On June 28th, Governor Gavin Newsom approved another three-month extension of California’s COVID-19 eviction moratorium through September 30, 2021. The State of California has indicated that it has sufficient funds to pay 100% of delinquent rent. While they are behind on processing applications, it’s important that landlords and tenants submit for rental assistance as soon as possible. Information on how to submit is available at HousingIsKey.com What This Means To Landlords With Non-Paying Tenants: As the law currently stands, Tenants cannot be evicted for rent due between March 1, 2020 and September 30, 2021 if: The tenant submits a signed Declaration of COVID-19 Related Financial Distress within 15 days of receiving a notice of nonpayment of rent; and The tenant pays at least 25% of the rent due for the period September 1, 2020 – September 30, 2021, either in monthly installments, or a lump sum payment by September 30, 2021. This means that a lawful detainer action for non-payment cannot be brought against any tenant providing a completed declaration prior to October 1, 2021. Tenants who fail to produce a completed declaration of COVID-19 hardship or, are in violation of the lease for anything other than non-payment, can be evicted. IMPORTANT: Specific Landlord Action Now Required: In the event that a tenant does not meet the minimum 25% rent payment requirements by September 30, 2021, Landlords may only move for eviction if: The landlord has filed for rent relief under the State’s Rental Assistance Program and waited 20 days for a response. The landlord provides verification of such application for such relief before proceeding with eviction action against tenants who are protected by SB 91. Landlords may begin serving non-paying tenants with notices to pay rent or quit on October 1, 2021, provided they are able to submit verification that they’ve filed for rent relief and waited 20 days for a response from the government or the tenant to the Court. With regard to any remaining accumulated rent for the period March 1, 2020 through September 30, 2021, Landlords may file their claims in small claims court beginning November 1, 2021. Important Notice Requirement: No later than July 31, 2021, Landlords must provide an updated CTRA Notice to Tenants owing rent as of June 30, 2021. If you are a current client of Forbes Group Property Management, we have taken care of this requirement for you. Reimbursement for Back Rent: Under the new law, qualifying rental owners will be reimbursed for 100% of back rent owed by qualifying tenants by the State of California. Landlords who have already received 80% under SB 91 will automatically receive the remaining 20%. Although rental assistance is still reserved for tenants earning less than 80% of the area median income, the state is now making some exceptions for higher-earning renters who can show a loss of wages due to COVID. The full text of AB 832 is available here: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB832 How to Apply for Rent Relief Qualifying renters and landlords are now eligible for 100% of rent and utilities owed. Both renters and landlords can apply for assistance here: https://housing.ca.gov/. Application Requirements for Landlords: If you have renters who are behind on their rent and need financial assistance to support this income loss, you may apply for the CA COVID-19 Rent Relief program, so long as: Your renter’s household is income eligible (the state will calculate this when they apply). All payments you receive must be used to satisfy the renter’s unpaid rent. Eligible timeframe for financial assistance dates back to April 1, 2020. Your renter(s) must take steps to verify that they meet eligibility requirements and sign the application. They will be notified once your application is submitted and asked to submit their required information. You will need: ONE of the following: Lease or rental agreement reflecting renter’s name, residence address, and monthly rent due Rent ledger or rent statement showing the balance of unpaid rent from April 1, 2020 W-9 (for tax purposes) Please note: Assistance paid directly to landlords through this program DOES qualify as reportable income for tax purposes. If you have additional questions, please contact your assigned Forbes Group Portfolio Manager. If you are not currently a client of Forbes Group Property Management, contact us to discuss the benefits of professional management by a company with over 25 years of property management experience in Silicon Valley. Experience matters! e. info@forbesgrouppm.com p. (408) 399-5252
Over the course of the past year, as we’ve dealt with navigating the institution of AB 1482 (Tenant Protection Act of 2019), as well as the various federal, state and local COVID-19 Eviction Moratoriums, I’m often asked by frustrated property owners facing bills to pay with non-paying tenants who are protected by the law, “Who is working to protect us?” My answer is: The California Apartment Association, of which Forbes Group Property Management is a long-time member. CAA works to keep us abreast of current and proposed Landlord/Tenant laws, and fights proposed legislature that they believe will discourage current and continued private investment in rental housing. This April, they managed to derail some of the worst rental housing proposals of the year, including: “Stay in Business Forever Act” (AB 854) [1] A bill to be watched that’s incubating in Sacramento is the “Stay in Business Forever Act.” This bill takes aim at California’s Ellis Act, which was enacted in 1986, and allows property owners to exit the rental business, albeit with significant notice requirements and tenant protections. AB 854 would prohibit rental housing providers from using the Ellis Act to terminate tenancies and exit the rental market until all owners of the property have held their ownership interest for five years or more. It would also prohibit owners from attempting to ever remove a second building from the market. “This law forces you to stay in business forever, prohibits you from moving into the building with your family, and prevents conversion of units into ownership housing like condominiums or tenancies in common,” CAA told its members in a mobilization email. Originally scheduled for a hearing in April by the Assembly Housing and Community Development Committee, it was pulled from consideration by the author, Assemblyman Alex Lee, D-San Jose (pictured). The proposal is now a two-year bill, meaning it won’t be heard again in 2021, but it can be resurrected in 2022. With this victory, California’s Ellis Act will remain intact, preserving a rental property owner’s right to exit the rental housing business when they choose. “Public Landlord-Tenant Registry” (AB 1188) AB 1188 is the 3rd attempt in the past 4 years to get a statewide rental registry online portal implemented. This “Public Landlord-Tenant Registry” bill also was scheduled for a hearing in the Assembly Housing and Community Development Committee in April; however, the authors, Assemblywoman Buffy Wicks, D-Oakland (pictured left), and Assemblyman Ash Kalra, D-San Jose (pictured right), pulled the item in order to make major amendments, changing the direction of the bill. What those changes will