CIV § 1947.12

California Civil Code § 1947.12 - The cap on rent increases (AB 1482)

Civil Code § 1947.12 limits annual rent increases on covered California housing to 5% plus inflation, capped at 10%, and lists the properties it does not cover.

Official text CIV § 1947.12 — California

(a) (1) Subject to subdivision (b), an owner of residential real property shall not, over the course of any 12-month period, increase the gross rental rate for a dwelling or a unit more than 5 percent plus the percentage change in the cost of living, or 10 percent, whichever is lower, of the lowest gross rental rate charged for that dwelling or unit at any time during the 12 months prior to the effective date of the increase. In determining the lowest gross rental amount pursuant to this section, any rent discounts, incentives, concessions, or credits offered by the owner of such unit of residential real property and accepted by the tenant shall be excluded. The gross per-month rental rate and any owner-offered discounts, incentives, concessions, or credits shall be separately listed and identified in the lease or rental agreement or any amendments to an existing lease or rental agreement.

(2) If the same tenant remains in occupancy of a unit of residential real property over any 12-month period, the gross rental rate for the unit of residential real property shall not be increased in more than two increments over that 12-month period, subject to the other restrictions of this subdivision governing gross rental rate increase.

(b) For a new tenancy in which no tenant from the prior tenancy remains in lawful possession of the residential real property, the owner may establish the initial rental rate not subject to subdivision (a). Subdivision (a) is only applicable to subsequent increases after that initial rental rate has been established.

(c) A tenant of residential real property subject to this section shall not enter into a sublease that results in a total rent for the premises that exceeds the allowable rental rate authorized by subdivision (a). Nothing in this subdivision authorizes a tenant to sublet or assign the tenant’s interest where otherwise prohibited.

(d) This section shall not apply to the following residential real properties:

(1) Housing restricted by deed, regulatory restriction contained in an agreement with a government agency, or other recorded document as affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the Health and Safety Code, or subject to an agreement that provides housing subsidies for affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the Health and Safety Code or comparable federal statutes.

(2) Dormitories owned and operated by an institution of higher education or a kindergarten and grades 1 to 12, inclusive, school.

(3) Housing subject to rent or price control through a public entity’s valid exercise of its police power consistent with Chapter 2.7 (commencing with Section 1954.50) that restricts annual increases in the rental rate to an amount less than that provided in subdivision (a).

(4) Housing that has been issued a certificate of occupancy within the previous 15 years, unless the housing is a mobilehome.

(5) Residential real property that is alienable separate from the title to any other dwelling unit, including a mobilehome, provided that both of the following apply: (A) The owner is not any of the following:

(i) A real estate investment trust, as defined in Section 856 of the Internal Revenue Code.

(ii) A corporation.

(iii) A limited liability company in which at least one member is a corporation.

(iv) Management of a mobilehome park, as defined in Section 798.2. (B) (i) The tenants have been provided written notice that the residential real property is exempt from this section using the following statement: “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.” (ii) For a tenancy existing before July 1, 2020, or July 1, 2022, if the lease is for a tenancy in a mobilehome, the notice required under clause (i) may, but is not required to, be provided in the rental agreement.

(iii) For a tenancy commenced or renewed on or after July 1, 2020, or July 1, 2022, if the lease is for a tenancy in a mobilehome, the notice required under clause (i) must be provided in the rental agreement.

(iv) Addition of a provision containing the notice required under clause (i) to any new or renewed rental agreement or fixed-term lease constitutes a similar provision for the purposes of subparagraph (E) of paragraph (1) of subdivision (b) of Section 1946.2.

(6) A property 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.

(e) An owner shall provide notice of any increase in the rental rate, pursuant to subdivision (a), to each tenant in accordance with Section 827.

(f) (1) On or before January 1, 2030, the Legislative Analyst’s Office shall report to the Legislature regarding the effectiveness of this section and Section 1947.13. The report shall include, but not be limited to, the impact of the rental rate cap pursuant to subdivision (a) on the housing market within the state.

