Radius endeavors to provide accurate and up to date information to our clients about matters that may impact your commercial real estate holdings. As such, it’s important you are aware of a recently passed ordinance from the City of Santa Barbara dealing with mandatory one year leases for residential tenants. This ordinance will only apply to units in the city of Santa Barbara and will only apply to properties consisting of two or more dwelling units.
Beginning in June, 2019, landlords will be required to offer a one year lease to prospective tenants of residential properties with two or more units. A tenant is not required to accept the one year lease and should they reject the offer of the one year lease then the landlord and tenant can come to any agreement they choose regarding length of lease.
However, a landlord must receive the rejection of the one year lease offer in writing. If the tenant accepts the one year lease offer then the rent that is set in the lease agreement will be the rent for the entire one year period. Landlords will not be allowed to increase the rent during that lease period. If the landlord wishes to continue leasing to the tenant at the end of the one year period they will be required to offer the one year lease again even if the tenant did not choose to accept the one year lease initially.
There is a ninety (90) day grace period for landlords who currently have month to month tenants. By the beginning of September, 2019, all landlords will be expected to have offered one year leases to their tenants unless the tenant is already in an existing lease with term left on the lease.
Section 26.40.030 D provides definitions of what constitutes a Rental Unit and shall provide for exemptions such as; Single Family Homes, Condominiums or Planned Unit Developments, Accessory Dwelling Units, Boarding Houses and Hotels and Governmental Housing or Housing Authority properties.
We recommend you contact your commercial real estate agent if you have any questions regarding this new ordinance and the consequences it may or may not have on your investment.
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