August 2025 California Rental Housing Legal Update
Three-Day Notices, ICE Subpoenas, and the Gas Appliance Phase-Out
This month brings three significant legal developments affecting California rental housing operations, each with direct consequences for how landlords manage compliance, communication, and capital planning.
First, a recent appellate court decision has disrupted long-standing notice procedures, prompting legal uncertainty around how three-day notices must be written and served. Industry associations are now petitioning the California Supreme Court to prevent the ruling from becoming binding precedent.
Second, federal immigration authorities have begun issuing administrative subpoenas to landlords, requesting tenant records, which raises serious questions about how to respond without violating California’s strong tenant privacy protections.
Finally, a federal court has upheld a major South Coast air quality rule that will eventually ban most gas-powered water heaters and boilers in Los Angeles, Orange, Riverside, and San Bernardino counties. The decision starts the clock on costly retrofits for many housing providers.
In this month’s update, we explain each issue clearly and practically, outlining what’s happened, why it matters, and what steps landlords can take next.
*This article is for educational purposes only and does not constitute legal advice. Educating yourself is crucial and can help streamline and reduce your legal risk. However, seeking professional legal counsel consolidates your efforts and pre-emptively ensures compliance whenever issues inevitably arise.
Three-Day Notices: Eshaghian v. Cepeda & Push to Depublish
A New Court Ruling Alters Notice Requirements
On June 26, 2025, the California Court of Appeal published a decision in Eshaghian v. Cepeda that invalidated a landlord’s three-day notice to pay or quit. The court found the notice legally insufficient because it did not include the date of service, nor did it state when the notice period began or ended. According to the ruling, an “ordinary tenant” must be able to clearly understand the deadline to comply. Without those date-specific details, the court concluded that the tenant could not reasonably determine when the three-day period expired—and reversed the landlord’s judgment for possession.
While the case involved a specific non-CAA form, the court’s reasoning has broader implications. By focusing on how a notice is interpreted by the average tenant, the ruling suggests that similar deficiencies—such as missing service dates or undefined notice periods—could render other three-day notices invalid as well.
Compliance Risks and Operational Disruption
The ruling immediately triggered concern among landlords statewide, particularly regarding existing notice templates and eviction workflows. Housing providers who rely on standard three-day notices—including those compliant with the federal CARES Act—must now reevaluate whether those forms contain enough information to meet the court’s “ordinary tenant” standard.
The decision introduces legal uncertainty for both past and future notices. Notices served before the ruling may still be challenged if they omitted key date information, while future notices that fail to meet this standard risk being thrown out in court. Until new notice templates are vetted and adopted, landlords should exercise caution and consult legal counsel before serving any three-day notice.
Letter to the Supreme Court
On July 21, 2025, the California Apartment Association and the San Francisco Apartment Association asked the California Supreme Court to depublish Eshaghian v. Cepeda.
If the Court agrees, the decision will still control the parties in that case, but will lose all precedential weight for other landlords and tenants. The trade groups contend that Eshaghian invents notice‑drafting duties, explicit service, and compliance dates that the statutes themselves never impose, forcing owners to rewrite forms without legislative direction.
Until the Court rules, the opinion remains published and therefore binding statewide. Serve only three‑day or 30‑day notices that spell out the date of service and the precise three‑day window. CAA’s revised forms, released July 10, 2025, already include those fields. Retire any prior versions immediately.
ICE Subpoenas and Tenant Information Requests
Unofficial Subpoenas Raise Serious Legal Questions
In recent weeks, immigration enforcement agencies, including ICE and USCIS anti-fraud units, have issued administrative subpoenas to landlords and property managers, seeking access to tenant files. These subpoenas typically request sensitive documents, such as lease agreements, rental applications, copies of identification, and information about co-tenants.
Importantly, these subpoenas are not signed by a judge. That means they are not court orders and may not carry the legal force required to compel compliance. The use of unsigned administrative subpoenas has led to confusion and hesitation among housing providers, many of whom are unclear about whether, or how, they are obligated to respond.
California Law Strongly Limits What Can Be Disclosed
Under California law, landlords face strict limits on what they can ask or disclose about a tenant’s immigration status. Civil Code § 1940.3 prohibits landlords from inquiring into an individual’s immigration status or using that information to influence tenancy decisions. Additionally, a July 22 consumer alert issued by Attorney General Rob Bonta reiterates that landlords may not harass, threaten, or retaliate against tenants based on actual or perceived immigration status.
Disclosing tenant records in response to a federal subpoena, especially one that lacks judicial authority, could expose housing providers to liability under state privacy and anti-discrimination laws. The risk is not only legal but also reputational, especially in communities where trust between landlords and tenants is essential for stability.
State–Federal Legal Tension
The legal status of an administrative subpoena differs significantly from a court-issued subpoena or warrant. While a judge-signed order generally compels compliance under federal law, an administrative subpoena, particularly one lacking judicial oversight, may not override California’s tenant-protection statutes.
