieve top NOI. Now lets define Min market rent (MMR) as a rent that is sure to get many applications the first day. Most of us set a rent between those two numbers expecting to get a small amount of applicants in less than a week. The market rent is the range of rent between MMR to TMR.
If I was renting to section 8, I would set my rent closer to TMR than I might otherwise and state in the ad that Section 8 welcomed. It would still be market rent. If no one applies then you are above market rent but it you get multiple applicants then clearly you are not above market rent as there are multiple tenants willing to pay that rent and that basically establishes it as market rent. In a free market, it is not easy to rent a unit above market rent.
I'd like to know how the new law is going to be enforced. The Department of Fair Employment and Housing (DFEH) was decimated by Gov. Brown and they couldn't handle fair housing complaints before this new law. They were already backed up by about a year and the system then basically just forced mediation if the tenant was still interested in pursuing a case.
Charging pet fees and rents and any non-refundable fees of any kind aren't legal in CA and yet they are charged on a regular basis without tenants knowing they could fight them, and even if they learned they were not legal, what are the odds they'd sue?
I'm not saying the law should be ignored, and I'm for the most part a tenant advocate, but I question the likelihood of any real enforcement or tenant lawsuits. Even the local fair housing clinics will probably be completely overwhelmed. But, let's say you get a complaint. What's the worst thing that could happen?
This law is just so stupid as far as it changing any homeless problems. Here in Silicon Valley, if you tell a homeless person that hey, good news! The rents that are now "only" at $2200/month for a studio apartment won't be raised by more than 5% a year! So, get yours today! All you need is perfect credit, $4400 to move in and income 3X the rent! Yeesh.
I believe you are incorrect that charging pet rent is not allowed. Can you provide a reference?
I do agree that any pet fee at move in is in fact a pet deposit but there are many ways around this including stating that the pet deposit will be applied to duct/furnace cleaning to remove pet dander to place unit back into pre-pet condition. As long as you actually do the duct cleaning, keeping the deposit is allowed (I.e. you are allowed to collect charges related to placing unit in same condition as prior to the pet). Note without duct/furnace cleaning, the unit is not appropriate to rent to tenants with pet allergies. Our pet lease now explicitly informs the tenant that we will be deducting from the deposit to clean the duct/furnace to place unit into a pre-pet condition.
Hi Dan, Sure, I can give you the codes. First California Civil code 1950.5 (b) says no matter what you call any money you collect other than rent, and the application fee - it is considered a security deposit and under the security deposit laws. So, calling something a pet fee or a cleaning fee or a flea treatment fee, the law says they're all included into the security deposit.
And California Civil code 1950.5 (m) says: No lease or rental agreement may contain a provision characterizing any security as “nonrefundable.”
So, there is no legal way around any charges that are non-refundable. California law wants tenants to be able to get their full deposits back and anything you collect, no matter what you call it, is under the security deposit laws and must be refundable.
Here's a link to the codes: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=1950.5
Your best bet is to just charge a higher security deposit up to the max security deposits allowed, which is 2x the rent for unfurnished and 3x the rent for furnished.
What a landlord could legally do is simply tell applicants with dogs that you charge a higher security deposit for tenants with dogs, and instead of a non-refundable pet rent, you charge a refundable pet rent that they can pay monthly until they hit the max security deposit allowed by law. It's perfectly legal to discriminate against tenants with dogs or other pets. Unless they are service animals, owners of pets are not a protected class.
But, if you get a savvy tenant, and you're charging non-refundable pet rents, they can just say sure to your contracts, knowing that under the law, your contracts can't be contrary to the law, so they're not bound by your pet rent clause. They could just sign the lease, pay your pet rents until they wanted to leave, so you will let them move in - and then sue you to get all of the money back and they would win, as long as they were within the statute of limitations. And if they could convince the judge you collect pet fees in bad faith, they could also get two or three times the amount you withheld (I forget if it's 2 or 3 times, but it's one or the other).
You could "sell" your refundable pet rent to applicants saying that you don't charge non-refundable pet rents - you allow payments towards a larger legal security deposit that they can get back in full if they leave the place undamaged when they move out. Yes, you'd have to return it, if they don't damage the place, but it would be legal and you'd have more money towards any damage, and not be scaring off applicants who can't afford a higher security deposit up front.
I agree with @Edit B. that there is a difference between a monthly Pet Rent and a non-refundable security fee. A pet rent is a monthly charge versus security fees are one time charges.
