AMENDED IN SENATE MAY 18, 2023
AMENDED IN SENATE MAY 1, 2023
AMENDED IN SENATE APRIL 17, 2023
AMENDED IN SENATE MARCH 20, 2023
SENATE BILL No. 567
Introduced by Senator Durazo
(Coauthors: Senators Menjivar and Smallwood-Cuevas)
(Coauthors: Assembly Members Haney, Lee, and McKinnor)
February 15, 2023
An act to amend Sections 1946.2 and 1947.12 of the Ci vil Code, relating to tenancy.
legislative counsel’s digest
SB 567, as amended, Durazo. Termination of tenancy: no-fault just causes: gross rental rate increases.
Existing law, after a tenant has continuously and la wfully occupied a residential real property for 12 months, prohibits the o wner of the residential real property from terminating the tenancy without just cause and requires that just cause to be stated in the written notice to terminate tenancy. Existing la w distinguishes between at-f ault just cause and no-fault just cause and defines no-f ault just cause to mean intent to occupy the residential real property by the owner or the owner’s spouse, domestic partner , children, grandchildren, parents, or grandparents, withdrawal of the residential real property from the rental mark et, the owner complying with specified go vernment orders that necessitate vacating the real property , and intent to demolish or to substantially remodel the residential real property.
95 This bill w ould, among other things, delete the condition for the tenancy termination pro vision described abo ve that a tenant has continuously and lawfully occupied a residential real property for 12 months. with respect to the no-fault just cause r elated to an e viction based on an intent to occupy the r esidential real property, require, among other things, that the owner or the owner’ s spouse, domestic partner, children, grandchildren, parents, or grandparents occupy the residential real property for a minimum of 12 continuous months as the person’s primary residence, as provided. The bill would also limit the applicability of each of those at-fault just causes, including by, also, with respect to the no-f ault just cause related to withdra wal of the residential real property from the rental market, requiring require that all of the rental units at the rental property be withdrawn from the rental market for at least 10 years, mark et, as prescribed. The bill w ould, among other things, would require an owner, before withdrawing all of the rental units at a residential real property as described abo ve, to record a notice with the county recorder that describes the real property, the dates applicable to the constraints, and the name of the o wner of record of the real property . The bill w ould require that notice to be recorded in the grantor -grantee index. By imposing a higher le vel of service on counties, the bill w ould impose a state-mandated local program. The bill would r equire an owner who displaces a tenant to substantially remodel a unit to pr ovide the tenant with written notice providing the tenant with specified information, including a description of the r epairs to be completed, the e xpected duration of the r epairs, and a copy of permits necessary to undertake the repairs.
This bill w ould also prescribe ne w enforcement mechanisms with respect to the provisions described above, including by making an owner who attempts to recover possession of a rental unit in material violation of those provisions liable to the tenant in a civil action for damages of not less than of up to 3 times the actual damages. damages, in addition to punitive damages. The bill would authorize the state and the local government, within whose jurisdiction the rental unit is located, to bring actions for injunctive relief against the landlord, as specified.
Existing law, until January 1, 2030, prohibits an owner of residential real property from, over the course of any 12-month period, increasing the gross rental rate for a dwelling or a unit more than 5% plus the percentage change in the cost of living, or 10%, whichever is lower, of the lowest gross rental rate charged for that dwelling or unit at any time 95 — 2 — SB 567
during the 12 months before the effective date of the increase, subject to specified conditions.
This bill would make a landlord who demands, accepts, receives, or retains any payment of rent in e xcess of the maximum rent increase allowed on or after March 1, 2023, allowed, as prescribed, liable in a civil action to the tenant from whom those payments are demanded, accepted, recei ved, or retained for certain relief, including, upon a showing that the landlord has acted willfully or with oppression, fraud, or malice, a civil penalty of treble the amount by which an y payment demanded, accepted, recei ved, or retained e xceeds the maximum allowable rent. This bill w ould authorize a local go vernment, within whose jurisdiction the residential property is located, to enforce the bill’s provisions and bring an action for injunctive relief, as specified.
This bill would also make a technical, nonsubstantive change to those provisions.
The California Constitution requires the state to reimb urse local agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
line 1 SECTION 1. Section 1946.2 of the Civil Code is amended to line 2 read:
line 3 1946.2. (a) Notwithstanding any other law, after a tenant has line 4 continuously and lawfully occupied a residential real property for line 5 12 months, the owner of residential real property shall not terminate line 6 a tenancy without just cause, which shall be stated in the written line 7 notice to terminate tenanc y. If any additional adult tenants ar e line 8 added to the lease before an existing tenant has continuously and line 9 lawfully occupied the residential real property for 24 months, then line 10 this subdivision shall only apply if either of the following ar e line 11 satisfied:
line 12 (1) All of the tenants have continuously and lawfully occupied line 13 the residential real property for 12 months or more. line 14 (2) One or mor e tenants have continuously and lawfully line 15 occupied the residential real property for 24 months or more. 95 SB 567 — 3 —
line 1 (b) For purposes of this section, “just cause” means either of line 2 the following:
line 3 (1) At-fault just cause, which means any of the following:
line 4 (A) Default in the payment of rent.
line 5 (B) A breach of a material term of the lease, as described in line 6 paragraph (3) of Section 1161 of the Code of Ci vil Procedure, line 7 including, but not limited to, violation of a provision of the lease line 8 after being issued a written notice to correct the violation. line 9 (C) Maintaining, committing, or permitting the maintenance or line 10 commission of a nuisance as described in paragraph (4) of Section line 11 1161 of the Code of Civil Procedure.
line 12 (D) Committing waste as described in paragraph (4) of Section line 13 1161 of the Code of Civil Procedure.
line 14 (E) The tenant had a written lease that terminated on or after line 15 January 1, 2020, or January 1, 2022, if the lease is for a tenanc y line 16 in a mobilehome, and after a written request or demand from the line 17 owner, the tenant has refused to e xecute a written e xtension or line 18 renewal of the lease for an additional term of similar duration with line 19 similar provisions, provided that those terms do not violate this line 20 section or any other provision of law.
