An investor client owns four units in Van Nuys. Rents are well under market. They ask what they can raise to on renewal.
If your answer is "market rate," you have just handed them a rent rollback, a possible penalty, and a reason to blame you.
California's Tenant Protection Act — AB 1482 — caps most residential rent increases statewide. It has been law since 2020 and it runs through 1 January 2030. Plenty of small landlords still don't know it applies to them.
The cap
5% + local CPI, capped at 10% total — whichever is LOWER
The CPI figure is the regional index for the property's area, published annually. In most recent California years the real-world ceiling has landed in the 8–10% range, but you must use the current figure for that region, not last year's.
Two increases per 12 months maximum, and combined they cannot exceed the cap.
The part that costs people money
Rent rollback on non-compliance. If a landlord raised rent above the cap, the tenant can demand the excess back. This is not theoretical — it is the most common way small landlords discover AB 1482 exists.
It applies retroactively to the March 2019 baseline. The Act reached back: increases after 15 March 2019 count toward compliance. A landlord who raised aggressively in 2019 may already be over.
Who is exempt — and how the exemption is lost
This is where agents are genuinely useful, because the biggest exemption requires an affirmative act that landlords routinely skip.
Exempt — new construction: housing with a certificate of occupancy within the last 15 years. This rolls. A building exempt in 2024 stops being exempt in 2025.
Exempt — single-family homes and condos, but only if BOTH are true:
- The owner is not a corporation, REIT, or an LLC with a corporate member, and
- The landlord gave the tenant specific written notice of the exemption.
⚠️ That notice is the whole ballgame. The statute specifies language substantially to the effect that the property is exempt from the Act's rent-cap and just-cause provisions. If it was never given — not in the lease, not as an addendum — the property is not exempt, no matter that it's a single-family home owned by an individual.
We have seen investors buy an SFR rental, assume exemption, raise 15%, and discover the prior owner never papered it.
Also exempt: owner-occupied duplexes, certain owner-occupied share arrangements, deed-restricted affordable housing, and dormitories.
Not exempt: an LLC with any corporate member. Agents get this wrong constantly — "it's in an LLC so it's a business" is backwards. Individual ownership preserves the exemption; corporate ownership destroys it.
Just cause — the half everyone forgets
AB 1482 isn't only about rent. After a tenant has occupied for 12 months, the landlord needs just cause to terminate.
At-fault (non-payment, breach, nuisance): generally requires notice and, for curable violations, an opportunity to cure.
No-fault (owner move-in, withdrawal from the market, substantial remodel, government order): requires relocation assistance — one month's rent, or a waiver of the final month.
An owner who wants the unit for their kid cannot simply give notice. They owe a month.
Local ordinances usually win
AB 1482 is a floor, not a ceiling. Cities with their own rent stabilisation — Los Angeles (RSO), Santa Monica, West Hollywood, Beverly Hills, Culver City, Pasadena, Inglewood and others — often impose stricter caps and broader just-cause rules.
Where a local ordinance is more protective of the tenant, it governs. Never advise from the state rule alone inside a rent-stabilised city. LA's RSO in particular covers most pre-October-1978 multifamily and allows far less than 5% + CPI.
What to say
To an investor buying tenanted property:
"Before we write this offer, I want to check the rent history and whether the exemption notice was ever given. If the seller assumed it was exempt and never papered it, you inherit that — including any over-cap increases they made. Let's ask for the leases and the notice in the disclosure package."
To an owner asking what they can raise:
"There's a state cap, and this city may have a stricter one on top. Let me confirm which applies before you send the notice — sending an over-cap increase is how people end up owing money back."
Add rent history and exemption notice to your due-diligence list on every tenanted property. It takes one email and it prevents the expensive version of this conversation.
You can model an allowable increase with our rent cap calculator.
General information for licensed agents, not legal advice. AB 1482 interacts with local ordinances in ways that vary block to block, and the CPI component changes annually. Route landlord clients to a landlord-tenant attorney before any notice goes out.