January 2025 Blog

January 2025 Property Management Newsletter

Dear Homeowners,

Happy New Year! We hope this message finds you well and that your 2025 is off to a great start. As always, we strive to keep you informed about key developments and responsibilities in property management. Below, you’ll find important updates on new laws, tax reporting requirements, and helpful maintenance tips for the winter season.

New Laws Affecting Landlords in 2025

As 2024 concludes, new California laws and trends affecting residential landlords will come into effect in 2025. Here’s a concise overview of these updates, categorized for your convenience. Please note, this does not cover local ordinances.

1. Landlord/Tenant Laws

  • Application Screening Fees (AB 2493): Landlords must adopt stricter rules for charging application fees and provide applicants with rental criteria and credit reports.
  • Security Deposits (AB 2801): New photo documentation requirements for unit conditions and limits on deposit deductions begin in 2025.
  • Prohibited Fees (SB 611): Bans fees for serving legal notices and prohibits fees for personal check payments.
  • Mandatory Credit Reporting (AB 2747): Landlords must offer positive rental payment reporting to tenants, with specific opt-in procedures.
  • Domestic Violence Protections (SB 1051): Landlords must cover lock changes for domestic violence victims and revise tenant screening policies.
  • Unlawful Detainer Timelines (AB 2347): Extends tenants’ response time in eviction cases and streamlines certain legal motions.
  • Natural Person Definition (SB 479): Clarifies owner-occupancy move-in rights under just cause eviction laws.
  • Parking Unbundling (AB 2898): Requires separate agreements for parking charges in new constructions in specific counties, with exceptions for voucher holders.

2. Affordable Housing Laws

  • Permanent Credit Reporting for Assisted Housing (SB 924): Ensures rental payment reporting options remain permanent.
  • Rent Increase Limits (AB 846): Introduces new rent cap regulations for tax credit properties.
  • Housing Authority Reporting (AB 653): Mandates public housing authorities publish operational data annually starting in 2026.
  • Monitoring Fee Removal (AB 2430): Prohibits monitoring fees for 100% affordable housing projects meeting specific criteria.

3. Fair Housing

  • Intersectional Discrimination (SB 1137): Recognizes claims based on multiple protected characteristics under fair housing laws.
  • Hairstyle Discrimination (AB 1815): Clarifies race-related protections to include hairstyles and traits associated with specific races.

4. Building Laws

  • Balcony Inspections (AB 2579): Extends inspection deadlines for balconies to January 2026.
  • Unpermitted ADUs (AB 2533): Expands compliance pathways for junior accessory dwelling units.
  • Extreme Heat Plans (AB 2684): Adds extreme heat hazards to future local housing safety reviews.
  • Substandard Building Standards (SB 1465): Broadens definitions and responsibilities for addressing unsafe housing conditions.

5. Military Protections

  • Service Member Payment Deferrals (AB 1854): Expands post-active duty payment deferment rights for military members, including rent obligations.

6. Real Estate License & Disclosure Laws

  • Broker Agreements (AB 2992): Introduces mandatory commission disclosure language in real estate agreements.
  • Gas Appliance Disclosures (SB 382): Requires sellers to inform buyers about gas appliance regulations starting in 2026.
  • Water Storage Tanks (SB 1366): Mandates disclosure of domestic water storage tanks in property sales.

These legislative updates will significantly impact landlord practices in 2025. For more details or assistance in implementing these changes, feel free to contact us.

We encourage you to reach out if you have questions about how these changes affect your properties.

1099 Reporting Requirements

Tax season is approaching, and understanding 1099 forms is crucial for accurate filing. Here’s what you need to know:

  • Purpose of 1099 Forms: These forms report rental income paid to property owners during the tax year.
  • Key Deadlines:
    • We’ll issue your 1099 forms by January 31, 2025.
    • Please review them promptly and notify us of discrepancies no later than February 15, 2025.
  • Reading Your 1099: Income received in December for January 2025 rent will be reported on your 2024 form because the IRS requires income to be reported in the year it was received (per IRS Publication 525).

California FTB 7% Withholding for Out-of-State Owners

For owners residing outside of California, the Franchise Tax Board (FTB) requires 7% withholding on rental income. Expect to receive Form 592-B summarizing the amounts withheld. This document is essential for filing your California state taxes.

If you have questions about your withholding or tax forms, please don’t hesitate to contact our office.

Winter Maintenance Tips

Proper home maintenance during winter can prevent costly repairs and keep your properties in excellent condition. Here are some key tasks to address annually:

  1. HVAC System Check: Ensure heating systems are functioning efficiently. Replace filters and consider a professional inspection.
  2. Gutter Cleaning: Remove debris to prevent water backup and potential damage during heavy rains.
  3. Inspect Weatherproofing: Check seals around doors and windows to minimize drafts and reduce heating costs.
  4. Roof Inspection: Look for loose or damaged shingles that might allow leaks during storms.

A Note on December Rent Payments

You might notice that rent payments received in December 2024 for January 2025 are included on your 2024 1099 form. This follows IRS cash-basis accounting rules, which stipulate that income is taxable in the year it is received.

For more details, refer to IRS Publication 525 or contact a tax professional.

Wishing You a Wonderful 2025!

As we embark on another year, we want to express our gratitude for your trust in our services. We are here to support your property management needs and are always happy to assist with any questions or concerns you may have.

Here’s to a successful and prosperous year ahead!

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