New No-Fault Rules Regarding Owner-Related-Occupant Evictions Begin April 1, 2024

California enacted new landlord-tenant legislation that takes effect April 1, 2024. Under the new law, California makes no-fault just-cause evictions more complex by expanding and defining specific terms for owner-occupation- and remodeling-based evictions.

The updated code replaces the word “landlord” with “owner.” For evictions based on owner occupation, the legislature added two pages of new clauses to define the exact terms under which an owner may utilize this no-fault cause as the basis for eviction. A highlighted (aka red-lined) copy of the changes can be viewed by downloading this document: Red-Lined Changes to Civil Code section 1946.2.

New Time Limits

Change 1: Time Limit: The legislature added: “for a minimum of 12 continuous months as that person’s primary residence.” (Civ. Code, § 1946.2, subd. (a)(2)(A)(i).) The length of occupancy was never specified before. The legislature now states that an owner-related occupant must intend to occupy the residence for at least 12 continuous months. Although the law states that the owner-related occupant must “intend” to occupy the residence for twelve months, one of the new paragraphs further states that the occupant must actually occupy the residence for twelve months (Civ. Code, § 1946.2, subd. (a)(2)(A)(v)), which removes flexibility for changed circumstances.

No Unit-Swapping or Strategic Unit Selections

Change 2: Restrictions against unit swaps and strategic evictions. It would appear that some clever and ill-intentioned owners decided to abuse the prior statute by moving a relative to a new unit within the same complex. Moving from one unit to another is no longer permitted. No-fault evictions will not be permitted when “the intended occupant [already] occupies a rental unit on the [same] property or [there exists] a similar unit already [] at the property.” (Civ. Code, § 1946.2, subd. (a)(2)(A)(iii).)

The second half of that rule (“or [there exists] a similar unit already [] at the property.” (Civ. Code, § 1946.2, subd. (a)(2)(A)(iii))) is intriguing because it prevents strategic evictions. Consider the situation where an owner has a tri-plex. Two units are vacant, but the owner wants to evict the last tenant. Under the old law, the owner could, as the property owner, say that he or she did not care that the other units were vacant because they wanted to occupy the one specific unit that was already rented. This could be because the owner wanted to get around eviction laws or because the owner genuinely wanted to occupy that unit (maybe it had the best view). Under the new law, the owner must take a vacant unit unless they can explain why the occupied unit is not similar to a vacant unit.

Proof and Disclosure Required

Change 3: New Occupant Must Be Identified to the Tenant: When giving a tenant notice of eviction based upon occupation by an owner’s relative, the notice must include the names of all owner-related occupants and their relationship to the owner. (Civ. Code, § 1946.2, subd. (a)(2)(A)(iv).) The notice must permit the tenant to demand proof of the owner’s ownership of the structure. (Civ. Code, § 1946.2, subd. (a)(2)(A)(iii).) For this paragraph, proof must demonstrate one of the following conditions:

  • The owner as a natural person holds at least 25 percent of the recorded title; (Civ. Code, § 1946.2, subd. (a)(2)(A)(viii)(II)(ia).)
  • The owner as a natural person holds less than 25 percent of the recorded title, but all other owners are related to each other as siblings, spouses, domestic partners, children, parents, grandparents, or grandchildren; (Civ. Code, § 1946.2, subd. (a)(2)(A)(viii)(II)(ib).)
  • The owner of record is a limited liability company or partnership, and the owner claiming family-related occupancy owns those entities. (Civ. Code, § 1946.2, subd. (a)(2)(A)(viii)(II)(ic).)

Be Speedy

Change 4: Expediency Requirement. An owner may only utilize the family-relation-occupancy cause if the intended occupant moves into the rental unit within 90 days after the tenant vacates. (Civ. Code, § 1946.2, subd. (a)(2)(A)(v).)

The Tenant Can Reclaim the Unit

Change 5: Restoration of Prior Tenant. Under the new law, if the owner-occupant fails to continuously occupy the space for twelve months or take possession within 90 days of vacancy, the owner must offer the space to the evicted tenant at the prior rental rate. (Civ. Code, § 1946.2, subd. (a)(2)(A)(vi)(I).) The only exception to this new rule is if the reason the family relative did not remain for twelve months is that the relative died before the twelve months were completed. (Civ. Code, § 1946.2, subd. (a)(2)(A)(vi)(II).)

No Favors

Change 6: Market Rent Requirement. Under the new law, owners cannot extend favors to family members. The family member causing an eviction must pay “the lawful rent in effect at the time any notice of termination of tenancy is served.” The legislature could have stated “market rent” but did not. The statute’s choice of words and context suggests that “lawful rent” is greater than or equal to the rate of the evicted tenant’s lease. If the market rate is lower, one might be able to rent to the family member at the market rate, but one should be prepared to support the rent rate with evidence.

General Thoughts

The new law is cumbersome. It has seven subsection levels, which makes tracking the relationships between paragraphs difficult. The statute clearly defines “owner,” “family trust,” “natural person,” and “beneficial owner.” However, it strangely only applies these specific definitions to a subset of the paragraphs and not the whole section, which is unusual and nonsensical.

In its efforts to enhance tenant protections, California’s legislature made the law too difficult for most laypersons to understand. The more complex structure may increase the reliance upon attorneys who are already overworked and charge “too much” for their services. Prices will only increase with the increased demand because price is the only lever attorneys have to reduce the number of clients who will demand their services.

The California legislature needs to step back and rework some of these statutes, reduce the number of sub-section levels to a reasonable amount, and decide whether defining words that apply only to a third-level paragraph is truly necessary.

Until that happens, law firms like Coleman & Horowitt will continue to charge landlords for hourly consultation services to help them navigate the complexities of landlord-tenant law.