Disclaimer: This document and any information contained herein are provided for informational purposes only and do not constitute legal advice. The author of this document is not an attorney, and the information presented should not be considered as a substitute for professional legal advice.
California’s legal landscape for landlords and property managers has changed in recent years. Through the chaos of COVID, it was easy to lose track of the shifting laws. In particular, there are three separate new laws that are significantly influential on how landlords in California can conduct their business with tenants.
These three laws are Assembly Bill 12 (AB12), Senate Bill 267 (SB 267), and Senate Bill 329 (SB 329). Earlier this year, we published three separate videos on these bills that we’ll link to throughout this blog. With the last of these bills, AB 12, set to take effect in July, a recap of all three laws is in order.
In Advantage Property Management Services’ continued efforts to educate and inform property owners, here’s a short breakdown of each of these 3 laws as well as links to additional information.
California SB 329: Housing Voucher Requirements
SB 329 is the oldest of the three laws, going into effect way back on January 1st, 2020. The bills’ intended purpose was to help mitigate California’s housing affordability crisis. The COVID pandemic beginning here in the U.S. just a few months later made it easy for many landlords to overlook this law. That’s why it’s still relevant to explain today.
SB 329 acted as an amendment to California’s Fair Employment and Housing Act. This amendment updated California law to protect tenants from being discriminated against based on using government assistance for housing. Prospective tenants can no longer be rejected on a rental application solely because they receive housing vouchers from any government agency. This includes Section 8 vouchers.
From 2020, you are legally obligated as a landlord to accept housing vouchers and cannot deny an applicant based on receiving this type of housing assistance. These programs often come with their own list of requirements from the landlord as well. These can include government paperwork for receiving payment as well as mandatory inspections on the property.
You can read more here about the requirements of SB 329 as well as potential benefits to landlords.
California SB 267: Credit Report Limitations
SB 267 is a bit newer than SB 329, but the two laws are very interconnected. California SB 267 was passed in October of 2023 so is still fairly new in the state’s legal world. It also impacts the relationship between landlords and tenants who receive government assistance for housing. It specifically targets a landlord’s ability to use credit reports when screening an applicant using government housing assistance.
What this means for you when screening applicants for a rental is that not only can you not deny an applicant because they receive housing vouchers, you also cannot use their credit history as a reason for denying them either. You must consider alternatives in evaluating their financial history.
When evaluating an applicant in California, it’s important to weigh all financial factors. Housing vouchers will be the primary source of rental income with these tenants. Beyond that, things like rental history and pay stubs must also be taken into account. It’s important for landlords to follow these guidelines to stay within the confines of the law.
For more details on SB 267 as well as how to align your screening process, checkout our video blog on the bill.
California AB 12: Security Deposit Cap
California’s Assembly Bill 12 is the most recent bill impacting landlords, so it’s very important to understand and adapt to quickly. This bill is targeting security deposits that landlords require from their tenants upon move in rather than the screening process. Specifically, it targets how much landlords can charge for a security deposit.
AB 12 goes into effect on July 1st, 2024. It will complete this trifecta of bills in recent years that have significantly shifted California landlords’ practices when accepting new tenants. The new bill imposes a maximum limit on security deposits equal to no more than one month’s rent for the property.
Security deposits are an important part of any lease agreement. They cover the property owner in case of damage incurred during the occupancy. That makes this bill a little harder to swallow for landlords. Lower security deposits means a higher risk for landlords for damage expenses.
It’s important to make sure your lease requirements are aligned with this new bill. Learn more about how to stay in accordance with AB 12 and who is exempt from this rule.
Changing Legal Landscape for California Landlords
California’s legal landscape has shifted, and it shows no signs of slowing down. On top of these three bills specifically affecting landlords and tenants, California has introduced several new laws as well in 2024 that can affect the wider scope of property management. These target everything from the minimum wage and job requirements, to healthcare rules.
In such a dynamic time for the state, landlords and property managers alike must stay on top of the changes to the legal system. Staying in accordance with the law is critical to maintaining a successful rental property. If you haven’t already, review your leasing policies and screening procedures to ensure you’re not overstepping any regulations.
Moving Forward With Your Rental
With so many new guidelines in place for property owners in California, it can feel overwhelming at times. If you’re managing your property alone, you don’t have to. Property management experts are available to partner with. Hiring an experienced property manager can help adapt your screening process and leasing terms to keep you successful and compliant with the law.
Advantage Property Management Services has been going above and beyond for our property owners since 2010. We consider ourselves an advocate for landlords in the Tri-Valley, and never settle for less regardless of the market climate.
Contact us anytime for our dedicated assistance with your rental property.
