California Civil Code 1947.12: Rent Caps, Exemptions, and Sunset

California Civil Code Section 1947.12 is the rent-cap provision of the Tenant Protection Act of 2019 (AB 1482). It limits annual rent increases on most residential units to 5 percent plus the local change in the cost of living, or 10 percent, whichever is lower, and it requires landlords of exempt single-family homes and condominiums to deliver a specific written notice to claim that exemption. Skip the notice, and the property falls under the cap and the companion just cause eviction rules by default.¹

How the Annual Rent Increase Is Calculated

The cap is 5 percent plus CPI, or 10 percent, whichever is lower. The percentage applies to the lowest rent the landlord charged for that unit at any point during the 12 months before the increase takes effect. That baseline is not necessarily the current rent. A landlord who offered a temporary discount is stuck using the discounted figure as the starting point for the next permissible increase.¹

The cost-of-living figure comes from the Consumer Price Index for All Urban Consumers (CPI-U) for the metropolitan area where the property sits, published by the U.S. Bureau of Labor Statistics. If no regional index exists, the statewide CPI from the Department of Industrial Relations applies. For an increase taking effect before August 1, the CPI change is measured from the April two years earlier to the April of the prior year. For an increase taking effect on or after August 1, the most recent April figures are used.¹

The statute also prohibits more than two increases in any 12-month period, and the combined total of those increases cannot exceed the cap.

Which Properties Are Exempt

Several categories of residential property sit outside the rent cap:¹

Housing that received its certificate of occupancy within the previous 15 years. The window rolls forward annually, so a building exempt in 2024 may become covered in 2025. Mobilehomes do not qualify for this exemption regardless of age.
Single-family homes and condominiums, but only if the owner is not a real estate investment trust, a corporation, or an LLC with at least one corporate member, and the landlord delivers the written notice described below. An individual owner or a family trust qualifies; a corporate-owned portfolio does not.
Owner-occupied duplexes, where the owner lives in one unit as a principal residence from the start of the tenancy and continues to live there. Accessory dwelling units and junior ADUs do not count as one of the two units.
Properties already subject to a stricter local rent control ordinance.
Units subject to a deed restriction or regulatory agreement with a government agency that limits rents, such as deed-restricted affordable housing.

The single-family home and condo exemption is the one most tenants should scrutinize, because it only applies if the landlord takes an affirmative step.

The Written Exemption Notice Landlords Must Deliver

For a single-family home or condominium to be exempt, the landlord must give the tenant a written notice using the exact language the statute prescribes:¹

“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.”

For any tenancy that began or was renewed on or after July 1, 2020, the notice must appear in the lease or rental agreement itself. For mobilehome tenancies, the corresponding date is July 1, 2022. For tenancies already in place before those dates, the notice can be delivered as a separate written document.¹

The wording is not customizable. A paraphrase, a notice missing the code citations, or a general statement that the property is “exempt from AB 1482” does not satisfy the statute.

What Happens If the Landlord Never Gave the Notice

Without a valid notice, the property is treated as covered. The landlord cannot raise rent above the cap and cannot terminate the tenancy without just cause, even if the home would otherwise qualify as an individually owned single-family rental.¹

The statute does not say whether a late notice can restore the exemption retroactively. The practical reading is that the property stays covered for any period during which no valid notice was in place, so rent increases imposed before the notice was delivered remain subject to the cap. A tenant who paid more than the cap allowed during that period has grounds to recover the difference.

How the Rent Cap Pairs with Just Cause Eviction

The notice refers to Section 1946.2 because AB 1482 tied the rent cap to just cause eviction protections. Once a tenant has lived in a covered unit continuously for 12 months, the landlord can only end the tenancy for a qualifying at-fault reason (such as nonpayment or a material lease breach) or a no-fault reason (such as owner move-in or withdrawal from the rental market), and no-fault terminations generally require relocation assistance equal to one month’s rent.²

A valid Section 1947.12 exemption notice releases a qualifying single-family home or condo from both the rent cap and the just cause rules. A missing notice keeps both in force.

What a Tenant Can Recover for an Overcharge

When a landlord charges above the maximum, whether by exceeding the cap on a covered unit or by charging a market increase without ever delivering the exemption notice, the tenant can sue for:¹

Actual damages equal to each payment that exceeded the legal maximum.
Injunctive relief stopping the overcharging. The statute presumes irreparable harm from a violation, which eases the standard for an injunction.
Reasonable attorney’s fees and costs, at the court’s discretion.
Up to three times the overcharged amount if the landlord acted willfully or with oppression, fraud, or malice.

The California Attorney General, city attorneys, and county counsel can also bring enforcement actions. A claim must be filed within three years of the overcharge.¹

The 2030 Sunset

Section 1947.12 is currently set to expire on January 1, 2030. Before then, the Legislative Analyst’s Office must report to the legislature on the rent cap’s effect on the housing market.¹ If the legislature does not extend the law, the rent cap, the exemption notice requirement, and the paired just cause protections all end on that date.

1
California Legislative Information. California Code CIV 1947.12
2
California Legislative Information. California Code CIV 1946.2