What you need to know about Rent Control

Rent control laws in California can feel like a maze, especially if you're an independent landlord managing one or two properties. While statewide rules like AB-1482 set broad guardrails, many cities add their own layers of regulation, making it essential to understand how these rules apply to your property.

It is illegal to increase rent by more than 10 percent during a state of emergency

What is Rent Control?

Rent control refers to government-imposed limits on how much landlords can increase rent. These limits can come from the state (like AB-1482) or from local cities that have their own rent control ordinances. Keep in mind that vacancy control and eviction are not the same as rent control.

“Rent” doesn’t just mean the base rent amount—it can include utility costs if paid to the landlord, fees for parking, storage, and even pet rent. Some landlords use methods like RUBS (Ratio Utility Billing System) to divide utility bills among tenants. These charges can be a gray area under rent control rules, so it’s best to be cautious.

Understanding the Costa-Hawkins Act

The Costa-Hawkins Rental Housing Act, passed in 1995, plays a major role in shaping what rent control cities can and can’t do. Here are the key regulations:

• Newer properties are generally exempt. If a unit was built after February 1, 1995 it is generally exempt.

• Single-family homes and condos are usually exempt. If a dwelling can be sold separately (“separately alienable”), it is typically not rent controlled.

• Vacancy decontrol is allowed. When a tenant voluntarily leaves, landlords can set the new rent at market rate.

• Local Ordinances can not undo these protections. Cities with rent control laws in place before Costa-Hawkins must still follow these regulations.

What About ADUs (Accessory Dwelling Units)?

ADUs and JADUs can’t be sold separately and as such don’t automatically qualify for exemption under Costa-Hawkins. However, they may be exempt under new construction clauses or if legislation like AB-1033 is fully enacted, which allows ADUs to be converted into condominium. If your ADU was built after 1995, it may still qualify for rent control exemptions, but it’s not guaranteed.

AB-1482 is California’s Statewide Rent Cap

Also known as the Tenant Protection Act of 2019, AB-1482 applies to a wide range of properties that aren’t exempt under Costa-Hawkins.

• Rent Increases Are Capped: No more than 5% + local CPI (inflation), with a maximum of 10% in any 12-month period.

• Only One Increase Per Year: You cannot raise the rent more than once annually, even if the total is within the cap.

• Exemptions Apply: Single-family homes and condos may be exempt if they’re not owned by a corporation, REIT, or an LLC with corporate members and the tenant is properly notified.

Make sure your lease includes the correct AB-1482 exemption language if your property qualifies.

Vacancy Control vs Vacancy Decontrol

Vacancy decontrol means that when a tenant voluntarily moves out, you can reset the rent to market rate. However, if you remove a tenant for a “no-fault” reason like ending a month-to-month lease with 60-day notice to renovate, you may not qualify to increase the rent significantly for the next tenant.

Situations that can block vacancy decontrol include:

• Unlawful eviction activity

• Failure to maintain habitable conditions

• Substandard housing violations within 60 days of a vacancy

• Ending a lease through no-fault (e.g., owner move-in, remodeling, etc.)

Always ensure a tenant voluntarily vacates to maintain your right to set a new rent.

Local Rent Control Ordinances

If you own property in areas with local rent control rules they may be more restrictive than AB-1482. These may include:

• Rollback of rents to a base year

• Annual increases tied to CPI or fixed percentages

• Requirements to petition for "fair rate of return" increases to cover operating expenses

• Allowances for rent decreases due to reduction in services

• Temporary rent freezes during emergencies

Price Gouging Laws During Emergencies

Landlords should be aware that California's anti-price gouging law, Penal Code Section 396, applies during times of declared emergencies, such as wildfires, pandemics, or other disasters. Under this law, it is illegal to increase rent by more than 10 percent during the emergency period and for a set time afterward. Violating this law is a misdemeanor and can carry serious consequences, including up to one year in county jail and fines of up to $10,000 per violation.

Additional civil penalties may also apply under California’s unfair competition laws. Even if your property is exempt from other rent control laws, these emergency restrictions still apply and should not be overlooked.

You Don’t Have to Navigate This Alone

Rent control laws can be overwhelming, especially when statewide and local rules overlap. Making a mistake—even accidentally—can lead to lawsuits, rent rollbacks, or missed income opportunities.

Rentegic can help

We help landlords understand what applies to their property, ensure lease agreements are legally compliant, and make sure you're maximizing your rental income within the law. Whether you need help understanding if your ADU qualifies for exemption or just want someone to handle tenant notices correctly, we’re here to support you.

The information provided in this blog is for general informational purposes only and does not constitute legal or financial advice. While striving to ensure accuracy, the content may not reflect the most current data, and it is not a substitute for professional council. You should consult a qualified professional for advice regarding your specific situation. Use of this information does not create an agent relationship and does not offer any guarantees, assurances, or protections from legal or financial liability.