(2) The report required by paragraph (1) shall be submitted in compliance with Section 9795 of the Government Code.

(g) For the purposes of this section, the following definitions shall apply:

(1) “Consumer Price Index for All Urban Consumers for All Items” means the following: (A) The Consumer Price Index for All Urban Consumers for All Items (CPI-U) for the metropolitan area in which the property is located, as published by the United States Bureau of Labor Statistics, which are as follows:

(i) The CPI-U for the Los Angeles-Long Beach-Anaheim metropolitan area covering the Counties of Los Angeles and Orange.

(ii) The CPI-U for the Riverside-San Bernardino-Ontario metropolitan area covering the Counties of Riverside and San Bernardino.

(iii) The CPI-U for the San Diego-Carlsbad metropolitan area covering the County of San Diego.

(iv) The CPI-U for the San Francisco-Oakland-Hayward metropolitan area covering the Counties of Alameda, Contra Costa, Marin, San Francisco, and San Mateo.

(v) Any successor metropolitan area index to any of the indexes listed in clauses (i) to (iv), inclusive. (B) If the United States Bureau of Labor Statistics does not publish a CPI-U for the metropolitan area in which the property is located, the California Consumer Price Index for All Urban Consumers for All Items as published by the Department of Industrial Relations. (C) On or after January 1, 2021, if the United States Bureau of Labor Statistics publishes a CPI-U index for one or more metropolitan areas not listed in subparagraph (A), that CPI-U index shall apply in those areas with respect to rent increases that take effect on or after August 1 of the calendar year in which the 12-month change in that CPI-U, as described in subparagraph (B) of paragraph (3), is first published.

(2) “Owner” includes any person, acting as principal or through an agent, having the right to offer residential real property for rent, and includes a predecessor in interest to the owner.

(3) (A) “Percentage change in the cost of living” means the percentage change, computed pursuant to subparagraph (B), in the applicable, as determined pursuant to paragraph (1), Consumer Price Index for All Urban Consumers for All Items. (B) (i) For rent increases that take effect before August 1 of any calendar year, the following shall apply: (I) 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. (II) 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.

(ii) For rent increases that take effect on or after August 1 of any calendar year, the following shall apply: (I) 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. (II) 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.

(iii) The percentage change shall be rounded to the nearest one-tenth of 1 percent.

(4) “Residential real property” means any dwelling or unit that is intended for human habitation, including any dwelling or unit in a mobilehome park.

(5) “Tenancy” means the lawful occupation of residential real property and includes a lease or sublease.

(h) (1) This section shall apply to all rent increases subject to subdivision (a) occurring on or after March 15, 2019, except as provided in subdivision (i).

(2) In the event that an owner has increased the rent by more than the amount permissible under subdivision (a) between March 15, 2019, and January 1, 2020, both of the following shall apply: (A) The applicable rent on January 1, 2020, shall be the rent as of March 15, 2019, plus the maximum permissible increase under subdivision (a). (B) An owner shall not be liable to the tenant for any corresponding rent overpayment.

(3) An owner of residential real property subject to subdivision (a) who increased the rental rate on that residential real property on or after March 15, 2019, but prior to January 1, 2020, by an amount less than the rental rate increase permitted by subdivision (a) shall be allowed to increase the rental rate twice, as provided in paragraph (2) of subdivision (a), within 12 months of March 15, 2019, but in no event shall that rental rate increase exceed the maximum rental rate increase permitted by subdivision (a).

(i) (1) Notwithstanding subdivision (h), this section shall apply only to rent increases for a tenancy in a mobilehome subject to subdivision (a) occurring on or after February 18, 2021.

(2) In the event that an owner has increased the rent for a tenancy in a mobilehome by more than the amount permissible under subdivision (a) between February 18, 2021, and January 1, 2022, both of the following shall apply: (A) The applicable rent on January 1, 2022, shall be the rent as of February 18, 2021, plus the maximum permissible increase under subdivision (a). (B) An owner shall not be liable to the tenant for any corresponding rent overpayment.