line 21 (F) Criminal acti vity by the tenant on the residential real line 22 property, including any common areas, or any criminal activity or line 23 criminal threat, as defined in subdivision (a) of Section 422 of the line 24 Penal Code, on or off the residential real property, that is directed line 25 at any owner or agent of the owner of the residential real property. line 26 (G) Assigning or subletting the premises in violation of the line 27 tenant’s lease, as described in paragraph (4) of Section 1161 of line 28 the Code of Civil Procedure.
line 29 (H) The tenant’ s refusal to allo w the o wner to enter the line 30 residential real property as authorized by Sections 1101.5 and 1954 line 31 of this code, and Sections 13113.7 and 17926.1 of the Health and line 32 Safety Code.
line 33 (I) Using the premises for an unlawful purpose as described in line 34 paragraph (4) of Section 1161 of the Code of Civil Procedure. line 35 (J) The employee, agent, or licensee’ s failure to v acate after line 36 their termination as an employee, agent, or a licensee as described line 37 in paragraph (1) of Section 1161 of the Code of Civil Procedure. line 38 (K) When the tenant fails to deliver possession of the residential line 39 real property after providing the owner written notice as provided line 40 in Section 1946 of the tenant’s intention to terminate the hiring of 95 — 4 — SB 567
line 1 the real property , or mak es a written of fer to surrender that is line 2 accepted in writing by the landlord, but fails to deliver possession line 3 at the time specified in that written notice as described in paragraph line 4 (5) of Section 1161 of the Code of Civil Procedure. line 5 (2) No-fault just cause, which means any of the following:
line 6 (A) (i) Intent to occup y the residential real property by the line 7 owner or the o wner’s spouse, domestic partner , children, line 8 grandchildren, parents, or grandparents for a minimum of 36 12 line 9 continuous months as that person’s primary residence. line 10 (ii) For leases entered into on or after July 1, 2020, or July 1, line 11 2022, if the lease is for a tenancy in a mobilehome, clause (i) shall line 12 apply only if the tenant agrees, in writing, to the termination, or if line 13 a provision of the lease allows the owner to terminate the lease if line 14 the o wner, or the o wner’s spouse, domestic partner , children, line 15 grandchildren, parents, or grandparents, unilaterally decides to line 16 occupy the residential real property . Addition of a pro vision line 17 allowing the owner to terminate the lease as described in this clause line 18 to a ne w or rene wed rental agreement or fix ed-term lease line 19 constitutes a similar pro vision for the purposes of subparagraph line 20 (E) of paragraph (1).
line 21 (iii) (I) Subject to subclause (II), this This subparagraph does line 22 not apply if the intended occupant occupies a rental unit on the line 23 property or if a v acancy of a similar unit already e xists at the line 24 property.
line 25 (II) This clause does not apply if the intended occupant is line 26 disabled, and a dif ferent unit is necessary to accommodate the line 27 intended occupant’s disability.
line 28 (iv) The written notice terminating a tenanc y for a just cause line 29 pursuant to this subparagraph shall contain the name, address of line 30 primary residence, name or names and relationship to the o wner line 31 of the intended occupant.
line 32 (v) Clause (i) applies only if the intended occupant moves into line 33 the rental unit within 90 days after the tenant vacates and occupies line 34 the rental unit as a primary residence for at least 36 12 consecutive line 35 months.
line 36 (vi) If the intended occupant fails to occupy the rental unit within line 37 90 days after the tenant v acates or fails to occupy the rental unit line 38 as their primary residence for at least 36 12 consecutive months, line 39 the owner shall offer the unit to the tenant who v acated it at the line 40 same rent and lease terms in effect at the time the tenant vacated 95 SB 567 — 5 —
line 1 and shall reimb urse the tenant for reasonable mo ving expenses line 2 incurred in excess of any relocation assistance that was paid to the line 3 tenant in connection with the written notice.
line 4 (vii) For a ne w tenancy commenced during the time periods line 5 described in clause (v), the accommodations shall be offered and line 6 rented or leased at the lawful rent in effect at the time any notice line 7 of termination of tenancy is served.
line 8 (viii) (I) Subject to subclause (II), clause (i) does not apply if line 9 the tenant is at least 60 years of age, disabled, or certified as being line 10 terminally ill by the tenant’s treating physician. line 11 (II) This clause does not apply if the intended occupant is line 12 disabled and no other units are available at the property. line 13 (ix)
line 14 (viii) As used in this subparagraph:
line 15 (I) “Intended occupant” means the owner of the residential real line 16 property or the owner’s spouse, domestic partner, child, grandchild, line 17 parent, or grandparent, as described in clause (i). line 18 (II) “Owner” means an owner who is a natural person that has line 19 at least a 51-percent recorded ownership interest in the property. line 20 (B) Withdrawal of all of the rental units at the residential real line 21 property from the rental market for at least 10 years. market. line 22 (i) If a rental unit withdra wn from the rental mark et pursuant line 23 to this subparagraph is offered again for rent or lease for residential line 24 purposes within five years of the date the rental unit was withdrawn line 25 from rent or lease, all of the following shall apply:
line 26 (I) The owner of the rental unit shall be liable to an y tenant or line 27 lessee who was displaced from the property by that action for any line 28 damages.
line 29 (II) An owner who offers the rental unit again for rent or lease line 30 shall first of fer the unit for rent or lease to the tenant or lessee line 31 displaced from that unit pursuant to this subparagraph on the same line 32 terms as the tenant’s previous lease and at the same rental rate plus line 33 any allowable increases a vailable under Section 1947.12 if the line 34 tenant has advised the o wner in writing, within 30 days of the line 35 displacement, of the tenant’s desire to consider an offer to renew line 36 the tenanc y and has furnished the o wner with current contact line 37 information to which that of fer is to be directed. The displaced line 38 tenant shall ha ve 30 days to accept the of fer and communicate line 39 acceptance to the landlord.
