San Diego Property Management Blog

What Investors Need to Know About Rent Control in San Diego

What Investors Need to Know About Rent Control in San Diego

Did you know you can raise your tenant’s rent by 9.1%? Under the Tenant Protection Act of 2019, the yearly cap for increasing rent is at 5%. The increase includes inflation adjustment but should not go above 10% even if CPI is high.

But San Diego landlords and investors had to wait until August 1, 2021, to effect the raise. All rental property in the San Diego Metropolitan Area falls under California rent control.

If you are looking to invest or rent property within California or the San Diego area, you should be familiar with the new rent control policies in San Diego. Continue reading to understand the effects of the new laws.

What Is AB 1482?

AB 1482 is mainly known as the Tenant Protection Act of 2019. The government uses the Californian Rent Control Laws to assert control over an annual rent increase. California passed the laws recently limiting yearly rent increase to 10% for the next decade.

The Act exempts condominiums, individually owned single-family homes, and a few others from its rent increase cap. However, it has also introduced the just cause eviction ordinance for lease termination.

San Diego landlords can no longer terminate a tenant’s rental leasing contract even after its term. The tenant can stay for as long as they wish unless they breach the lease, have due rent, or damage the rental property.

You can still evict the tenant, but only if you are personally moving back into the property. Under certain conditions, you can terminate the lease at the end of its term without reason.

The conditions allow the tenant to receive potential relocation fees from the property owner.

Rent Control Lease Disclosure Requirements

To take advantage of exemptions in AB 1482, the landlord needs to provide their tenants with disclosures that have verbiage in the lease agreement.

There are three types of disclosure that landlords have to comply with and build into their lease documentation.

The first disclosure explains whether your property is subject to the rent cap. All property that is not a single-family home, townhouse, condominium, or multi-family should be under the cap.

You then explain how civil code sections protect the tenants under the just cause ordinance and the rent cap.

The second disclosure is if there is an owner move-in exception. Under the just cause ordinance, you can terminate a lease. But the catch is, you must have added the exception before July 1, 2020. The final disclosure is if your property is subject to rent control.

Price Gouging

In the 2018 AB 1919 Bill, California passed a law limiting rent increase by more than 10% during an emergency. The bill classifies earthquakes, floods, and fires as emergencies.

However, in 2020 the bill was expanded to include pandemic and disease. The SB 1196 statement affects all types of rental properties. Even if your parcel does not fall under the AB 1482 provisions, you are limited to increase property rent during emergencies.

Take Advantage of Rent Control Exceptions

Keeping up with changing rent control laws can become exhausting for most rental property owners. Investors looking to invest in San Diego are required to comply with California rent control on all their property.

At Penny Realty, we provide portfolio management, tenant placement services, rent control consultations, among other services. Give us a call if you have any questions concerning the San Diego Just Cause ordinance, or anything else regarding Property Management in the San Diego area..