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Prepared By: Melissa C. Marsh, Los Angeles Landlord-Tenant Attorney
Written: May 2022

Rent Increases in Los Angeles California

The allowable rent increase on a rental property in Los Angeles California depends on: (i) what month and year the rental property was built, (ii) what's on the parcel containing the rental unit (one single family home, a duplex, an apartment building), (iii) the language in the lease agreement, and (iv) where the rental property is located (does a local rent control ordinance apply). This article provides an overview of: (1) California law on rent increases for properties that are exempt from California state rent limits (Single Family Home, Condo, Etc..), (2) California state law on rent increases for properties that are subject to the California Tenant Protections Act (California state rent control), if the landlord has served the tenant with Notice of the exemption, and (3) the law on rent increases for properties subject to the Los Angeles Rent Stabilization Ordinance.

California State Law on Rent Increases for Rental Properties Not Subject to State or Local Rent Control.

Under California law a landlord cannot raise the rent during the initial lease term, absent a lease provision to the contrary. If there is no lease lease, or if the lease has gone a month-to-month, then the landlord can increase the rent so long as the Landlord properly serves a formal 30 or 90 day Notice of Rent Increase on the tenant. Under California law, the landlord must provide a tenant with at least 30 days' advance written notice of a rent increase if the rent increase is 10 percent (or less) of the rent charged at any time during the 12 months before the rent increase takes effect. 35 days notice is required if the notice of the rent increase is served by mail. If the landlord is increasing the rent more than 10% in a 12-month period, then pursuant to California Civil Code §827, the landlord must give the tenant at least 90 days prior written notice (95 days if the notice is mailed).

California Law on Rent Increases for a Rental Property Subject to California State Rent Control (AB 1482).

Pursuant to the California Tenant Protections Act, annual rental increases for most California multi-unit dwellings built more than 15 years ago (built before May 2007 when this article was last updated) are capped at the lesser of 10%, or 5% plus the local consumer price index for the rate of inflation. The California Tenant Protections Act further prohibits an owner of a residential multi-unit dwelling built before May of 2007 from increasing the rent more than 2 times in any 12-month period. A multi-unit building is defined as a more than one rental unit on the parcel of land with a limited exception for a duplex if one of the two units is owner occupied.

CAUTION: Some single family homes, condos, and duplexes are inadvertently subject to California limits on rent increases if the owner did not: (1) include the formal language of the exemption notice in 12 point type in the lease (if the lease was executed or renewed after July 1, 2020) or (2) properly serve the tenant with a formal AB 1482 Notice before August 1, 2020 (if the original lease was executed before July 1, 2020), or (3) have the tenant sign an acknowledgement of receipt of the Notice or sign an Addendum to the Lease notifying the tenant that the property in which they are residing is exempt from the rent limits imposed by the California Tenant Protection Act. This is a very tricky area of the law and owners must serve the right notice, addendum, or lease renewal to maintain a rental property’s exemption from the California Tenant Protection Act’s limits on rent increases. For more information on this topic, please read CA Rent Control Statute - AB 1482.

Have some questions? You can schedule a same day low cost 30 minute telephone consultation with Ms. Marsh, a California attorney with 25+ years experience, and Ms. Marsh will contact you at the time you select. Please note that at least 30 minutes is required for Ms. Marsh to properly review your options pertaining to any landlord tenant matter due to the interplay of local, county, and state laws.

The California Tenant Protections Act (AB 1482) limits the annual rent increase a California landlord may impose on a tenant residing in a “covered” rental unit to the lesser of 10% or 5% plus the local increase in the Consumer Price Index (CPI) for or All Urban Consumers as established each year in the month of April. In 2020, the allowable rent increase for a “covered” rental unit in Los Angeles County was 5.7%. For August 1, 2021 through July 31, 2022, the allowable rent increase for a “covered” rental unit in Los Angeles County was 8.6%. For August 1, 2022 through July 31, 2023, the annual change in the CPI for Los Angeles County was 7.9%, so the allowable rent increase in Los Angeles County will be 10%.

