California Rent Increase Laws 2024: Know Your Rights as a Renter

According to Rentspree, With inflation rising and living expenses increasing, landlords are reassessing the return on investment for their rental properties. The pressure to raise rents in response to mounting costs is understandable. However, California has specific guidelines on how and when you can increase rent, which you must follow to remain compliant.

How Much Can Rent Increase in California?

California’s Tenant Protection Act (AB 1482) sets limits on rent increases for rental properties. The law establishes a statewide rent cap, restricting annual rent hikes to the lower of 5% of the current rent plus the local rate of inflation or 10% of the current rent.

Calculating Rent Increases

To determine the allowable rent increase, use the Consumer Price Index (CPI) published by the Bureau of Labor Statistics. This index measures inflation and helps align rent adjustments with economic conditions. For example, if your current rent is $2,000 and the CPI has increased by 3%, you would calculate the increase as follows:

$2,000 * 3% = $60

Thus, the new rent could be up to $2,060. The Tenant Protection Act requires using the CPI from the previous April for your area.

Nationwide Overview of Rent Increases

Rent increase regulations vary by state, county, and city. While California has specific rules, other states like Texas may offer landlords more flexibility, and local ordinances might provide additional tenant protections. It’s essential for both landlords and tenants to understand their local regulations to ensure compliance.

Exemptions from AB 1482

Certain properties are exempt from AB 1482’s rent control provisions, including:

• New Construction: Properties with a certificate of occupancy issued within the last 15 years.
• Single-Family Homes and Condos: Properties not owned by a REIT, corporation, or LLC, and not a duplex where the owner occupies one unit.
• Certain Affordable Housing: Units with specific affordability restrictions.
• Student Housing: Housing provided by nonprofits affiliated with universities or colleges.
• Short-Term Rentals: Properties rented for 14 days or less per year via platforms like Airbnb.
• Government-Subsidized Housing: Properties with government-imposed rent increase limits.
• Employee Housing: Housing provided by an employer as a condition of employment.

If your property is exempt, you must notify tenants. Consult with a real estate attorney or a professional organization for guidance.

Updates for 2024

Security Deposits: Assembly Bill 12, effective July 1, 2024, caps security deposits at one month’s rent, addressing concerns about excessive deposits. Small landlords with fewer than three properties are exempt.

Screening Fee Receipts: AB 1764 allows landlords to send receipts for tenant screening fees via email, streamlining the application process.

City-Specific Rent Increase Laws

Rent increase regulations can differ by city:

• Los Angeles: Rent increases are prohibited through January 31, 2024, with a 4% increase allowed from February 1 to June 30, 2024.
• San Francisco: Permitted rent increases are 3.6% until February 29, 2024, and 1.7% from March 1, 2024, to February 28, 2025.
• San Diego: A proposed cap of 10% for rent increases over a 12-month period is being considered.

Providing Rent Increase Notices

When raising rent, landlords must provide tenants with a rent increase notice. This notice is crucial for:

• Transparency and Legal Compliance: Ensures you meet legal requirements and are transparent with tenants.
• Respect for Tenant Rights: Allows tenants to prepare for budget adjustments and informs them of changes.
• Building Trust: Clear communication helps maintain positive landlord-tenant relationships.

What to Include in a Rent Increase Notice

Ensure your notice includes:

• Effective Date: When the new rent rate starts.
• Current and New Rent Amount: Clearly state both amounts.
• Reason for Increase (if required): Provide a brief explanation if mandated by local regulations.
• Payment Details: Include information on how to make future payments.
• Contact Information: Update tenants on how to reach you with questions.
• Notice Period: The time frame tenants have before the increase takes effect.
• Method of Delivery: How the notice is delivered, whether in person, by mail, or electronically.

By staying informed and adhering to these regulations, landlords can navigate the complexities of rent increases while ensuring compliance with California’s legal requirements.

Disclaimer: This article is strictly informational and is not legal advice. Please consult an attorney for advice on how to interpret this information, its accuracy, and how the law applies to your individual circumstances.