A.D. CANTELMO REALTY/TONY CANTELMO
BROKER
TONY CANTELMO

A.D. Cantelmo Property Management
Our Business is Property Management Orange County California


          Unnecessary Confusion

On October 8, 2019 The Governor of California signed Assembly Bill 1482 into Law. There are Hundreds of bills that are signed into Law every year, but most go without notice. This Law has been noticed by many.
The first people to get excited about the new law, may want to think twice about it. Tenants may be thinking that they are going to be protected from what they may think of as predatory rent increases, but is that true.
This new law has two parts to it. The first part is a “Rent Cap” and the second is “Just Cause”.

Rent Cap

What does the “Rent Cap” part of the Law mean? The Law Caps rent increases in California to 5% plus inflation per year, and it is retroactive from March 15 2019, even though the Law does not technically take effect until January 1, 2020.

Just Cause

The next part of the Law is “Just Cause”. The “Just Cause” part of the law has to do with Evictions. The Law now is that once a Tenants Lease is up, or if a Tenant is on a Month to Month Rental Agreement, a Landlord can for no reason remove the Tenant from the property. So, for example, a Tenant has Been in a property for a year and wants to remain. The Tenant has paid rent on time, and has been a very good Tenant. The Landlord, has an “Aunt Harriet” who needs a place to live, so the Landlord decides to allow “Aunt Harriet” to move into the rental property. The Landlord notifies the Tenant that they need to Vacate the property. The Tenant must leave.
The New Law does not allow for an eviction without “Just Cause”. This means that is if “Aunt Harriet” want to move into the property, the Landlord cannot remove the Tenant from the property if the tenant is in good standing. If the Landlord really wants “Aunt Harriet” to move into the property, then the Landlord must pay the Tenant relocation compensation, which is equal to one month’s rent.

What is the Confusion

This is how I started the article
 “The first people to get excited about the new law, may want to think twice about it. Tenants may be thinking that they are going to be protected from what they may think of as predatory rent increases, but is that true”?
I ask the question, because any time government steps in to help, if usually does just the opposite. You now may ask, “How will this hurt Tenants”?
First, let’s talk about the confusion about the Law.
Many Landlords really don’t understand how the law will Affect them, so there may be an over reaction.

Exemptions

The interesting part of the Law, is that most Single Family homes and Condo’s are exempt from the law unless they are owned by corporations, REITs, or LLC’s that are owned by corporations. This means that many of the Landlords in California, are not Affected by the Law, but they are still reacting by raising the rent, or thinking of raising the rent. I have had clients who had no thought of raising the rent before the Law, are now ready to raise the rent, even when I explain to them that they are exempt from the Law.

Long Term Ramifications

There are going to be long term ramification to this Law and many Tenants will not be happy about it. Since the Law Caps the rent increase every year to 5% plus inflation, many if not most Landlords are going to raise the rent the maximum allowed, just to be safe. Many Landlords, when they do raise the rent, try and keep it manageable, so they keep good Tenants. Let me give you an example of how Tenants are going to be hurt.
If the rent on a property is $3000.00 per month. In the past, when the lease is up, The Landlord may increase the rent $100 and most of the time, the Tenant is able to absorb that increase. That increase is a little over 3%. Now, if the Landlord raises the rent to the maximum cap of the new Law, 5% plus inflation, let’s say that comes to 7%, the rent increase will be $210.00. That increase is a big difference. Believe me, this is going to happen.
As far as the Just cause eviction, most Landlords rarely evict good Tenant, so this part of the Law will have little effect on most of my clients and since most of my clients are exempt, it will have no effect.

Conclusion

This is another example of trying to fix things for a few and in the end, hurt the many. I understand that renting in California is very expensive, but trying to get in the way of the natural market, may make some people feel good, but these kinds of Laws rarely work the way they are intended. We are already seeing in Los Angeles, they are passing emergency measures to prohibit Landlord’s from taking action before the law takes effect. Believe me, this will not be the end of it and Many Landlords are going to do what they have to do, to protect themselves and their investment before the next shoe falls.

If you have any questions, Please feel free to contact me.
 
Tony Cantelmo
714-313-7413

A.D. Cantelmo Property Management
Our Business is Property Management Orange County California






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5 reviews 5.0 star rating 1/21/2016 I was tired of using a large management team to manage my investment property. I felt I was always on the back burner. I was recommended to Tony from a business associate, he assured me I would be very pleased. Well that was an understatement, Tony is amazing. He's above all honest and always available for my concerns. I'm not as well versed as other investors with property management and maintenance and tenant relations, Tony has been an excellent partner and has guided me through quite a bit of needed repairs and worked far beyond what was expected to help turn my little investment into quite a prosperous investment, If what your looking for is prompt return calls, honest direction and someone very knowledgeable with general contractors and real estate laws, Tony is your man. Angela

 

~ Angela

5 reviews 5.0 star rating 1/21/2016 I was tired of using a large management team to manage my investment property. I felt I was always on the back burner. I was recommended to Tony from a business associate, he assured me I would be very pleased. Well that was an understatement, Tony is amazing. He's above all honest and always available for my concerns. I'm not as well versed as other investors with property management and maintenance and tenant relations, Tony has been an excellent partner and has guided me through quite a bit of needed repairs and worked far beyond what was expected to help turn my little investment into quite a prosperous investment, If what your looking for is prompt return calls, honest direction and someone very knowledgeable with general contractors and real estate laws, Tony is your man. Angela

 

~ Angela

"10 out of 10 I am so Happy Since I left my old company and I joined AD Cantelmo Property Co I am stress free I live in a different state and this company watches my house and always Mr Tony Cantelmo is on top of things I really want to thank you for what you do for me and I would really Recomend this Company to any and every one Thank You again. Shawn" ------------------- "I need to trust the people I work with and I trust Tony. He stays on tops of things, communicates well, and gets things done. He not only gets things done but he gets things done the right way. Jim"

 

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