For rent increases that take effect before August 1st of any calendar year, the percentage change is calculated using the amount published for April (or March, if no amount is published for April) of the immediately preceding calendar year and April (or March) of the year before that.

For rent increases that take effect on or after August 1st of any calendar year, the percentage change in the CPI is calculated using the amount published for April (or March, if no amount is published for April) of that calendar year. For rent increases that take effect BEFORE August 1st of any calendar year, the percentage change in the CPI is calculated using the amount published in April of the preceding calendar year (or March, if no amount is published for April).

Allowable Rent Increase for a Rental Property Subject to California Rent Control in LA County

Based on Consumer Price Index (CPI) for or All Urban Consumers – LA County

Year	Annual Change In CPI	Allowable Rent Increase
August 1, 2020 – July 31, 2021	0.7%	5.7% (5% + 0.7%)
August 1, 2021 – July 31, 2022	3.6%	8.6% (5% + 3.6%)
August 1, 2022 – July 31, 2023	7.6%	10% (Max)

The California Tenant Protections Act further prohibits an owner of a residential multi-unit dwelling from increasing the rent more than 2 times in any 12-month period. For example, if a landlord increased the rent 5% in January of 2021, but was allowed to increase the rent 8.6%, the landlord is allowed to issue a second 30 Day Notice of a Rent Increase for 3.6% in that same year for the difference.

Master tenants must also beware. The California Tenant Protections Act prohibits master tenants with subtenants from collecting rent from the subtenants that exceed the total amount of rent paid by the master tenant to the owner / landlord. In other words, the total rent paid by subtenants to a master tenant cannot exceed the rent charged by the landlord.

Have some questions? You can schedule a same day low cost 30 minute telephone consultation with Ms. Marsh, a California attorney with 25+ years experience, and Ms. Marsh will contact you at the time you select. Please note that at least 30 minutes is required for Ms. Marsh to properly review your options pertaining to any landlord tenant matter due to the interplay of local, county, and state laws.

What happens if a California landlord gave an Illegal Rent Increase? If the rent was increased by more than 5% + CPI between March 15, 2019 and January 1, 2020, then on January 1, 2020 the rent must revert back to the rent paid on March 15, 2019, plus the allowable increase of 5% + CPI (0.7% in Los Angeles). While California landlords do not have to return overpayments of rent made between March 15, 2019 and January 1, 2020, they must return overpayments made after January 1, 2020. If the landlord fails to return the overpaid rent collected, the tenant can bring an action in either small claims, or state, court and if the court finds in the favor of the tenant, the court may additionally award the tenant their reasonable attorneys fees and costs (the attorneys fees and costs will likely exceed the amount the landlord was required to refund).

What About Local Rent Control Rent Limits?

The allowable rent increase for any rental unit depends on: (1) where the rental property is located, (2) the type of property, (3) when the property was built, and (4) the Notices that have been served and language in the Lease. Let's look at the City of Los Angeles which has a rent control ordinance in effect. The Los Angeles Rent Stabilization Ordinance only applies to multi-unit dwellings that were built prior to October of 1978 and illegal dwelling units. So what is the allowable rent increase on a multi unit rental property (parcel with more than 1 rental unit on it) built pre-1978 versus 1995 versus 2019 in the City of Los Angeles?

• If a multi-unit rental property (parcel of land with more than one rental unit) in the City of Los Angeles was built before October 1978, then the rent limits imposed by the Los Angeles Rent Stabilization Ordinance will control (Presently 0% for 2022, as there is still a Covid 19 Rent Freeze in effect);
• if a multi-unit rental property in the City of Los Angeles was built in 1985, then California State Rent Control Limits apply and the rent increase will be capped at 8.6% for rent increases that take effect before August 1, 2022 (5%, plus the 3.6% increase in the consumer price inflation index for the City of Los Angeles as published in April of 2021);
• if the multi-unit rental property in the city of Los Angeles has an original certificate of occupancy of 2019, then there would be no rent increase limit, or rent cap, until the building is 15 years old.

