The question most Landlords want to know this day and age, especially after Covid, is how they can increase rents legally and by how much. The Los Angeles Rent Stabilization Act addresses allowable rent increases which historically has been three percent (3.0%) annually, but can be lower or even higher depending on the CPI for the previous year, as well as other factors they take into account.   This can get a little tricky, and confusing, because landlords have not been allowed to increase the current rents of existing tenants due to the pandemic.  During the Covid 19 pandemic,  all rent increases were temporarily halted in California, and in some areas were still in place by local municipalities (Los Angeles City, and Santa Monica), even after the state removed their restrictions.  Los Angeles city extended their rent increase moratorium through June 30, 2022.  So as of now, landlords can resume increasing rents.   However, please keep in mind that if you do not follow proper protocol to increase your rents, your rental increase may be invalid.

Timing is one of the most important considerations for rent increases.  Depending on the amount of the rent increase, you may be required to give at least thirty (30) days’ notice, and upwards of sixty (60) days’ notice.  However, with the recent passage of AB-1482 (California Tenant Protections and Relief Act of 2019), your rent increase is limited to the lower of either 5% plus local CPI, or 10% total.  You do need to give the tenant a 30-day notice before doing so if it is 10% or less, (35 days if you mailed the notice instead of presenting it to them). Additionally, If the landlord pays for all the costs of gas and/or electricity supplied to a tenant’s unit, landlords may raise the rent by an additional 1% for each two utilities supplied. Also, if written in the lease, the landlord may raise the security deposit once every 12 months by the annual allowable percentage increase.  Just remember, you don’t have to wait until the anniversary to serve a 30-day notice, instead put it in your calendar at least 30 days prior to the lease anniversary, to serve a 30-day notice for rent increase.  That way you don’t lose out on a month or two of increased rent!

Now that we have an idea of how to increase rents annually after the pandemic, lets dive in a little bit more to see how else landlords can increase rents by use of special circumstances. For starters, capital improvements! Landlords, in Los Angeles, who are planning on renovating, rehabbing, or basic capital improvements can apply for special rent increases using an application submitted to and approved by the Rental Board. That’s not all. Another easy one that most Landlords overlook is the ability to raise rent an additional 10% for each additional tenant, that was not in the original lease, or amendment thereof. If the original lease states “x” number of tenants for a specific unit and now there or more tenants living in that unit, you can raise the rent by and additional 10% per tenant! That is a large amount, so if you are like most investors, and use a property management company to look after your investment properties, then maybe it’s time you asked them the last time they did a walk-thru of the unit to get a head count!