I believe pet rent is allowed and have never seen otherwise (we are long time landlords). My initial pet agreement was written by a California RE attorney (we have made modifications to it over time including explicitly stating pet deposit will be used to place unit in a pre-pet state including cleaning of duct work and furnace). Our pet agreement has always included a pet rent (so our RE attorney believed that pet rent was legal).
I also believe collecting a pet deposit that is virtually certain to be used to place the unit in a pre-pet state (as long as it is used) is allowed (i.e. for duct/furnace cleaning to remove pet dander). It may be semantics but it amounts to a Pet Deposit that is not going to be returned because it is a necessary cost to place the unit in a pre-pet state. A pet fee is not allowed and would allow the LL to keep the pet fee without spending the money to place the unit in a pre-pet state (this is not allowed in CA). The difference is that to not return the pet deposit you must incur the expense which is not a requirement of a pet fee.
By the way duct/furnace cleaning for pet dander is legit expense. There are many people with pet allergies. Even without pet allergies, some pets result in much quicker build up in the ducts and furnace. I am sure many LL have seen the furnace filter of one unit that lasts 4 months when the same unit filter lasted 12 months with a prior tenant. One big factor in this additional build up is pets. About half our units we allow dogs, but we return the unit to a pre-pet state between tenants and use the pet deposit to do this.
We have dogs and cats (and too many other animals to list) and love our pets. In our home we are responsible for all pet related expenses. We expect the same from our tenants.
Lawyers are just people and make mistakes all the time. Many of them are lazy and just go along with what others are doing or copy some other lawyer's lease that isn't actually correct or legal - or - they'd love charging you to represent you when their lease is challenged by a savvy tenant. I went before a workers comp judge who didn't know the new laws and won and he apologized to me for not knowing the new laws. My workers comp lawyer didn't know the new laws and wouldn't listen to me, so I fired him and won without a lawyer because I knew the new law. This is what I love about the law. If you know it, you win. And if you get a bad judge, you can just appeal. But, judges don't like their decisions getting appealed, so if you know the law and your argument is sound - you win.
Landlords do get away with pet fees all the time because most tenants don't know the law, and believe that just because something's in a contract means it must be legal.
So, you'll probably get away with it forever. I'm just pointing out here what the law says and that landlords might want to change the way they are collecting additional funds for pet damage so that there is no question that it's legal, so you can stay out of court altogether. Like I say, the arguments mentioned above are just that - arguments that would have to be made in court. Court is expensive. So, why not be sure to avoid it?
At any rate, we can agree to disagree here. I love discussing the law, but I think it's time to agree to disagree. No hard feelings.
I am not a section 8 expert, but I have a friend who has a lot of section 8 units and he has advised me that the rent is set by the section 8. Some people have charged above that from the tenant. But my understanding is that that is illegal.
If someone doesn’t reach out with more info I will do some more digging around.
I recall reading a story where someone was charging something like $50 more/ month in addition to the section 8 rent. This deal was agreed to by the renter.. and they ended up having to pay years of rent back. Sounded like a big no-no
I respectfully disagree. I think judges are smart people and know that a rose by any other name is a rose, and that the law intended to keep landlords from calling disallowed non-refundable charges something else. But, you could always argue it in front of a judge and you might get lucky.
I'd rather be safe than sorry. Instead of having a separate pet rent, just charge a higher regular rent to pet owners, then. But, I think you're opening yourself up to a losing lawsuit by charging a separate pet rent.
If you look at section 1950.5(c)1, it includes the phrase "however denominated" when talking about the max security deposit you can collect - in other words, whatever you want to call your fees, they're part of the security deposit. The law just really makes the intent clear, in my opinion, that non-refundable fees, no matter what name you put on them, must be refundable and part of the security deposit.
As I say, you certainly could try to argue it, but why take the chance, when it's definitely not a slam dunk win.
Just to show how the law is worded for anyone else interested, this is the first part of the code we're discussing, from here: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=1950.5
1950.5.(a) This section applies to security for a rental agreement for residential property that is used as the dwelling of the tenant.
(b) As used in this section, “security” means any payment, fee, deposit, or charge, including, but not limited to, any payment, fee, deposit, or charge, except as provided in Section 1950.6, that is imposed at the beginning of the tenancy to be used to reimburse the landlord for costs associated with processing a new tenant or that is imposed as an advance payment of rent, used or to be used for any purpose, including, but not limited to, any of the following:
(1) The compensation of a landlord for a tenant’s default in the payment of rent.
(2) The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant.
