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4 New Laws California Landlords Need to Know for 2021

2021 brings new laws that affect landlords throughout California. We break down how these bills affect your property so you can be informed and prepared.

The start of a new year means the implementation of new laws in California. These new laws address issues with property transfers, HOAs, and the big one–COVID-19 related rent relief and eviction rules. We are here to break down these laws for you so that you can be informed and prepared for these changes.

Prop 19

Proposition 19 passed in November, which means that inherited homes that are not used as primary residences, such as secondary homes or rentals, must be reassessed at market value when transferred. Previously this was not the case under the Parent-Child Exclusion rule that was established as a result of Prop 58 from 1986. This section of the law goes into effect on February 16, 2021.

The other part of Prop 19 pertains to people over the age of 55 or with specified disabilities. They can now transfer their tax assessments up to three times. Previously this was only allowed one time. These eligible homeowners can also now transfer their tax assessments anywhere within the state and these tax assessments can be transferred to a more expensive home with an upward adjustment. Lastly, the new ordinance expands the group of affected persons to also include victims of wildfires or other natural disasters. This section of the law goes into effect on April 1, 2021. For a detailed breakdown of prop 19, check out our full blog here.

SB 91

SB 91 is crucial for all landlords and tenants to be aware of. Just passed on January 28th, 2021, this bill is designed to assist landlords and tenants throughout California that have been affected by the COVID-19 pandemic.

You may recall that in 2020, AB 3088, also referred to as the Tenant Relief Act, was established to provide this type of assistance. However, the provisions of that ordinance were set to expire at the end of January 2021. These provisions included an eviction moratorium that prevented landlords from evicting tenants that were financially affected by the pandemic.

SB 91 extends the eviction moratorium to June 30, 2021. This makes California the state with the most renter protections in the country. Tenants are still responsible for paying unpaid amounts to landlords, but these unpaid amounts cannot be the basis for an eviction, even after the moratorium ends.

California is set to receive $2.6 billion in federal rental assistance, which will go fund the State Rental Assistance Program. The goal of this program is to help tenants across the state, starting with those income-qualified tenants that are most at-risk with unpaid back rent. A portion of these funds (estimated $150 billion) will also be allocated specifically to tenants in counties with populations less than 200,000. The rental assistance program will begin accepting applications from property owners and tenants in March 2021.

So how does this act help property owners? Landlords that agree to waive 20% of unpaid rent will receive government assistance. When they agree to this waiver, they will become eligible for 80% in rent reimbursements for amounts owed between April 1, 2020 and March 31, 2021.

AB 3182

AB 3182 requires common interest developments (also known as HOAs) to allow at least 25% of owners to rent out their units beginning January 1, 2021. Even if said HOA has not updated their governing documents, this law applies. They are still able to ban short-term rentals (less than 30 days). However, the law prohibits unreasonable restrictions on rental homes, accessory dwelling units (ADUs), or junior accessory dwelling units (JADUs). The term “unreasonable” in this scenario has yet to be completely defined, but if the HOA is found to be placing these unreasonable restrictions, they will be subject to a fine.

SB 1079

The goal of SB 1079 is to level the playing field for home buyers and prevent huge corporations from mass-buying foreclosed homes. The new law gives owner-occupants, tenants, local governments, and nonprofit housing associations a better chance at securing a home by providing a 45-day window to purchase residential property through foreclosure if they can match (in the case of tenants) or exceed (in the case of other buyers) the last and highest bid made on residential single-family homes at a foreclosure auction.

The law also forbids the bundling of multiple homes and selling them to a singular buyer. By selling the properties individually, it gives people who actually plan to live in the home a chance to purchase it. These provisions apply to all residential properties that have one to four housing units.

If you have any questions regarding these new bills, please reach out to us. Subscribe to our newsletter for all the latest updates!