CAUTION: The overlapping laws are not only complex but they also keep changing. In addition to the City of Los Angeles' RSO, there is also a Los Angeles County Rent Control Ordinance which covers all multi-unit buildings built BEFORE February of 1995. To complicate matters further, the California Tenant Protection Act enacted in 2019 has already been amended in 2021. A California landlord must be mindful of overlapping laws.

Allowable Rent Increases Under the Los Angeles Rent Stabilization Ordinance - (See Rent Freeze Below).

The Los Angeles RSO addresses allowable rent increases which can range from 3% to 8%, the registration of rental units, legal reasons for eviction, and the causes for eviction requiring a relocation assistance payment to the tenant. Typically, under the Los Angeles Rent Stabilization Ordinance (RSO ), the landlord is allowed to make the following rental increases:

1. Raise the rent once every 12 months by the annual allowable increase (Was 4% for July 1, 2019 through March of 2020, but the annual rent increase has been halted due to Covid 19 through at least May 30, 2023).
2. If the landlord pays for all of the costs of gas and/or electricity supplied to a tenant's unit, the landlord may raise the rent by an additional one percent (1%) for each of the two utilities supplied.
3. At the same time the landlord raises the rent, if the written lease so provides, the landlord may also raise the security deposit (and last month's rent if applicable) once every 12 months by the annual allowable percentage increase (presently 4% for 7/1/2019-4/30/2020).

Under the Los Angeles RSO There Are Four Special Circumstances Which Allow the Landlord to Raise the Rent Beyond the Annual Allowable Percentage Rent Increase.

1. Additional Tenant. The Landlord can raise the rent by ten percent (10%) for each additional tenant / occupant of a rental unit exceeding the number of initial occupants allowed in the original rental agreement, EXCEPT THAT If the landlord had actual or constructive knowledge of the additional tenant's occupancy for more than 60 days and failed to provide the tenant with a 30 Day Notice of the rent increase, then the landlord forfeits the right to increase the rent per Ordinance No. 181744, effective July 1, 2011. A corresponding reduction in rent is required when the additional tenant vacates the unit. Security deposits may be raised for additional tenants by the same dollar amount as the rent is raised.
2. There Has Been No Rental Increase Since May 1976. The Landlord can raise the rent nineteen percent (19%), plus 2% if the landlord provides the gas and electricity, If a landlord has not increased the rent since May 31, 1976.
3. There Has Been No Rental Increase Since May 1977. The Landlord can raise the rent thirteen percent (13%), plus 2% if the landlord provides the gas and electricity, If a landlord has not increased the rent since May 31, 1977.
4. Landlord Makes Capital Improvements. A landlord who is planning to improve his rental, may apply for special rent increases based on an application for Primary Renovation, Capital Improvements, Rehabilitation, or a "Just and Reasonable" rent adjustment which must be submitted to and approved by the Rental Board.

Notice Required Under the RSO.

To raise the rent, the landlord must serve the tenant(s) with a written 30-day notice for rent increases that are 10% or less of the tenant's rent (35 days if the notice is mailed), or a 90-day notice (95 days if mailed) for rent increases that exceed 10% of the tenant's lowest rent within the preceding 12-month period.

Additional Costs a Landlord Subject to the Los Angeles RSO is Allowed to Pass Through to a Tenant:

1. Each month the landlord may collect an additional $1.61 from each tenant (50% of the annual $38.75 registration fee paid to the Rent Stabilization Division). Previously the landlord was required to collect half of the registration's fees only in the month of August.

