Legislative Update for Housing Providers: Key Laws to Know for 2025
October 21, 2024
As state lawmakers wrap up the 2024 legislative session, it's time for rental property owners, property managers, and real estate professionals to prepare for the new laws that will take effect in the New Year. While we await the results of key ballot initiatives on November 5th, here’s a roundup of the legislative changes impacting housing providers:
1. Extended Time for Renters to Respond to Eviction Actions
Eviction timelines just got longer. Starting in 2025, renters will have 10 days, instead of the current 5, to file an answer to an unlawful detainer (eviction action). While this provides renters with more time to respond, it could result in further delays in the already lengthy eviction process. For rental owners, this means preparing for potentially prolonged vacancies as renters leverage additional time and legal support to extend their stays.
2. Credit Reporting for Rent Payments
Starting April 1, 2025, rental owners of buildings with 15 or more units will be required to offer renters the option to have their rent payments reported to credit bureaus. This could serve as a double-edged sword. On the one hand, renters may be incentivized to make timely payments, knowing it will improve their credit. On the other hand, owners can also benefit by identifying renters with consistent payment histories through credit checks in future rentals. However, it’s important to note that once a renter opts in, this could work against them if they fall behind on rent, leaving them with a blemished credit history.
3. Mandatory Photos for Security Deposit Deductions
To increase transparency and reduce disputes over security deposits, housing providers will need to photograph rental units in three stages: before move-in, at the end of the tenancy, and before and after any repairs or cleaning. Owners must comply with these photo documentation requirements starting April 1, 2025, for repairs, and for new tenancies starting on or after July 1, 2025. Proper documentation is crucial to avoid common security deposit disputes that often result in rental owners losing in small claims court.
4. Balcony Inspections Deadline Extended to 2026
Under SB 721, all multifamily buildings with three or more units were originally required to have their balconies, decks, and other exterior structures inspected by January 1, 2025. However, AB 2579 extends this deadline to January 1, 2026, providing more time to comply. While this gives housing providers a bit more breathing room, it’s still advisable to schedule inspections sooner rather than later, as only qualified professionals—civil engineers, architects, or licensed contractors—can perform these inspections. Proactive compliance is key to avoiding last-minute rushes and ensuring your building remains safe and code-compliant.
5. Renter Screening Fee Rules Updated
Under a new law, rental housing providers who charge a renter screening fee must provide the applicant with a copy of their credit report within 7 days of receiving it, even if the applicant doesn’t request it. Additionally, housing providers must offer the rental to the first applicant who meets the established screening criteria, which must be disclosed in writing. For those looking to avoid the hassle of these new requirements, consider not charging a screening fee and instead conducting thorough vetting on a smaller pool of qualified applicants.
These new regulations reflect the growing complexity of managing rental properties in California. As always, EBRHA encourages early compliance and proactive planning to avoid potential legal and financial pitfalls. Stay informed, stay prepared, stay in constant communication with your renters, and let’s navigate these new changes together.
For further guidance, reach out to EBRHA, where we’ll continue to provide resources and education to support your success as a housing provider.