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What You Need to Know about Statewide Rent Control Rent Caps

Rent increases are capped at 5% plus CPI, or up to a hard cap of 10%, whichever is lower.

  • All rent increases since March 15, 2019 count towards the rent cap
  • Increases since March 15, 2019 above the permissible rent cap, must be rolled back effective January 1, 2020
  • This law sunsets January 1, 2030 after 10 years
  • Only applies to residential property

california-statewide-rent-cap-guide

When State and Local Rent Control Do Not Agree

The more restrictive law to the landlord (tenant friendly) rules.

EXEMPTIONS

The exemptions listed will apply to up to both rent cap and just cause.

  • Single-family properties and condos if:
    1. Notice of the exemption is provided to the tenant AND
    2. The owner is not a REIT, a corporation, or an LLC where an owner is a corporation
  • Housing built in the last 15 years
  • Owner-occupied duplexes

HOW TO CALCULATE CPI

The regional Consumer Price Index (CPI) published by the US Bureau of Labor Statistics (Using the 12-month period from April to April).  If regional index is not available then the California Consumer Price Index for All Urban Consumers shall apply.

JUST CAUSE EVICTION

Applies to tenants who have been continuously and lawfully occupying the property for 12 months.  Landlords may only evict for “just cause.” There are 15 reasons categorized as “at fault” or “no fault.”

EXEMPTIONS TO JUST CAUSE

Owner-occupied single-family properties renting no more than two bedrooms including Accessory Dwelling Units (ADUs). If a property is exempt from just cause, the owner can evict without cause.

BASIS OF CAUSE – “AT FAULT” AND “NO FAULT”

“At fault” is based upon a tenant’s breach of the lease and does not require the landlord to make any payment for relocation assistance. “At fault” includes:

  1. Non-payment of rent
  2. Nuisance
  3. Criminal Activity
  4. Refusal to allow entry
  5. Refusal to sign a new Lease
  6. Breach of material term of Lease

“No fault” is allowed when the tenant has not breached the lease and requires the landlord to pay one month’s rent in relocation assistance.  “No fault” includes:

  1. Owner occupancy
  2. Withdrawal from rental market
  3. Substantial remodeling
  4. Compliance with government order to vacate

THE NEED FOR PROFESSIONAL PROPERTY MANAGEMENT IN CALIFORNIA

The overlapping City and State rent control laws make it more important than ever to use a professional management company that is able to sort through all the often confusing new laws and keep landlords in compliance.

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