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Home | Newsroom | Housing | Remove 15-Unit Exemption from AB 2747 – to protect low-income, undocumented and BIPOC tenants

Remove 15-Unit Exemption from AB 2747 – to protect low-income, undocumented and BIPOC tenants

June 11, 2024

The Honorable Matt Haney
1021 O Street, Suite
Sacramento, CA 95814

RE: AB 2747 (Haney) – Oppose Unless Amend

Dear Assemblymember Haney,

On behalf of the low-income renters and communities we serve, we are writing in respectful opposition to AB 2747, the Building Renter Credit Act, unless amended to remove the provision exempting tenants living in buildings with 15 or fewer units and to clarify that landlords cannot deduct the credit reporting fee from paid rent. Without these changes, the bill will do more harm than good by codifying a harmful and unworkable exemption and leaving tenants who opt in to credit reporting vulnerable to eviction.

REMOVE THE EXEMPTION FOR PROPERTIES WITH 15 UNITS OR LESS
AB 2747 exempts rental properties that contain 15 or fewer units unless the landlord owns more than one residential rental building or is a real estate investment trust (REIT), a corporation, or an LLC in which one member is a corporation. Such an exemption is both impossible to enforce and without a rational basis. A tenant’s rights under the law should not depend on the number of units their landlord owns.

Approximately 72% of California renters live in buildings with fewer than 20 units and 36% live in single-family homes. In San Francisco, approximately 68% of residential rental units are in buildings with under 20 units. While AB 2747 purports to allow tenants the opportunity to build their credit, it effectively eliminates that opportunity for the vast majority of California renters.

In addition to being unfair and extremely limiting, this exemption is not workable because it is nearly impossible for the average tenant to determine how many properties their landlord owns or if an LLC has a corporate member. For $20 and some simple paperwork, anyone can form an LLC. Once a property is held in an LLC, it is challenging to figure out who the actual owners are because there is no requirement that LLC filings include names of the beneficial owners.. A single person could own dozens of 10-unit buildings in separate LLCs but could still claim that each property is exempt from offering credit reporting because they all appear to have separate owners.

CLARIFY THAT RENT REPORTING FEES CANNOT BE TAKEN FROM RENT
AB 2747 allows landlords to charge tenants who elect to have their rental payments reported to credit reporting agencies up to $10 per month for this service. While the bill prohibits a landlord from evicting a tenant for failing to pay the fee or from taking the fee from the tenants’ security deposit, it does not prohibit a landlord from deducting the fee from a tenant’s paid rent and then alleging that the tenant is behind on rent, leaving the tenant vulnerable to eviction. To address this, the bill should be amended to clarify that the fee is not rent and cannot be deducted from the rent and that rental payments cannot be applied towards fee charges.

While we support your intent to help tenants build their credit, we respectfully oppose AB 2747 unless it is amended to address these concerns.

Best regards,
Tina Rosales-Torres
Policy Advocate
Western Center on Law and Poverty

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Anya Lawler
Policy Advocate
California Rural Legal Assistance Foundation

Gregory Cramer
Senior Legislative Advocate
Disability Rights of California

Leah Simon Weisberg
Executive Director
Movement Legal

Michelle Pariset
Director of Legislative Affairs
Public Advocates

Jovana Morales Tilgren
Housing Policy Coordinator
Leadership Counsel for Justice and Accountability

Amy Schur
Campaign Director
Alliance of Californians