(3) The cleaning of the premises upon termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy. The amendments to this paragraph enacted by the act adding this sentence shall apply only to tenancies for which the tenant’s right to occupy begins after January 1, 2003.
(4) To remedy future defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement.
(c) (1) Except as provided in paragraph (2), (3), or (4), a landlord may not demand or receive security, however denominated, in an amount or value in excess of an amount equal to two months’ rent, in the case of unfurnished residential property, and an amount equal to three months’ rent, in the case of furnished residential property, in addition to any rent for the first month paid on or before initial occupancy.
I will go with my RE attorney who believes that pet rent is legal. I suggest each person who is concerned about it to consult their own RE attorney familiar with California RE law. My attorney distinguishes pet rent from a non refundable upfront pet security fee (no such thing in CA as a non refundable security fee of any type). So we charge a pet deposit that we are upfront about will be spent to place the unit in a pre-pet state (the tenant has the understanding that this deposit is not going to be returned) and we charge a pet rent.
Like many LL we are encountering a lot of tenants claiming service animals which we cannot charge extra (no additional pet deposit and no pet rent). However, we disclose to the perspective tenants that we charge to place the unit in a per-animal (service animals are not considered pets) state (duct/furnace cleaning) and that cost will be deducted from their deposit and we use PetScreening.com for our service animal screening. Our last five vacancies received no applications from anyone that was claiming a service animal. These service animal tenants want their service animal expecting LL to pick up the associated cost. Many of them are bogus service animals, but even those with legit service animals should be expected to pick up the expense of returning the unit to a pre-animal state. If they know they are going to get charged to put the unit back in a pre-animal state, they usually find a different place to rent that has a LL OK keeping the unit in a animal occupied state. We do have two service animal units. One was very legit service animal (I am perfectly fine not collecting any pet rent in this case). The other may not have been legit but it was already a unit with a pet rent and pet deposit so the roommate basically is avoiding pet rent but the initial tenants are paying a pet rent and paid a pet deposit.
1950.5.
(a) This section applies to security for a rental agreement for residential property that is used as the dwelling of the tenant.
(b) As used in this section, “security” means any payment, fee, deposit, or charge, including, but not limited to, any payment, fee, deposit, or charge, except as provided in Section 1950.6, that is imposed at the beginning of the tenancy to be used to reimburse the landlord for costs associated with processing a new tenant or that is imposed as an advance payment of rent, used or to be used for any purpose, including, but not limited to, any of the following:
(1) The compensation of a landlord for a tenant’s default in the payment of rent.
(2) The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant.
(3) The cleaning of the premises upon termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy. The amendments to this paragraph enacted by the act adding this sentence shall apply only to tenancies for which the tenant’s right to occupy begins after January 1, 2003.
(4) To remedy future defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement.
(c) (1) Except as provided in paragraph (2), (3), or (4), a landlord may not demand or receive security, however denominated, in an amount or value in excess of an amount equal to two months’ rent, in the case of unfurnished residential property, and an amount equal to three months’ rent, in the case of furnished residential property, in addition to any rent for the first month paid on or before initial occupancy.
Regarding section 8, you have to look for infor from their website either by county or city. They always post how much you can charge according to zip codes and number of bedrooms that your rental properties have.
Thank you all that gave their $0.02, it sounds like I would just have to ask directly what the local HA's max rent would be, beyond the FMV rent set by HUD, then maybe negotiate as I'm sure they don't want Section 8 units in this area being taken off the market
With evictions needing to be just cause, or no-fault just cause (owner wishes to occupy property), are landlords no longer needing to pay the ~10k cash for keys? Everything I am reading on AB 1482 is showing relocation assistance (or waiver) via one month's rent.
For example, buyer wishes to purchase a fully occupied duplex and live in half as their primary residence. Would they just need to provide the necessary notice and relocation assistance upon closing? Could the notice period be baked into escrow for property to be delivered vacant?
Some of this is really bad. For one if you are an owner who is underrenting at the moment and plan on selling you will be screwed. Whoever will purchase will not be able to increase rents above 5% + inflation which means the perceived ROI will be very low and the sale price will be severely impacted.
The other key thing here is the no fault eviction- you will basially not be able to get rid of a tenant for any reason you want even after the lease contract has expired. This is crazy. This can be abused in so many ways by the tenant and places all the burden on the landlord.
