Federal, state, and local eviction moratoria are starting to expire and will soon be a thing of the past. But if you’re a residential landlord with problem tenants, the end of those emergency restrictions doesn’t mean a return to pre-pandemic eviction-as-usual.

The lease termination process you will need to navigate in 2021 is far different from the one you were used to in 2019. That’s because, on October 8, 2019, the Tenant Protection Act of 2019 (AB 1482) was signed into law. That Act instituted a statewide system of residential rent control and restrictions on residential lease termination. But those new lease termination requirements were only in place for a few months when they were temporarily eclipsed by COVID-related moratoria, so most landlords didn’t have a chance to become familiar with the new procedures mandated by the Act. Now that those moratoria are disappearing, residential landlords need to reacquaint themselves with the Act’s requirements. Before you terminate a residential lease or begin eviction proceedings, here are some important things you need to know about the Tenant Protection Act of 2019:

It Doesn’t Just Cover New Leases.  If all tenants have occupied the premises for 12 months, or if even one tenant has occupied the premises for at least 24 months, the lease and the tenants are protected by the Act.

The Lease Can Only Be Terminated for “Just Cause.”  An unspecified or loosely defined event of default under the lease doesn’t automatically give the landlord the right to terminate the lease.  Instead, the lease can only be terminated for “just cause” as that term is defined by the Act.

Terminating the Lease when the Tenant is at Fault.  There are 11 types of “at-fault” just cause which allow the landlord to terminate the lease based on the tenant’s acts or omissions:

    • Failure to pay rent.
    • Breach of a material lease term.
    • Maintaining, permitting, or allowing a nuisance.
    • Committing waste.
    • Refusing to enter into a new lease upon the expiration of the existing lease.
    • Committing crimes at the premises, or threatening to kill or severely injure the landlord.
    • Unauthorized assignment or subletting.
    • Refusing to allow the landlord to enter the premises for reasons authorized by the Act.
    • Using the premises for an unlawful purpose.
    • Where the tenant is a property manager or other on-site employee of the landlord, failure to vacate upon termination of employment.
    • The tenant’s failure to deliver possession after having notified the landlord that the tenant was terminating the lease.

Terminating the Lease when the Tenant is Not at Fault.  In certain situations, the Act permits the landlord to terminate the lease even where the tenant has done nothing wrong.  Here are the four types of “no-fault” just cause:

    • When the landlord intends to occupy the premises himself or herself or to have it occupied by his or her spouse, domestic partner, children, grandchildren, parents, or grandparents – but termination for this reason is only allowed where the lease contains language specifically authorizing such termination.
    • When the premises are being withdrawn from the rental market.
    • When the premises must be vacated to allow the landlord to comply with government regulations or court orders.
    • When the landlord intends to demolish or substantially remodel the premises. Here the remodeling must truly be substantial, such that it cannot safely be done during the tenant’s occupancy and requires removal of the tenant for at least 30 days.

Sometimes You’ll Have to Pay the Tenant upon Termination.  If you terminate the lease for “no-fault” just cause, you’ll have to provide relocation benefits to the tenant.

Not All Residential Properties are Covered by the Act. While the Act covers most residential properties, some are exempt from the Act’s lease termination provisions:

    • Housing that has been issued a certificate of occupancy within the previous 15 years. Note that this is a rolling exemption period. For instance, a 10-year old house is exempt now and will continue to be exempt for the next five (5) years, but won’t qualify for this exemption six (6) years from now.
    • Single-family homes, condominiums, and townhomes, but only if (a) the owner is not a real estate investment trust, a corporation, or an LLC in which one member is a corporation, and (b) the lease contains appropriate notice language. This exemption can allow most “mom-and-pop” landlords to avoid compliance with the Act.
    • Duplexes in which the landlord lives in one unit and leases the other.
    • Deed-restricted affordable housing.
    • College dormitories.
    • Single-family owner-occupied residences where the landlord leases no more than two bedrooms. This also exempts accessory dwelling units and junior accessory dwelling units.
    • Any other housing accommodations in which the owner maintains his or her principal residence and shares bathroom or kitchen facilities with the tenant; in other words, the Act doesn’t apply to the landlord’s roommates.
    • Housing accommodations in certain nonprofit hospitals, religious facilities, extended care facilities, licensed residential care facilities for the elderly, or adult residential facilities.
    • Elementary school dormitories.
    • Hotels and motels.

Finally, Don’t Forget About City and County Ordinances.  The Act provides a minimum level of protection to tenants.  If the local ordinances in the city or county where the property is located offer better protection to tenants than the Act, landlords must comply with those local ordinances.

For additional information and questions, please contact AlvaradoSmith real estate attorney, Craig Hardwick at chardwick@alvaradosmith.com or at 714.852.6800.

A responsive and detail-oriented advocate, Craig Hardwick helps clients successfully meet a broad range of real estate needs. The Chairman of AlvaradoSmith’s Real Estate and Land Use Transactions Department, he has managed and led a variety of real estate transactions over the course of his career: from acquisition to sale, and everything in between, including procurement of real estate development entitlements, construction, financing, and leasing.

 

DISCLAIMER: The information contained herein is intended for informational purposes only and should not be construed as professional counsel or legal advice. Seek legal counsel for advice with respect to any legal matter. The information in this document may not reflect the most current developments as the subject matter is extremely fluid and may change daily. The content and interpretation of the issues addressed herein are subject to change.