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The Ins and Outs of California’s New Rent Control Laws

California recently passed new legislation pertaining to rent control, so today we’ll break down what this development means for you.

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As you’ve probably heard, California recently passed new legislation on rent control. So, to better explain what this might mean for you, I recently sat down with Adrian Del Rio of PCG Commercial for a conversation on the subject.

As Adrian explained, many landlords have been focusing on just one aspect of this legislation—the new cap on rent increases, which is 5% plus the consumer price index. Given that most landlords only increase rental rates by between 2% and 5% each year, this cap isn’t actually that significant.

The real point of focus for landlords and tenants should be the introduction of “Just Cause” Eviction. Essentially, Just Cause Eviction will require landlords to go before a rental board with evidence in order to evict a tenant.

Landlords and Realtors will need to keep both local and state ordinances pertaining to rent control in mind when dealing with rental properties.

It’s important to note, however, that single-family rentals (SFRs) are exempt from rent control unless the property is owned by a corporation. Duplexes, fourplexes, and other multi-unit properties are still all subject to this new rent control legislation, though, except in the cases of certain exemptions. If you own a duplex and live in one unit while renting out the other, for example, the unit you’re renting out would be exempt from rent control.

The bottom line is that landlords and Realtors will need to keep both local and state ordinances pertaining to rent control in mind when dealing with rental properties.

If you’d like to learn more, you can reach out to Adrian by phone at (916) 303-0133 or by visiting his brokerage’s website: www.pcgcommercial.com.

And, as always, if you have any other questions for me or would like more information on this or any other topic related to real estate, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.