We were not too concerned about rent control when it was passed across the state because in our experience as Sacramento property managers, our owner clients are never going to raise their rent more than 10 percent. These are owners who understand the value of a long term tenant, and they’re investing for the long haul.
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Rent Control: Does It Apply to Me & How Do I Know? | Sacramento Property Management
Rent control is a loaded topic and one of the most frequently asked questions we get is: does it apply to my property?
We are happy to tell you everything we know about rent control from a
Sacramento property management
standpoint. But if you have any legal questions about rent control and how it applies to your current tenant or property, we will always refer you to an attorney for those specific answers.
Current rent control laws were passed in 2019 and went into effect in 2020. We’ve been dealing with rent control as well as COVID, so there’s been a near-constant state of emergency in California that affects how much rent can be raised.
A lot of property owners assume their homes are under rent control, but often they are not.
Single-Family Homes in Sacramento and Rent Control
If you own a single-family
rental home that’s not part of a real estate LLC, your property is exempt from rent control. Properties included in rent control are:
- Multifamily properties over 15 years old
- Duplexes over 15 years old
- Properties owned by a corporation or a real estate LLC.
There are a lot of questions about what’s permitted. For example, you can only ask a tenant to vacate a rent controlled property for a couple of reasons:
- You or an immediate family member is moving into the unit
- You’re remodeling or renovating due to necessity and not just free will. After a renovation or repair, you have to offer the property back to the prior tenant at the same rate they were paying before they had to move.
Homes subject to rent control also include rent caps. You can only raise a tenant’s rent within city limits at 5 percent plus inflation. Within county limits, it’s at 6 percent plus inflation. Each county in California is different.
Inflation rates fluctuate annually. Last year, it was 3 percent and this year it’s 8 percent.
Our best practice is to keep all rental increases under 10 percent. We’ve been in a state of emergency since the Sonoma wildfires, so keep your increase at or below 10 percent. Otherwise, a tenant could potentially think you’re making an illegal rental increase and then you’re facing a lawsuit.
Raising Rent When You’re Exempt from Rent Control
Renting out a single-family home, we recommend staying in line with rent control fundamentals.
You can ask a resident to vacate without cause and there are different rules to raising the rent, but we would never recommend that you raise the rent more than 10 percent even if the rent control laws do not cover you.
Why Rent Control Doesn’t Hurt Your Sacramento Investment Property
Just cause eviction requirements give us a bit of concern, but rent control is fair and reasonable as it pertains to the properties we rent out. Part of managing this process and all new laws is talking with your property manager. We can help you understand what looks like a reasonable rental increase. We know the market and we provide some of the best practices that you’ll find in the property management industry.
Our job is to keep you (and ourselves) out of court.
We also want to be fair to tenants because in our experience, happy tenants lead to happy owners.
If you have rent control questions, please contact us at Sacramento Delta Property Management.
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910 Florin Road, Suite 100, Sacramento, CA 95831
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