(3) An owner of residential real property subject to subdivision (a) who increased the rental rate on that residential real property on or after February 18, 2021, but prior to January 1, 2022, by an amount less than the rental rate increase permitted by subdivision (a) shall be allowed to increase the rental rate twice, as provided in paragraph (2) of subdivision (a), within 12 months of February 18, 2021, but in no event shall that rental rate increase exceed the maximum rental rate increase permitted by subdivision (a).

(j) This section shall not apply to a homeowner of a mobilehome, as defined in Section 798.9.

(k) (1) An owner who demands, accepts, receives, or retains any payment of rent in excess of the maximum rent allowed by this section shall be liable in a civil action to the tenant from whom those payments are demanded, accepted, received, or retained for all of the following: (A) Injunctive relief. (B) Damages in the amount by which any payment demanded, accepted, received, or retained exceeds the maximum allowable rent. (C) In the court’s discretion, reasonable attorney’s fees and costs. (D) Upon a showing that the owner has acted willfully or with oppression, fraud, or malice, damages up to three times the amount by which any payment demanded, accepted, received, or retained exceeds the maximum allowable rent.

(2) The Attorney General, in the name of the people of the State of California, and the city attorney or county counsel in the jurisdiction in which the rental unit is located, in the name of the city or county, may do both of the following: (A) Enforce the provisions of this section. (B) Seek injunctive relief based on violations of this section.

(3) In an action pursuant to this subdivision for injunctive relief, it shall be presumed that a tenant suffers irreparable harm through violation of this section.

(4) An action pursuant to this subdivision shall not be brought after the date that is three years from the date on which the cause of action accrued.

(l) Any waiver of the rights under this section shall be void as contrary to public policy.

(m) (1) The Legislature finds and declares that the unique circumstances of the current housing crisis require a statewide response to address rent gouging by establishing statewide limitations on gross rental rate increases.

(2) It is the intent of the Legislature that this section should apply only for the limited time needed to address the current statewide housing crisis, as described in paragraph (1). This section is not intended to expand or limit the authority of local governments to establish local policies regulating rents consistent with Chapter 2.7 (commencing with Section 1954.50), nor is it a statement regarding the appropriate, allowable rental rate increase when a local government adopts a policy regulating rent that is otherwise consistent with Chapter 2.7 (commencing with Section 1954.50).

(3) Nothing in this section authorizes a local government to establish limitations on any rental rate increases not otherwise permissible under Chapter 2.7 (commencing with Section 1954.50), or affects the existing authority of a local government to adopt or maintain rent controls or price controls consistent with that chapter.

(n) This section shall become operative on April 1, 2024.

(o) This section shall remain in effect until January 1, 2030, and as of that date is repealed.

Text as published in the 2026 snapshot of the code.

Source: Vaquill Open US Law, compiled from official state publishers (huggingface.co), reproduced under license CC BY 4.0.

Read this provision at the official source →

What it actually says

Section 1947.12 is the rent cap half of the Tenant Protection Act. Subdivision (a) says that over any 12-month period an owner of residential real property may not raise the gross rental rate by more than 5 percent plus the percentage change in the cost of living, or 10 percent, whichever of those two is lower. The comparison is made against the lowest gross rental rate charged for that unit at any time in the 12 months before the increase takes effect, and discounts or concessions the tenant accepted are excluded from that figure — so a landlord cannot manufacture headroom by discounting first. The same subdivision caps the number of increases: no more than two increments in any 12 months for a tenant who stays.

The cap follows the unit, not the tenant, only up to a point. Subdivision (b) is the part landlords rely on: when no tenant from the prior tenancy remains in lawful possession, the owner sets the initial rent for the new tenancy free of subdivision (a), and the cap then applies to increases after that. That is why the section restrains rent during a tenancy without controlling what a unit is advertised at once it is empty.