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Hello goodlifers, Adam Manley here from Good Life Property Management bringing you guys another video today about some of the new laws that have passed here in California for 2021. Today we’re going to look at specifically for laws that all landlords and investors, property managers, tenants should know about the deal with everything from property tax transfers on inherited properties to H.O.A. rules with regards to the capacity for which you can rent your property. So a lot of different stuff going on and we’re going to jump right into it here. So the first new law we’re going to be talking about is Proposition 19. And Proposition 19 deals with how inherited properties are taxed. It also removes the parent child exclusion for secondary properties. And it also addresses how seniors and disabled people are able to transfer their existing tax base into a new property. So there are a couple of different things going on with Proposition 19. It actually covers quite a bit. And we’ve done a very detailed blog on this proposition specifically that will include below the video here. So if you’re looking for more information on Proposition 19, definitely check out our full blog on that topic. The next law we’re going to look at is SB 91, which was specifically implemented to address tenants and landlords who have been affected by the COVID-19 pandemic. And SB 91 actually does a couple of things. So the first thing that it does is it expands on a lot of the legislation that came with AB 3088. And SB 91 will actually extend the eviction moratorium that AB 3088 had originally put into place. Now that has been extended out until June 30 of 2021. So it pushed that date back about five or six months. And it also implemented some new things that renters could no longer be evicted for. So while renters are still responsible for the unpaid rents that were accrued during that time of the COVID-19 pandemic, they can no longer be evicted for any of that unpaid rent, even after the eviction moratorium has expired. So that’s also a new change. One of the other things that SB 91 does is it is creating $2.6 billion in federal funds that are going to be allocated to states for various programs that are designed to help tenants and landlords. And California is going to be receiving a large chunk of that into what we are calling the rental assistance program. And the rental assistance program is going to do a couple of things. They are going to make funds directly available to tenants who have been impacted by COVID-19. There’s still some more details to follow on that. And they’re also going to make funds available for landlords who have been affected by COVID-19 in the form of having a tenant who lost their job or something like that. So with this new rental assistance program, landlords who agree to waive 20% of their tenants’ rents are going to be eligible to receive government funds. So once they sign this waiver with their tenant and have them enter into this agreement, reducing the amount of rent that they would have to pay, the landlords are then able to potentially apply to receive up to 80% of any unpaid rents that the tenant had not paid during the time of the COVID-19 pandemic. So this is a very complicated bill also. We’re going to be putting some more content out about this bill specifically, but that kind of outlines some of the more important factors of SB 91. So the state of California is going to start accepting applications for their rental assistance program from both tenants who have been affected by COVID-19 and also accepting applications from owners starting in March of 2021. So keep posted for more details on that and we will be sure to let you guys know of any new developments. So the third most important law that is new for 2021 is AB 3182. And this law specifically requires that HOAs or any type of common interest development allow at least 25% of their owners to rent out their properties. This has been different in the past. Kind of each HOA was able to create their own rules allowing how many owners were allowed to run out their individual properties. So AB 3182 now requires that HOAs allow at least 25% of all of their owners to run out their property. Now it still allows HOAs to flat out ban short-term rentals so anything under 30 days, but they must allow at least 25% of their owners to run out their property or if they had an ADU or some type of JADU situation, the HOA must allow at least 25% of their owners to rent those out. So that’s very exciting news for 2021. All right guys wrapping it up with the last bill that you should be aware of that is new for 2021. This is going to be SB 1079. So what this bill is designed to do is to really level the playing field in the event that a residential property is being foreclosed on. In the past what we saw is these really large hedge fund or corporations kind of sweeping the landscape and buying up every property that you know somebody had unfortunately had to foreclose on and this bill really tries to tackle that head on. So it’s going to allow owner occupants, tenants, local nonprofit associations, a 45 day window to either match in the case of the tenants or exceed in the case of the buyers, the highest bid that was made on the property during a specified 45 day window. So this will allow local people tenants who lived in the property kind of a better opportunity to buy these places rather than getting outbid by some big corporation or something like that. So we’re really happy to see this bill passed and that’s it for some of the new laws that you need to be aware of for 2021. We’re going to include some links to some of the more detailed bills below and if you guys have any other questions or concerns just feel free to reach out. Thank you.