“You have to learn the rules of the game, and then you have to play better than anyone else.” Albert Einstein

According to AB 247 and SB 924, housing providers with fifteen or more total units in the California may be required to offer reporting of positive rental history of tenants as of April of 2025. There are some exceptions and there are requirements on the tenant’s part, so this may or may not affect you and your units, but in the changing of landlord tenant legislation in California, it is good to know the rules.

WHAT ARE THEY ASKING FOR? According to the law, The offer must be made annually to existing tenants and accompany the lease for new tenants. They are asking for positive rental payment history to be reported to at least one nationwide reporting agency (like Experian for instance) This is the tenants’ choice to offer this service and they can be charged up to ten dollars a month in addition to the rent to have this done for them.

ARE THERE EXCEPTIONS? There are some exceptions. These requirements apply, regardless of number of units owned, to REIT’s (real estate investment trusts), corporations, and LLC’s with at least one corporate member. If you own MORE than 15 units, but they are under your personal name, this most likely will not apply. For instance, if you personally owned five fourplexes, you would likely not be affected. The tenant can also opt out if desired. If your tenant does opt out of the program, they must wait at least six months to opt in again. Additionally, if the tenant does not pay the fee for the service (up to 10 dollars per month) for 30 days, you may opt them out of the service.

APARTMENT ASSOCIATION Most Apartment Owners Associations in California provide services to set up this reporting for you. If you are in doubt as to whether or not this legislation applies to you, you should check with your AOA or your attorney. My feeling is that most tenants will not want to add an extra cost to their rent every month, but some might want to use this as a way to increase their credit score. So far, none of my tenants have wanted this service, but it could be important to some. If you are affected by these laws be sure to document your tenant’s choice. I was able to get forms from my AOA, so most likely that will work for you as well.

“Do not let what you cannot do interfere with what you can do.” John Wooden

What we at PRS PROPERTIES CAN DO. We can give you a good idea of the current value of your building. We can suggest changes you might want to make before sale to give you an idea what type of building you would be able to exchange into. You may decide to stay in the rental business or you may want to move into a more passive real estate investment, such as a triple net or a DSL.. We are always available to chat. We can give you referrals for professionals, such as lenders, contractors, and engineers, so that you can decide who you feel best with. We can supply you with rent and sale comparable in the area of your properties, so that you know what rental values are in your area. It is important that you know the true value of your rental units, so that you can get them rented right away at market value, or at least as much as possible with rent control restrictions. We can look at potential purchases that you may be interested in to make the property more desirable, and maybe look at potential issues that an insurer might require you to repair.

If you should decide to sell your building, we can help you exchange into a larger or smaller properties. We can even help you move into something with less management responsibilities. We can also help with getting the paperwork together for a refinance if that is your desire. We can also recommend experienced licensed contractors who can perform any repairs or installations you may need prior to selling. We can also look at your building for other easy and inexpensive changes that might allow you to get a higher value. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.

We are currently looking for “as-is” properties and are willing to purchase with low rents, deferred maintenance or even with a problem tenant in place. We can offer a 7 day escrow and all cash at closing. Give us a call. We have also put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are currently in 1031 exchanges and need to identify a replacement property before their 45 day identification period runs out.

Should you decide to put your property on the market, we will put together an aggressive, targeted and professional campaign to get your property sold fast. We have been doing this for over 40 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.

We look forward to a prosperous 2025 and we look forward to be of any help we can to buyers and sellers of multi unit properties.