All Forum Posts by: Mike Franco

rent cap only applies to existing tenants, such as inherited ones.

The first step is to get rid of the existing tenants, and the new bill outlines various ways you can do that.

Once you get rid of existing tenants, then you can re-rent at market rates. But of course, you can't raise rent on new tenants more than market rate + 5% + inflation every 12 months.

single family homes are not exempt for absentee owners.

And fixed term leases are not required to be renewed. 

Many people have the assumption that a fixed term lease automatically goes to month to month, but there is no law that requires that. Whatever you want to do at lease end, you spell it out in the contract.

For example, the C.A.R lease template states that tenants must vacate at the end of term, unless another agreement is made in writing. 

The only time a yearly lease would become a m2m automatically is when you keep accepting rent without writing up a new contract.

As the bill states, a lease term not specified, like a m2m agreement, would automatically renew every month. 

A fixed term lease, by definition, has a term specified, and all these rules do not apply.

With a fixed term lease, tenants are always under the assumption that they need to move at the end of the term. The benefit of the yearly or fixed term lease is that they have the comfort of knowing their rent won't get hiked up during the lease term.

m2m tenants are different. It used to be that they could get surprise rent hikes of any amount, and this bill aims to protect these people specifically.

it's not all doom and gloom. Boys and girls, here are your ways out...

pretty much what I said before regarding rebates.

And the time to improve your property and jack up the rent is in between tenants. So if you plan to renovate and jack up your rent, make sure your tenant is on a fixed term lease, and kick them out at the end of the lease so you can make improvements.

relax.

jack up your rents, and keep jacking them up to the maximum allowed. 

I'll have to wait to see what real estate attorneys say, and see if C.A.R puts out a webinar about ab1482, but it sounds like ab1482 has one major loophole in regard to fixed term leases vs "term not specified" leases.

All of these new rules seem to apply to term unspecified leases, i.e when you allow a year lease to lapse into month-to-month. If you sign a lease for a fixed term, you can still require the tenant to move at the end of it.

You're not stuck with the tenant forever, as long as you don't have a month-to-month arrangement.

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This bill protects existing tenants from price gouging, but I don't think it applies once your tenant leaves and you try to acquire a new tenant.

That would not make any sense. For example, let's say you have a crap shack renting for $1000. 

Tenant moves out, and you add-on, remodel, triple the square footage, quadruple the house value.

Then you put it back on the rental market. 

Do you think you're required to list this mansion at $1050 max by law? Hell no. You jack it up to market rents.

So go ahead and make your improvements.

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Also, according the bill verbiage, the rent increase cap is based on the previous 12 months of rent, so if you took it off the market for over a year, you're free to charge whatever rent you want.

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I also see another workaround through the use of rebates. If you collect $2500 rent payment every month, and you rebate $200 monthly as a reward for keeping the house in top shape, technically your rent is $2500. 

We're not talking about it because it's not set in stone yet. constantly being revised.

Just look at the text... 

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1482

let's be real. How many of you increase rent by 5% per year plus 1.5 to 2% inflation?

some of you never increase rent on your tenants, and this would be a good time to keep up.

Let's take the average $2000 rental, you jack up the rent $100 every year, even on your existing tenants, and you come out ahead.

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also, there are loopholes LLs can take advantage of, last I read. Your hands are not completely tied.

ab1482 proposes that you can get rid of tenants if you plan to move back in, but you need to cover a month of moving expenses.

so move back in, then jack up the rent to market rates.

Sam Leon that is hilarious. Congress needs to do something, but there's too much on their plate, so these fly by night ESA websites are skating by unopposed, cashing in on this loophole.

Did you check if the therapists' license is legit, and valid in the USA?

WTF? 78F is high? Are you guys looking to live in an igloo in alaska?

What temperature do you set during the winter? 68F? 

I'd be happy if my rental could maintain 78, which it does, but not without lots of electricity usage.

78F is perfectly comfortable, and if I ever have a tenant who complains about it, I'm letting them out of the lease.

Has anyone had a greasy kitchen issue despite having a high powered stove hood? Is it difficult getting tenants to use proper ventilation?

The reason your house is greasy is that your range hood is underpowered for the cooking that is done. All that oil vapor accumulates on the walls and cabinets, and becomes a sticky mess over time because it's not getting sucked out fast enough.

A powerful range hood would solve this issue, but they tend to be loud. If they're loud, I'm not so sure tenants would want to use the hood exhaust consistently.

My new tenant is a stay at home mom, and I recently realized that she cooks full blown meals for lunch and dinner, smoke smell and all. 

She either doesn't turn on the fan, or turns it on low speed, which doesn't do jack. Looks like I'm going to have to tell her that breathing cooking smoke causes cancer, and see if that helps. I don't want a smelly home that is unrentable.

no refund. educate the parents so they don't pull this sh again elsewhere. 

sometimes bulldozer/lawnmower parents will back up their kids no matter how foolish they were. Parents think you might be a pushover, but stand your ground.

you can end a fixed term lease at the end of the term. No reason needed usually.

This ESA epidemic is going to require a massive class action against HUD, along with all the realtor associations teaming up to lobby state assemblymen to make it more strict and difficult to get ESA certification.

I just read that some states like Vermont prohibit the use of online ESA certification. Must be from doctor with in person exam.

Doctors are less likely to risk their reputation and license with bogus diagnoses, unlike these online ESA outfits which have no risk/liability/skin in the game.

The ESA barrier to entry is too low right now.

We need a way to push back against these fake ESA websites. They're skating by unregulated. Holy chit