This is why we have to vote out politicians who are too invasive on landlords and investors. These are usually the ones who want to expand local gov policies and raise prop taxes. Vote or support apartment associations, AOA, CAA and spread word about voting
Our city councils are always trying to do these but we need to vote them out. Apartment associations are good routes to fight it
Need help interpret this soon to be law. Does this new rent cap apply to section8 units? I have 3 of my unites under section 8 and I am about $500 below the market
Here is the text on the bill
Housing restricted by deed, regulatory restriction contained in an agreement with a government agency, or other recorded document as affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the Health and Safety Code, or subject to an agreement that provides housing subsidies for affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the Health and Safety Code or comparable federal statutes.
I would also like to know if this new Rent Cap Law of 5% plus inflation per year affects Section 8 units that are well below Fair Market Rates
My view is section 8 should not be below market value. The extra burden placed on landlord should be passed on to the tenant (the government is in a tenant role). So market rent on a section 8 should be higher than the equivalent non-section 8 unit due to the extra burden. If you have let your section 8 housing get below market, you have been saving the government from paying market rent. Why?
In all honesty, complacency is what allowed this rate to remain so low up until now, but now is my chance to make things right.
Would you happen to be familiar with how much above fair market rate can be requested in a Section 8 rent request? We have a unit each in Long Beach (2bd), South LA (3bd) and La Puente (2bd). We pay for all utilities including water, electricity, trash and occasionally maintenance and thankfully we've had decent people occupying these units. I have not done this before and a lot of information I'm finding for CA might be outdated. Thank you in advance for your time
If the unit is not A SFR, you will be constrained on the rent increase to the rent control rules which is 5% plus inflation.
As to what is fair market rent for section 8, if I was targeting section 8 I would start at non section 8 market rent and add a small amount for the extra burden associated with section 8. Seeing that you are not even at market rent, your first step is to get to market rent.
I intentionally set my rents outside the section 8 threshold because I do not desire to have section 8 tenants. Legally I cannot look at the source of the funds, but I can price my units to where they do not qualify for section 8.
Good luck
After pouring through the text, I found that Section 8 is exempt from this new rent cap legislation and landlords are entitled to being increased to HUD's standard FMR. Would you say a request of 10% above FMR in LA County would go through? It seems SoCal's strained housing market gives Section 8 landlords some clout, but I am inexperienced with this matter
Yes Section 8 can change, they might impose more restrictions on section 8 and taxessome are suggestig fees straight out of the sec 8 program. Vote out the rent control politicians
VOte them out? you vote Democrats and this is what you get!!! lmao you vote them out and they will replace it with another democrat adn you'll get a different version of this and maybe worse!! lol you're not in charge the poor people who are enjoying all the benefits are, they will outvote you anytime.
Future landlord here. I am closing on a 4plex with all 4 units being rented about $200-300 below market. If I plan on keeping the tenants can I set rents to market since I am a new landlord with a new lease agreement or can I only increase by 5%+ CPI? The property is still netting about 1200 positive cash flow at its current rental prices but I'd like to get them each at least $150 higher without having to force them out.
Future landlord here. I am closing on a 4plex with all 4 units being rented about $200-300 below market. If I plan on keeping the tenants can I set rents to market since I am a new landlord with a new lease agreement or can I only increase by 5%+ CPI? The property is still netting about 1200 positive cash flow at its current rental prices but I'd like to get them each at least $150 higher without having to force them out.
>If I plan on keeping the tenants can I set rents to market since I am a new landlord with a new lease agreement or can I only increase by 5%+ CPI?
You can only raise the rent 5% + CPI. Also the if you plan on keeping the tenants is questionable. In general the tenants can stay as long as they desire with a couple exceptions 1) to move in an allowed family member 2) for a major renovation. You cannot simply decide you do not want to keep the tenants even if their lease is month to month.
>The property is still netting about 1200 positive cash flow at its current rental prices but I'd like to get them each at least $150 higher without having to force them out.
Which cash flow calculator did you use? what does 50% rule show for projected initial cash flow? The reasons I have these questions is that an initial cash flow positive, new financed at traditional investor LTV or higher, property is rare in San Diego when using realistic expense projections.
“force them out …” as indicated you are constrained on conditions to force them out. You or family can move in or you can do an extensive remodel. If a tenant can safely occupy the unit for the rehab work, they likely cannot be terminated without consent. I would think the following rehab projects would qualify for removing a tenant that desires to stay: abatement issues, new kitchen, reconfiguring layout for open floor plan, etc. what I think would not qualify are new paint, new floorng, re-doing bathrooms in a unit with multiple bathrooms, new windows, new room, new HVAC, etc.
good luck