California has some of the most tenant friendly laws in the nation. This is no surprise to a professional Property Manager. During the two plus years since the COVID pandemic began, California law makers have taken advantage of the situation to implement more restrictions on landowners, including statewide rent control and “Just Cause” evictions.

As Gavin Newsom stated in Jan 2020, “With 1482, California will boast the nation’s strongest statewide renter protections”. That was not an overstatement.  Since then, many temporary renter protections have been extended, or made permanent; as California’s housing crisis worsens, it is likely this trend will continue.

What is rent control?

Although it does not apply to all types of properties, including most Single Family Residences, rent control is now statewide. What does this mean? In most areas, a Property Manager, or landlord may only increase the rent by 5% plus the area’s Consumer Price Index. With current inflation, the total amount rent can be increased is nearly 10% in some areas. Unfortunately, due to the moratorium on rent increases during COVID, many rent amounts are significantly below 10% of Fair Market Value.  If you read about rent control, you will notice a hesitation to call it such. Politicians fear the term “rent control” will scare off investors, and actually worsen the housing shortage. They are correct in their assumption. While owners are experiencing ever increasing costs of repairs, remodels, and new construction, their ability to mitigate losses has been severely affected by these new restrictions.

It is also worth noting, there may be local laws more restrictive regarding rent control than what is imposed at the state level. If the local rules are less restrictive, they are superseded by the state. However, local rent control more restrictive than the state, takes precedent. A competent Property Manager should be well informed of the local laws regarding rent control.

What is a “Just Cause” eviction?

In the past, if an owner wanted their rental property vacated, they could simply serve the tenant with a “Notice to Vacate”. In most areas, the owner did not need to provide a reason to the tenant. Typically, there were some rules that needed to be followed, such as time to vacate, and proper delivery, but no need to list a cause. As with rent control, there is now a Statewide law that states Property Manager, or landlord must show “Just Cause” to evict a tenant.

“Just Cause” is described as continual violations of the rental agreement. According to an article written by, Jenna Chandler, from la.curber.com, possible violations that may cause termination of tenancy include things such as, committing a crime on the property or non-payment of rent.

Other causes that may be considered “good reason” to ask a tenant to vacate are; an owner desires to sell a property, they have the right to do so, without the tenant impeding the sale. There are specific guidelines regarding a tenant’s rights during the listing period which are described in the “Notice of Sale” that should be sent to the tenant from the listing agent, or the landlord if no Realtor is involved. The current statute also requires that the tenant is compensated for their moving expenses up to one month’s rent.

Owners also have the right to ask the tenant to vacate if they wish to occupy the property as their personal residence. Again, the only rule is that the tenant be properly served a notice, and provided sufficient time required by law to vacate.

Despite both “Rent Control” and “Just Cause” being made statewide, many areas and cities may have their own rules in place.

Again, an experienced Property Manager should be aware of local ordinances, how to properly document lease violations, and non-payment of rent.

How does a professional Property Manager help avoid the above issues?

The most important function of a Property Manager has always been, placing a well-qualified applicant. Given the ever-increasing difficulty of evicting a tenant, the importance of placing someone properly vetted has become crucial. The manager should check the prospective tenant’s credit, income, job and rental history. The manager should also be utilizing a scoring system with a defined pass/fail score. Walker & Associates has spent the last 12 years improving our tenant screening process, and as of this writing, Walker & Associates Property Management has not had to formally evict a placed tenant by our company in more than 5 years.

Simply put, every I must be dotted, and every t must be crossed for an application to be considered by Walker & Associates Property Management.

If all the above concerns were not enough to convince an owner a professional Property Manager is worth the expense, there are many other factors to consider. Do you know what property conditions must be disclosed? Do you have the correct, and up to date disclosures? Are you aware of what verbiage can be used in advertising? Where to advertise? How to properly process an application? Create an iron clad lease agreement? The list goes on and on and on.

Conclusion, Property Managers have always been well worth the nominal fee they charge. In 2022, and particularly in California, they are essential to the success of an income property owner; And will be more so in the future.

As we begin emerging from the surrealness of the last 24 months, many have been asking “where does the real estate market go from here?”. Rent amounts and home prices have soared, leaving some priced out of the market completely. The one bright spot is the continuation of historically low interest rates, but it is likely they will increase in 2022. How much will that affect the sales volume is anyone’s guess.

As stated in an article published on October 7, 2021, by California Association of Realtors, “Supply constraints and higher home prices will bring California home sales down slightly in 2022, but transactions will still post their second highest level in the past five years.” The question I’m asked most often is “when do you think we may see a correction?” It is my opinion that unless there is a major disruption in our economy, the robust market is not going anywhere in the near future.

