California's New Housing Bills: Strategies for Real Estate Investors

Anthony A. Luna • May 24, 2024


Assembly Bill 2216: Required Acceptance of Pets


Assembly Bill 2216 prohibits rental housing providers from asking about pets during the rental application process and bans the collection of pet deposits or fees.


As California introduces new housing legislation aimed at enhancing tenant protections, real estate investors and property owners must navigate a complex and changing landscape. While these bills aim to promote fairness and accessibility, they present significant challenges for property owners. Here’s what you need to know about these new regulations and how to manage their impact effectively.



Challenges for Property Owners:

  • Increased Risk of Damage: Property owners bear the full risk of potential damages caused by pets without the ability to charge pet deposits.
  • Higher Maintenance Costs: Potential increases in maintenance costs due to pet-related damages.
  • Operational Adjustments: Revision of screening processes, leading to additional administrative burdens.


Strategic Response:

  • Enhanced Screening: Implement thorough tenant screening, including references and rental history.
  • Detailed Lease Agreements: Include clauses about pet behavior and maintenance responsibilities.
  • Regular Inspections: Conduct regular property inspections to address pet-related issues early.


Assembly Bill 2347: Extended Time for Tenant Response to Eviction Complaints

This bill extends the response time for tenants in eviction lawsuits from 5 court days to 10 court days.


Challenges for Property Owners:

  • Prolonged Eviction Process: Longer eviction processes can result in delayed rental income and extended vacancy periods.
  • Financial Strain: Potential financial strain due to prolonged non-payment of rent.


Strategic Response:

  • Proactive Communication: Maintain open communication with tenants to address issues before they escalate.
  • Legal Preparation: Work with legal advisors to streamline eviction processes and ensure proper documentation.
  • Rent Guarantee Insurance: Consider obtaining rent guarantee insurance to protect against potential losses.


Assembly Bill 2493: Restrictions on Charging Applicant Screening Fees

This bill prohibits charging applicant screening fees unless a reusable screening platform is used or if no units are available. It also mandates timely delivery of screening reports and tenant selection based on application order.


Challenges for Property Owners:

  • Reduced Flexibility: Limits flexibility to choose the most suitable tenants.
  • Administrative Burden: Increased administrative workload and costs due to mandated reporting timelines and screening platforms.


Strategic Response:

  • Adopt Screening Platforms: Invest in reputable reusable screening platforms.
  • Efficient Documentation: Develop systems to ensure timely delivery of screening reports.
  • Clear Communication: Clearly communicate the application process and criteria to prospective tenants.


Assembly Constitutional Amendment 10: Right to Adequate Housing

This amendment seeks to recognize the fundamental human right to adequate housing, obligating jurisdictions to uphold this right through expanded tenant protections, rent caps, and free legal representation.


Challenges for Property Owners:

  • Rent Caps: Potential rent caps could limit rental income and affect financial viability.
  • Increased Legal Challenges: Free legal representation for tenants may lead to more disputes and higher legal costs.
  • Regulatory Compliance: Continuous adjustments needed to comply with new tenant protection laws.


Strategic Response:

  • Financial Planning: Conduct thorough financial planning to account for potential rent caps.
  • Legal Resources: Build relationships with legal professionals to navigate disputes and stay informed about regulatory changes.
  • Tenant Relations: Foster positive relationships with tenants to reduce conflicts and enhance communication.


Senate Bill 1201: Disclosure Requirement for Beneficial Owners of Corporations

This bill mandates that beneficial owners of more than 10% of a corporate entity must disclose their names and addresses annually.


Challenges for Property Owners:

  • Privacy Issues: Mandatory disclosure raises privacy concerns.
  • Compliance Costs: Increased administrative and legal costs to ensure compliance.


Strategic Response:

  • Privacy Management: Consult with legal advisors on best practices to protect privacy while complying with disclosure requirements.
  • Compliance Systems: Develop robust systems to manage and streamline the disclosure process.
  • Stakeholder Communication: Communicate transparently with stakeholders about the disclosure requirements.


These new legislative measures present significant challenges for real estate investors and property owners. At Coastline Equity, we are committed to helping our clients navigate these changes and develop effective strategies to mitigate potential risks. Staying informed, seeking professional advice, and proactively adapting to the evolving regulatory landscape are essential for continued success in property management.


For more insights and personalized advice on navigating these legislative changes, contact us today.


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News & Updates

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