Proposed California Rent Freeze Faces Opposition from Property Owners

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A newly proposed bill, AB 246, seeks to impose a one-year rent freeze across Los Angeles County, preventing rental housing providers from increasing rents until 2026. While the measure aims to address affordability concerns, property owners warn it could create long-term challenges, including financial strain on landlords and reduced housing supply.

What AB 246 Proposes

Introduced by Assemblyman Isaac G. Bryan (D-Los Angeles), AB 246 would:

  • Prevent rent increases for one year, locking rents at January 7, 2025, levels.
  • Override local government decisions, enforcing a rent freeze even in areas where local leaders have opted against such policies.
  • Allow civil penalties of up to $10,000 per violation for landlords who raise rents during the freeze.

Why Property Owners Are Concerned

Many rental housing providers argue that AB 246 is unnecessary and harmful for several reasons:

  1. California already limits rent increases during emergencies – Penal Code §396 caps rent hikes at 10% in declared emergency zones. AB 246 would introduce additional restrictions, even when existing protections are in place.
  2. Landlords are still recovering from pandemic-era rent freezes – Many housing providers endured nearly five years of restrictions, with some losing their properties due to mounting expenses and frozen rental income.
  3. It could set a precedent for future state-mandated rent freezes – If passed, AB 246 could be expanded or replicated after wildfires, floods, or other emergencies, further reducing landlord control over rental income.
  4. It may discourage property investment and maintenance – Freezing rents while operational costs continue to rise could make rental housing a less viable investment, leading to a decline in available units.

Next Steps for Rental Housing Providers

While the California Assembly has not yet voted on AB 246, rental housing advocates are actively voicing their concerns. Property owners and stakeholders are encouraged to stay informed, engage with local representatives, and explore strategies to protect their investments while remaining compliant with evolving regulations.

For expert guidance on California’s rental laws and how they impact property owners, contact our team today. We specialize in keeping landlords informed and compliant in a shifting regulatory landscape.

AB 2801: New Security Deposit Regulations for California Landlords in 2025

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Understanding the New Compliance Requirements

California’s rental laws are changing again. Assembly Bill 2801 (AB 2801) introduces new requirements for security deposit deductions and property condition documentation, impacting landlords across the state.

Starting in 2025, landlords must follow stricter procedures when handling security deposits, including mandatory photo documentation at various stages of a tenancy. Failure to comply could result in financial penalties and legal disputes.

This article outlines everything landlords need to know to remain compliant under the new law.

Key Requirements Under AB 2801

Mandatory Photo Documentation at Key Stages

AB 2801 requires landlords to take and retain photographs of rental units at three specific points:

Move-In Photos – Effective July 1, 2025

  • Landlords must photograph the rental unit’s condition before or at the start of a new tenancy.
  • These images serve as evidence of the property’s initial state.

Move-Out Photos – Effective April 1, 2025

  • After a tenant vacates, landlords must take photos of the unit before any repairs or cleaning occur.
  • These photos help document any damage or excessive wear beyond normal use.

Post-Repair Photos

  • If landlords deduct funds from the tenant’s security deposit for cleaning or repairs, they must take additional post-repair photographs to document the completed work.

Providing Tenants with Documentation

When landlords withhold any portion of a security deposit, they must provide tenants with:

  • Move-in, move-out, and post-repair photos
  • A detailed, itemized statement outlining repair and cleaning costs
  • A way for tenants to access these materials, which can be sent via mail, email, flash drive, or a secure website link

Legal Risks for Non-Compliance

Failing to follow AB 2801’s requirements could have serious consequences for landlords:

  • Landlords who “willfully and in bad faith” fail to provide required documentation may lose the right to claim deductions from the security deposit.
  • Without proper documentation, landlords may be unable to recover costs for legitimate damages.

This new law underscores the importance of detailed record-keeping and transparent security deposit practices.

What This Means for California Landlords

The passage of AB 2801 signals increased tenant protections and stricter landlord responsibilities.

For rental property owners, this means:

  • More documentation requirements to justify security deposit deductions
  • Potential legal exposure if proper records are not maintained
  • A need for structured record-keeping and streamlined tenant communication

To avoid legal disputes and ensure compliance, landlords should implement a consistent system for capturing and storing property condition photos.

How Real Property Management Select Helps You Stay Compliant

Navigating California’s evolving rental laws can be challenging. At Real Property Management Select, we provide professional property management services that ensure landlords remain compliant with new regulations.

Our team handles:

  • Move-in and move-out documentation
  • Security deposit compliance and legal oversight
  • Property maintenance and tenant management

Stay ahead of new rental laws. Protect your investment and avoid costly penalties by working with a trusted property management expert.

Learn more about AB 2801 and how it impacts your rental properties: www.norcalpm.com

The AB 2801 law reinforces the need for clear, organized documentation in property management. By implementing the required photo documentation process, landlords can ensure legal compliance, reduce disputes, and maintain smooth operations.

For expert assistance in managing your rental properties under California’s changing regulations, contact Real Property Management Select today.

