AB 1482, also known as the “California Tenant Protection Act of 2019”, restricts residential rent increases in any 12-month period to the lesser of CPI plus 5% or 10%. As originally enacted, the law defined the “percentage change in the cost of living” as the percentage from April 1 of the prior year to April 1 of the current year. This method of calculating rent increases became problematic, as the CPI figures are often not available in April. The California Legislature amended the law to address this issue.
As modified, landlords may apply the April CPI to rent increases that are effective on or after Aug. 1 of each year. Landlords must round CPI percentage to the nearest one-tenth of a percent.
The table below sets out which CPI to use based on the effective date of the rent increase:
If you increase rent: Then use the following CPI:
Now through July 31, 2021 April 2020
August 1, 2021 to July 31, 2022 April 2021
August 1, 2022 to July 31, 2023 April 2022
Don’t forget, if you let property in a rent control city, there are additional caps or moratoriums on rent increases, some which do not expire until 2023. This week, the City of Los Angeles announced that the Mayor’s March 2020 Emergency Order, regarding rent stabilization prohibits rent increases until 2023. However, the moratorium on rent increases in unincorporated LA County will expire at the end of January 2022, unless the County Supervisors extend protections. City rent stabilization rules usually apply only to apartments built before October 1978. Landlords can usually raise the rent of existing tenants to less than 3% per year in response to inflation.
If you are unsure if you can raise rents or by how much, contact Furton Legal for help.