Subdivision (d) is where most disputes actually land, because it lists the housing this section does not reach: deed-restricted affordable housing, dormitories, housing already under a stricter local rent ordinance, housing issued a certificate of occupancy within the previous 15 years, single-family homes and condominiums separately alienable where the owner is not a REIT, corporation or corporate-member LLC and the required written exemption notice was given, and owner-occupied duplexes. The exemption notice has prescribed wording, which is why the question "is my building covered" is usually answered by reading the lease and the age of the building rather than by reading the cap itself. Working out coverage for a particular address, and what a landlord owes if an increase went over, is a matter for a lawyer or a local rent board.

When it applies

A rent increase notice that raises the rent by 15% or 20% in one step
Three separate increases inside a single year
The landlord discounted the rent for six months and now measures the increase from the discounted figure
A new owner says the cap does not apply because the building changed hands
The lease contains a paragraph saying the property is exempt from § 1947.12 and you want to know what makes that true
The unit was empty for a month between tenants and the rent jumped before you signed

What this section does not say

It does not stop a landlord raising the rent to market once the unit is genuinely vacant. Subdivision (b) lets the owner set the initial rate for a new tenancy where nobody from the old tenancy remains in possession.
It is not a reason the tenancy cannot be ended. The cap on the amount and the requirement of a reason for termination are different provisions; just cause lives in § 1946.2.
It does not override a stricter local ordinance. Subdivision (d)(3) excludes housing already subject to a local rent stabilisation scheme that allows less than this section does, so in those cities the local rule is the operative one.
It does not cover new buildings. Housing with a certificate of occupancy issued within the previous 15 years is outside the section, which is a rolling exclusion — a building can age into coverage.
It does not set the percentage itself. The figure depends on the regional cost-of-living change for the period, so a number quoted in an article from a previous year is not the number that applies to your increase.

Worked examples

Invented situations, written to show how the wording bites. They are not real cases, not judgments and not precedent, and nothing here predicts what would happen in yours.

Illustrative example

A tenant of four years receives notice of an 18 per cent rent increase from the following month.

How the wording applies

Section 1947.12 caps increases over any 12-month period at 5 per cent plus the regional cost-of-living change, or 10 per cent, whichever is lower, and allows no more than two increases in that period. The facts that decide it are the applicable regional figure for the period and whether the unit is exempt under subdivision (d), because the percentage is worthless without knowing which.

How the parties settled it

The increase is reduced to the statutory maximum, backdated to its effective date with any overpayment credited, and the landlord confirms in writing when the next increase may fall due.

Illustrative example

A lease contains a printed paragraph saying the property is exempt from sections 1947.12 and 1946.2, and the tenant wants to know whether that is true.

How the wording applies

Exemption comes from the property, not from the paragraph. Subdivision (d) exempts, among others, housing with a certificate of occupancy issued within the previous 15 years, and separately alienable single-family homes owned by someone other than a corporation where the required notice has been given. It hinges on the certificate date and the ownership, and the 15-year exclusion rolls, so a building can age into coverage.

How the parties settled it

The landlord produces the certificate of occupancy date and the ownership details, and where the exemption does not hold the increase is reset to the capped figure and the clause struck from the lease on renewal.

The same problem elsewhere

The other legal systems in this collection answer the same everyday problem with their own provisions.

The comparison and these one-line summaries are in English.

The landlord wants to raise the rent: four systems that limit it, and three civil codes that say nothing

Read the full comparison →

Related sections

CIV § 1946.2 Just Cause Required After 12 Months: CIV § 1946.2 CIV § 1946.1 30 or 60 Days Notice (Month-to-Month) | CIV § 1946.1 CIV § 1942.5 180-Day Retaliatory Eviction Ban | CIV § 1942.5

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We copy this text from the official publisher and re-check it against that source on every page load, but we cannot guarantee it is complete, current or free of error, and we accept no liability for any reliance on it. An amendment can take effect before a consolidation catches up. The publisher's own copy is linked below; where the two differ, it is the official one that counts.

This page reproduces the text of CIV § 1947.12 in force at the date shown and explains it in general terms. It is not legal advice and takes no account of the circumstances of your case, which can change the answer completely. For a live dispute, for limitation periods, and before taking any step in court, consult a qualified lawyer in California.

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