Sacramento Report

The Heat is On

by Debra Carlton

We are now half way through the year, and the California Legislature is not showing any signs of cooling down prior to its summer recess—especially as it relates to bills that will affect the rental housing industry. As the legislative session opened in January, we were introduced to SB 1403, which allows local government to adopt a law requiring rental property owners to give tenants a 60-day notice prior to terminating a tenancy. Despite hundreds of letters from members of the California Apartment Association, the bill successfully moved out of the Senate and awaits a hearing in the Assembly.

On May 1, Assembly Member Carole Migden (D-San Francisco) amended her bill, AB 2330, to make significant changes to landlord-tenant law. The amendments are sponsored by the Association of Community Organizations for Reform Now (ACORN), which, with over 120,000 member families, considers itself the nation’s largest community organization of low- and moderate-income families.

The Bill Does the Following:

Requires rental property owners to pay to tenants interest on security deposits when the deposits are held by the owner for more than six months.
Adds anti-retaliatory protections for tenants who complain about their tenancy or the conditions of the property. If an owner raises the rent or decreases services to a tenant within 180 days after the tenant raises any concerns about his or her tenancy, the owner would be subject to a retaliatory claim.
Prohibits an owner from collecting any nonrefundable fees at the beginning of a tenancy as reimbursement for the costs of processing the application of a new tenant (i.e., application screening fees).
Clarifies the law concerning security deposits as it relates to cleaning the unit. Upon termination of a tenancy, an owner would be allowed to deduct from the security deposit the costs of whatever cleaning of the premises is needed to return the unit to the same condition it was in at the start of the tenancy.
Defines “ordinary wear and tear” in the security deposit law to include routine painting, carpet replacement, or other repairs. An owner could not retain a portion of the security deposit for these purposes.
Requires an owner to perform a walk-through at the end of the tenancy and mandates that the tenant be given the option to be present.

Given California’s crucial need for housing, this may be the worst possible time for bills like SB 1403 and AB 2330. These bills are both harmful to the industry and, more importantly, extremely detrimental to the very citizens they offer to help—the tenant community. It will certainly increase the expenses necessary for owners to manage their rental housing business adequately, and it may very well require owners to pass these expenses on to residents in the form of increased rents; this is certainly not a positive development for existing tenants.

The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of the SFAA or the SF Apartment Magazine. Debra L. Carlton is the Vice President of Policy and Research for the California Apartment Association and is CAA’s chief lobbyist. © Copyright 2002.