be, remains to be seen. As written, AB 1188 would require cities and counties to create and administer a rental registry and online portal designed to receive specified information from landlords who own or operate five or more rental dwellings. The bill would have required landlords to provide a variety of information regarding the location of the rental property, its ownership, tenant information, and personal financial information. It also would prohibit a landlord from issuing various notices to increase the rent or terminate a tenancy unless the landlord has submitted information through the online portal. Opposition to this bill has been mounted by various California Apartment Association Groups on the basis that this bill and AB 854 do not create new housing or make it more affordable. In addition, given that the information provided pursuant to AB 1188 would have been made available to the general public, other tenants in the building, activists and the government, the California Apartment Association of Greater Los Angeles also asserts that any such register is unconstitutional in that it “represents a de facto registry of residents and rents without due process”. With this victory, Rental property owners will be spared having to register their properties with the state or share private information on a public, online database. “Homes for Families & Corporate Monopoly Transparency Excise Tax” (AB 1199) With the state’s housing demand by 2025 estimated to be 1.8 Million Units, and with only 80,000 a year in the pipeline, the state’s legislature is consistently working to come up with solutions to providing affordable housing in California. How will we pay for the proposed housing? With this bill by Assemblyman Mike Gipson, D-Los Angeles (pictured), which proposes an annual excise tax on a person or entity owning 10 or more multifamily or single-family rental properties. Opponents assert that AB 1199 is either a property tax disguised as an excise tax on rental properties and against the will of the voters who rejected Proposition 15 in November, or it’s a business license tax. If enacted, the bill would compel the California Secretary of State’s Office to create a database of all limited liability corporations, along with their beneficiaries to avoid transfers of property in an attempt to side-step this excise tax. Either way, the yet to be defined tax rate would be based on the gross receipts of the rental income and is anticipated to generate $1 Billion a year for the state to apply toward affordable housing programs. Gipson has pulled AB 1199 from consideration for the rest of the year making it a two-year bill which could be brought back in 2022. With this victory, Rental owners will not be charged an excise tax in order to fund government housing programs. While put to bed in 2021, all of these bills are expected to reappear in 2022. We will post updates as we hear further. [1] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220AB854 [2] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB1188 [3] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB1199 If you are not currently a client of Forbes Group Property Management, contact us to discuss the benefits of professional management by a company with over 25 years of property management experience in Silicon Valley. Experience matters! e. info@forbesgrouppm.com p. (408) 399-5252
The curb appeal or first impression that your property gives is critical to your overall success. Far and away the easiest way to increase cash flow and value is to simply clean up and address the deferred maintenance found in most properties. One of the fundamental rules of real estate is basic supply and demand. If your property really stands out and looks much better than comparable properties, you generate high demand. Especially important in this downward trending market, proactive maintenance will help your rental stay occupied, and assist vacant units in attracting new tenants more quickly. Besides curing the simple deferred maintenance, another great way to increase cash flow (and value) is to renovate the property. The key here is to spend money only on items that enhance the property and provide a quick payback. Examples include sub-metering utilities, upgrading appliances, increasing curb appeal, or adding new features that tenants desire. The Benefits to Staying on Top of Property Maintenance Increased Property Value A lack of repairs will detract from the property’s market value and rental prices received, ultimately leading to a lower return on investment. Overall, well maintained properties out-perform lesser maintained properties both in terms of rentals and, ultimately, sale of the property. Satisfied Residents Poor maintenance of buildings, property, and appliances will generate dissatisfied residents. This can lead to negative reviews, increased churn, and more vacancies. Reduced Costs An efficient property maintenance schedule can help save money by minimizing risks, extending the life of appliances and equipment. Deferred maintenance often culminates in much larger expenses. Pro Tips Forbes Group Property Management has a team of vendors on hand to help you make some simple, affordable investments in your property to increase curb appeal, as recommended by the pros: Landscaping Improvements Trim trees and replace declining or dead plantings is the simplest way to improve curb appeal. Hiring a professional landscaper to tend to your property not only results in proper care but they will notice if plants or the lawn is dying because the tenants are failing to water properly. Repainting Tired Exteriors By simply repainting and adding cost-effective framing out of windows with a contrasting color to enhance architectural details, your property will stand out from a typical "rental property". Tenants wish to create a home. Setting your building apart from other properties allows them to do that which, in turn, leads to a property that rents more quickly with tenants that tend to stay in the property longer. Updating the Property For residential rentals, the best return on investment inside the units is found in updating the baths and kitchens. If a full renovation is not in the budget, upgrading old appliances or repainting kitchen cabinets will ensure your property stands out. Another easy upgrade is removing old carpet and replacing it with a cost-effective engineered wood flooring or tile. Many tenants dislike carpet. Protecting your Investment By investing in the installation of an automated, water-conserving, drip irrigation system, you not only conserve water but will properly maintain your landscaping. Poorly maintained landscaping and drab curb appeal quickly provides the impression of an uncared-for property. Holding tenants responsible for landscaping damage due to improper watering is also important and is just one of the recommended practices Forbes Group Property Management follows in preparing leases on behalf of our owners. If you are not currently a client of Forbes Group Property Management, contact us to discuss the benefits of professional management by a company with over 25 years of property management experience in Silicon Valley. Experience matters! e. info@forbesgrouppm.com p. (408) 399-5252
