Rent Control in Temecula? Know the Rules Before You Rent or Invest!

Welcome back inside Uplift Property Management I'm Tommy Perfect CEO and managing broker here at Uplift and today I want to talk to you guys about rent control in Temecula.

So really the big question is is there rent control specifically for Temecula? I know we have California stuff but is there something in Temecula that is going to affect me and my rental properties quick answer is no there is no specific city or county regulations regarding rent control however we still are in California and we do need to follow the whole state laws and regulations regarding rent control that all falls under.

California AB1482 this is often referred to as the California Tenant Protection Act of 2019 there have been a lot of different modifications to the Tenant Protection Act of 2019 but mainly this is going to talk about a specific group of properties namely multifamily properties and it goes into specific actions on those multi family properties regarding how much you can increase your rent and also what kind of reasons you can give notice to these tenants the main first step of understanding the tenant protection act of 2019 is understanding what properties this actually applies to this law was actually targeted toward multifamily properties and when I talk about multifamily properties this is 2 units or more on a property so when I get into a a forplex an 8plex a 60-unit apartment building yes I'm going to have rent control however there are a lot of exceptions to that rule the other type is a little bit on property ownership and when you talk about corporations REITs and LLC's that don't have only persons natural persons as ownerships uh those are also going to be properties that are included the exemptions we talk about are single family homes and condos if you just have that single family home that condo those are not rent controlled units anymore they are there's no legislation regarding what you can do for your rent increases or those just cause evictions you also have owner occupied duplexes.

So I know I talked about it being applied toward multif family and you would think hey a duplex is multi family but one exemption is if the owner actually resides in one of those units that duplex or the other one rented out unit is not included within the coverages of AB1482 there are also some other small exclusions for newly built units that received their certificate of occupancy within the last 15 years and also some very special circumstances regarding affordable housing um obviously those ones already have their own slew of regulations that they have to work through with their local housing authority so those ones are not covered under this AB1482 protection now that we know what properties rent control applies to.

Let's talk about what those rules look like for those properties that are included in the coverages of AB1482 in California first off rent control right the max amount of rent you can increase that is 5% plus the local CPI for housing they tell us to go based off the April number but hey they don't act the Bureau of Labor Statistics doesn't actually provide an April number so usually we go based off the March number and then that gets applied that following August for that following entire calendar year so for example we'll take the March of 2024 number it gets applied for all rent increases going into effect August 2024 all the way through July of 2025 then we'll see that March of 2025 number and apply that for August of 2025 currently right now in Tmacula Riverside San Bernardino Ontario that number for CPI was 3.3 so 5% plus 3.3% gives us a max increase of 8.3% for this calendar year all the way up until August 2025 where we'll have that new number uh released and made known for us what happens if CPI is more than 5% 5 + 5 gives us a max increase of 10 so if it if the CPI is actually 12% and we've seen different CPIs go much higher than the 5% increase in certain counties in California but you're capped at a maximum of a 10% rent increase if CPI um plus 5% ex exceeds that 10% increase these rent increases really only apply to a tenant during their lease so if their lease comes up at the end of a year and you're going to increase their rent that's where this cap is applied to right so or if they're month-to-month tenants and after whatever period of time that you have them you want to give them rent increase it's capped at this again there's a couple other small rules one you're only allowed to increase the rent twice per year and between the two of them it can't be more than 10% off of that first initial basis amount so you can't do 5% now and then 5% again in 6 months on top of it cuz then you would actually be a little bit more than 10% right you have to do 5% of the first amount and then if you want to do again 5% again of that first amount not the increased amount again so you need to make sure that you're staying compliant and making sure that your cap doesn't go above the 5% plus CPI or the maximum of 10% whichever is lower this is something that you can get around when somebody moves out you aren't limited on how much you're allowed to reent the property out for so when you go and find a new tenant you can market that and get market rent even if you were severely undermarket before in closing up and summarizing.

What should you do as the landlord of a property that is covered you need to figure out first if you're covered or if you're exempt if you are covered then you need to make sure you understand the rules if you're exempt you need to actually have some documentation in your lease regarding that as well second if you are covered stick to those rent cap rules and frankly I recommend everybody stick to these rent cap rules even if you aren't covered unless you have a special a special circumstance where you actually have severely undermarket rent and tenants that are capable of paying more there are just there's just some really good things that you can do as a landlord to create longer tenencies and actually increase your ROI without necessarily keeping your property all the way at market rent 100% of the time again there are some just cause eviction rules we can talk about those in more detail feel free to call us if you want to know about just cause and those reasons why you would have somebody move out those are some protections in this ordinance but it's not about rent control and that there are some disclosure requirements in your lease so if you are covered you have to disclose that and have a specific agenda in your lease that goes over AB1482 the Tenant Protection Act of 2019 and if you're exempt you also have to have very specific language that's live that's listed in the law of what you have to say to say that your property is excluded from rent control as well so those are a few of the things you need to do as a as a landlord as a tenant this does help you it protects you from some large rent hikes when you're a covered property and it protects you from a landlord taking advantage of you for just trying to squeeze you for every penny that you're worth so some of these things are are really good i know that landlords this is a real hot topic a sticking point for a lot of people especially when it comes around to getting rid of your property selling it renovating it trying to get a new tenant in and there's a lot of restrictions around that however it is something that allows us to really be highquality landlords that actually uplift people in our community rather than just treating people like they're another paycheck so these are great opportunities for us to be better landlords and better humans in our society.