95 — 6 — SB 567
line 1 (III) For an y tenanc y commenced during the time periods line 2 described in this clause, the accommodations shall be offered and line 3 rented or leased at the la wful rent in effect at the time the notice line 4 of termination of tenanc y w as serv ed plus annual adjustments line 5 available under Section 1947.12.
line 6 (ii) Notwithstanding paragraph (4) of subdivision (d) of Section line 7 1947.12, if a rental unit withdrawn from the rental market for the line 8 just cause authorized pursuant to this subparagraph is demolished, line 9 and a ne w rental unit is constructed on the same property and line 10 offered for rent or lease within five years of the date the rental unit line 11 was withdrawn from rent or lease, the ne wly constructed rental line 12 unit shall be subject to Section 1947.12.
line 13 (iii)
line 14 (i) This subparagraph shall apply to any successor in interest of line 15 an o wner who has withdra wn rental units from rent or lease line 16 pursuant to this subparagraph.
line 17 (iv)
line 18 (ii) (I) Before withdrawing all of the rental units at a residential line 19 real property pursuant to this subparagraph, an owner shall record line 20 a notice with the county recorder that describes the real property, line 21 the dates applicable to the constraints, and the name of the owner line 22 of record of the real property.
line 23 (II) The notice required by this clause shall be inde xed in the line 24 grantor-grantee index.
line 25 (III) A person who acquires, as a bona fide purchaser for value, line 26 title to real property subsequent to the date upon which all rental line 27 units thereon have been withdrawn from rent or lease shall not be line 28 a successor in interest for the purposes of this chapter if the notice line 29 prescribed by this clause has not been recorded with the county line 30 recorder at least one day before the transfer of title. line 31 (v) (I) Except as provided in subclause (II), the line 32 (iii) The date on which the rental unit is withdra wn from rent line 33 or lease pursuant to this subparagraph, as well as the date of line 34 termination of tenancy, shall be deemed to be 120 days from the line 35 delivery of the written notice to terminate the tenancy. line 36 (II) If the tenant or lessee is at least 62 years of age or disabled, line 37 as defined in Section 12955.3 of the Go vernment Code, and has line 38 lived in the rental unit or unit within the rental unit for at least one line 39 year before the date of deli very of the notice required by clause line 40 (iv), the date of withdrawal of the rental unit of that tenant or lessee 95 SB 567 — 7 —
line 1 shall be e xtended to one year after the date of deli very of that line 2 notice to the tenant if the tenant gives written notice of the tenant’s line 3 entitlement to an extension to the owner within 60 days of the date line 4 of delivery of the notice of intent to withdraw. line 5 (C) (i) The owner complying with any of the following:
line 6 (I) An order issued by a go vernment agency or court relating line 7 to habitability that necessitates permanently vacating the residential line 8 real property.
line 9 (II) An order issued by a go vernment agenc y or court to line 10 permanently vacate the residential real property. line 11 (III) A local ordinance that necessitates permanently vacating line 12 the residential real property.
line 13 (ii) If it is determined by any government agency or court that line 14 the tenant is at fault for the condition or conditions triggering the line 15 order or need to v acate under clause (i), the tenant shall not be line 16 entitled to relocation assistance as outlined in paragraph (3) of line 17 subdivision (d).
line 18 (D) (i) Temporary relocation Intent to demolish or to line 19 substantially remodel the residential real property. line 20 (ii) For purposes of this subparagraph, “substantially remodel” line 21 means the replacement or substantial modification of any structural, line 22 electrical, plumbing, or mechanical system that requires a permit line 23 from a go vernmental agenc y, or the abatement of hazardous line 24 materials, including lead-based paint, mold, or asbestos, in line 25 accordance with applicable federal, state, and local la ws, that line 26 cannot be reasonably accomplished in a safe manner with that line 27 allows the tenant to r emain living in place, the place and that line 28 requires the tenant to v acate the residential real property for at line 29 least 60 days, that is required to bring the property into compliance line 30 with applicable codes and laws affecting the health and safety of line 31 the tenants, and for which all necessary permits have been obtained line 32 by the owner as of the date that the termination notice is serv ed. line 33 30 consecutive days. A tenant is not r equired to vacate the line 34 residential real property on any days where a tenant could continue line 35 living in the r esidential real property without violating health, line 36 safety, and habitability codes and laws. Cosmetic improvements line 37 alone, including painting, decorating, and minor repairs, or other line 38 work that can be performed safely without having the residential line 39 real property vacated, do not qualify as substantial rehabilitation. 95 — 8 — SB 567
line 1 (iii) A written notice terminating a tenanc y for a just cause line 2 pursuant to this subparagraph shall include all of the follo wing line 3 information:
line 4 (I) A statement informing tenants of their right to temporary line 5 relocation expenses. the intent to demolish or substantially remodel line 6 the rental unit.
line 7 (II) The following statement:
line 8
line 9 “When
line 10 “If the needed repairs are not completed on your unit, the owner line 11 must offer you the opportunity to return to your unit with a rental line 12 agreement containing the same terms as your original rental line 13 agreement at the same rental rate.”
line 14
line 15 (III) A description of the repairs to be completed and completed, line 16 the approximate expected duration of the repairs. repairs, and a line 17 copy of permits necessary to undertake the repairs. line 18 (IV) A notification that if the tenant is interested in reoccupying line 19 the rental unit following repairs, the tenant shall inform the owner line 20 of the tenant’ s interest in r eoccupying the r ental unit following line 21 repairs and provide to the owner the tenant’s temporary address, line 22 telephone number, and email address.
line 23 (V) A notification of the tenant’ s right to elect permanent line 24 relocation pursuant to clause (vi), the e xact amount of the line 25 permanent relocation payment to which the tenant w ould be line 26 entitled, and instructions for claiming permanent relocation. line 27 (iv) Notwithstanding subdivision (d), an owner issuing a written line 28 notice terminating a tenanc y for a just cause pursuant to this line 29 subparagraph shall provide any tenant subject to the termination line 30 with comparable alternate housing in the same city as the rental line 31 unit or pay all actual expenses associated with temporary relocation line 32 for the duration of the relocation.
