Selected New California Laws Impacting the Rental Housing Industry in 2024

1.    Use of Credit History in Application Process (SB 267). Effective 1/1/24. This law prohibits a landlord, in instances where there is a government rent subsidy (e.g., Section 8 voucher) from using a person’s credit history as part of the rental application process without offering the applicant the option, at the applicant’s discretion, of providing lawful, verifiable alternative evidence of reasonable ability to pay the portion of the rent to be paid by the tenant, including but not limited to, government benefit payments, pay records, and bank statements. If applicant elects to provide alternative evidence of reasonable ability to pay, the landlord must provide the applicant reasonable time to respond with that alternative evidence and reasonably consider that alternative evidence in lieu of the person’s credit history in determining whether to offer the rental accommodation to the applicant.  Notwithstanding the foregoing, the landlord may still request information or documentation to verify employment, to request landlord references, and to verify the identity of the applicant.

2.     Electronic Screening Receipts (AB 1764). Effective 1/1/24. This law provides landlords with the option to provide receipts for tenant screening fees via email when agreed to by both landlord and applicant. Presently, landlords are required to provide the screening receipt personally or by mail.

3.     Personal Micromobility Storage (SB 712). Effective 1/1/24. This law prohibits a landlord from prohibiting a tenant from owning personal micromobility devices (e.g., bicycles, scooters, hoverboards, skateboards, and their electronic counterparts such as an e-bike, e-scooter, etc.) or from storing and recharging up to one personal micromobility device in their dwelling unit for each person occupying the unit, subject to certain conditions and exceptions. To qualify for protections, the devices must meet certain criteria as follows: (i) they are not powered by an electric motor; or (ii) they comply with certain safety standards for e-bikes or e-scooters; or (iii) failing compliance with such safety standards, the tenant has insurance covering storage of the device within the unit.  However, if the landlord provides the tenant with “secure, long-term storage” outside of the unit for their devices, and such storage is offered without charge, the landlord can prohibit the in-unit storage of these devices. A landlord may prohibit repair or maintenance on batteries and motors of personal micromobility devices within a rental unit. A landlord can require a tenant to store a personal micromobility device in compliance with applicable fire code.

4.     Changes to the Tenant Protection Act of 2019 (SB 567). Effective 4/1/24. This law provides additional requirements for no-fault evictions based upon owner move-in or substantial remodeling, including specific notice/disclosure requirements. Termination based on landlord’s intent to demolish or to substantially remodel the premises must require the tenant to vacate for 30 consecutive days (i.e., the remodel must not be able to be reasonably accomplished in a safe manner that allows tenant to remain living in the premises and must require tenant to vacate). Additionally, this law adds damages, penalties, and enforcement mechanisms for violation of Tenant Protection Act of 2019 (AB 1482). 

5.     Security Deposits (AB 12). Effective 7/1/24. This law prohibits landlord from demanding or receiving more than one month’s security deposit, regardless of whether the residential property is unfurnished or furnished, in addition to any rent for the first month paid on or before initial occupancy. There is an exception for small landlords (i.e., a natural person or LLC that owns no more than 2 residential rental properties that collectively include no more than 4 dwelling units offered for rent); small landlords may receive a deposit of up to 2 months’ rent. Landlords who currently hold a security deposit or demand or collect a security deposit in excess of one month’s rent prior to July 1, 2024 may continue to retain the security even if it is more than one month’s rent.

6.     Disabled Tenant Transfers (AB 1620). Effective 1/1/24. This law allows a jurisdiction with local rent control to require an owner of a rent-controlled unit to allow a tenant with a permanent physical disability to relocate to an available comparable or smaller unit located on an accessible floor (e.g., the 1^st floor) of the property and retain the same rental rate. Tenant would still need to verify disability and disability-related need for such accommodation.

7.     “No Trespass” Letters (SB 602). Effective 1/1/24. This law allows property owners to maintain a “no trespass” letter on file with local law enforcement for up to one year or for a time determined by local ordinance. Under current law, property owners experiencing problems with trespassers can submit a no trespass letter (i.e., a 602 letter) to law enforcement. These letters remain in effect for 30 days, once filed, giving law enforcement the mandate to remove trespassers from the designated property. This new law now allows property owners to keep their 602 letters active for up to a year.

8.     Small Claims Limit (SB 71). Effective 1/1/24. This law increases the small claims limit for natural persons from $10,000 to $12,500, and for non-natural persons from $5,000 to $6,250. However, if a person, either a natural person or an entity, brings more than two claims in a calendar year, then the threshold limit remains the same at $2,500.

9.     Local “Crime-Free” Rental Housing Programs (AB 1418). Effective 1/1/24. This law prohibits local ordinances that penalize tenants and landlords for various types of law enforcement contracts—for example, local “crime free” rental housing programs and ordinances. This law prohibits cities and counties from enacting local policies that (i) require landlords to use criminal background checks; (ii) requires landlords to evict an entire household when a household member is convicted of a felony; (iii) defines nuisance behavior to include police contact, police service calls, or anything else outside the scope of the existing state definition of a nuisance; or (iv) requires landlords to include lease provisions that provide a basis for eviction beyond those in existing state laws. The prohibitions in this law are prohibitions against a local ordinance, rule, policy or program. They are not prohibitions against landlords themselves.

10.     Unbundled Parking Spaces (AB 1317). Effective 1/1/25. This law will apply only to properties with at least 16 residential units; which have a certificate of occupancy issued on or after January 1, 2025, and which are located in the following counties: Alameda, Fresno, Los Angeles, Riverside, Sacramento, San Bernadino, San Joaquin, Santa Clara, Shasta, and Ventura.  This law requires landlords to unbundle parking from the price of rent for the life of the property.  The agreement to lease the parking spot shall not be included in a rental agreement or addendum.  “Unbundled parking” means the practice of selling or leasing parking spaces separate from the lease of the residential property.  A tenant will have the right of first refusal to parking spaces built for their property.  If no parking spaces are available for a new tenant, and a space subsequently becomes available, the new tenant will receive a right of first refusal to the available parking space.  Unleased parking spaces can be rented to other on-site users or off-site residential users on a month-to-month basis. A tenant’s failure to pay the parking fee pursuant to a separately leased parking agreement shall not form the basis of any UD action. If a tenant fails to pay by the 45th day following the date payment is owed for a separately leased parking space, the property owner may “revoke that tenant’s right to lease that parking spot.”

11.    Reminder: SB 721 (Building Standards – Decks and Balconies) requires an inspection of exterior elevated elements and associated waterproofing elements, including decks and balconies, for all buildings with 3 or more multifamily dwelling units by a licensed architect, licensed civil or structural engineer, a building contractor holding specified licenses, or an individual certified as a building inspector or building official. This law requires the inspections, including any necessary testing, to be completed by January 1, 2025, with certain exceptions, and would require subsequent inspections every 6 years, except as specified.   

The law firm of Wallace, Richardson, Sontag & Le, LLP represents landlords, property management companies, institutional and private lenders, employers and insurance companies throughout the State of California in real estate, business and employment litigation. The information provided herein is for general interest only and should not be relied upon or construed as legal advice.