California Supreme Court Upholds Cotenancy Clauses in Retail Leases: What This Means for Property Owners

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The California Supreme Court recently issued a landmark ruling that solidifies the enforceability of cotenancy clauses in retail leases. This decision could have long-term implications for landlords, tenants, and commercial property investors across the state. Understanding this ruling and its impact is crucial for property owners navigating lease agreements in California’s competitive commercial real estate market.

What Are Cotenancy Clauses?

Cotenancy clauses are provisions in retail lease agreements that allow tenants to adjust their rent obligations if key tenants in a shopping center close their businesses. These clauses are particularly common in malls and multi-tenant retail spaces where the presence of major anchor stores drives foot traffic.

Typically, cotenancy clauses enable tenants to:

  • Pay reduced rent (such as a percentage of sales instead of a fixed rate) if key tenants leave.
  • Terminate the lease if specific occupancy thresholds are not met for an extended period.

These clauses protect tenants from declining foot traffic caused by the departure of high-profile businesses. However, they have long been a point of contention between landlords and retailers.

The Supreme Court’s Decision

The California Supreme Court ruled that cotenancy clauses are legally enforceable, clarifying that they are considered alternative rent structures rather than penalties or unfair business practices. The court’s decision came after a case in which a landlord attempted to challenge a retailer’s right to reduced rent after a key tenant left the shopping center.

By upholding the validity of these clauses, the court reinforced tenants’ ability to negotiate lease terms that account for business risks associated with retail property dynamics.

Implications for Retail Property Owners

 

1. Potential Revenue Fluctuations

For landlords, the ruling underscores the importance of carefully structuring lease agreements. With cotenancy clauses being enforceable, landlords may face revenue volatility if key tenants vacate and remaining tenants exercise their right to reduced rent.

2. Increased Negotiation Leverage for Retail Tenants

Retail tenants now have greater legal backing when negotiating lease terms. New lease agreements may see tenants more aggressively pursuing cotenancy protections, which could impact rental income stability.

3. Stronger Incentives to Maintain Occupancy Levels

Property owners will need to ensure that anchor tenants remain operational to prevent triggering cotenancy clauses in multiple lease agreements. This could lead to increased investment in tenant retention strategies, incentives for long-term leasing, or re-evaluations of anchor store agreements.

4. Potential Impact on Commercial Real Estate Investment

For investors evaluating retail properties, this ruling adds another layer of risk assessment. Properties with multiple cotenancy clauses could present financial challenges if anchor tenants leave, making lease reviews a critical part of due diligence.

Key Takeaways for Property Owners

  1. Review existing lease agreements – Ensure that cotenancy clauses are clearly defined and understood to avoid unexpected financial impacts.
  2. Develop tenant retention strategies – Keeping anchor tenants in place is more crucial than ever to maintain rental income stability.
  3. Negotiate future lease terms carefully – Consider structuring leases that balance tenant protections while safeguarding rental revenue.
  4. Monitor market trends – The retail sector is evolving, and landlords must stay informed about occupancy trends, tenant preferences, and potential legal changes.

Stay Updated on California Real Estate Developments

The commercial real estate landscape is shifting, and legal rulings like this have a direct impact on property owners and investors. To stay informed about the latest trends, regulations, and strategies for managing your investment properties, visit Real Property Management Select for expert insights and professional property management solutions.

New California Bill Could Allow Tenants to Avoid Eviction by Paying Rent at the Last Minute

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California lawmakers are considering a new bill that could significantly impact rental housing providers by allowing tenants to halt eviction proceedings at any stage if they pay overdue rent or provide proof of approved rental assistance.

Overview of SB 436

Senate Bill 436, introduced by Sen. Aisha Wahab (D-Hayward), proposes changes that would require courts to dismiss eviction cases if tenants either:

  • Pay all outstanding rent, including any additional accrued rent.
  • Submit proof that rental assistance has been approved.

This provision would apply both before and after a court judgment, meaning that tenants could effectively stop the eviction process at any time before the final lockout by the sheriff. Additionally, the bill mandates that landlords include a new notice in three-day eviction warnings, informing tenants of their right to avoid eviction by settling past-due rent.

Potential Impact on Rental Housing Providers

Current law allows courts to use discretion in delaying evictions for tenants facing hardship. However, SB 436 does not require tenants to prove hardship or limit how often they can invoke this provision. This raises concerns that:

  • Tenants may repeatedly delay rent payments without facing eviction consequences.
  • Property owners could face financial strain from unpaid rent and extended legal battles.
  • Eviction processes could become more costly and time-consuming, making it harder for rental housing providers to reclaim their properties.

For many housing providers, the eviction process is already a last resort after months of nonpayment. By allowing tenants to avoid eviction even after a court ruling, this bill could increase financial risks for rental property owners and disrupt the stability of the rental market.

Legislative Outlook

The proposed bill has sparked debate among property owners, tenant advocates, and lawmakers. Supporters argue that it would provide renters with a final opportunity to avoid homelessness, while opponents highlight the potential for abuse and financial harm to small housing providers.

As this bill moves through the legislative process, it is critical for rental property owners to stay informed and prepared for potential changes.

Stay updated on the latest legislative developments and how they could impact your rental business.