line 33 (v) (I) If the o wner reco vers possession pursuant to this line 34 subparagraph, whether or not pursuant to an unla wful detainer line 35 judgment, the tenant shall be gi ven the right of first refusal to line 36 reoccupy the unit at the same rental terms.
line 37 (II) An owner shall notify a tenant in writing that the unit is line 38 ready to reoccupy.
line 39 (vi) (I) A tenant who recei ves a written notice terminating a line 40 tenancy for a just cause pursuant to this subparagraph may elect 95 SB 567 — 9 —
line 1 for permanent relocation instead of reoccup ying the unit by line 2 notifying the owner of the tenant’s intent to permanently relocate line 3 in writing within 30 days of service of the termination notice. line 4 (II) If the tenant elects for permanent relocation pursuant to this line 5 clause, notwithstanding any other law, the owner shall pay to the line 6 tenant a permanent relocation payment of six times the current fair line 7 market rent, calculated pursuant to Section 888.113 of Title 24 of line 8 the Code of Federal Regulations, for the jurisdiction in which the line 9 rental unit is located, corresponding to the size of the rental unit. line 10 (c) Before an owner of residential real property issues a notice line 11 to terminate a tenanc y for just cause that is a curable lease line 12 violation, the owner shall first give notice of the violation to the line 13 tenant with an opportunity to cure the violation pursuant to line 14 paragraph (3) of Section 1161 of the Code of Ci vil Procedure. If line 15 the violation is not cured within the time period set forth in the line 16 notice, a three-day notice to quit without an opportunity to cure line 17 may thereafter be served to terminate the tenancy. line 18 (d) (1) For a tenanc y for which just cause is required to line 19 terminate the tenanc y under subdi vision (a), if an o wner of line 20 residential real property issues a termination notice based on a line 21 no-fault just cause described in paragraph (2) of subdi vision (b), line 22 the owner shall, regardless of the tenant’s income, at the owner’s line 23 option, do one of the following:
line 24 (A) Assist the tenant to relocate by providing a direct payment line 25 to the tenant as described in paragraph (3).
line 26 (B) Waive in writing the payment of rent for the final month of line 27 the tenancy, prior to the rent becoming due.
line 28 (2) If an owner issues a notice to terminate a tenancy for no-fault line 29 just cause, the o wner shall notify the tenant in the written line 30 termination notice of the tenant’s right to relocation assistance or line 31 rent waiver pursuant to this section. If the o wner elects to w aive line 32 the rent for the final month of the tenanc y as pro vided in line 33 subparagraph (B) of paragraph (1), the notice shall state the amount line 34 of rent waived and that no rent is due for the final month of the line 35 tenancy.
line 36 (3) (A) The amount of relocation assistance or rent waiver shall line 37 be equal to one month of the tenant’s rent that was in effect when line 38 the owner issued the notice to terminate the tenancy. Any relocation line 39 assistance shall be provided within 15 calendar days of service of line 40 the notice.
95 — 10 — SB 567
line 1 (B) If a tenant fails to vacate after the expiration of the notice line 2 to terminate the tenanc y, the actual amount of an y relocation line 3 assistance or rent w aiver pro vided pursuant to this subdi vision line 4 shall be recoverable as damages in an action to recover possession. line 5 (C) The relocation assistance or rent w aiver required by this line 6 subdivision shall be credited against any other relocation assistance line 7 required by any other law.
line 8 (4) An owner’s failure to strictly comply with this subdivision line 9 shall render the notice of termination void.
line 10 (e) This section shall not apply to the follo wing types of line 11 residential real properties or residential circumstances:
line 12 (1) Transient and tourist hotel occupanc y as defined in line 13 subdivision (b) of Section 1940.
line 14 (2) Housing accommodations in a nonprofit hospital, religious line 15 facility, extended care facility, licensed residential care facility for line 16 the elderly, as defined in Section 1569.2 of the Health and Safety line 17 Code, or an adult residential f acility, as defined in Chapter 6 of line 18 Division 6 of Title 22 of the Manual of Policies and Procedures line 19 published by the State Department of Social Services. line 20 (3) Dormitories owned and operated by an institution of higher line 21 education or a kindergarten and grades 1 to 12, inclusive, school. line 22 (4) Housing accommodations in which the tenant shares line 23 bathroom or kitchen facilities with the owner who maintains their line 24 principal residence at the residential real property. line 25 (5) Single-family o wner-occupied residences, including both line 26 of the following:
line 27 (A) A residence in which the o wner-occupant rents or leases line 28 no more than two units or bedrooms, including, but not limited to, line 29 an accessory dwelling unit or a junior accessory dwelling unit. line 30 (B) A mobilehome.
line 31 (6) A property containing two separate dwelling units within a line 32 single structure in which the o wner occupied one of the units as line 33 the owner’s principal place of residence at the be ginning of the line 34 tenancy, so long as the owner continues in occupancy, and neither line 35 unit is an accessory dwelling unit or a junior accessory dwelling line 36 unit.
line 37 (7) Housing that has been issued a certificate of occupanc y line 38 within the previous 15 years, unless the housing is a mobilehome. line 39 (8) Housing restricted by deed, regulatory restriction contained line 40 in an agreement with a go vernment agenc y, or other recorded 95 SB 567 — 11 —
line 1 document as affordable housing for persons and f amilies of very line 2 low, low, or moderate income, as defined in Section 50093 of the line 3 Health and Safety Code, or subject to an agreement that provides line 4 housing subsidies for affordable housing for persons and families line 5 of very low, low, or moderate income, as defined in Section 50093 line 6 of the Health and Safety Code or comparable federal statutes. line 7 (9) Residential real property, including a mobilehome, that is line 8 alienable separate from the title to any other dwelling unit, provided line 9 that both of the following apply:
line 10 (A) The owner is not any of the following:
line 11 (i) A real estate investment trust, as defined in Section 856 of line 12 the Internal Revenue Code.
