Important Notice: Your single-family rental home may not be exempt from state-imposed rent caps. Here is what you can do about it.
A law signed by the governor in 2019 known as AB 1482 – The Tenant Protection Act — caps annual rent increases on residential rental property. Most single-family homes and condominiums are exempt from these rent caps so long as the owner provides a specific disclosure to the tenants in the home.
The language must be provided to the tenant in a written notice, informing the tenant that the property is exempt from the law. Here is the language you must provide:
“This property is not subject to the rent limits imposed by Section 1947.12 of the Civil Code and is not subject to the just cause requirements of Section 1946.2 of the Civil Code. This property meets the requirements of Sections 1947.12(d)(5) and 1946.2(e)(8) of the Civil Code and the owner is not any of the following: (1) a real estate investment trust, as defined by Section 856 of the Internal Revenue Code; (2) a corporation; or (3) a limited liability company in which at least one member is a corporation.”
While most single-family homes and condominiums qualify for this exemption, those which are owned by a corporation, LLC in which a corporation is a member, or real estate investment trust do not qualify (family trusts are allowed). In addition, if there is more than one unit on the title to the single-family home or condominium – such as if there is a second unit or accessory dwelling unit – then the property also does not qualify for the exemption.
If you are the owner of a duplex, you are also exempt if you live in one of the units as your principal place of residence at the beginning of the tenancy, so long as you continue to occupy the unit.
Summary of the Tenant Protection Act
Costa-Hawkins Rental Housing Act
This is a law passed in 1995. It places limits on what local governments can do when it comes to controlling the rents of residential housing. Among other things, the law provides that local governments cannot place rent caps on single-family rental homes and condominiums. Unlike AB 1482 above, rental property owners do not need to include any notice to their tenants in order to be exempt.
Note: If the Justice for Renters statewide ballot measure is passed by the voters in November 2024, your single-family home may fall under strict rent control imposed by the local government.
