How Much Can a Landlord Raise Rent in Santa Clara?

How Much Can a Landlord Raise Rent in Santa Clara?

Did you know that the average real estate property in the United States now costs over $350,000? As you might guess, this has served as an obstacle for those who are looking to purchase their first house. For others, it serves as a lucrative investment opportunity.

As time goes on, rent prices seem to be increasing more than ever before.

In Santa Clara, California, it's essential to understand how much a landlord can go about raising rent.

This topic might seem difficult at first, but it's much easier than you think. We've put together a guide that has everything you need to know about how much a landlord can raise rent prices. Let's get started.

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So, What Is Rent Control?

Rent control is a government-mandated price ceiling on rent prices.

It is designed to make housing more affordable for tenants by capping how much landlords can charge for Santa Clara rent prices. There are two different types of rent control: universal rent control and targeted rent control.

Universal rent control applies to all rental units in a jurisdiction, while targeted rent control only applies to units that are considered affordable housing.

Rent control is a controversial policy, with opponents arguing that it decreases the supply of rental units and drives up prices in the long run. Supporters argue that rent control is necessary to protect tenants from exploitation and ensure that everyone has access to affordable housing.

A Brief Look Into AB 1482 in California

In 2020, the state of California passed a rent control law, called AB 1482.

This law placed a statewide cap on rent increases at 5% plus the Consumer Price Index (CPI), with a maximum of 10%. The CPI is an index that measures the change in prices of goods and services over time.

AB 1482 also included a number of other provisions designed to protect tenants, such as barring landlords from evicting tenants without just cause and requiring landlords to provide relocation assistance to tenants who are displaced due to no fault of their own.

The law went into effect on January 1, 2020, and will sunset on January 1, 2030, unless it is extended by the legislature. However, the direction that the state government will take remains to be seen.

How Does This Impact How Much a Landlord in California Can Raise Their Rent?

Under AB 1482, a landlord in California can only raise the rent by 5% plus the CPI, with a maximum of 10%. So, if the CPI is 2%, then a landlord can raise the rent by 7% (5% + 2%).

However, if the CPI is 4%, then the landlord can only raise the rent by 9% (5% + 4%).

Be sure that you keep this in mind when considering Santa Clara living.

What About if the Rent Is Already Higher Than the Average Rent in the Area?

AB 1482 includes a provision that allows landlords to charge up to 20% above the average rent for units that are considered to be luxury units.

A luxury unit is defined as a unit that is newly constructed or has rent that is already more than 30% above the average rent in the area. Under most circumstances, though, this does not apply.

How Does This Law Impact Evictions in California?

AB 1482 bars landlords from evicting tenants without just cause. Just cause means that the landlord has a legitimate reason for evicting the tenant, such as non-payment of rent, damage to the property, or a lease violation.

This law also requires landlords to provide relocation assistance to tenants who are displaced due to no fault of their own. The amount of relocation assistance is based on the number of bedrooms in the unit and often ranges from $2,700 to $4,500.

What Type of Properties Does Rent Control In California Apply To?

Rent control in California applies to nearly all residential rental units, with the exception of units that are owned by landlords who own fewer than two properties.

This includes single-family homes, apartments, and condos. However, there are certain exceptions.

For example, if there is a three or four-unit property that is occupied by the owner, conventional rent control laws do not apply. Other exceptions include mobile homes, college dormitories, and properties that have already been subjected to previous rent control regulations.

Are Landlords Required to Issue Notice About Rent Increases?

Yes, landlords are required to give tenants written notice of any rent increases at least 60 days before the increase takes effect.

The notice must include the amount of the rent increase and the date when it will take effect. Otherwise, the landlord may run into legal complications in the future.

For example, let's assume that a tenant receives a notice that the rent will increase within the next 60 days. If the landlord does not convey by how much the rental increase, they will be breaking rent control laws.

What if a Tenant Can't Afford the Rent Increase?

If a tenant has resided at a property for less than a year, a landlord must give a 30-day notice. If the tenant has resided at that location for more than a year, the landlord must give a 60-day notice. If the landlord chooses to increase rent by more than 10%, they must give a 90-day notice to their tenants.

It's also worth noting that landlords must give a 30-day notice to tenants who are under week-to-week leases.

Under This New Law, How Do Evictions Work?

Landlords are still able to evict tenants for just cause, such as non-payment of rent, damage to property, or a lease violation. However, it's essential to understand that there is both at-fault just cause and no-fault just cause.