2. The landlord may also collect the entire annual Systematic Code Enforcement Program (SCEP) fee ($67.94) if paid in full by the landlord by increasing the rent $5.66 per month. To collect this monthly fee from the tenant, the owner must similarly give the tenant a written thirty (30) Day Notice of Rent Increase prior to the collection of this fee once a year and provide the tenant a copy of the Registration Certificate.

Rent Increases After a Vacancy

The allowable rent level after a vacancy depends on the reason for the vacancy. The RSO provides that the rent may be raised to any amount upon re-rental if the vacancy resulted because the tenant: (1) voluntarily vacated the unit; (2) was evicted for non-payment of legal rent; or (3) was evicted for violating the terms of the rental agreement and thereafter failing to cure the violation. If the vacancy occurs for any other reason, the Los Angeles RSO requires the rent to a new tenant to remain the same as that for the prior tenant. Examples include: (1) an eviction to recover the unit for the use of the landlord, his immediate family. or a resident manager; (2) an eviction based on the prior tenant's illegal acts; (2) an eviction based on the tenant's refusal to sign a new lease with the same terms as are in the RSO; and (3) an eviction based on the tenant's refusal to allow the landlord reasonable access to the unit.

The LA City Rent Increase Freeze Is Still In Effect

In the City of Los Angeles the Rent Increase Freeze Still Remains in Effect for all Properties Subject to the Rent Stabilization Ordinance.

Two years into this pandemic with staggering inflation, and the City of Los Angeles's RENT FREEZE for rental units subject to the Los Angeles Rent Stabilization Ordinance (RSO) still remains in effect.

Pursuant to the Los Angeles Rent Stabilization Ordinance, the owner of a rent stabilized rental unit is allowed to increase the rent annually a minimum of 3% and up to 8% as established by the City based on the change in the annual Consumer Price Index. The Los Angeles Rent Stabilization Ordinance further provides that if an owner provides for utilities, the owner is entitled to an extra 1% rent increase for electrical and an extra 1% rent increase for gas.

In January 2019, HCIDLA (now again known as the Los Angeles Housing Department) posted the ″Rent Stabilization Update, stating that the annual allowable rent increase for rental units subject to the RSO for the fiscal year July 1, 2018 through June 30, 2019 was 3%, and that the annual allowable rent increase for the fiscal year July 1, 2019 through June 30, 2020 was 4%. (LAMC 151.07A.6)″.

In March of 2020, however, the City of Los Angeles instituted a RENT FREEZE on all rent stabilized properties.

"property owners shall not increase rent on occupied rental units subject to the RSO beginning on the date of this order (March 30, 2020) through 60 days after the expiration of the local emergency period (which is still ongoing as of May 2022). This order suspends any conflicting provisions of Chapter 14 of the Los Angeles Municipal Code.″

At the same time, the Los Angeles Housing Department added that all renters must be provided with a copy of the ″Los Angeles COVID-19 Renter Protection Fact Sheet″ with any notice of termination of tenancy both during the local emergency and for one year thereafter.

Paragraph 3 of the Los Angeles COVID-19 Renter Protection Fact Sheet, states that "no rent increase that became effective on or after March 30, 2020 … or allowable for property subject to the RSO … [shall be valid] unless approved by the LAHD until one year after the local emergency expires. Rent increases do not accumulate during the one-year period.″

In January of 2021 and again in January of 2022, the Los Angeles Housing Department did NOT publish an advisory regarding the allowable rent increase, or any update and Mayor Garcetti's initial emergency declaration from March of 2020 still remains in effect.

Please be aware that the laws have been changing quite frequently and this article may not reflect current rules. Please do not rely on this article when making legal decisions.

Have some questions? You can schedule a same day low cost 30 minute telephone consultation with Ms. Marsh, a California attorney with 25+ years experience, and Ms. Marsh will contact you at the time you select. Please note that at least 30 minutes is required for Ms. Marsh to properly review your options pertaining to any landlord tenant matter due to the interplay of local, county, and state laws.

© 2022 Melissa C. Marsh. All Rights Reserved.