What are the New Eviction Requirements for Landlords in California?
Effective January 1, 2024, but not operative until April 1, 2024, new requirements for evictions of dwelling units in Civil Code §§ 1946.2 and 1947.12 tighten up the requirements for a landlord to terminate a tenancy under the Tenant Protection Act (i.e., California statewide rent cap and just cause eviction law) for no-fault evictions based upon owner move-in or substantial remodeling.
Additionally, an owner who violates the TPA by improperly terminating a tenancy or by raising rent beyond the maximum amount is liable for actual damages, reasonable attorney’s fees and costs (at the discretion of the judge), up to three times actual damages for willful violations and punitive damages.
The Tenant Protection Act of 2019 is a statewide rent cap and just cause eviction law. Under the TPA, there are only four permissible reasons on which a landlord may base a no-fault termination of tenancy.
The new law seeks to close perceived loopholes in two of them: terminations based on owner-move and those based on demolishing or substantial remodeling. The new law also seeks to address the question of remedies for a violation of the TPA. Currently, the TPA does not specify damages or enforcement mechanisms.
Termination of tenancy based on owner move-in.
In order to lawfully evict a tenant for just cause on the basis of an owner move-in:
1. The owner must identify in the written eviction notice the name and relationship to the owner of the intended occupant and include notification that the tenant may request proof that the intended occupant is actually an owner or related to the owner.
2. The owner or their family member would have to move in within 90 days after the tenant vacates and then occupy the unit for at least one year
3. The owner or their family member could not already occupy a unit and there could not be another vacant unit at the property.
4. If the intended occupant does not actually move in within 90 days or use the unit as their primary residence for at least a year, the owner must offer the unit back to the tenant who was evicted at the same rent and lease terms in effect at the time they vacated and reimburse the tenant for reasonable moving expenses incurred in excess of the required relocation assistance payment that may have been made in connection with the eviction.
5. If the former tenant does not move back in, and the owner subsequently identifies a new tenant still within the yearlong period after the eviction, the unit must continue to be offered at the lawful rent in effect at the time the eviction occurred and
6. The owner has to be a natural person holding at least a 25% ownership interest in the property (in order to prevent someone who holds a very small share of the property from evicting a tenant), a natural person who co-owns the property entirely with family members either outright or via a family trust, or a natural person who meets the 25% ownership threshold and whose recorded interest in the property is owned through an LLC or partnership.
Termination based on intent to demolish or to substantially remodel the residential real property.
1. Remodeling must require the tenant to vacate for 30 Consecutive Days. The remodel must not be able to be reasonably accomplished in a safe manner that allows the tenant to remain living in the place and must require the tenant to vacate the property for at least 30 consecutive days.
a. However, the tenant is not required to vacate the property on any days where a tenant could continue living in the property without violating health, safety, and habitability codes and laws.
2. Written Notice. A written notice terminating a tenancy must include all of the following:
a. A statement informing tenants of the intent to demolish or substantially remodel the unit,
b. The following statement verbatim: "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 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 30 days of notifying the owner of your acceptance of the offer”,
c. A description of the substantial remodel to be completed, the approximate expected duration of the substantial remodel, or, if the property is to be demolished, the expected date by which the property will be demolished,
d. A copy of the permit or permits required to undertake the substantial remodel. However, if the renovation is to abate hazardous materials then no permit need be given unless legally required.
e. A notification that if the tenant is interested in reoccupying the rental unit following the substantial remodel, the tenant must inform the owner of their interest and provide to the owner their address, telephone number, and email address.
Any termination notice that does not comply with any provision of the just cause rules is void.
Damages and enforcement mechanisms: Recovery of possession.
An owner who attempts to recover possession of a rental unit in material violation of the just cause provisions will be liable for:
a. Actual damages.
b. In the court’s discretion, reasonable attorney’s fees and costs.
c. Upon a showing that the owner has acted willfully or with oppression, fraud, or malice, up to three times the actual damages. An award may also be entered for punitive damages for the benefit of the tenant against the owner.
Damages and enforcement mechanisms: Collecting or demanding rent beyond the maximum.
An owner who demands, accepts, receives, or retains any payment of rent in excess of the maximum rent shall be liable in a civil action for all of the following:
a. Injunctive relief.
b. Damages in the amount by which any payment demanded, accepted, received, or retained exceeds the maximum allowable rent.
c. In the court’s discretion, reasonable attorney’s fees and costs.
d. Upon a showing that the owner has acted willfully or with oppression, fraud, or malice, damages up to three times the amount by which any payment demanded, accepted, received, or retained exceeds the maximum allowable rent.
Note on “actual damages” for material violation in termination of tenancy rules:
A tenant who has been wrongfully evicted is now authorized to recover actual damages. How might one calculate actual damages? The case of DeLisi v Lam (2019) 39 Cal.App.5th 663, which involved the San Francisco rent control ordinance, is illustrative of how open ended the calculation can be. In the DeLisi case, the judge permitted the jury to weigh two competing (and mutually exclusive) methods of determining actual damages, as set forth by the expert witnesses for each side.
First, according to the expert for the tenant, actual damages are the difference between the rent being paid by the tenant and the market rate rent, multiplied by the tenant’s intended length of occupancy. The tenant testified that she intended to stay five or ten years. Under the San Francisco ordinance, a triple damage penalty is automatically applied. Taking into account the present value of a ten-year tenancy, the expert arrived at a figure of $287,180. That figure multiplied by three would allow for total damages of approximately $860,000.
The expert for the landlord took a different view. In his view, the value of the rent-controlled tenancy was not an asset the tenant could monetize. Instead, damages would be the amount the tenant was out-of-pocket beyond what she would have been if she had stayed in the rent-controlled apartment. This included moving expenses, the difference between her monthly rent at the rent-controlled property and her monthly rent at her new apartment, and any differences in expenses for items such as commuting to work. All in all, “actual damages” would be $23,139 for a five-year period and $48,183 for a 10-year period. Multiplied by three these dollar figures are still considerable, but a far cry from amount calculated by the tenant’s expert.
The jury returned a verdict for $120,000 which multiplied by three equals $360,000. Which theory of “actual damages” did the jury base their decision on? No one knows for sure. Juries are not required to report the basis of their decisions. (They can be asked to answer specified questions. But even there, they are not reporting the reasoning behind their decision).
In many legal cases the attorney fees are staggering, often in excess of the actual damages awarded. Attorney fees may be awarded to the tenant at the discretion of the judge.
LESSONS:
1. Landlords should carefully review Civil Code §§ 1946.2 and 1947.12 to determine the requirements for evicting tenants of dwelling units.
2. Landlords should also carefully review any applicable city and county eviction requirements.
3. The new law seeks to close perceived loopholes in two of them: terminations based on owner-move and those based on demolishing or substantial remodeling.
4. The new law also seeks to address the question of remedies for a violation of the TPA because currently, the TPA does not specify damages or enforcement mechanisms.