Statewide Rent Caps & Just Cause - Understanding AB 1482

Understanding AB 1482 – Rent Caps & Just Cause 

As SCRHA previously reported, the Bureau of Labor Statistics has released the CPI change figures for San Diego and Riverside Counties. Due to high inflation, increases will be limited to 10% because the law states that rent increases for rentals subject to the rent cap can never be more than 10%. The figure that will apply to Imperial County has not been published yet. Currently, for rent increases that take effect through July 31, the cap is 9.1% for San Diego, 8.6% for Riverside, and 9% for Imperial County.

IMPORTANT NOTE: Some declared emergencies trigger anti-price gouging rules which cap rent increases and newly set rents at no more than 10% over the last amount charged. The 10% limitation applies to properties exempt from statewide rent caps and to properties that are vacant and being advertised for rent. Members should consult the Governor's Office of Emergency Services website to see a list of County and Statewide emergencies: Click here. The specific portions of Penal Code 396 applicable to rental housing are subsections b, e and f. To learn more about Penal Code 396, click here.  

Find out what Rent Control means for you...  

Effective January 1, 2020, AB 1482 limits how much a property owner or manager can increase their rent in a 12-month period.   

Rent increases in any 12-month period are limited to 5% (percent) plus the change in inflation from April 1 of the prior year to April of the current year, as measured by the Consumer Price Index (CPI-U) for the area which the property is located. Some regions do not have a United States Bureau of Labor Statistics report, in which case the California CPI is used (i.e. Imperial County). 

For rent increases that take effect before August 1 of any calendar year, the following shall apply:  

• The percentage change shall be the percentage change in the amount published for April of the immediately preceding calendar year and April of the year before that. If there is not an amount published in April for the applicable geographic area, the percentage change shall be the percentage change in the amount published for March of the immediately preceding calendar year and March of the year before that (Applies to San Diego & Riverside Counties).  

For rent increases that take effect on or after August 1 of any calendar year, the following shall apply:  

• The percentage change shall be the percentage change in the amount published for April of that calendar year and April of the immediately preceding calendar year. If there is not an amount published in April for the applicable geographic area, the percentage change shall be the percentage change in the amount published for March of that calendar year and March of the immediately preceding calendar year (Applies to San Diego & Riverside Counties).  
  

The Bureau of Labor Statistics has released reports for CPI-U changes from March 2020 to March 2021. 

• San Diego CPI: 4.1%
• Riverside CPI: 3.6%
• Imperial County CPI: 4%.  
• Click here to access the CA Department of Industrial Relations CPI Chart.
• Click here to access the Bureau of Labor Statistics report.

REMINDER: Even properties exempt from AB 1482 may be subject to rent increase limitations as a result of Anti-Price Gouging rules that accompany emergency declarations for things such as fires. When these rules are in effect, rent increases are limited to no more than 10% of the previously charged or advertised price. This is particularly important to AB 1482-exempt properties and newly created tenancies. 

• An owner/manager may increase rent up to two times in a 12-month period, but are still limited to the annual cap.
• Vacancy Decontrol remains intact. You will be able to reset your rents to market rate upon all original tenants vacating.  
• The bill is scheduled to sunset in 10 years.  
• Just Cause termination will be implemented statewide and kick in at 12 months of tenancy if all tenants have occupied the unit for 12 months or more.  
  If there has been changes in occupancy, then Just Cause takes effect at 24 months.  
• Just Cause applies to month-to-month tenancies and fixed-term lease renewals. 
• At-Fault terminations include, but are not limited to, non-payment of rent, lease violations, criminal activity.  
• No-Fault terminations are defined as owner move-in, withdrawal from rental market, a habitability order from a government agency, and intent to demolish or substantially remodel. 
  • Substantially remodel is defined as: the replacement or substantial modification of any structural, electrical, plumbing, or mechanical system that requires a permit from a governmental agency, or the abatement of hazardous materials, including lead-based paint, mold, or asbestos, in accordance with applicable federal, state, and local laws, that cannot be reasonably accomplished in a safe manner with the tenant in place and that requires the tenant to vacate the residential real property for at least 30 days. Cosmetic improvements alone, including painting, decorating, and minor repairs, or other work that can be performed safely without having the residential real property vacated, do not qualify as substantial rehabilitation.
• No-Fault terminations will trigger a relocation payment of one-month's rent, regardless of the tenant's income, to be paid within 15 days of the notice being served. The last month's rent may also be waived. 
• Specific language and disclosures are required for exempt properties and when terminating tenancy. Please make sure to use the relevant SCRHA forms.   

Exemptions 

• Single-Family Homes and Condos 
  • This does not apply if they are owned by a Real Estate Investment Trust (REIT), Corporation or an LLC where one of the owners is a Corporation.  
• Properties containing two separate dwelling units within a single structure in which the owner occupied one of the units as the owner’s principal place of residence at the beginning of the tenancy, so long as the owner continues in occupancy, and neither unit is an accessory dwelling unit or a junior accessory dwelling unit.  
• Deed Restricted Housing 
• Housing built within the last 15 years (determined by Certificate of Occupancy date) 
• Housing subject to a local Rent Control ordinance (Local Ordinance & Costa-Hawkins apply. i.e. Palm Springs)  
• Dormitories owned and operated by an institution of higher education or a kindergarten and grades 1 to 12, inclusive, school. 
• Housing accommodations in which the tenant shares bathroom or kitchen facilities with the owner who maintains their principal residence at the residential real property. 
• Single-family owner-occupied residences, including a residence in which the owner-occupant rents or leases no more than two units or bedrooms, including, but not limited to, an accessory dwelling unit or a junior accessory dwelling unit are excluded from the Just Cause provisions.  
• Jurisdictions like the City of San Diego, who already had an ordinance in place before Sept. 1, 2019, are not subject to the state Just Cause provisions. Owners and managers of properties in the City of San Diego should refer to Form 420 and SCRHA White Paper - Cause Eviction (60-day with cause) - City of San Diego.   

To read the Just Cause law, click here. 

To read the Rent Cap law, click here.