California Rent Increase Rules: Caps, Notice, Exemptions

California's Tenant Protection Act (AB 1482), which became effective January 1, 2020, established statewide rent caps that limit how much landlords can increase rent each year. These protections are codified in Civil Code § 1947.12. Understanding these rules is critical to staying compliant and avoiding penalties.

Statewide Rent Cap

Official Law Citation: The rules and regulations outlined on this page are strictly configured under the official California Civil Code § 1947.12 (added by AB 1482). Landlords must always ensure their lease agreements directly adhere to this state code.

For properties covered by AB 1482, the maximum annual rent increase is:

5% + local Consumer Price Index (CPI), or 10% - whichever is LOWER

This cap applies per 12-month period. Landlords cannot increase rent in more than two increments over any 12-month period, provided the total increase does not exceed the allowable cap.

Notice Requirements

Note: Notice must be in writing and delivered personally or by mail. If served by mail, additional days may be required under Code of Civil Procedure § 1013.

Properties Covered by AB 1482

Most residential properties in California are covered, including:

• Apartments and multi-family buildings
• Condos and townhouses (if not owner-occupied and owned by a corporation)
• Single-family homes owned by corporations, REITs, or LLCs with at least one corporate member

Exempt Properties

The following are exempt from the statewide rent cap under Civil Code § 1947.12:

1. New construction - Properties issued a certificate of occupancy within the previous 15 years (on a rolling basis).
2. Single-family homes and condos - Exempt ONLY IF the owner is not a REIT, a corporation, or an LLC with at least one corporate member, AND the landlord provides the tenant with the specific statutory disclosure notice required by § 1947.12(d)(5)(B). There is no limit on the number of properties a natural person may own.
3. Owner-occupied duplexes - A property with two units where the owner occupied one unit as their principal residence at the start of the tenancy and continues to do so.
4. Affordable housing - Subject to a government deed restriction or regulatory agreement.
5. Dormitories - Owned and operated by an institution of higher education or a K-12 school.
6. Properties under local rent control - If the local ordinance restricts annual increases to an amount less than the state cap.
7. Mobile homes - Explicitly exempt from § 1947.12. Qualified mobilehome parks are instead subject to Civil Code § 798.30.5, which limits increases to 3% + CPI, or 5%, whichever is lower.

Local Rent Control Ordinances

Several California cities have their own rent control laws that may be more restrictive:

Always check your local city's ordinances - they override state law if more restrictive.

Penalties for Exceeding the Rent Cap

If a landlord increases rent beyond the allowable cap:

• The tenant may file a complaint with the local rent board or take legal action in the Superior Court of California
• The excessive portion may be deemed void and unenforceable under state law
• The landlord may be required to refund the overcharge plus interest and statutory damages
• In some cities, additional administrative penalties and attorney's fees may apply

Best Practices

1. Calculate CPI before each increase - Check your local CPI published by the Bureau of Labor Statistics.
2. Document the calculation - Keep records showing your increase is within the cap.
3. Serve proper notice - Use the correct notice period (30 or 90 days) and delivery method.
4. Check local rules first - Your city may have stricter limits.
5. Include AB 1482 disclosure - Notify tenants in the lease whether the property is covered or exempt to maintain your exemption status.

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