CPI/AB 1482 – Rent Caps & Just Cause 

Understanding the Tenant Protection Act/AB 1482 – Rent Caps & Just Cause 

The Bureau of Labor Statistics has released reports for CPI-U changes from March 2023 to March 2024. 

CPI Percentages for Rent Increases Effective August 1, 2024, or Later:

• San Diego CPI: 3.6%
  • Max Increase = 8.6%
• Riverside CPI: 4.3%
  • Max Increase = 9.3%
• Imperial County CPI: 3.8%
  • Max Increase = 8.8%

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).  

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. 
• Substantial 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.
  • The remodel must not be able to be reasonably accomplished in a safe manner that allows the tenant to remain living in the place and must requires the tenant to vacate the property for at least 30 consecutive days. *SCRHA note: Chula Vista requires that the remodel necessitate the unit being vacant for at least 60 days and that the remodel cost $40/sq. ft. 
  • Provides that the tenant is not required to vacate the property on any days where a tenant could continue living in the property without violating health, safety, and habitability codes and laws.
  • Requires a written notice terminating a tenancy under to include all of the following:
    1. A statement informing tenants of the intent to demolish or substantially remodel the unit;
    2. The following statement: "If the substantial remodel of your unit or demolition of the property as described in this notice of termination is not commenced or completed, the owner must offer you the opportunity to re-rent your unit with a rental agreement containing the same terms as your most recent rental agreement with the owner at the rental rate that was in effect at the time you vacated. You must notify the owner within 30 days of receipt of the offer to re-rent of your acceptance or rejection of the offer, and, if accepted, you must reoccupy the unit within 30 days of notifying the owner of your acceptance of the offer;"
    3. A description of the substantial remodel to be completed, the approximate expected duration of the substantial remodel, or, if the property is to be demolished, the expected date by which the property will be demolished, together with one of the following:
       1. A copy of the permit or permits required to undertake the substantial remodel or demolition; or
       2. If the notice is issued pursuant to a need to abate hazardous materials that does not require any permit, a copy of the signed contract with the contractor hired by the owner to complete the substantial remodel, that reasonably details the work that will be undertaken to abate the hazardous materials. *SCRHA Note: The cities of Chula Vista and San Diego have local ordinances that may require additional language. Please refer to the relevant SCRHA forms.
    4. A notification that if the tenant is interested in reoccupying the rental unit following the substantial remodel, the tenant must inform the owner of their interest and provide to the owner their address, telephone number, and email address.
• Rules for Owner/Family Member Move-In
  1. The owner or owner's spouse, domestic partner, children, grandchildren, parents, or grandparents must occupy the property for a minimum of 12 continuous months as their primary residence, and must move into the unit within 90 days after the tenant vacates;
  2. This no-fault cause is not available if the intended occupant occupies a rental unit on the property or if a vacancy of a similar unit already exists at the property;
  3. The written notice terminating a tenancy must contain the name or names and relationship to the owner of the intended occupant, and must notify the tenant that they may request proof that the intended occupant is an owner or related to the owner, as defined;
  4. If the intended occupant fails to occupy the rental unit within 90 days after the tenant vacates, or fails to occupy the rental unit as their primary residence for at least 12 consecutive months, the owner must offer the unit to the tenant who vacated it at the same rent and lease terms in effect at the time the tenant vacated, and the owner must reimburse the tenant for reasonable moving expenses incurred in excess of any relocation assistance that was paid to the tenant in connection with the written notice;
  5. If the intended occupant moves into the rental unit within 90 days after the tenant vacates, but dies before having occupied the rental unit for 12 months, this does not constitute a failure to comply with the bill or a material violation by the owner;
  6. For a new tenancy commenced within 12 months after terminating a tenancy, the unit must be offered and rented or leased at the lawful rent in effect at the time any notice of termination of tenancy was served; and
  7. Defines "owner" to mean any of the following:
     1. An owner who is a natural person that has at least a 25% recorded ownership interest in the property;
     2. An owner who is a natural person who has any recorded ownership interest in the property if 100% of the recorded ownership is divided among owners who are related to each other as sibling, spouse, domestic partner, child, parent, grandparent, or grandchild; or
     3. An owner who is a natural person whose recorded interest in the property is owned through a limited liability company (LLC) or partnership.
  8. Defines "natural person" to include any of the following:
     1. Any natural person who is a settlor or beneficiary of a "family trust," which means a revocable living trust or irrevocable trust in which the settlors and beneficiaries of the trust are persons who are related to each other as sibling, spouse, domestic partner, child, parent, grandparent, or grandchild; or
     2. If the property is owned by an LLC or partnership, a natural person with at least a 25% recorded ownership interest in the property.
  9. Defines "beneficial owner" to mean a natural person or family trust for whom, directly or indirectly and through any contract arrangement, understanding, relationship, or otherwise, any of the following applies:
     1. The natural person exercises substantial control over a partnership or LLC;
     2. The natural person owns 25% or more of the equity interest of a partnership or LLC; or
     3. The natural person receives substantial economic benefits from the assets of a partnership.
• 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.  
• The Cities of San Diego and Chula Vista have implemented their own Just Cause/Tenant Protection Ordinances (TPO) and have specific noticing requirements, including Mandatory Notifications (and a copy of the Tenant Protection Guide in San Diego), city-specific Exemption Notification (the state notification alone will not suffice), and required language in Termination of Tenancy Notices. 
• Click here for City of San Diego TPO Guidance.
• Click here for City of Chula Vista TPO Guidance. 

To read the Just Cause law, click here. 

To read the Rent Cap law, click here.