California Property Management Law Changes – Mid-Year 2025 Update
California MidYear Property Management Laws: AB 2801 & SB 611 Changes for Inland Empire Investors
By Brian Bean
Three significant property management laws recently took effect in California. And if you haven’t already put your new processes and policies in place, now’s the time.
New Rules on Charging for Tenant Damages: AB 2801
First up, new rules that restrict you from charging an outgoing tenant for damages to a property. Introduced as Assembly Bill 2801, this new law requires property owners and managers to take time-stamped photographs of your rental unit prior to a new move-in, starting this past July. And then, you must also take time-stamped photos after the moveout to show the contrast of before and after. And you also must take time-stamped photos of the issue after the repairs, all before you can deduct repair costs from a resident’s security deposit.
The biggest changes here are obviously the “before” pictures. For all new tenancies, you have to have photographic evidence. But the timing is also crucial. The repairs and after-repair photos must all be provided in an itemized list, with copies of invoices, within 21 days of moveout.
The law also prohibits flat fees for such things as carpet cleaning or house cleaning. The deductions can only be for actual costs to address damages to return the property to the condition it was in before the move-in, minus normal wear and tear.
This is about transparency and ensuring that residents are not being charged unfairly. But the time restriction could surprise people. Twenty-one days rolls by pretty quickly on some turnovers, especially those that require extensive updates to make rent-ready. Make sure you have your processes in place to address tenant-related repairs first.
And start testing out your equipment and software now to properly document and store records of homes before and after a moveout. By the way, if you had a move-in in July or August this year and didn’t properly document the unit prior to move-in, then you will NOT be able to deduct repair costs when they move out in the future. So make sure you don’t put yourself in that situation going forward. Because if you improperly deduct from a security deposit, you could be liable for triple the amount in penalties.
Impermissible Fees: SB 611
Senate Bill 611, which took effect April 1, prohibits property owners and managers from charging fees for such things as paying rent by check or for posting and serving notices related to the tenancy.
If you’ve been charging extra when residents pay by check instead of online, stop now.
The law requires that a resident be allowed to pay their rent with at least one method in addition to paying by cash or electronic transfer. And for those who opt to pay with a paper check, you cannot charge them an extra fee for that convenience.
There’s no doubt that electronic payment methods are the easiest and most efficient ways to make rent payments. A payor gets credit when they hit the button to pay, and the receiver doesn’t have to go to the bank. The self-managing owner or their property manager may even incur their own fees to accept electronic payments, but it’s worth it for the ease of use.
But not all residents have the ability or wish to work that way. And if you provide rental housing in California, it’s your responsibility to make allowances for them.
Serving notices to your residents also falls into this category. If you serve a three-day notice to pay or quit, 24-hour notices of inspections, or any legally required notice, you are not allowed to assess a fee to the resident for the act of posting on the property. This is just part of your cost of doing business.
Military Service Member Protections
Lastly, Senate Bill 611 also covers military service members and their security deposits. And this is an important one for Inland Empire landlords, given our proximity to March Air Reserve Base and other military installations.
SB 611 requires landlords to return any additional security deposit collected from military service members after six months of residency, provided the resident isn’t behind on rent during that time.
So if you are allowed to charge more than one month’s rent for a security deposit, if any of your residents is active military, you must return that amount that exceeds one month’s rent after they’ve been in good standing for six months.
And rightfully so. Members of our military go above and beyond to serve this country. That sometimes creates less stability in the longevity of a lease and occupancy. That’s the price we pay and it pales in comparison to the price they pay for what they do.
Why This Matters for Inland Empire Investors
So those are the most recent changes to California landlording. And they won’t be the last. At any given time in this state, there are dozens of property-management-related bills in varying stages of negotiation. Every year, there’s a new group to which we must all adapt.
And it’s only accelerating, especially with the anti-landlord attitudes that seem to pervade in Sacramento. It’s difficult for professional property managers to keep track, not to mention individual property owners. But it’s crucial to stay up to date to make sure you are in compliance, treating people properly, and staying out of court.
Put your processes in place to stay abreast of the latest legislation, and budget yearly for legal consultations with a real estate attorney who specializes in landlord-tenant law. Or, find someone to take on that oversight for you and manage the entire process. The cost of professional management is less than the value and time savings for most property owners.
Have questions about anything you’ve heard here today? Call Brian directly at 951-314-5402. You can also find valuable information at dreambigpm.com. And if you’d like a free consultation about your rental home and the challenges you might be facing today, give us a call.
About the Author: Brian Bean is President of Dream Big Property Management in Riverside, California. His personal mission is to “Educate, Equip and Encourage Others” in building wealth through rental property investment.
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