line 13 (ii) A corporation.
line 14 (iii) A limited liability company in which at least one member line 15 is a corporation.
line 16 (iv) Management of a mobilehome park, as defined in Section line 17 798.2.
line 18 (B) (i) The tenants have been provided written notice that the line 19 residential property is exempt from this section using the following line 20 statement:
line 21 “This property is not subject to the rent limits imposed by Section line 22 1947.12 of the Ci vil Code and is not subject to the just cause line 23 requirements of Section 1946.2 of the Ci vil Code. This property line 24 meets the requirements of Sections 1947.12 (d)(5) and 1946.2 line 25 (e)(8) of the Civil Code and the owner is not any of the following:
line 26 (1) a real estate investment trust, as defined by Section 856 of the line 27 Internal Revenue Code; (2) a corporation; or (3) a limited liability line 28 company in which at least one member is a corporation.” line 29 (ii) (I) Except as pro vided in subclause (II), for a tenanc y line 30 existing before July 1, 2020, the notice required under clause (i) line 31 may, but is not required to, be provided in the rental agreement. line 32 (II) For a tenancy in a mobilehome existing before July 1, 2022, line 33 the notice required under clause (i) may, but is not required to, be line 34 provided in the rental agreement.
line 35 (iii) (I) Except as pro vided in subclause (II), for an y tenancy line 36 commenced or renewed on or after July 1, 2020, the notice required line 37 under clause (i) must be provided in the rental agreement. line 38 (II) For any tenancy in a mobilehome commenced or renewed line 39 on or after July 1, 2022, the notice required under clause (i) shall line 40 be provided in the rental agreement.
95 — 12 — SB 567
line 1 (iv) Addition of a provision containing the notice required under line 2 clause (i) to an y new or renewed rental agreement or fix ed-term line 3 lease constitutes a similar pro vision for the purposes of line 4 subparagraph (E) of paragraph (1) of subdivision (b). line 5 (f) An owner of residential real property subject to this section line 6 shall provide notice to the tenant as follows:
line 7 (1) (A) Except as provided in subparagraph (B), for any tenancy line 8 commenced or renewed on or after July 1, 2020, as an addendum line 9 to the lease or rental agreement, or as a written notice signed by line 10 the tenant, with a copy provided to the tenant. line 11 (B) For a tenancy in a mobilehome commenced or renewed on line 12 or after July 1, 2022, as an addendum to the lease or rental line 13 agreement, or as a written notice signed by the tenant, with a copy line 14 provided to the tenant.
line 15 (2) (A) Except as provided in subparagraph (B), for a tenancy line 16 existing prior to July 1, 2020, by written notice to the tenant no line 17 later than August 1, 2020, or as an addendum to the lease or rental line 18 agreement.
line 19 (B) For a tenanc y in a mobilehome e xisting prior to July 1, line 20 2022, by written notice to the tenant no later than August 1, 2022, line 21 or as an addendum to the lease or rental agreement. line 22 (3) The notification or lease pro vision shall be in no less than line 23 12-point type, and shall include the following:
line 24
line 25 “California law limits the amount your rent can be increased. See line 26 Section 1947.12 of the Civil Code for more information. California line 27 law also pro vides that after all of the tenants ha ve continuously line 28 and lawfully occupied the property for 12 months or more or at line 29 least one of the tenants has continuously and la wfully occupied line 30 the property for 24 months or more, a landlord must pro vide a line 31 statement of cause in any notice to terminate a tenancy. See Section line 32 1946.2 of the Civil Code for more information.” line 33
line 34 The notification or lease provision shall be subject to Section 1632. line 35 (g) An owner terminating a tenanc y pursuant to this section line 36 shall allege and prove that the recovery of possession is proceeding line 37 in good faith and honest intent, and there is not an ulterior motive line 38 for the reason stated in the written termination notice. line 39 (h)
95 SB 567 — 13 —
line 1 (g) An owner’s f ailure to comply with an y pro vision of this line 2 section shall render the written termination notice void. line 3 (i)
line 4 (h) (1) An attempt to reco ver possession of a rental unit in line 5 material violation of this section shall render the o wner liable to line 6 the tenant in a civil action for damages of not less than up to three line 7 times the actual damages. An awar d may also be enter ed for line 8 punitive damages for the benefit of the tenant against the owner. line 9 (2) The state and the local government in which the rental unit line 10 is located shall ha ve the authority to do both of the follo wing:
line 11 bring actions for injunctive r elief on behalf of the state , city, or line 12 county, or on behalf of tenants seeking compliance by landlor ds line 13 with this section. Nothing in this par agraph is intended to limit line 14 the remedies that a state or local go vernment has under existing line 15 law.
line 16 (A) Enforce the provisions of this section.
line 17 (B) Bring actions for injuncti ve relief on behalf of the state, line 18 city, or county , or on behalf of tenants seeking compliance by line 19 landlords with this section.
line 20 (C) With respect to a local go vernment, enact additional line 21 consequences for no-f ault e victions which are carried out in line 22 violation of this section.
line 23 (3) A pre vailing party in an action brought pursuant to this line 24 subdivision that is not an unla wful detainer action shall reco ver line 25 costs, any damages allo wable by la w, and reasonable attorne y’s line 26 fees.
line 27 (j)
line 28 (i) (1) This section does not apply to the following residential line 29 real property:
line 30 (A) Residential real property subject to a local ordinance line 31 requiring just cause for termination of a residential tenancy adopted line 32 on or before September 1, 2019, in which case the local ordinance line 33 shall apply.
line 34 (B) Residential real property subject to a local ordinance line 35 requiring just cause for termination of a residential tenancy adopted line 36 or amended after September 1, 2019, that is more protective than line 37 this section, in which case the local ordinance shall apply . For line 38 purposes of this subparagraph, an ordinance is “more protective” line 39 if it meets all of the following criteria:
95 — 14 — SB 567
line 1 (i) The just cause for termination of a residential tenancy under line 2 the local ordinance is consistent with this section. line 3 (ii) The ordinance further limits the reasons for termination of line 4 a residential tenanc y, pro vides for higher relocation assistance line 5 amounts, or pro vides additional tenant protections that are not line 6 prohibited by any other provision of law.
