AB1157 - Tenancy: just cause termination: rent increases.

Amended IN Assembly March 27, 2025 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 1157 Introduced by Assembly Member Kalra (Coauthors: Assembly Members Bonta, Bryan, Elhawary, Garcia, Jackson, Lee, McKinnor, Ortega) (Coauthor: Senator Smallwood-Cuevas) February 20, 2025 An act to amend Section 3506 of the Civil Code, relating to nuisance. An act to amend Sections 1946.2, 1947.12, and 1947.13 of the Civil Code, relating to tenancy. LEGISLATIVE COUNSEL'S DIGEST AB 1157, as amended, Kalra. Nuisance: motion pictures: enforcement. Tenancy: just cause termination: rent increases. (1) Existing law prohibits the owner of a residential real property from terminating a tenancy without just cause, as defined, after a tenant has continuously and lawfully occupied a residential real property for 12 months. Among other residential real properties or residential circumstances, existing law exempts from these provisions a residential real property, including a mobilehome, that is alienable separate from the title to any other dwelling unit if the owner meets specified criteria and the tenants have been provided a specified written notice of the exemption. Existing law repeals these provisions on January 1, 2030. This bill would revise these provisions by removing the exemption for separately alienable residential real property and, instead, only exempting a mobilehome if the above-described criteria are met. The bill would delete the January 1, 2030, repeal date, thereby extending these provisions indefinitely. (2) Existing law prohibits an owner of residential real property, except as specified, from increasing over the course of any 12-month period the gross rental rate for a dwelling or a unit more than 5% plus the percentage change in the cost of living, or 10%, whichever is lower, of the lowest gross rental rate charged for that dwelling or unit at any time during the 12 months prior to the effective date of the increase, as specified. This bill would reduce the permissible gross rental rate increase under these provisions to the lesser of 2% plus the percentage change in the cost of living, or 5%. Among other residential real properties, existing law exempts from these provisions a residential real property that is alienable separate from the title to any other dwelling unit, including a mobilehome, if the owner meets specified criteria and the tenants have been provided a specified written notice of the exemption. This bill would revise these provisions by removing the exemption for separately alienable residential real property and, instead, only exempting a mobilehome if the above-described criteria are met. Existing law repeals these provisions on January 1, 2030. This bill would delete the January 1, 2030, repeal date, thereby extending these provisions indefinitely. (3) Notwithstanding the above-described gross rental rate increase prohibition, existing law, upon the expiration of rental restrictions, as defined, authorizes the owner of affordable housing units that meet certain requirements to establish the initial rental rate for the unit, and also authorizes the owner of an assisted housing development who demonstrates compliance with certain requirements under penalty of perjury to establish the initial unassisted rental rate for units in the assisted housing development. Existing law repeals these provisions on January 1, 2030. This bill would remove the January 1, 2030, repeal date, thereby extending the initial rental rate authorizations indefinitely. By extending provisions that require the owner of an assisted housing development to demonstrate compliance with specified requirements under penalty of perjury, the bill would impose a state-mandated program. (4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Existing law defines a nuisance as anything injurious to health, indecent or offensive to the senses, or an obstruction to the free use of property, as specified. Under existing law, a nuisance includes the exhibition of a motion picture in which an intentional killing of, or cruelty to, a human being or an animal is shown if that action actually occurred in the production of the motion picture. Existing law authorizes the district attorney or the Attorney General to commence an action in equity to abate and prevent this nuisance and to perpetually enjoin the person conducting or maintaining it, as provided. This bill would specify that this authorization also applies to the county counsel. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO YES Local Program: NO YES Bill Text The people of the State of California do enact as follows: SECTION 1. Section 1946.2 of the Civil Code is amended to read: 1946.2. (a) Notwithstanding any other law, after a tenant has continuously and lawfully occupied a residential real property for 12 months, the owner of the residential real property shall not terminate a tenancy without just cause, which shall be stated in the written notice to terminate tenancy. If any additional adult tenants are added to the lease before an existing tenant has continuously and lawfully occupied the residential real property for 24 months, then this subdivision shall only apply if either of the following are satisfied: (1) All of the tenants have continuously and lawfully occupied the residential real property for 12 months or more. (2) One or more tenants have continuously and lawfully occupied the residential real property for 24 months or more. (b) For purposes of this section, “just cause” means either of the following: (1) At-fault just cause, which means any of the following: (A) Default in the payment of rent. (B) A breach of a material term of the lease, as described in paragraph (3) of Section 1161 of the Code of Civil Procedure, including, but not limited to, violation of a provision of the lease after being issued a written notice to correct the violation. (C) Maintaining, committing, or permitting the maintenance or commission of a nuisance as described in paragraph (4) of Section 1161 of the Code of Civil Procedure. (D) Committing waste as described in paragraph (4) of Section 1161 of the Code of Civil Procedure. (E) The tenant had a written lease that terminated on or after January 1, 2020, or January 1, 2022, if the lease is for a tenancy in a mobilehome, and after a written request or demand from the owner, the tenant has refused to execute a written extension or renewal of the lease for an additional term of similar duration with similar provisions, provided that those terms do not violate this section or any other provision of law. (F) Criminal activity by the tenant on the residential real property, including any common areas, or any criminal activity or criminal threat, as defined in subdivision (a) of Section 422 of the Penal Code, on or off the residential real property, that is directed at any owner or agent of the owner of the residential real property. (G) Assigning or subletting the premises in violation of the tenant’s lease, as described in paragraph (4) of Section 1161 of the Code of Civil Procedure. (H) The tenant’s refusal to allow the owner to enter the residential real property as authorized by Sections 1101.5 and 1954 of this code, and Sections 13113.7 and 17926.1 of the Health and Safety Code. (I) Using the premises for an unlawful purpose as described in