Owning a rental property in San Francisco means that you are potentially sitting on top of a gold mine. You are based in one of the most desirable areas in the country. And this location has a large influx of potential business and corporate renters. In time, this unique opportunity could create a lucrative revenue stream for you.

However, there are always going to be pros and cons. For example, San Francisco landlords may have a lot of opportunities, but they also have a lot of responsibility. National attention regarding the city’s housing shortage means there will be upcoming rental law changes in 2019.

Here are some key examples you need to look out for.

How the laws are changing and why

Below are the 10 new laws the San Francisco is implementing.

1. AB 2219: Landlords need to accept third-party payments

This particular bill covers the methods of payment that San Francisco residential landlords can take from their tenants. In the new rental law changes, landlords are required to accept rent payments through a third party, as long as the payor can provide a signed acknowledgment that they are not currently a tenant on the premises and that their payment doesn’t create a new tenancy. It’s not unheard of for a relative or other entity to pay for someone’s housing. Because of this, it may pay to draft a document that you can use for these purposes.

2. AB 1796: All new leases need to permit electric car stations

Electric cars are more than just a fad. This particular law covers how vehicle charging stations can be installed. In the past, San Francisco landlords had to approve a written request for residents to install stations in their allotted parking spaces, at the expense of the tenant.

The new change eliminates the exemption on the books for properties subject to a rent control ordinance. Now, for leases executed, extended, or renewed on or after 1.1.19, you will need to permit installation of stations.

3. SB 721: Inspections required for decks, balconies

A balcony can be a great selling point for a property, but this new law requires inspections of any “wooden exterior elevated elements with load-bearing components,” which includes decks, balconies, stairways, and walkways that extend beyond interior walls in the building.

While the initial inspection isn’t required until January 1st, 2025, you will need to have it done every six years after that, so be ready to incorporate this into your budget.

4. SB 745: Water-conserving plumbing fixtures required

If you own an older property, this new law could represent another expense you need to start budgeting for. Properties constructed before January 1, 1994, will need to install water-conserving plumbing fixtures. Originally passed in 2014, 2019 marks the deadline for noncomplying properties to act, so make sure your property has the proper fixtures.

5. SB 1397: New properties must install AEDs

This law requires owners of specific commercial and residential properties to install automated external defibrillators (AED), given that they are built after January 1, 2017. Properties built before then will also need to install AEDs if the structure is modified or renovated on or after January 1, 2020.

6. AB 2598: Fines for building and safety infractions increased

This new law allows local counties as well as cities in California to increase the maximum amount of money fined for infractions of building and safety codes. First violations have increased to $130 from $100, second violations to $700 from $300, and $1,300 for any additional violations of the same ordinance within one year of the initial violation.

This gives more reason for property owners to pay close attention to potential issues and tenant complaints.

7. SB 1194: Guest records cannot be communicated without court orders

Vacation or corporate property owners will need to pay attention to this law, which strictly prohibits such individuals from communicating any or all parts of their guest records to a third party without the presence of a subpoena, warrant, or court order.

8. AB 2164: Fines will be imposed for illegal marijuana cultivation

Attitudes towards marijuana may be changing across the country, but this law puts landlords on the hook if illegal cultivation is taking place on their property. The bill allows local agencies to impose fines and penalties for health and safety code violations that exist due to illegal marijuana cultivation. 

However, if the lease specifically prohibits this and the cultivation is done by a tenant without the landlord’s knowledge, the agency must provide time to correct the issue. Make sure that you add that provision to all your leases.

9. AB 2324: Landlords need to give more time to evict

This bill may seem like a minor change at first, but it’s something that every San Francisco landlord needs to consider. The basic point of this new law is to exclude judicial holidays, Saturdays, and Sundays from the previous three days that a landlord attempting to evict has to give their tenants to "cure the violation or vacate". This adds yet another consideration you need to make during the eviction process should you need to start it.

10. AB 1919: No price gouging after disasters

Following the recent wildfires in California, several different bills are now in place related to fires and disasters. These new laws should be of particular note to landlords. Under the current laws against price gouging, landlords cannot raise rents by 10% within 30 days of a declared disaster. 

However, this law will not apply for rental properties that weren’t on the market at the time of the emergency. The law also includes other related reforms to limit rent raises and evictions following an emergency.

Now, landlords need to be careful moving forward that they do not accidentally do anything that may be seen as price gouging, even if it’s coincidental. You will also need to keep a close eye on emergencies, especially during the summer. This will help you to be sure any rent raises you put in place don’t coincide with those emergencies.

How can landlords adapt to these laws in 2019?

The good news - many people still will come to live in San Francisco. Whether they want to live here permanently, or for a few months, they still need your rental space. This means that the main concern for San Francisco landlords is using research to stay abreast of potential changes. There are a few things you can do, such as joining groups like the San Francisco Apartment Association, having regular contact with your attorney, or partnering with a property management company that has expertise in these matters.

For example, since Blueground specializes in leasing and furnishing high-quality properties in San Francisco, as well as several other major U.S. cities, we are well aware of the different laws property owners need to adapt to. Working with us takes the burden of keeping up with these changes off your shoulders.