Many rental laws were introduced in the last year, and rent control went into effect in California. Many of the rules remained the same and were simply clarifications, while some completely changed the way landlords do the rental business in California.
One of the main things that most tenants want to know is the maximum rent that a landlord can increase in California.
This might be a little confusing for some people. In simple words, every landlord in California that is exempt from AB1482 can raise their annual rent by about 5% plus yearly CPI (consumer price index) percentage change. If their rental property has an exemption from AB1482, they can increase their rents as much as necessary.
Over the last 20 years, California has become one of the most expensive places to live because of the steady increase in rental prices there. It is recommended to both landlords and renters to double-check with local city laws as some cities have special restrictions.
In this article, we have discussed the minimum and maximum a house owner can raise the rent in California. So continue reading!
How does rental control work in California under 2021 law?
Under the new rental law of California, the landlord has two limitations. First, they have limits on rent increases, and the second one is that it removes landlords’ rights to evict renters without any cause.
AB1482 is a statewide act that allows annual rent increase to 5%, including a local cost-of-living change of no more than 5%. The maximum raise a landlord can do is 10%. Under this legal act, a landlord can only evict his renter for several legal reasons.
This law is only applicable to renters who have lived in the apartment of the rental unit for more than one year.
For example, a house owner has a right to evict his tenant if they are not paying rent, breach the lease contract, convert a unit into a condo, criminal activity in the rental apartment, and renovate and demolish the rental house.
➡LEARN MORE: Can a Landlord Change the Lease After It Is Signed?
Minimum raise rent in California
Under the tenant protection act, the minimum rent increase a landlord can do is 5% per year. You could get an exception from this law if you do not apply to properties in the last one and half decades or not apply to single-family homes unless they are owned by the real estate trust, LLC with a corporation member and corporation itself.
If you are a renter and see that your landlord is breaching the contract by raising the rent, you can sue them because rental laws are strict in California and precise in separate legislation.
Maximum raise rent in California
The properties like single-family homes, mobile homes, hotels, any duplex where the owner occupies the unit, school and colleges dormitories, and many others are exempt from the tenant protection act.
The landlords of properties can increase their rents as much as necessary after providing notice of exemption from AB1482 to renters.
An average maximum annual rental increase is above 5% with CPI percentage change. Ensure to check the CPI indexes as there are different CPI indexes in many cities and regions in the US.
Suppose you have signed a one-year lease with a tenant. At the end of the lease, they decided to stay. You can switch to the month-to-month rental agreement.
You can increase the rent after passing the initial 12-month period only two times according to the laws. It is essential to notify your tenants 60 days before the lease expiration. The local CPI of your supposed property is 3%, but you can quickly increase 8% to the rent.