paragraph (4) of Section 1161 of the Code of Civil Procedure. (J) The employee, agent, or licensee’s failure to vacate after their termination as an employee, agent, or a licensee as described in paragraph (1) of Section 1161 of the Code of Civil Procedure. (K) When the tenant fails to deliver possession of the residential real property after providing the owner written notice as provided in Section 1946 of the tenant’s intention to terminate the hiring of the real property, or makes a written offer to surrender that is accepted in writing by the owner, but fails to deliver possession at the time specified in that written notice as described in paragraph (5) of Section 1161 of the Code of Civil Procedure. (2) No-fault just cause, which means any of the following: (A) (i) Intent to occupy the residential real property by the owner or the owner’s spouse, domestic partner, children, grandchildren, parents, or grandparents for a minimum of 12 continuous months as that person’s primary residence. (ii) For leases entered into on or after July 1, 2020, or July 1, 2022, if the lease is for a tenancy in a mobilehome, clause (i) shall apply only if the tenant agrees, in writing, to the termination, or if a provision of the lease allows the owner to terminate the lease if the owner, or the owner’s spouse, domestic partner, children, grandchildren, parents, or grandparents, unilaterally decides to occupy the residential real property. Addition of a provision allowing the owner to terminate the lease as described in this clause to a new or renewed rental agreement or fixed-term lease constitutes a similar provision for the purposes of subparagraph (E) of paragraph (1). (iii) This subparagraph does not apply if the intended occupant occupies a rental unit on the property or if a vacancy of a similar unit already exists at the property. (iv) The written notice terminating a tenancy for a just cause pursuant to this subparagraph shall contain the name or names and relationship to the owner of the intended occupant. The written notice shall additionally include notification that the tenant may request proof that the intended occupant is an owner or related to the owner as defined in subclause (II) of clause (viii). The proof shall be provided upon request and may include an operating agreement and other non-public documents. (v) Clause (i) applies only if the intended occupant moves into the rental unit within 90 days after the tenant vacates and occupies the rental unit as a primary residence for at least 12 consecutive months. (vi) (I) If the intended occupant fails to occupy the rental unit within 90 days after the tenant vacates or fails to occupy the rental unit as their primary residence for at least 12 consecutive months, the owner shall offer the unit to the tenant who vacated it at the same rent and lease terms in effect at the time the tenant vacated and shall reimburse the tenant for reasonable moving expenses incurred in excess of any relocation assistance that was paid to the tenant in connection with the written notice. (II) If the intended occupant moves into the rental unit within 90 days after the tenant vacates, but dies before having occupied the rental unit as a primary residence for 12 months, as required by clause (vi), this will not be considered a failure to comply with this section or a material violation of this section by the owner as provided in subdivision (h). (vii) For a new tenancy commenced during the time periods described in clause (v), the accommodations shall be offered and rented or leased at the lawful rent in effect at the time any notice of termination of tenancy is served. (viii) As used in this subparagraph: (I) “Intended occupant” means the owner of the residential real property or the owner’s spouse, domestic partner, child, grandchild, parent, or grandparent, as described in clause (i). (II) “Owner” means any of the following: (ia) An owner who is a natural person that has at least a 25-percent recorded ownership interest in the property. (ib) An owner who is a natural person who has any recorded ownership interest in the property if 100 percent of the recorded ownership is divided among owners who are related to each other as sibling, spouse, domestic partner, child, parent, grandparent, or grandchild. (ic) An owner who is a natural person whose recorded interest in the property is owned through a limited liability company or partnership. (III) For purposes of subclause (II), “natural person” includes any of the following: (ia) A natural person who is a settlor or beneficiary of a family trust. (ib) If the property is owned by a limited liability company or partnership, a natural person who is a beneficial owner with at least a 25-percent ownership interest in the property. (IV) “Family trust” means a revocable living trust or irrevocable trust in which the settlors and beneficiaries of the trust are persons who are related to each other as sibling, spouse, domestic partner, child, parent, grandparent, or grandchild. (V) “Beneficial owner” means a natural person or family trust for whom, directly or indirectly and through any contract arrangement, understanding, relationship, or otherwise, and any of the following applies: (ia) The natural person exercises substantial control over a partnership or limited liability company. (ib) The natural person owns 25 percent or more of the equity interest of a partnership or limited liability company. (ic) The natural person receives substantial economic benefits from the assets of a partnership. (B) Withdrawal of the residential real property from the rental market. (C) (i) The owner complying with any of the following: (I) An order issued by a government agency or court relating to habitability that necessitates vacating the residential real property. (II) An order issued by a government agency or court to vacate the residential real property. (III) A local ordinance that necessitates vacating the residential real property. (ii) If it is determined by any government agency or court that the tenant is at fault for the condition or conditions triggering the order or need to vacate under clause (i), the tenant shall not be entitled to relocation assistance as outlined in paragraph (3) of subdivision (d). (D) (i) Intent to demolish or to substantially remodel the residential real property. (ii) For purposes of this subparagraph, “substantially remodel” means either of the following that cannot be reasonably accomplished in a safe manner that allows the tenant to remain living in the place and that requires the tenant to vacate the residential real property for at least 30 consecutive days: (I) The replacement or substantial modification of any structural, electrical, plumbing, or mechanical system that requires a permit from a governmental agency. (II) The abatement of hazardous materials, including lead-based paint, mold, or asbestos, in accordance with applicable federal, state, and local laws. (iii) For purposes of this subparagraph, a tenant is not required to vacate the residential real property on any days where a tenant could continue living in the residential real property without violating health, safety, and habitability codes and laws. Cosmetic improvements alone, including painting, decorating, and minor repairs, or other work that can be perfo [Text truncated for display. Full text available on Congress.gov.]