How to Properly Increase Rent Without Legal Troubles

I’m back to answer more of your questions surrounding the rent control measures here in the state of California.

There has been a lot of talk about rent control in California lately; many people don’t seem to fully  understand how to navigate this tricky issue. Today I’ll answer three frequently asked questions to provide clarity on this issue and help you avoid legal issues down the road.

“Why is there rent control now when, in 2018, Prop 10 was defeated by 62%?”

Well, the state legislature has a supermajority of people who back rent control, so if you want it to be overturned, you have to vote for people who don’t back rent control measures.

“How do you do a rate increase based on AB-1482?”

The rent increase under AB-1482 has two components: an annual 5% base increase, as well as the added CPI. The verbiage is not very clear here, and you won’t get very far if you use the U.S Bureau of Labor Statistics’ published CPI.

For example, if you had a property that had an increase in December, you’d use the most recent published CPI from November to add on the 5%. For example, in Los Angeles, the November CPI is 3.2%, so you’d add 3.2% to the 5% base rent increase for a total of an 8.2% increase. If you stay within that range, you should be legally compliant with AB-1482.

If you want rent control to be overturned, you have to vote for people who don’t back rent control measures.

You can use the average CPI of the previous 12 months, too. In the case of the December rent increase, you’d add the 5% base increase to the average CPI of the 12 months between November 2018 and October of 2019.

The cap on the rent increase is 10%, so if the CPI is 5.5%, you’d still add that to the base 5% increase, though it would go no higher than 10%.

“How does this affect relocation?”

If you’re relocating somewhere outside of Los Angeles, West Hollywood, or Santa Monica, for example, and you have to substantially remodel the home, you can require the tenants to move as long as you pay them one month’s rent as compensation.

If you have any questions about this topic, don’t hesitate to reach out to me. I’d be glad to help you. Until then, stay safe and happy!