Senate Bill 567 is Signed by Governor Newsom: New No-Fault Eviction Rules Effective April 1, 2023

Senate Bill 567 is Signed by Governor: New No-Fault Eviction Rules Effective April 1st

Governor Gavin Newsom has signed Senate Bill 567, a bill that amends the “no fault” tenancy termination rules under Assembly Bill 1482, which is also known as the “California Tenant Protection Act of 2019.” Under the new rules, which become effective on April 1, 2024, the following changes to tenancy termination rules will occur:

• No Fault Evictions Due to Substantial Remodel. While housing providers may still terminate tenancies to substantially remodel their property, tenancy termination notices must detail the planned work and inform the tenant of their right to reoccupy the rental unit if and when the planned substantial remodel work does not commence or is not otherwise completed, and also requests that the tenant provide forwarding information so that the housing provider can inform the tenant about reoccupying the vacated unit. In addition, property owners must now provide tenants with copies of any required permits for the substantial remodel work to be completed with the notice of termination. In the event a notice is issued pursuant to a substantial remodel to abate hazardous materials and does not require a permit, the owner is required to provide a copy of the signed contract with the contractor hired by the owner to complete the substantial remodel, which reasonably details the work that will be undertaken to abate the hazardous materials.

The following notice must be provided to tenants in connection with any no fault, substantial remodel eviction:

“If the substantial remodel of your unit or demolition of the property as described in this notice of termination is not commenced or completed, the owner must offer you the opportunity to re-rent your unit with a rental agreement containing the same terms as your most recent rental agreement with the owner at the rental rate that was in effect at the time you vacated. You must notify the owner within thirty (30) days of receipt of the offer to re-rent of your acceptance or rejection of the offer, and, if accepted, you must reoccupy the unit within thirty (30) days of notifying the owner of your acceptance of the offer.”

In the event the work does not commence or is not completed, Senate Bill 567 requires the owner to reimburse the tenant for reasonable moving expenses incurred in excess of any relocation assistance that was paid to the tenant in connection with the written notice. However, if the previous tenant does not move back in when work either does not commence or is not completed, and a new tenancy commences within 12 months after terminating a tenancy, the rental unit must be offered and rented or leased at the lawful rent in effect at the time any notice of termination of tenancy was served.

• No Fault Evictions Due to Owner Move-In. While property owners (or members of their family, as defined) are still allowed to move into their properties, they must do so for at least 12 months and move in within 90 days following their tenant’s relocation. In order to qualify as an “Owner” under the new rules, and while property may hold title to their properties as individuals (with family members), in family trusts, or through a partnership or LLC, they must hold at least 51% or more of the recorded interest in the rental property to qualify under the new legislation to exercise the “owner move-in” option. Owner or owner’s family generally include the owner or owner’s spouse, domestic partner, children, grandchildren, parents, or grandparents. Any written notice terminating a tenancy for owner move-in must contain the name or names and relationship to the owner of the intended occupant.

Nevertheless, this owner move-in, no-fault cause for tenancy termination is not available if the intended occupant already occupies a rental unit on the property or if a vacancy of a similar unit already exists at the property.

• Other No Fault Tenancy Terminations – Ellis Act or Demolition. For “no-fault just cause” evictions for purposes of withdrawal of residential real property from the rental market under the Ellis Act, the owner must withdraw all the rental units at the property from the rental market. For “no-fault just cause” eviction for the purpose of demolishing or substantially remodeling the property, a tenant is not required to vacate the residential real property on any days where a tenant could continue living in the residential real property without violating health, safety, and habitability codes and laws. Also for purposes of eviction due to demolition, the same notice must be provided to tenants as for no fault eviction due to substantial remodel.

In the event housing providers fail to comply with Senate Bill 567’s provisions, they face fines and possible exposure to possible litigation commenced by tenants.

Updating Notices for Members

The Apartment Association of Greater Los Angeles will update the applicable tenancy termination notice to provide space to indicate this additional, required information as the effective date of the new law gets closer.

The Tenant Protection Act of 2019, or Assembly Bill 1482, created a statewide “just cause” rules that requires housing providers that own properties that are subject to its provisions to have a specific reason(s) specified by the law to terminate a tenancy.  In general, under Assembly Bill 1482, when a tenancy is terminated for a reason that is not a fault of the tenant, or for “no fault” reasons, the housing provider is required to pay relocation expenses equal to one month of rent in the event a tenant has resided in the unit for at least 12 months (or up to 24 months in certain situations).

Single-family homes, condominiums, certain owner-occupied duplexes, and newly constructed rental housing are generally exempt from Assembly Bill 1482’s requirements, although a mandatory notice of exemption must be given to tenants for the exemption to apply. Moreover, under Senate Bill 567, no changes are being made to just cause eviction rules related to “at fault” evictions such as failure to pay rent, creating a nuisance, conducting criminal activity, etc.

Violations Under the Tenant Protection Act

• An owner’s failure to comply with any of the just cause provisions of the Tenant Protection Act renders a written termination notice void. Any owner who attempts to recover possession of a rental unit in material violation of the just cause provisions of the Tenant Protection Act is liable to a tenant in a civil action for actual damages, reasonable attorney’s fees and costs. In the event evidence shows that the owner has acted willfully or with oppression, fraud, or malice, up to three times the actual damages, then an owner may be subjected to punitive damages for the benefit of the tenant against the owner.
• The Attorney General and the city attorney or county counsel in the jurisdiction in which the rental unit is located is permitted to bring actions for injunctive relief based on violations of any of the “just-cause” provisions. 
• An owner who demands, accepts, receives, or retains any payment of rent in excess of the maximum rent allowed by the Tenant Protection Act liable in a civil action to the tenant from whom those payments are demanded, accepted, received, or retained for all of the following: (i) Reasonable attorney’s fees and costs; (ii) Injunctive relief; (iii) Damages in the amount by which any payment exceeds the maximum allowable rent; and (iv) Upon a showing that the owner has acted willfully or with oppression, fraud, or malice, damages up to three times (3x) the amount by which any payment demanded, accepted, received, or retained exceeds the maximum allowable rent.

Enforcement / Statute of Limitations

• The bill empowers the Attorney General and the city attorney or county counsel in the jurisdiction in which the rental unit is located to have the authority to do both of the following: (i) Enforce the rental rate provisions of the Tenant Protection Act; (ii) Seek injunctive relief based on violations of the rent cap provisions of the Tenant Protection Act; and (iii) Provides that in an action for injunctive relief regarding violation of the rent limitation, a tenant is presumed to suffer irreparable harm. Prohibits an action pursuant to the rental rate provisions of the Tenant Protection Act from being brought after three years from the date on which the cause of action accrued.

While at the time this article was written, amendments to Senate Bill 567 were still be negotiated, we believe the information provided here materially covers what will ultimately become the final bill. As always, we will keep our members apprised of the status and final outcome of the proposed bill.