California Rent Increase Laws: What Tenants Should Know

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In recent years, California has experienced a significant surge in rental prices, reaching unprecedented levels in 2022. This trend has prompted lawmakers to introduce regulations aimed at maintaining housing affordability.

A key development in this area is the enactment of rent control laws in 2019, designed to expand the availability of affordable housing across the state.

The Scope of Rent Increases in California

Under the Tenant Protection Act of 2019, also known as AB-1482, California landlords are restricted in how much they can increase rent annually. The law stipulates a maximum increase of 5% per year, plus the change in the cost of living based on the consumer price index, or 10% of the lowest rent at any time during the previous 12 months, whichever is lower.

For instance, in the high-inflation landscape of 2022, many regions have adopted the 10% cap, as it is significantly lower than the rate dictated by the consumer price index. However, it's important to note that these regulations apply only to properties under rent control, and there are notable exceptions.

Exemptions from Rent Control in California

Not all properties fall under the purview of California's rent increase laws. Exempt properties include:

• Single-family homes and condos, unless owned by a corporation, REIT, or a corporation-owned LLC.
• Duplexes where the landlord occupies one unit.
• Mobile homes.
• School and college dormitories.
• Hotels.
• Commercial properties.
• Buildings constructed in the last 15 years.
• Rentals managed by non-profit organizations.
• Properties already governed by local rent control ordinances.

Landlords of exempt properties have the freedom to set rent increases as they see fit, provided they comply with any other applicable local regulations. They must, however, inform tenants of their exemption from AB 1482.

Frequency of Rent Increases

In California, the frequency of rent hikes is tied to the lengthtied to the length of the lease. For longer leases, landlords can increase rent only once per year, at the lease's conclusion. For shorter leases, including month-to-month agreements, landlords are limited to two rent increases per year, subject to rent control laws.

Notice Requirements for Rent Increases

The required notice period for rent increases depends on the magnitude of the increase and the duration of the tenant's occupancy. Increases over 10% necessitate a 90-day notice.

For increases under 10%, a 60-day notice is required if the tenant has resided in the unit for over a year, and a 30-day notice for those who have lived there for less than a year.

Sources:

https://oag.ca.gov/consumers/general/landlord-tenant-issues

https://propertyclub.nyc/article/california-rent-increase-laws