line 7 (iii) The local government has made a binding finding within line 8 their local ordinance that the ordinance is more protective than the line 9 provisions of this section.
line 10 (2) A residential real property shall not be subject to both a local line 11 ordinance requiring just cause for termination of a residential line 12 tenancy and this section.
line 13 (3) A local ordinance adopted after September 1, 2019, that is line 14 less protective than this section shall not be enforced unless this line 15 section is repealed.
line 16 (k)
line 17 (j) Any waiver of the rights under this section shall be v oid as line 18 contrary to public policy.
line 19 (l)
line 20 (k) For the purposes of this section, the follo wing definitions line 21 shall apply:
line 22 (1) “Owner” includes any person, acting as principal or through line 23 an agent, having the right to offer residential real property for rent, line 24 and includes a predecessor in interest to the owner. line 25 (2) “Residential real property” means any dwelling or unit that line 26 is intended for human habitation, including an y dwelling or unit line 27 in a mobilehome park.
line 28 (3) “Tenancy” means the lawful occupation of residential real line 29 property and includes a lease or sublease.
line 30 (m)
line 31 (l) This section shall not apply to a homeowner of a mobilehome, line 32 as defined in Section 798.9.
line 33 (n)
line 34 (m) This section shall remain in ef fect only until January 1, line 35 2030, and as of that date is repealed.
line 36 SEC. 2. Section 1947.12 of the Civil Code is amended to read:
line 37 1947.12. (a) (1) Subject to subdi vision (b), an o wner of line 38 residential real property shall not, over the course of any 12-month line 39 period, increase the gross rental rate for a dwelling or a unit more line 40 than 5 percent plus the percentage change in the cost of living, or 95 SB 567 — 15 —
line 1 10 percent, whiche ver is lo wer, of the lo west gross rental rate line 2 charged for that dwelling or unit at any time during the 12 months line 3 prior to the effective date of the increase. In determining the lowest line 4 gross rental amount pursuant to this section, an y rent discounts, line 5 incentives, concessions, or credits of fered by the o wner of such line 6 unit of residential real property and accepted by the tenant shall line 7 be excluded. The gross per-month rental rate and any owner-offered line 8 discounts, incentives, concessions, or credits shall be separately line 9 listed and identified in the lease or rental agreement or an y line 10 amendments to an existing lease or rental agreement. line 11 (2) If the same tenant remains in occupanc y of a unit of line 12 residential real property over any 12-month period, the gross rental line 13 rate for the unit of residential real property shall not be increased line 14 in more than tw o increments over that 12-month period, subject line 15 to the other restrictions of this subdivision governing gross rental line 16 rate increase.
line 17 (b) For a new tenancy in which no tenant from the prior tenancy line 18 remains in lawful possession of the residential real property , the line 19 owner may establish the initial rental rate not subject to subdivision line 20 (a). Subdivision (a) is only applicable to subsequent increases after line 21 that initial rental rate has been established.
line 22 (c) A tenant of residential real property subject to this section line 23 shall not enter into a sublease that results in a total rent for the line 24 premises that e xceeds the allo wable rental rate authorized by line 25 subdivision (a). Nothing in this subdivision authorizes a tenant to line 26 sublet or assign the tenant’s interest where otherwise prohibited. line 27 (d) This section shall not apply to the following residential real line 28 properties:
line 29 (1) Housing restricted by deed, regulatory restriction contained line 30 in an agreement with a go vernment agenc y, or other recorded line 31 document as affordable housing for persons and f amilies of very line 32 low, low, or moderate income, as defined in Section 50093 of the line 33 Health and Safety Code, or subject to an agreement that provides line 34 housing subsidies for affordable housing for persons and families line 35 of very low, low, or moderate income, as defined in Section 50093 line 36 of the Health and Safety Code or comparable federal statutes. line 37 (2) Dormitories owned and operated by an institution of higher line 38 education or a kindergarten and grades 1 to 12, inclusive, school. line 39 (3) Housing subject to rent or price control through a public line 40 entity’s valid exercise of its police power consistent with Chapter 95 — 16 — SB 567
line 1 2.7 (commencing with Section 1954.50) that restricts annual line 2 increases in the rental rate to an amount less than that provided in line 3 subdivision (a).
line 4 (4) Housing that has been issued a certificate of occupanc y line 5 within the previous 15 years, unless the housing is a mobilehome. line 6 (5) A property containing two separate dwelling units within a line 7 single structure in which the o wner occupied one of the units as line 8 the owner’s principal place of residence at the be ginning of the line 9 tenancy, so long as the owner continues in occupancy, and neither line 10 unit is an accessory dwelling unit or a junior accessory dwelling line 11 unit.
line 12 (6) Residential real property that is alienable separate from the line 13 title to any other dwelling unit, including a mobilehome, provided line 14 that both of the following apply:
line 15 (A) The owner is not any of the following:
line 16 (i) A real estate investment trust, as defined in Section 856 of line 17 the Internal Revenue Code.
line 18 (ii) A corporation.
line 19 (iii) A limited liability company in which at least one member line 20 is a corporation.
line 21 (iv) Management of a mobilehome park, as defined in Section line 22 798.2.
line 23 (B) (i) The tenants have been provided written notice that the line 24 residential real property is e xempt from this section using the line 25 following statement:
line 26 “This property is not subject to the rent limits imposed by Section line 27 1947.12 of the Ci vil Code and is not subject to the just cause line 28 requirements of Section 1946.2 of the Ci vil Code. This property line 29 meets the requirements of Sections 1947.12 (d)(5) and 1946.2 line 30 (e)(8) of the Civil Code and the owner is not any of the following:
line 31 (1) a real estate investment trust, as defined by Section 856 of the line 32 Internal Revenue Code; (2) a corporation; or (3) a limited liability line 33 company in which at least one member is a corporation.” line 34 (ii) For a tenancy existing before July 1, 2020, or July 1, 2022, line 35 if the lease is for a tenanc y in a mobilehome, the notice required line 36 under clause (i) may , but is not required to, be pro vided in the line 37 rental agreement.