This creates a complex risk calculation. Landlords may face consequences for wrongfully disclosing protected information. At the same time, refusing to respond could create friction with federal authorities, especially if the subpoena escalates into a formal legal proceeding.
Practical Guidance for Housing Providers
With this uncertainty, housing providers should follow a cautious and well-documented approach:
- Do not respond automatically. Treat as non-binding pending counsel review.
- Verify and consult. Review the subpoena for authenticity and scope, and consult a qualified attorney before responding.
- Protect tenant privacy. Maintain clear records of all communications, and ensure that no tenant information is disclosed without a clear legal obligation to do so.
Remaining compliant with California law while navigating potential federal pressure requires thoughtful handling. In all cases, protecting tenant confidentiality must remain a top priority.
Gas Appliance Ban Upheld: South Coast Rule 1146.2 Moves Forward
Federal Court Upholds Zero-NOx Mandate
In a July 2025 decision, U.S. District Judge Percy Anderson upheld South Coast Air Quality Management District (AQMD) Rule 1146.2, rejecting a legal challenge brought by a coalition of housing providers and industry groups. The plaintiffs had argued that the rule was preempted by federal law, specifically the Energy Policy and Conservation Act, which limits state and local regulations on energy-efficient appliances.
However, the court sided with the Air District, finding that Rule 1146.2 regulates emissions, not energy efficiency. Judge Anderson also distinguished the rule from the 2024 California Restaurant Association v. City of Berkeley decision, which involved a local ban on gas piping in new construction. The court concluded that the Berkeley ruling was narrow and fact-specific, and did not apply to this broader, region-wide emissions regulation.
Who’s Affected and What the Rule Requires
Rule 1146.2 applies to a wide swath of Southern California, including Los Angeles, Orange, Riverside, and San Bernardino counties. The rule mandates a transition to “zero-NOx” appliances, effectively phasing out most gas-fired water heaters and boilers used in multifamily housing and other commercial buildings.
Compliance Timeline for Rule 1146.2
Phase I – Smaller units (≤ 400 kBtu/hr water heaters/boilers; ≤ 200 kBtu/hr instantaneous units)
• New building permits pulled ≥ Jan 1, 2026, must use zero‑NOx equipment.
• All buildings: any replacement or retrofit ≥ Jan 1, 2029 must meet the same standard.
Phase II – Larger units and pool heaters (> 400 kBtu/hr or > 200 kBtu/hr instantaneous)
• New building permits pulled ≥ Jan 1, 2028 must use zero‑NOx equipment.
• All buildings: any replacement or retrofit ≥ Jan 1, 2031 must meet the same standard.
Phase III – High‑temperature units (outlet > 180°F)
• New building permits pulled ≥ Jan 1, 2029 must use zero‑NOx equipment.
• All buildings: any replacement or retrofit ≥ Jan 1, 2033 must meet the same standard.
(Compliance dates source: amended Rule 1146.2, adopted June 7, 2024)
Planning and Budgeting for Compliance
Landlords in the affected counties should begin preparing now for the eventual electrification of building systems. This includes:
- Capital budgeting for retrofits, including equipment replacement and installation labor.
- Electrical infrastructure upgrades, especially in older buildings that may lack sufficient capacity to support electric boilers or water heaters.
- System planning and tenant impact assessments, such as evaluating backup hot water options, anticipating potential rent or utility adjustments, and reviewing local incentive programs.
While appeals may still be considered, the rule remains in effect, and deadlines are approaching. Housing providers should view compliance planning as a near-term operational priority.
Key Takeaways for Property Managers & Owners
- Eviction Notices: Immediately discontinue use of any three-day or 30-day notice forms that do not clearly state the date of service and the beginning and end dates of the notice period. Revised templates should be implemented without delay, and housing providers should stay informed about the California Supreme Court’s pending decision on whether the request by the CAA to depublish the Eshaghian ruling has any merit.
- Tenant Information Requests: If you receive an administrative subpoena from ICE or another immigration agency, do not assume it carries legal force. These are not court orders. Avoid disclosing any tenant information without first consulting with legal counsel, and ensure your practices align with California’s strict rules that protect against immigration-based discrimination.
- Gas Appliance Planning: For properties located in Los Angeles, Orange, Riverside, and San Bernardino counties, begin preparing now for compliance with Rule 1146.2. Begin with a comprehensive equipment inventory and identify where electrification retrofits are necessary. Incorporate projected upgrade costs and infrastructure needs into your 2026 and 2029 capital improvement budgets and reserve studies.
Mehigan Law – Professional Eviction Legal Services
Mehigan Law has served California’s property management and independent landlord communities for over 45 years. We take pride in our ability to give your business and each case the personal attention it deserves.
We understand that every business and property environment is different. Each requires a thorough understanding of the unique challenges and needs to manage eviction compliance successfully. We consider all overlapping layers of legal jurisdiction and help you navigate disruptions to normal business operations efficiently.
