A new law took effect earlier this year which aims to make no fault evictions more difficult on landlords. Many California landlords are still reeling from the pandemic-era restrictions on evictions and rent moratoriums. Well, California’s legislature has placed further restrictions on landlords. The general rule is that after a tenant has lived in the real property continuously for a year, that tenant’s lease can only be terminated for just cause and that just cause must be stated in a written notice.

Obviously, “just cause” includes the normal reasons for terminating the tenancy: failing to pay rent, breaching the lease, nuisance, waste, criminal activity, etc. These reasons are all considered “just cause” for a landlord wanting to terminate the tenant’s lease. What happens when none of these “just causes” happen to be the reason a landlord wants to terminate the lease? Well, that’s where the new law creates a larger burden for landlords. Where the landlord is looking to terminate the lease at no fault of the tenant’s, termination of the lease would be deemed “no-fault just cause.”

The new law discusses the “no-fault just causes” and adds additional burdens for the landlords if the landlords are seeking to terminate a tenant’s lease because of a “no-fault just cause.” The phrase “no-fault just causes” includes a landlord’s intent to occupy the property, taking the property off the rental market, a landlord complying with an order from a government agency or local ordinance, or a landlord’s intent to demolish or remodel the property.

First, in cases where the landlord intends to occupy the property, the new law requires a landlord to provide the tenant with a written notice. The written notice must contain all of the following or it is deemed void: the intended occupant’s name, relationship to the owner, proof that the intended occupant is an owner, or proof the intended occupant is related to the owner. The intended occupants are limited to the owner of the property, the owner’s spouse, domestic partner, child, grandchild, parent, or grandparent. No other relative can be used as an intended occupant. If the relative does not fit nicely into one of these categories, the landlord cannot terminate the tenant’s lease. In addition, any owner that occupies the property must move in within 90 days and live in the property for at least one year. Failure to do so means the landlord is obligated to offer to re-rent the property to the tenant at the same rent and lease terms and to reimburse the tenant for his or her reasonable moving expenses.

Second, in cases where the landlord intends to demolish or substantially remodel, the new law also requires additional information in the written notice and requires the landlord to allow the tenant to re-rent the property after the remodel is complete. The written notice of termination must include the following or is considered void: a description of the remodel, the expected duration of the remodel (or in the case of demolish, the expected date by which the property will be demolished), a copy of the permit(s) required to do the substantial remodel or demolition, or (if no permit(s) are required) a copy of the signed contract with the contractor hired by the owner of the property that reasonably details what work will be done by the contractor.

In addition, a new law signed last year (AB 12) reduced the amount of security deposit a landlord can demand from a tenant prior to the tenant moving into the property. Prior to the new law, landlords could demand two-months’ rent as a security deposit for unfurnished apartments and three month’s rent for furnished apartments. Obviously, this allowed landlords to have more peace of mind when renting property because they had a significant sum of money they could use to deduct any of the damage done by a tenant, especially after the landlord-tenant relationship has soured and the tenant is on the way out.

In all cases, after terminating the tenant’s lease, the owner must pay the tenant “relocation assistance” which is either waving the final month’s rent or directly paying to the tenant one month’s rent. Yes, in all cases where the landlord is seeking to terminate the lease at no fault of the tenant’s, the landlord must pay “relocation assistance” which is the value of one month’s rent. Clearly, terminating a lease at no fault of the tenant is going to cost the landlord, whether by cash payment or forfeiting one month’s rent. Thus, the new law creates a disincentive for landlords to terminate a tenant’s lease when the tenant is not at fault, which has the consequence of keeping tenants in the rental unit longer.