The Tenant Protection Act – AB 1482 Exemption is not available to all real estate owners, but the CA landlord protection is not yet widely used by those qualified. There are however multiple ways a property may qualify. It’s important to remember the bill was not written to penalize Mom and Pop, but to assist renters with housing affordability amid rising costs and aid in the fight against homelessness.

Landlords are naturally seeking a return on their investment. AB 1482 may limit returns to the point it is necessary for owners to reposition their assets, as seems to be the current trend for those with flexibility. Let’s take a look at The California Tenant Protection Act – AB 1482, cover some of the ways Los Angeles real estate owners and landlords have been affected, and review the qualifications for homeowners to claim the exemption.

AB 1482

Known as the California Tenant Protection Act of 2019, AB 1482 placed a number of restrictions on landlords statewide, affecting all except those in areas where the local rent ordinances are more strict. Some of the newly enacted  measures:

• Rent Increases – Under AB 1482, maximum annual rent increases are limited to no more than 5% + local CPI (consumer price index = inflation rate), or 10% whichever is lower. Furthermore, there can be no more than two increases in a 12-month period, and the combined increases cannot exceed the annual cap stated previously.
• Eviction Protections – Under AB 1482, a tenancy may not be terminated unless the landlord has one of the allowable “just cause” reasons, which must be stated in the notice terminating tenancy. The mere expiration of a lease or rental agreement is not considered a “just cause” to terminate a tenancy. The “just cause” reasons are categorized as either “at-fault” reasons or “no-fault” reasons; with relocation assistance being required for “no-fault” evictions.
• Required Notices – Under AB 1482, all housing units covered by the state law must receive a notice explaining the “just cause” and rent cap protections. Additionally, an owner claiming an exemption from the law must provide specific written notice to the tenant.

Effects of AB 1482

Since going into effect, AB 1482 has not had a significant impact on homeowners, until recently. This is because approximately 2 months after the start date of the new law, eviction moratoriums and rent price freezes were mandated as part of Covid-19 initiatives. With the initiatives expired, landlords are now faced with the reality of the effects of AB 1482 after years of not being able to raise rents. Some landlords have discussed:

• Loss of Returns – For a number of landlords, AB 1482 hampered their ability to recoup the rental income losses faced from 2020 through 2023. Faced with the rising costs of labor and materials combined with limited rental income, some were unable to properly care for their properties and are now facing additional tenant issues due to deferred building maintenance. We would be remiss if we did not mention the onset of new “habitability laws” as a contributing factor.
• Increased Costs – With the implementation of AB 1482, a number of owners have also expressed heightened costs of ownership. The increase in Administrative and Legal Costs were the most frequently mentioned by landlords dealing with tenants under the new provisions. Some owners also mentioned being unhappy with Property Management Services they’ve received during the transition.
• Disposition of Assets – Another outcome of AB 1482 has been homeowners choosing to reposition their assets. By selling their properties and acquiring vacant housing units, landlords are able to receive rents at current market rate and potentially avoid shortfalls caused by AB 1482. Reliable property management service providers have assisted with asset repositioning since the announcement of the California Tenant Protection Act.

Exemption from AB 1482

Some homeowners are finding hope through AB 1482 exemption. There are a number of ways to qualify for Tenant Protection Act Exemption in California, but recent reviews have found that not all property management service providers have been meeting the requirements to keep homeowners protected and profitable. Unfortunately, we are not able to cover all of the qualifications details here. The information provided is not intended as legal advice and is for informational purposes only. AB 1482 exemption may apply by:

• Property Type – The rental property is a single family home or condo not owned by a real estate investment trust (REIT), corporation, or corporation-owned LLC. This exemption for single-family homes does not apply to properties where there is more than one dwelling unit on the same lot, or any second residence unit in the building that cannot be sold separately from the subject unit (such as an in-law unit). A duplex or single-family home with an ADU (accessory dwelling unit) may qualify provided the second unit was occupied by an owner of the property for the entire period of the tenancy. Commercial Buildings, hotels, and dormitories are some other instances where housing may be exempt.
• Building Age – Housing units built within the past 15 years may qualify for exemption. This rule is applied on a rolling basis. For example, housing constructed on January 11, 2011 could qualify for exemption through January 11, 2025 but would no longer qualify as of January 11, 2026.
• Ownership – Housing units owned by individual(s); or provided by non-profit organizations, extended care facilities, or adult residence facilities may qualify for exemption.

Are you still unsure if you qualify for Tenant Protection Act – AB 1482 Exemption in California, or are you seeking to make adjustments to your real estate portfolio to maximize returns? Exemption from AB 1482 can prove to be significant and the increased returns substantial given the rental rates in Los Angeles. Complete the information request below.

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