No-fault just cause it includes situations where the tenant has to be evicted due to no fault of their own, such as if the landlord needs to move into the unit or if the property is being sold.

In contrast, at-fault just cause involves evicting a tenant because they have done something wrong, such as not paying rent or damaging the property. If a landlord wants to evict a tenant for no-fault just cause, they must give the tenant at least 60 days' notice.

However, if the landlord wants to evict a tenant for at-fault just cause, they must give the tenant at least 30 days' notice.

What if a Tenant Wants to Move Out Before Their Lease Is Up?

If a tenant wants to move out before their lease is up, they are still responsible for paying rent for the remainder of the lease term. However, the landlord must make a reasonable effort to re-rent the unit, and the tenant is only responsible for paying rent for the amount of time that the unit is vacant.

This is key information to consider.

For example, imagine if you as a tenant continue to pay rent even though the landlord had already re-rented the unit. They would receive twice as much income and you will have to pay for a dwelling that you are no longer able to occupy.

What Are the Long-Term Effects of Rent Control on Landlords?

The long-term effects of rent control on landlords are contentious. Some experts believe that rent control could lead to a decrease in the quality of rental units, as landlords may be less likely to invest in maintaining and improving their properties if they're not able to increase rents.

Additionally, rent control could reduce the overall supply of rental units, as landlords may be more likely to convert their units into condos or sell them if they're not able to keep up with rising property taxes and maintenance costs.

Unfortunately, there is currently no available comprehensive research about these effects in the state of California. So, it remains to be seen how this new law will impact property owners.

As a direct result of rent control, landlords are now more apprehensive when it comes to choosing tenants. For example, let's assume that a landlord is willing to rent to anyone.

Tenant-related issues could justify increasing rent for the next tenant. To clarify, let's also assume that the tenant in question damaged the property, leaving the landlord to make expensive repairs.

Now that the property has amenities like new hardware, flooring, etc., they should be able to charge more rent to help recoup the money they spent on improving the property. Under rent control regulations, though, landlords may not be able to increase their rent by enough.

As you might guess, many landlords are also moving out of state to avoid these restrictions.

What Are the Long-Term Effects of Rent Control on Tenants?

Rent control could have a number of positive effects for tenants in the long term. For one, it could help to keep rents affordable, which would allow tenants to stay in their homes for longer periods of time.

Additionally, rent control could incentivize landlords to keep their units in good condition, as they would be less likely to evict tenants and lose income if they did so. Of course, there are also some potential negative effects of rent control on tenants. For example, if landlords are less likely to invest in their properties, the quality of rental units could decline over time.

Additionally, if rent control reduces the overall supply of rental units, it could lead to increased competition for housing and higher rents in the long run. Overall, the long-term effects of rent control on tenants are unclear.

More research is needed to determine how this new law will impact renters in California in the years to come.

How Do I Know if My Landlord Is Following the Law?

As previously mentioned, landlords must give tenants at least 60 days' notice if they want to evict them for no-fault just cause, and at least 30 days' notice if they want to evict them for at-fault just cause.

If your landlord is trying to evict you with less than the required amount of notice, they may be breaking the law. Remember that landlords can only raise the rent once each year, as well.

What Should I Do if I Discover My Landlord Is Breaking the Law?

If you feel as though your landlord is infringing upon your rights, there are a few things you can do. First, try to talk to your landlord and see if you can come to an agreement. If that doesn't work, you can file a complaint with the California Department of Consumer Affairs.

Finally, if your landlord is still breaking the law, you can contact an attorney or file a lawsuit. Of course, it's always best to try to avoid conflict if possible.

So, before you take any legal action, make sure you understand your rights and the law. That way, you can be sure that your landlord is actually breaking the law before you take any further steps.

It’s Essential to Understand How Much a Landlord Can Raise Rent

Rent control is a new law in California that limits how much landlords can raise rent and makes it more difficult for them to evict tenants.

The long-term effects of rent control on tenants are unclear. More research is needed to determine how this new law will impact renters in California in the years to come.

If you think your landlord is breaking the law, try to talk to them first. If that doesn't work, you can file a complaint with the California Department of Consumer Affairs or contact an attorney.

Keep this above guide in mind about how much a landlord can raise rent — it will prove to be valuable in the future.

Looking for more info on how we can help? Reach out to us today to discover what we can do.

Vinicius Brasil - The Brasil Group

VINICIUS BRASIL
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