The housing shortage in California doesn’t just have an impact on homeowners and potential homeowners. It has an impact on the number of potential rental units throughout the state. In order to address the shortage of rental units, the California state legislature passed AB 3182 and Governor Newsom signed it into law.
What does AB 3182 do?
Approximately 25 percent of the homes in California belong to an HOA. Prior to the passage of AB 3182, any HOA could limit the number of units allowed for rental within the community. The goal of the legislation was to allow for a larger percentage of those units throughout the state to be put on the market for renters and landlords.
The law limits the ability of an HOA to restrict homeowners to lease their units. Now that the law is in effect, an HOA has to allow at least 25 percent of the units to be leased. This doesn’t mean 25 percent have to be rented out. It does require that it allow at least 25 percent giving more owners the option to become landlords.
An HOA can also no longer ban the lease of an accessory dwelling unit or a junior accessory dwelling unit. If a landlord leases out a room, an ADU or a junior ADU but lives in the main property, it doesn’t count against the 25 percent of the units required to be allowed to be rent-able. Without any grandfather clause, this means that no HOA can block the new law by having different rules signed into contract prior to the passage of the law.
AB 3182 exemption
There is an exemption for vacation rental/airbnb short term rentals. An HOA can restrict a landlord from leasing their unit out for fewer than 30 days. Another big change is that short term leases over 30 days are required to be allowed under the new law. This means that if there was a previous limit in the HOA for 90 day minimum for rentals, it is no longer allowed. This opens up the possibility for landlords to use their units for seasonal rentals while they are not being used or even short term corporate rentals.
What if your HOA doesn’t comply with the law?
An HOA that doesn’t comply with the new law can be liable up to a 1,000 dollar fine per person in the HOA as well as be liable for potential damages which in this case could be lost revenue. If you have been considering renting out a unit in an HOA, now would be a good time to speak with the HOA and find out if your unit could be eligible to rent. If they aren’t allowing your unit to go up for rent but fewer than 25 percent are up for rent, the new law is in your favor. Speak with a lawyer and your HOA if there are any issues when it comes to putting your unit up for rent.