California AB 1482: Rent Caps, Just Cause, and Owner Compliance Review

A California owner planning a rent increase or termination needs to check more than a statewide percentage. AB 1482, the Tenant Protection Act, created a rent cap in Civil Code §1947.12 and just cause rules in §1946.2. Coverage, exemptions, tenancy history, notice, and applicable local law must be checked for the property before anyone prepares a resident notice.

The statewide rent cap

For a covered unit, the increase over any 12-month period may not exceed 5% plus the applicable cost-of-living change, or 10%, whichever is lower. The calculation uses the lowest gross rental rate charged in the 12 months before the increase takes effect, subject to the statute’s treatment of accepted discounts, incentives, concessions, and credits. If the same tenant remains, the gross rate cannot be increased in more than two increments in any 12-month period; splitting an increase does not enlarge the cap.

Two hypothetical examples show the ceiling: if the applicable CPI change is 3%, the state formula gives 8%; if it is 7%, the 10% ceiling applies. Neither figure is a current rate for a named city. The applicable CPI series and measurement period depend on the unit’s location and the increase’s effective date; the statute uses the April-to-April change, with a March fallback where April is unavailable, and a change in reference year on August 1. A valid local rule may impose a lower limit.

Coverage and exemptions need records

Do not use “built before 2005” as a fixed coverage test. The statute exempts housing with a certificate of occupancy issued within the previous 15 years, so the cutoff moves over time. A separately alienable home or condo may qualify for an exemption only when ownership and the required written tenant notice meet the statute. Corporate, REIT, and specified corporate-member LLC ownership can defeat that route. Affordable housing, certain owner-occupied two-unit properties, and other listed categories have their own terms.

The rent-cap and just-cause provisions have related but not identical exemption lists. Check both. Save the certificate of occupancy, title and entity records, lease dates, exemption notice, applicable CPI, prior gross rent history, and any local ordinance analysis before stating a lawful increase.

When just cause applies

For a covered tenancy, §1946.2 generally requires a stated just cause after 12 months of continuous lawful occupancy. If additional adults joined before an existing tenant reached 24 months, the rule applies when all tenants have 12 months or one has 24 months. The statute distinguishes at-fault grounds, such as nonpayment or a qualifying material lease breach, from no-fault grounds, such as qualifying owner occupancy, withdrawal from the rental market, a required government order, or demolition or substantial remodel.

Those labels are not blank checks. A curable lease violation has a statutory opportunity-to-cure step. Owner occupancy has specific eligible occupants, lease and notice terms, a move-in period, and a minimum intended residence. A substantial remodel must meet the statute’s work, safety, displacement and documentation tests; cosmetic work alone does not qualify. An owner should verify the exact facts and current local requirements before a termination decision or notice.

No-fault relocation assistance

When state just cause applies and a qualifying no-fault notice is issued, the owner must choose either a direct payment or a written waiver of the final month’s rent, each equal to one month of the rent in effect when notice is issued. The notice must explain the right; a direct payment is due within 15 calendar days. Local rules can change the applicable obligation. This is a budgeting and notice-review issue, not a suggestion to terminate any particular tenancy.

Local rules and the owner review

State and local rent rules interact through the statutory exemptions; local just cause ordinances have their own preemption and more-protective tests. “Whichever is stricter” is a useful warning but not a complete legal method. Review the property address, unit type, dates, current local ordinance, tenant history, and contemplated action together.

For a rent increase: Establish coverage, the prior 12 months’ gross rent, applicable CPI period, prior increments, local limit, and notice method before computing a number.

For a possible termination: Establish just cause coverage, exact ground, supporting records, local rule, resident notice requirements, and any relocation obligation before drafting.

For any claimed exemption: Retain the statutory basis and the required tenant disclosure; do not rely on a property type label alone.

Coastline’s Rent Increase Pre-Notice Review is an owner intake for checking the facts before a resident-facing rent notice. It does not calculate or authorize a property-specific increase or termination from this article.

Official sources

California Civil Code §1947.12 (rent limits and exemptions); Civil Code §1946.2 (just cause, exemptions, notice, and relocation). This article is educational and does not decide an individual tenancy.