California Moratorium / Lease Agreements

5 Replies

HI BP Team - I'm in the process of purchasing a tri-plex investment property in CA.  Rents are under market by about $300 / unit so my goal would be to get in there, clean the units up, and increase to market rate once the leases expire.  Does the moratorium prevent me from notifying the tenants I won't be extending their leases?  They are all currently paying.  

Any info / advice is appreciated.  Thanks, 

@Robert Zabel

The moratorium is on evictions. Giving notice is not an eviction. Even still, cash for keys is a good way to go with today’s climate. 

You should probably still talk to a real estate attorney about the potential issues that can arise if the tenants aren’t cooperative.

@Robert Zabel   You didn't mention where in CA you're located, so I'll just speak broadly from a statewide perspective. 

To answer your question, there is no state/federal eviction moratorium currently in effect that would prevent you from notifying your tenants that you won't be renewing their leases.

However, if the tenants have resided there over 12 months (and assuming the property is over 15 years old), this would fall under AB1482.  Consequently, if you wanted to get rid of the tenants they would have certain protections under the "just cause" portion of AB1482, and if they ended up staying they would have certain protections against how much you could raise the rent under the "rent cap" portion of AB1482. 

Point is, you really need to understand AB1482.  Here's some more reading on it as a brief introduction: https://cal-rha.org/advocacy/ab-1482/

Due to AB1482, buying a property with below market rents is now a burden and no longer unrealized value. It means property owners need to always raise the rents where possible to maximize selling value.

You can choose to not extend the lease. The moratorium only prevents eviction based on non payment of rent.