Understanding California’s Newly Implemented Restrictions on the Raising of Rent and Eviction without Just Cause

by Andrew Parslow

On January 1, 2022, two new statutes impacting the respective rights of landlords and tenants went into effect. California Civil Code §1947.12 and the amended §1946.2 impose a variety of restrictions on a landlords ability to increase rent, evict tenants, and terminate rentals.

Civil Code §1947.12 restricts a landlord’s ability to raise the rent on their property. Over a twelve (12) month period, rent cannot be raised more than the lower of five (5) percent plus the percentage change in the cost of living or a flat ten (10) percent. See §1947.12 (a)(1). Furthermore, even if the increase in rent would be within the proper amount parameters the rent cannot be raised in more than two (2) increments per every twelve (12) month period. See §1947.12 (a)(2). For a new tenancy which does not include any tenants from the prior tenancy, you may set the new rate regardless of §1947.12. See §1947.12 (b).

Civil Code §1946.2 restricts a landlord’s ability to evict tenants and terminate the tenancy. After twelve (12) months of residency, a tenant can only be evicted for just cause into determined by the statute. See §1946.2 (a). It further subdivides just causes as “at-fault” and “no-fault.” If the eviction is at-fault, the process proceeds as normal; however, if the eviction is no-fault, the property owner must either waive payment of rent for the last month on the tenancy, or within 15 days of notice, provide relocation assistance equal to the value of one month’s rent. See §1946.2 (d).

Under §1946.2 (b)(1) at-fault grounds for eviction include the following:

• default in payment;
• breach of a material term of the lease;
• committing waste or a nuisance;
• criminal activity on the property or illegal use of the property;
• refusal to allow the owner entry to the property for necessary or agreed upon repair and maintenance;
• subletting in violation of the lease;
• unlawful detainer; and
• failure to deliver possession to the owner after providing notice of intent to terminate.

Prior to the notice of termination, the property owner must first provide notice of the violation with an opportunity to cure the violation if possible.

§1946.2 (b)(1) lists the no-fault grounds for eviction. These grounds include:

• intent of the owner and/or their family to move into the property;
• withdrawal of the property from the market;
• owner complying with an order from a governing body to vacate the property; or
• the owner’s decision to demolish or perform major remodeling to the property.

Furthermore, owners of residential real property must provide the following notice to their tenants:

“California law limits the amount your rent can be increased. See Section 1947.12 of the Civil Code for more information. California law also provides that after all of the tenants have continuously and lawfully occupied the property for 12 months or more or at least one of the tenants has continuously and lawfully occupied the property for 24 months or more, a landlord must provide a statement of cause in any notice to terminate a tenancy. See Section 1946.2 of the Civil Code for more information.” See §1946.2 (f)(3).

While §1947.12 and §1946.2 cannot be contractually waived, they can be avoided if the rental in question has a title separate from any other dwelling unit; the owner is not a real estate investment trust, a corporation, an LLC, or the management of a mobile home; and the required statement is provided. See 1947.12 (d)(5) and 1946.2 (e)(8). The required statement is:

“This property is not subject to the rent limits imposed by Section 1947.12 of the Civil Code and is not subject to the just cause requirements of Section 1946.2 of the Civil Code. This property meets the requirements of Sections 1947.12 (d)(5) and 1946.2 (e)(8) of the Civil Code and the owner is not any of the following: (1) a real estate investment trust, as defined by Section 856 of the Internal Revenue Code; (2) a corporation; or (3) a limited liability company in which at least one member is a corporation.”

If you have any questions about the new laws we invite you to call to speak with us personally at (949) 729-8002, or email us, and our experienced attorneys will be happy to assist you.