line 38 (iii) For a tenancy commenced or rene wed on or after July 1, line 39 2020, or July 1, 2022, if the lease is for a tenancy in a mobilehome, 95 SB 567 — 17 —
line 1 the notice required under clause (i) must be provided in the rental line 2 agreement.
line 3 (iv) Addition of a provision containing the notice required under line 4 clause (i) to an y new or renewed rental agreement or fix ed-term line 5 lease constitutes a similar pro vision for the purposes of line 6 subparagraph (E) of paragraph (1) of subdi vision (b) of Section line 7 1946.2.
line 8 (e) An owner shall provide notice of any increase in the rental line 9 rate, pursuant to subdivision (a), to each tenant in accordance with line 10 Section 827.
line 11 (f) (1) On or before January 1, 2030, the Legislative Analyst’s line 12 Office shall report to the Le gislature regarding the effectiveness line 13 of this section and Section 1947.13. The report shall include, but line 14 not be limited to, the impact of the rental rate cap pursuant to line 15 subdivision (a) on the housing market within the state. line 16 (2) The report required by paragraph (1) shall be submitted in line 17 compliance with Section 9795 of the Government Code. line 18 (g) For the purposes of this section, the follo wing definitions line 19 shall apply:
line 20 (1) “Consumer Price Inde x for All Urban Consumers for All line 21 Items” means the following:
line 22 (A) The Consumer Price Inde x for All Urban Consumers for line 23 All Items (CPI-U) for the metropolitan area in which the property line 24 is located, as published by the United States Bureau of Labor line 25 Statistics, which are as follows:
line 26 (i) The CPI-U for the Los Angeles-Long Beach-Anaheim line 27 metropolitan area co vering the Counties of Los Angeles and line 28 Orange.
line 29 (ii) The CPI-U for the Ri verside-San Bernardino-Ontario line 30 metropolitan area co vering the Counties of Ri verside and San line 31 Bernardino.
line 32 (iii) The CPI-U for the San Die go-Carlsbad metropolitan area line 33 covering the County of San Diego.
line 34 (iv) The CPI-U for the San Francisco-Oakland-Hayw ard line 35 metropolitan area covering the Counties of Alameda, Contra Costa, line 36 Marin, San Francisco, and San Mateo.
line 37 (v) Any successor metropolitan area index to any of the indexes line 38 listed in clauses (i) to (iv), inclusive.
line 39 (B) If the United States Bureau of Labor Statistics does not line 40 publish a CPI-U for the metropolitan area in which the property 95 — 18 — SB 567
line 1 is located, the California Consumer Price Inde x for All Urban line 2 Consumers for All Items as published by the Department of line 3 Industrial Relations.
line 4 (C) On or after January 1, 2021, if the United States Bureau of line 5 Labor Statistics publishes a CPI-U inde x for one or more line 6 metropolitan areas not listed in subparagraph (A), that CPI-U index line 7 shall apply in those areas with respect to rent increases that tak e line 8 effect on or after August 1 of the calendar year in which the line 9 12-month change in that CPI-U, as described in subparagraph (B) line 10 of paragraph (3), is first published.
line 11 (2) “Owner” includes any person, acting as principal or through line 12 an agent, having the right to offer residential real property for rent, line 13 and includes a predecessor in interest to the owner. line 14 (3) (A) “Percentage change in the cost of li ving” means the line 15 percentage change, computed pursuant to subparagraph (B), in the line 16 applicable, as determined pursuant to paragraph (1), Consumer line 17 Price Index for All Urban Consumers for All Items. line 18 (B) (i) For rent increases that tak e effect before August 1 of line 19 any calendar year, the following shall apply:
line 20 (I) The percentage change shall be the percentage change in the line 21 amount published for April of the immediately preceding calendar line 22 year and April of the year before that.
line 23 (II) If there is not an amount published in April for the applicable line 24 geographic area, the percentage change shall be the percentage line 25 change in the amount published for March of the immediately line 26 preceding calendar year and March of the year before that. line 27 (ii) For rent increases that tak e effect on or after August 1 of line 28 any calendar year, the following shall apply:
line 29 (I) The percentage change shall be the percentage change in the line 30 amount published for April of that calendar year and April of the line 31 immediately preceding calendar year.
line 32 (II) If there is not an amount published in April for the applicable line 33 geographic area, the percentage change shall be the percentage line 34 change in the amount published for March of that calendar year line 35 and March of the immediately preceding calendar year. line 36 (iii) The percentage change shall be rounded to the nearest line 37 one-tenth of 1 percent.
line 38 (4) “Residential real property” means any dwelling or unit that line 39 is intended for human habitation, including an y dwelling or unit line 40 in a mobilehome park.
95 SB 567 — 19 —
line 1 (5) “Tenancy” means the lawful occupation of residential real line 2 property and includes a lease or sublease.
line 3 (h) (1) This section shall apply to all rent increases subject to line 4 subdivision (a) occurring on or after March 15, 2019, e xcept as line 5 provided in subdivision (i).
line 6 (2) In the event that an o wner has increased the rent by more line 7 than the amount permissible under subdivision (a) between March line 8 15, 2019, and January 1, 2020, both of the following shall apply:
line 9 (A) The applicable rent on January 1, 2020, shall be the rent as line 10 of March 15, 2019, plus the maximum permissible increase under line 11 subdivision (a).
line 12 (B) An o wner shall not be liable to the tenant for an y line 13 corresponding rent overpayment.
