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2025 Housing Laws: What You Need To Know
California property owners, it's time to take note! Starting in 2025, numerous new laws and regulations affecting multi-family properties will go into effect. These changes aim to enhance tenant protection, promote fairness in housing, and improve building standards across the state. While they promise benefits for tenants and landlords alike, they also present unique challenges, especially for property owners juggling compliance.
This comprehensive guide will help you understand the key changes, their implications, and practical steps to ensure you’re ready for 2025.
Key Changes Affecting Multi-Family Properties
Here’s an overview of the most significant legal updates set to impact property owners in California.
1. Freddie Mac and Fannie Mae Multifamily Lease Standards Policy
Freddie Mac and Fannie Mae have developed new multifamily lease standards with the following provisions, designed to increase transparency and fairness for tenants:
30-Day Notice of Rent Increases
Rent increases of less than 10% require a written notice at least 30 days in advance. For increases exceeding 10%, landlords must provide a 90-day written notice.
30-Day Lease Expiration Notice
Landlords must inform tenants of upcoming lease expirations with at least 30 days’ notice.
5-Day Grace Period for Late Rent Payments
Landlords must allow a minimum five-day grace period after the rent due date before charging late fees or penalties.
2. Extended Tenant Eviction Response Time
Tenants now have up to 10 business days to respond to an eviction notice, doubling the previous five-day timeframe. This extension gives tenants more time to seek legal assistance and prepare their cases.
3. Credit Report and Screening Transparency
Credit Report Disclosure
Landlords must provide a copy of the applicant’s credit report within seven days, even if not requested.
Screening Criteria Disclosure
Landlords must disclose all screening criteria in writing and offer the rental to the first qualified applicant who meets them.
Screening Fee Limits
Fees for tenant screening are capped at $65.37 per applicant, adjusted annually for inflation.
No Screening Fees Without Units Available
Landlords can only charge screening fees if rental units are currently available or will become available within a reasonable timeframe.
4. Rent Payment Credit Reporting
Starting April 1, 2025, tenants in multi-family buildings with over 15 units can request that their timely rent payments be reported to credit bureaus. This allows tenants to boost their credit scores. Landlords must inform tenants about this option annually. If a tenant ops in he/she can opt out later through a written request and then cannot opt back in for six months.
5. Security Deposit Transparency
Landlords must provide “before” and “after” photos when deducting money from a security deposit for property damages. This ensures clear accountability and fairness in the deductions process. In court, if landlords can't provide photo documentation it is very likely the landlord will lose the case.
6. Domestic Violence Protections
Beginning January 1, 2025, additional protections for tenants who are survivors of domestic violence will include the requirement for landlords to change locks at the landlord’s expense upon receiving a statement from the victim. Police reports or court orders will no longer be required.
7. Oakland-Specific Updates
Property owners in Oakland (and other Bay Area cities) must annually update or confirm their tenancy data by March 1st. Failure to do so will restrict rights to file petitions for rent increases or respond to tenants' petitions.
8. Balcony and Exterior Structure Inspections Postponed until 2026
The deadline for multi-family properties with three or more units to complete inspections of balconies and exterior structures has been extended to January 1, 2026 under SB 721. Property owners are encouraged to schedule inspections early to ensure compliance and avoid last-minute rushes.
Implications for Property Owners
These regulatory updates come with both opportunities and challenges for multi-family property owners.
The Upside
Enhanced clarity in how landlords and tenants interact, minimizing disputes.
Improved tenant trust and transparency through clear notifications, credit reporting options, and updated lease standards.
Strengthened building safety measures through extended time to complete inspections.
The Challenges
Increased administrative responsibilities, such as providing credit reports, maintaining detailed tenancy records, and updating screening practices.
Potential delays in filing eviction notices due to extended tenant response times.
Compliance costs for building inspections and system upgrades (e.g., notifying tenants about credit reporting).
How to Prepare for 2025
To avoid compliance headaches and maximize the benefits of these regulatory changes, here are some practical steps property owners can take:
1. Educate Yourself on the New Laws
Familiarize yourself with the updated requirements and deadlines. A clear understanding of these expectations will help you avoid fines and maintain positive tenant relationships.
2. Update Your Lease Agreements
Work with legal counsel to ensure your lease agreements align with the new Freddie Mac and Fannie Mae standards and other statewide updates.
3. Adjust Communication Practices
Implement processes for providing timely notifications about rent increases, lease expirations, and credit report disclosures. Use automated tools if necessary.
4. Conduct Early Inspections
Don’t delay balcony and exterior structure inspections. Start scheduling assessments with licensed professionals to stay ahead of the 2026 deadline.
5. Improve Record-Keeping
Ensure thorough documentation of tenant communications, lease agreements, and screening criteria. Tools like property management software can streamline this process.
6. Engage a Professional Property Manager
If compliance feels overwhelming, consider enlisting a property manager with expertise in California’s rental laws and standards.
7. Build Relationships with Tenants
Transparency and proactive communication go a long way in building trust and maintaining tenant satisfaction during transitions.
A Final Word to Property Owners
The changing legal landscape in California and Bay Area presents both complexity and opportunity for multi-family property owners. With this shift comes the chance to build stronger relationships with tenants, enhance operational transparency, and uphold the highest standards in property management.
By staying informed and proactive, you can not only meet these new requirements but also thrive in a fairer and more collaborative rental environment.
Have questions or need support navigating these changes? Connect with us TODAY at Beacon Properties by calling us at 510-961-3757.
