California Rent Cap — the Tenant Protection Act (AB 1482)

The Tenant Protection Act of 2019 — usually called by its bill number, AB 1482 — sets a statewide cap on rent increases. The cap is 5% plus the percentage change in the regional Consumer Price Index, and the total may never exceed 10% in any 12-month period, no matter how high inflation runs.

The CPI figure is regional, not statewide. A property in the Bay Area uses a different index than one in Los Angeles or the Sacramento Valley, so two identical increases on opposite ends of the state can be legal in one place and illegal in the other. The applicable CPI is updated each year and applies to increases effective on or after August 1.

The cap is measured against the lowest rent charged in the previous 12 months — not against the highest, and not against a "market rate" the landlord wishes they were charging. Discounts and concessions can complicate that baseline, which is one of the more common ways an otherwise careful owner ends up over the cap.

AB 1482 covers most residential rental property in California. The rent cap applies once the tenancy has existed for 12 months; the separate just-cause protections attach at 12 months, or at 24 months if an adult tenant was added to the original lease.

The most important exemptions are:

• New construction — housing issued a certificate of occupancy within the previous 15 years. This is a rolling window, so buildings age into coverage.
• Single-family homes and condos, but only if the owner is not a corporation, REIT, or an LLC with a corporate member — and the required exemption notice was properly given.
• Owner-occupied duplexes, where the owner lives in one of the two units as their principal residence.
• Deed-restricted affordable housing, dormitories, and certain shared-bathroom-or-kitchen arrangements with the owner.

AB 1482 is a floor, not a ceiling. Cities with their own rent stabilization ordinances — Los Angeles, San Francisco, Oakland, Berkeley, San Jose, Santa Monica, Richmond, and a growing list of others — frequently allow far smaller increases, sometimes in the 3% range or lower, and apply their own registration, banking, and pass-through rules.

Where a local ordinance is more protective of the tenant, the local ordinance controls. Where the state law is more protective, the state law controls. In practice this means you have to check both for every property, every time.

An increase above the cap is void as to the excess. The tenant is only obligated to pay the lawful amount, and a notice demanding the unlawful amount will not support an eviction for nonpayment — a defect that routinely sinks an unlawful detainer case at the pleading stage.

SB 567 added a private right of action, so a tenant can sue directly rather than only raising the issue as an eviction defense. Recovery can include actual damages and, for willful violations, up to three times the actual damages plus attorney fees.