line 14 (3) An owner of residential real property subject to subdivision line 15 (a) who increased the rental rate on that residential real property line 16 on or after March 15, 2019, b ut prior to January 1, 2020, by an line 17 amount less than the rental rate increase permitted by subdivision line 18 (a) shall be allowed to increase the rental rate twice, as pro vided line 19 in paragraph (2) of subdi vision (a), within 12 months of March line 20 15, 2019, but in no event shall that rental rate increase exceed the line 21 maximum rental rate increase permitted by subdivision (a). line 22 (i) (1) Notwithstanding subdivision (h), this section shall apply line 23 only to rent increases for a tenanc y in a mobilehome subject to line 24 subdivision (a) occurring on or after February 18, 2021. line 25 (2) In the e vent that an o wner has increased the rent for a line 26 tenancy in a mobilehome by more than the amount permissible line 27 under subdivision (a) between February 18, 2021, and January 1, line 28 2022, both of the following shall apply:
line 29 (A) The applicable rent on January 1, 2022, shall be the rent as line 30 of February 18, 2021, plus the maximum permissible increase line 31 under subdivision (a).
line 32 (B) An o wner shall not be liable to the tenant for an y line 33 corresponding rent overpayment.
line 34 (3) An owner of residential real property subject to subdivision line 35 (a) who increased the rental rate on that residential real property line 36 on or after February 18, 2021, but prior to January 1, 2022, by an line 37 amount less than the rental rate increase permitted by subdivision line 38 (a) shall be allowed to increase the rental rate twice, as pro vided line 39 in paragraph (2) of subdivision (a), within 12 months of February 95 — 20 — SB 567
line 1 18, 2021, but in no event shall that rental rate increase exceed the line 2 maximum rental rate increase permitted by subdivision (a). line 3 (j) This section shall not apply to a homeowner of a mobilehome, line 4 as defined in Section 798.9.
line 5 (k) (1) The amendments to this section made by the act adding line 6 this subdi vision shall apply to all rent increases subject to line 7 subdivision (a) occurring on or after March 1, 2023. line 8 (2) In the event that an o wner has increased the rent by more line 9 than the amount permissible under subdivision (a), as amended by line 10 the act adding this subdi vision, between March 1, 2023, and line 11 January 1, 2024, both of the following shall apply:
line 12 (A) The applicable rent on January 1, 2024, shall be the rent as line 13 of March 1, 2023, plus the maximum permissible increase under line 14 subdivision (a), as amended by the act adding this subdivision. line 15 (B) An o wner shall not be liable to the tenant for an y line 16 corresponding rent overpayment.
line 17 (3) An owner of residential real property subject to subdivision line 18 (a) who increased the rental rate on that residential real property line 19 on or after March 1, 2023, b ut before January 1, 2024, by an line 20 amount less than the rental rate increase permitted by subdivision line 21 (a), as amended by the act adding this subdivision, shall be allowed line 22 to increase the rental rate twice, as pro vided in paragraph (2) of line 23 subdivision (a), before March 1, 2024, but that rental rate increase line 24 shall not e xceed the maximum rental rate increase permitted by line 25 subdivision (a), as amended by the act adding this subdivision. line 26 (l)
line 27 (k) (1) A landlord who demands, accepts, recei ves, or retains line 28 any payment of rent in e xcess of the maximum rent allo wed by line 29 this section shall be liable in a civil action to the tenant from whom line 30 those payments are demanded, accepted, received, or retained for line 31 all of the following:
line 32 (A) Reasonable attorney’s fees and costs.
line 33 (B) Injunctive relief.
line 34 (C) Damages in the amount by which any payment demanded, line 35 accepted, received, or retained e xceeds the maximum allo wable line 36 rent.
line 37 (D) Upon a showing that the landlord has acted willfully or with line 38 oppression, fraud, or malice, a ci vil penalty of treble the amount line 39 by which any payment demanded, accepted, received, or retained line 40 exceeds the maximum allowable rent.
95 SB 567 — 21 —
line 1 (2) A local government within whose jurisdiction the residential line 2 real property is located shall ha ve the authority to do both of the line 3 following:
line 4 (A) Enforce the provisions of this section.
line 5 (B) Bring actions for injuncti ve relief on behalf of the city or line 6 county or on behalf of tenants seeking compliance by landlords line 7 with this section.
line 8 (3) In an action pursuant to this subdivision for injunctive relief, line 9 it shall be presumed that a tenant suffers irreparable harm through line 10 violation of this section.
line 11 (4) An action pursuant to this subdivision shall not be brought line 12 after the date that is three years from the date on which the cause line 13 of action accrued.
line 14 (m)
line 15 (l) Any waiver of the rights under this section shall be v oid as line 16 contrary to public policy.
line 17 (n)
line 18 (m) This section shall remain in ef fect until January 1, 2030, line 19 and as of that date is repealed.
line 20 (o)
line 21 (n) (1) The Le gislature finds and declares that the unique line 22 circumstances of the current housing crisis require a state wide line 23 response to address rent gouging by establishing state wide line 24 limitations on gross rental rate increases.
line 25 (2) It is the intent of the Le gislature that this section should line 26 apply only for the limited time needed to address the current line 27 statewide housing crisis, as described in paragraph (1). This section line 28 is not intended to e xpand or limit the authority of local line 29 governments to establish local policies regulating rents consistent line 30 with Chapter 2.7 (commencing with Section 1954.50), nor is it a line 31 statement regarding the appropriate, allowable rental rate increase line 32 when a local go vernment adopts a polic y regulating rent that is line 33 otherwise consistent with Chapter 2.7 (commencing with Section line 34 1954.50).
line 35 (3) Nothing in this section authorizes a local go vernment to line 36 establish limitations on an y rental rate increases not otherwise line 37 permissible under Chapter 2.7 (commencing with Section 1954.50), line 38 or affects the existing authority of a local government to adopt or line 39 maintain rent controls or price controls consistent with that chapter. 95 — 22 — SB 567
line 1 SEC. 3. No reimbursement is required by this act pursuant to line 2 Section 6 of Article XIIIB of the California Constitution because line 3 a local agency or school district has the authority to le vy service line 4 charges, fees, or assessments sufficient to pay for the program or line 5 level of service mandated by this act, within the meaning of Section line 6 17556 of the Government Code.
O
95 SB 567 — 23 —