By Alan Pentico
I can’t help but laugh when I see videos and memes about “getting rich with real estate.” Whether it’s on Instagram, TikTok or X, it’s a common topic: How homeowners can supposedly make easy money by renting out an Accessory Dwelling Unit, one half of a duplex, a room or even a garage.
I’ve even heard rentals described as a “passive” investment – meaning there’s not much work involved.
This is 100 percent wrong.
Let’s get one thing straight: managing rental properties requires work, whether you own just one or two properties or hundreds. Landscaping the grounds and maintaining buildings are just a few components of the job. The biggest challenge, though, is compliance with ever-changing rules – and in California, we have many laws.
I have some news for anyone who plans to rent out a home in California: If you are not actively engaged and following the recent legislation, you are probably breaking the law.
That’s because the rules and laws are changing rapidly. As one example, if you have a rental application form you used last year, it might be outdated by now due to recent laws at the state and local level.
In recent years, because of an inadequate supply of homes, the rental market has become more competitive – a significant challenge for Californians. As living costs soar, legislative bodies are stepping forward with laws aimed at regulating the rental process, preventing tenant displacement, and ensuring healthier living conditions.
These well-intentioned legislative efforts are changing the landscape not just for renters but also for landlords, who play a vital role as housing providers within the community.
Landlords are working hard to adapt and comply – but especially for smaller property owners, it’s not an easy task.
Here’s one example. A local property manager recently took over management of a San Diego rental home property. Once she received copies of the leases and other paperwork, the manager discovered a big problem – the property was in violation of the City of San Diego’s Tenant Protection Ordinance that went into effect in 2023. The tenants had not been served the mandatory notification and 16-page Tenant Protection Guide required by the City – placing the owner in legal jeopardy.
Cities like San Diego and Chula Vista recently updated their Tenant Protection Ordinances to align with a new California State Law, SB 657. This law, taking effect April 1, 2024, aims to eliminate “loopholes” that previously allowed for tenant evictions under pretenses of major renovations or for a family member to move into the property.
Landlords are now tasked with providing detailed notices that include specific information about the remodeling work, permits obtained, and the tenant’s right to reoccupy the unit. These changes demand a greater level of transparency and accountability from landlords – and a whole set of new forms and checklists.
Again, these rules apply to everyone, except for specific exceptions. If you’re renting out a home, they probably apply to you.
And that’s not all. More new rules are ahead.
The introduction of a California state law limiting security deposits to one month’s rent, effective July 1, 2024, is another change.
Similarly, new legislation is being proposed that would force landlords to allow pets.
With all these rules affecting landlords, it’s easy to forget that tenants have responsibilities, too. Tenants should familiarize themselves with their lease rules about smoking, pets, noise and other rules specific to the property. They have a responsibility to notify landlords of items needing repair and seek permission to make significant changes to the property.
Landlords, as integral members of the housing community, are engaging with these legislative changes constructively. They are committed to following the law and upholding the rights and well-being of their tenants.
As these laws and ordinances come into effect, landlords are focused on continuing to provide safe, affordable, and healthy housing options for the community.
For everyone navigating the rental market, staying informed and prepared for these changes is not just beneficial—it’s crucial for building a thriving, supportive community.
And that takes work.
Alan Pentico, CAE, is the Executive Director of the Southern California Rental Housing Association.
