by Robert T. Finlay, Esq.,Wright, Finlay & Zak, LLP
What Is the Tenant Protection Act of 2019?
California recently approved the Tenant Protection Act of 2019 (TPA) in an effort to help stabilize rent for California residents. Effective January 1, 2020, the TPA significantly changes traditional landlord/tenant relationships in two ways: (1) caps the amount that a landlord may increase the tenant’s rent during a 12 month period; and (2) requires “just cause” for evictions. This article will outline the TPA’s key provisions and discuss its potential impact on landlords, lenders and loan servicers.
Rent Limits
Beginning on January 1, 2020, landlords cannot increase the gross rental amount during a 12 month period, by more than 5% plus the cost of living as determined by the regional CPI (in any event no more than a total of 10%).
- The gross rental amount cannot be raised more than two times in a calendar year, and the total cannot exceed the allowable increase
- Any rent discounts, incentives, concessions, or credits offered by the owner and accepted by the tenant are excluded from the calculation of the gross rental amount (and should be documented in the lease).
- Additionally, a tenant that subleases a covered property also cannot raise the rent above the allowable rental rate.
- The landlord can adjust the rents to market rate after a tenant vacates the property.
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