As we look ahead to 2025, we see a number of new laws hitting the books, many of which expand tenant rights. On the face of it, these laws may seem innocuous, but each time a new regulation is enacted, there’s often a cost, though it may be hidden. If you own investment property, you may be the one paying.
California Assembly Bill 2347
Currently, when a landlord files an eviction notice against a tenant, called an unlawful detainer, the tenant has five days to respond. When AB2347 takes effect on January 1, tenants will have 10 days (twice as much time).
While I understand that responding appropriately to an unlawful detainer notice may be difficult for the tenant, adding more time costs the landlord more money. An unlawful detainer is only part of the eviction process, which can often take 60 days or more. If you consider an apartment that rents for $1,500 per month, five more days of delay adds up to $250.
Some people are under the impression that those who own investment property can afford a few extra bucks; however, sometimes that rental income is what keeps someone afloat—it’s their sole source of income because they are unable to work outside the home because they are disabled or taking care of a loved one, for example. Plenty of landlords only break even with the cash flow from their rental, meaning that the loss of $250 comes directly out of their pocket.
California Assembly Bill 2747
AB2747 allows renters to boost their credit score with on-time rental payments. This is a nice idea, but for leases entered into on April 1, 2025, and thereafter, it requires landlords to offer reporting be made to credit agencies when the lease agreement is signed and at least once annually thereafter. For leases outstanding as of January 1, 2025, landlords must offer credit reporting no later than April 1, 2025, and at least once annually thereafter.
While this isn’t hugely onerous, it’s a little like the issue above. It’s death by a thousand cuts. Sending this notice to each tenant on a lease requires someone to manage the process: assure the letters are sent, note whether the tenant opts in or out (tenants can opt in and then opt out, and six months later opt in again), track the payment history, and submit it to the appropriate credit agency.
For property management firms, this will require someone to print all the letters, stuff all the envelopes, add postage, and mail them. Again, it’s not difficult, but it takes the landlord’s time and resources.
California Assembly Bill 2801
AB2801 does not fall into the death-by-a-thousand-cuts category. It inflicts a large wound all by itself, demanding significant project management, technical skill, and computer storage space. AB2801 requires landlords to capture photo documentation to justify security deposit deductions beginning July 1, 2025.
This requires a landlord to photograph the entire premises before a tenant moves in and again after a tenant moves out. If the landlord has to make repairs, discard left-behind items, and/or clean anything, another set of photos must be taken.
This means photographing every cupboard, closet, cabinet, drawer, carpets, and wall space at least twice. If cleaning or repairs are required, a third photo must be taken. Conservatively, this will add up to more than 100 color photos per unit. Each photo must be cataloged with the site address, date, description, and tenant name.
When a tenant moves out, the landlord must print and send pictures along with the disposition of the security deposit. Selzer Realty Property Management oversees about 400 units. The turnover on 400 units is about 10-12 per month. Handling this volume of work and accompanying digital files will likely require another half-time employee and a computer upgrade.
California Assembly Bill 2684
AB2684 requires a city or county to update its safety element to address the hazard of extreme heat the next time the general plan is updated (on or after January 1, 2028). This could lead to additional safety requirements and infrastructure retrofits, even for older buildings that aren’t equipped to handle modern heating and air conditioning systems.
So what?
If we want less expensive rents, we cannot keep adding onerous requirements to manage properties. These new laws will be enough for some landlords to throw up their hands and get out of the market, which will reduce the number of rentals available, causing rents to increase overall.
If you have questions about property management or real estate, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s Bakery.