New rental laws that California landlords need to know for 2024
SOURCE: Photo by Ján Jakub Naništa on Unsplash
If you’re a landlord in California, or even if you’re just a property owner thinking about renting out your home, you need to know about California’s new rental laws that go into effect this year. While California has always been an extremely pro-tenant state, 2024’s new rental laws take the state’s pro-tenancy stance to a whole new level.
We’re going to discuss the following three big changes that you need to know about California’s new rental laws for 2024:
Security Deposits
Moving back into your home to break your tenant’s lease
Storage of micromobility or e-bikes
This is educational material and does not constitute legal advice nor is any attorney/client relationship created with this article, hence you should contact and engage an attorney if you have any legal questions.
SECURITY DEPOSITS | EFFECTIVE JULY 1, 2024
When you rent out your home to a tenant, it is good practice, if not essential, to collect a security deposit at the start of your lease signing with a tenant. This is to be used if, at the end of the lease, there is damage caused by your tenants that are beyond “ordinary wear and tear” that you choose to repair.
Note that this security deposit is different from collecting “last month’s rent” in the sense that the security deposit can only be used to make repairs, while the last month’s rent can only be used to pay for the last month of your tenant’s tenancy at your home.
The amount you could collect for your security deposit depended on various factors:
Unfurnished homes: 2 months’ rent
Furnished homes: 3 months’ rent
Unfurnished homes rented to a service member: 1 month’s rent
Furnished homes rented to a service member: 2 months’ rent
Tenants with a service or emotional support animal: N/A - no security deposit allowed
Starting July 1, 2024, these limits are being reduced as follows; changes are highlighted:
Unfurnished homes: 1 month’s rent
Furnished homes: 1 month’s rent
Unfurnished homes rented to a service member: 1 month’s rent
Furnished homes rented to a service member: 1 month’s rent
Tenants with a service or emotional support animal: N/A - no security deposit allowed
⚠️ There is an exception carved out for small landlords defined as (a) a natural person or an LLC in which all LLC members are natural persons and (b) the landlord owns no more than 2 residential properties that collectively include no more than 4 dwelling units offered for rent. This exception includes family trusts, too.
If you currently retain a security deposit that would exceed the new limits as of July 1, 2024, you may continue to hold onto it; on the other hand, pro-tenant attorneys are encouraging their clients to (politely) ask for that excess deposit returned. As of this writing, there is no obligation to do so, but you are encouraged if it would not otherwise inconvenience or risk financial harm to you.
So net-net, the big change is that if you’re a large property company or an individual with more than two residential properties that include more than four dwelling units, you can no longer demand more than one month of rent up front.
But for small property owners, say a family that lives in one home and rents out another, nothing has changed: you can still demand two months’ rent for a security deposit.
SOURCE: Cal. Civ. Code §1950.5
MOVING BACK INTO YOUR PROPERTY TO BREAK TENANT’S LEASE | EFFECTIVE APRIL 1, 2024
The Tenant Protection Act (TPA) of 2019 protects tenants from no-fault evictions, i.e., situations where the landlord chooses to evict a tenant due to no fault of the tenant such as non-payment of rent or breach of lease agreement.
There are four types of no-fault evictions covered by the TPA:
Owner (or immediate relative) wants to move back in
Intent to demolish or substantially remodel
Withdrawal of the unit from the rental market for at least 10 years
Complying with government order or local law that requires the tenant to leave
We’re going to discuss the scenario where the owner or relative wishes to move back into the property. Note that the TPA does not apply to the following types of property:
Single-family homes as long as the home is not owned or controlled by a corporation
Units covered by even more protective local rent control ordinances than provided by the TPA
Units less than 15 years old from the present date
Mobile homes not owned and offered for rent by the owner or manager of a mobile home park
Duplexes where the owner is living in one of the units when the tenant moves into the other unit, but only while the owner continues to live there
Affordable housing
Dormitories
In order for the property owner or immediate family member to move back into the property, new, more stringent requirements are now in place:
The written eviction notice must identify the name and relationship to the property owner of whomever intends to move into the unit; this can be the property owner or a family member of the property owner
The notice must include written notification that the current tenant may request proof that the above-listed person is in fact the owner or related to the owner
The property owner and/or family member must then move into the unit within 90 days after the current tenant vacates the property
The property owner and/or family member must then reside in the unit for at least one year
There was no other vacant unit on the property for the property owner and/or family member to use
If the property owner and/or family member does not in fact move into the unit within 90 days and use the property as their primary residence for at least one year, then the unit must be offered back to the tenant at the same lease terms as when they were evicted, and they must be reimbursed for reasonable moving expenses beyond those required in connection with the eviction itself.
If the property owner and/or family member doesn’t move back in within 90 days or use the property as their primary residence for at least one year, and if the prior tenant doesn’t wish to return, then a new tenant must be offered the property at the same lease terms as the outgoing tenant
SOURCE: Cal. Civ. Code §§ 1946.2 and 1947.12
MICROMOBILITY & E-BIKE STORAGE | EFFECTIVE JANUARY 1, 2024
With the ever increasing popularity of micromobility devices like electric scooters and electric bicycles (e-bikes), a new law now makes it effectively impossible to deny a tenant from storing and charging such devices in your rental property. Specifically, a landlord cannot refuse the storage of such mobility devices if:
it is not electrically powered (i.e., a non-electric scooter or bike cannot be denied storage to your tenant)
it is electrically powered and complies with certain safety standards as explained below
in the absence of such compliance with safety standards, the tenant has insurance to cover the the device
Safety regulations require the following:
e-bike batteries must comply with either the UL 2849 or EN 15194 standards
e-scooter batteries must comply with either the UL 2272 or EN 17218 standards
Landlords can provide the option for exterior “secure, long-term storage” which, if offered free of charge, allows the landlord to prohibit in-unit storage of devices.
Landlords cannot be required to modify their rental unit to allow for in-unit storage of a mobility device, nor must a landlord allow for the service or maintenance of batteries or motors inside a dwelling unit.
SOURCE: Cal. Civ. Code § 1940.41
For more information on California’s new rental laws for 2024, don’t hesitate to contact us.