Santa Rosa has had a strange relationship with rent control over the last decade. In 2016, the City Council passed a rent control law. There was a lot of backlash against that local ordinance, and it was put to a vote in a special election in 2017. Santa Rosa citizens voted against the rent stabilization regulation with 52% of the voters saying no thanks.
The plot twist, of course, is that statewide rent control went into effect in 2020, thanks to The Tenant Protection Act of 2019.
Things can get confusing quickly, especially if you’re an investor from outside of Santa Rosa or you’re just getting started on your journey of renting out properties in our competitive and fast-moving market. As professional property management experts in Santa Rosa, we see it as our job to protect you from making expensive legal mistakes. So we’ve put together this helpful blog post on how to understand the rent control regulations in Santa Rosa and beyond. California tenant protections are no joke. Make sure you’re compliant, otherwise you’re setting yourself up for trouble.
Is Your Santa Rosa Rental Covered by or Exempt from Rent Control?
Before you begin pulling your hair out about rent control regulations and which regulations you need to follow legally, let’s make sure your rental property is covered by California’s rent control laws.
- Which rental homes are covered by rent control?
Nearly all multifamily properties that were constructed at least 15 years ago are subject to the rent stabilization laws and the just cause eviction laws that are in The Tenant Protection Act.
- Which rental homes are exempt from the rent control laws?
Exempt properties include single-family homes and condos not owned by a Real Estate Investment Trust (REIT) or a corporation. If your property received a certificate of occupancy within the last 15 years, you’re also exempt until you have reached the point of being 15 years old. Mobile homes, dormitories, and hotels are exempt as well. Duplexes are also exempt from rent control laws when the owner of the property lives in one of the units.
Here’s something important to know: if your Santa Rosa rental property is exempt from rent control, you must say so in your lease agreement. This is an important detail to check. If you have not updated your lease agreement since this law was passed, it’s time to do that.
Rental Increases in Santa Rosa
The rent control limits are 5% plus the increase in the Consumer Price Index (CPI) or 10%, whichever is lower. This means that before you raise your rent, you have to know what the CPI is. In 2024, the maximum amount landlords can raise the rent is 8.8 percent. This is the 5% allowable increase plus the 3.8% increase in cost of living as established by the statewide CPI. Local jurisdictions may have different limits based on their rent stabilization laws and differing CPI levels. For Santa Rosa, however, landlords impacted by the statewide law are not permitted to raise the rent more than 8.8%.
The CPI component of rent control has become especially relevant in the last few years, as inflation has skyrocketed and costs for everything have increased. As inflation eases, you can expect to be closer to the 5% allowable increase than the 10% maximum increase. Be sure to watch the economic news carefully, and follow what the California Department of Finance does with the Consumer Price Index.
When Can You Raise the Rent?
Rent control laws allow Santa Rosa landlords to raise the rent to the allowed amount over a 12-month period. Typically, you’ll raise the rent one time during the course of a lease, and that’s when you’re ready to offer a renewal. While you can raise the rent at different times during the tenancy, you’d have to include that stipulation in your lease agreement, and you still could not raise the rent more than the allowed amount.
The Tenant Protection Act applies to month-to-month rentals as well as fixed lease agreements. So, if your initial lease agreement has ended and you and your tenant are now operating on a month-to-month schedule, the law still applies; both the limits on rental increases and the timing in which you can raise the rent.
You’ll need to provide proper notice to your tenants before raising the rent. Sixty days before the rent increase will go into effect, put the new amount in writing and the date that it will apply.
Increasing Rents Outside of Rent Control Laws
If you’re exempt from the statewide rent control laws, you can raise your rent as much as you want to.
Even if your property is included in the rent control laws, you can set the rent at any rate you want once a tenant has vacated and you’re preparing to lease the property to a new tenant.
Still, you should be mindful of the rent control limits.
You have to remember that even if you’re renting out a property that’s exempt from stabilization concerns, you’re still competing with rental units that have to follow those laws. So, if you raise your rent at renewal time to an amount that’s outside of what your tenant believes is fair and competitive, they’re going to leave your property and look for a more affordable place to live. And, if you set your rent at a price that’s too high for what the market demands, you can expect a longer vacancy because there are more competitively priced homes out there for Santa Rosa tenants to choose from.
Santa Rosa Just Cause Eviction and Rent Control
When we talk about rent control and the laws that brought it to most Santa Rosa properties, we have to remember that we’re talking about price control (limits to rental increases) and we’re also talking about eviction control. You cannot kick a tenant out of your property just because you want to avoid the rent control restrictions and lease your home to a new tenant at a higher rent.
That’s illegal.
And so the state of California included just cause eviction laws in The Tenant Protection Act. It’s not just about how much you can legally raise the rent; it’s also about the requirement that you allow your tenants to continue living in your property unless you have a good reason to evict them.
To evict your tenant or cancel the lease agreement, you must have just cause, or a legally compliant reason. There is a long list of what qualifies as just cause, but the most common reasons that a landlord will lawfully be able to evict a tenant in Santa Rosa are:
- Unpaid rent. When your tenant does not pay the rent that is due and you have sent the required notice demanding rent or the tenant’s vacating of the property but rent is still not paid, you are entitled to begin eviction proceedings.
- Lease violations. If your tenant violates the lease agreement in some way and you serve a notice demanding that they come into compliance but refuse to cure the lease violation, you have just cause to evict that tenant.
- Criminal activity. This is perhaps the easiest and fastest way to evict a tenant, but you’ll need documentation that criminal activity is occurring at your property.
- Property damage. If you discover excessive damage to your property that was caused by the tenant, you can lawfully evict that tenant.
All of these reasons (and a few more, less common reasons for eviction), are at-fault evictions, meaning the tenant has done something or not done something that has precipitated the eviction.
There are also no-fault evictions that are still legally acceptable in California but come with some extra requirements for the property owner, namely financial penalties. No-fault evictions that are still considered just cause include:
- Owner occupancy. If you or an immediate family member decide to move into the property that you own, you can avoid renewing the lease agreement and ask your tenants to leave. Laws have tightened up around this. For the eviction to be lawful, the owner or the owner’s family member must live in the property for at least 12 months. They’re also required to move into the property within 90 days of the tenant’s departure.
- Remodels. You’re permitted to terminate a lease agreement and move a tenant out to make substantial remodels. Again, recent changes to the law have tightened up the requirements for this type of eviction to be just. Your termination notice must detail the type of work that’s being done and provide the tenant with re-occupancy rights if the work does not begin or is not completed.
If you evict a tenant because of occupancy or remodel work, you’ll be required to pay a relocation fee to those residents. Typically, this is the equivalent of one month’s rent. You can either let tenants use this money to pay for their last month of rent or you can collect that rent and provide a direct payment to the departing tenant for the full amount.
As you can see, the law is always changing and rent control will never get less complicated in Santa Rosa or in California. We can help you understand the law and stay in compliance. Contact us at Prestige Real Estate & Property Management.
