Keeping abreast of changing laws in property management
Rental property owners throughout the Bay Area have a host of laws to contend with, on the federal, state and local levels. In the past 18 months or so, we have seen a tremendous increase in the amount of information that landlords have been forced to digest. This is not the most fun topic to discuss, but one that has to be broached in order to stay compliant and avoid costly legal mistakes that can be detrimental – if not catastrophic – to your real estate business.
Staying on top of these ever expanding regulatory regimes is difficult for even seasoned, hands-on landlords who invest an enormous amount of time and energy into the day-to-day activities of their rental business. Keeping abreast of the laws is all the more vexing for “accidental” landlords whose heart is not into their enterprise because they didn't want to play landlord - they fell into this role. If this sounds like you, we painted the plight of the accidental landlord, felt your pain, and
had a frank conversation
with you earlier.
Here’s some considerations from 40,000 feet.
Rent & eviction controls
Many municipalities throughout the Bay Area have passed ordinances that limit how much rental housing providers can charge tenants, spell out how often the rent can be raised, and enumerate specific reasons why a tenant can be evicted. Still more protections are carved out in these hodge-podge of ordinances, such as minimum lease terms, relocation payment assistance, special notice requirements, buyout agreement regulations, mandated mediation in landlord-tenant conflicts, and other safeguards that
are best journeyed with a property management company that deals with these issues on a daily basis.
What about statewide rent control, anyways?
There are questions that abound concerning The Tenant Protection Act of 2019 (AB-1482), a law that went into effect January 1, 2020. For those of you with rental properties situated in jurisdictions with more onerous, protective rent control and “just cause” eviction rules, you are unfortunately bound to follow these local ordinances. We are speaking to landlords in San Francisco, Oakland, Berkeley, and other cities with a more comprehensive set of regulations.
Although this topic is tricky, our broker of record, Attorney Daniel Bornstein, recently hosted a webinar that broke down the new state law in an easily digestible fashion.
Daniel will be tailoring another educational webinar reserved for valued Bay Property Group clients in the near future - please check your inbox for more
details as they become available.
Rules surrounding security deposits
California has some of the most rigorous security deposit accounting rules in the nation. This process entails a carefully choreographed series of steps with a fiduciary duty on the part of the landlord, carrying with it specialized notice requirements, unforgiving deadlines, and many rights that tenants enjoy.
You can rest assured that one of the first things on the minds of outgoing residents - even before they figure out how to navigate a corner to move a monstrous sofa down the stairs - is when and even if their security deposit will be returned. This is why security deposit disputes are the most common reason landlords are dragged into small claims court.
By letting Bay Property Group manage the relationships with your tenants from the cradle to the grave, you can feel at ease knowing that our meticulous professionals are intimately familiar with the myriad rules surrounding security deposits and you do not have to fret about them.
Compliance with fair housing laws
California defines discrimination much more broadly than federal law, as an ever-expanding pool of rental applicants and tenants are considered to be
part of a “protected class.” Take, for instance, source of income - California makes it illegal for blanket bans on Section 8 tenants.
Local ordinances can also craft their own categories of vulnerable or protected tenants that are entitled to increased safeguards against discrimination or displacement.
As a recent example, Oakland City Council has enacted an ordinance that, with some exceptions, prohibits landlords or their agents from conducting criminal background checks. As a sidebar, Berkeley is expected to vote on a similar measure in February. Following such a wide array of housing laws may not be something you would expect to do in the ordinary course of your rental business, but it's essential information you need to know to survive and thrive. At Bay Property Group, we are heavy consumers of the laws that impact our industry and take the guesswork out of the equation.
One final thought on this point is that most violations of fair housing laws come in the form of ads that invite certain groups to apply for a rental listing, or dissuade another sub-set of tenants from applying, through the select use of words, phrases, symbols, visual aids and other media. These personal preferences are wrongful discrimination under the law, but can be avoided by hiring a professional property management company that can stay far away from these common blunders that haunt landlords down the road.
In parting thoughts
While we’ve only scratched the surface here, suffice it to say there are many perilous legal issues best approached with experienced property managers who know the lay of the land. Add in the many disclosure requirements, the prospect you may have to submit your units to a local rent registry, and lawfully transitioning tenants out of the rental unit if the relationship fails, among other potential pitfalls, it’s easy to see why owners can be daunted.
Bay Property Group can remove the uncertainty.