Interest rates will rise, but not enough to significantly affect buying power. A lack of rentals will continue increasing rent amounts. I know that is bad news for many, but there is simply no indicators that I have seen to the contrary.

To sell, or not to sell is the question. If a persons goal is to retire outside California, it may be a great time to sell. To buy, or not to buy. If a persons goal is to remain in California long term, it is difficult to say there is ever a bad time to buy.

That is just one man’s opinion, but believe it or not, I have been wrong before. Only time will tell.

When it comes time to rent a property, especially if an owner has never had a rental, they receive a crash course in what it is to own a small business. Add into this the sentimental attachment, if it was their primary residence, and you have a tender box waiting for a match that will almost certainly start a fire at some point. This is where an excellent property manager becomes an invaluable resource to an income property owner. Not only for their expertise in the industry, but for preparing an owner for the crazy things that can happen with a rental, and its occupants.

A property manager when screening an applicant can look at their income, credit, job history, and rental history, but must qualify the prospect using a strict set of guidelines set forth by local, state, and federal laws regarding Fair Housing. So, when that 4 bedroom house you raised your children in, and thing is nearly perfect is being applied for by a multi-generational family, which includes 5 children, the criteria that will be used is indifferent to your personal feeling about 9 individuals occupying your home. This is one of the first struggles PM’s will have with a new income property owner. When you decide to make your home a rental, you decided to own a small business, one that will be required to adhere to an ever-increasing amount of laws and restrictions. Simply put, it is no longer your home, it is a business.

Next big question that I ask, can you handle that? The answer is sometimes, no. This is where a person must make the decision to either sell, leave vacant, or drop their personal attachment.

How about maintenance and repairs. Well, what you lived with or repaired yourself, many renters will not. This can be another big pill for owners to swallow. Again, you now own a small business, which will have recurring and unexpected expenses… However, a confident and competent PM will educate you early on into the process about setting aside reserves for unexpected expenses so that they are not an unmanageable blow to your pocketbook. Good practice is to set aside 10% of the rent amount for turnover, and/or large repairs, such as a water heater, flooring, or furnace.

Think about it like this. You have a unit that has received $1500 per month for 5 years. The total revenue would be $90,000. The tenant vacates the property, and beyond what can be deducted for the deposit in accordance with the provisions set forth by the CA. Dept. of Consumer Affairs, the home needs new carpet, some new plumbing fixtures, and paint. The total cost for these items is $5000. If the recommended 10%, or $9000 had been set aside, this expense would not only be covered, but the owner would have a $4000 surplus to do with what they please. Maybe a trip to Maui?

As with most things in life, knowledge, understanding, and preparation goes a long way in making the experience of owning an income property, one that is both pleasant, and profitable as possible.

In today’s market, it is quite likely that an application to rent will have competition. Below are some suggestions of how to make your application as attractive as possible.

1. The application should be submitted online if possible.
It is more convenient for a PM to receive an electronic application, as opposed to a paper copy. This accelerates the screening process, and may help you receive a decision more quickly.

2. Submit all required accompanying documents with the application.
Any missing information will likely delay the process.

3. Complete and legible applications are looked at first.
If an application cannot be submitted online, be sure all boxes are filled in with clear print. Black ink is preferred.

4. If you have had past credit issues that can be explained, submit a letter with the application.
The letter should be factual, and concise. Some personal info is ok, but try to keep it professional, and direct.

5. Follow up after the application has been submitted.
Ensure all necessary items have been received, and ask if there is anything that can be done to help the chances of approval.

Good Luck in your house hunting, and remember the old adage. The early bird gets the worm!

When submitting an application to rent a property, be sure it is fully completed. Include all required documents, and the application fee in the required form of payment. i.e. cashier check or money order.

Fields left blank, or missing documents, could result in a delay of the screening process. This may allow an application with all the necessary items to be placed in front of one that is incomplete.

References are very important. Supply names and phone numbers to people that can provide an unbiased referral. Such as a previous landlord and/or employer. Referrals from friends and family, in most cases, are not sufficient.

Including a letter of introduction, and expressing the funds are available for the deposit, is never a bad idea. It adds a human element to your application and just may be the deciding factor if two similarly qualified applications are received.

If denied, don’t be afraid to ask what caused you to lose out on the property. You may be made aware of items on your credit that you did not know existed.

Good luck, and be sure to visit our website often for current listings and other useful information.