California Lease Renewal Agreement: Notice, Rent Caps, and Disclosures

A California lease renewal agreement is governed by the Tenant Protection Act, which caps rent increases on covered units and, for tenants of 12 months or more, requires the landlord to have a legally recognized reason before declining to renew. Even without a signed renewal, Civil Code 1945 presumes the tenancy continues month-to-month on the same terms once a fixed-term lease ends, so neither side starts from zero.¹ The practical questions at renewal are how much the rent can go up, what the landlord must disclose or notice in writing, and what the deposit rules look like now that AB 12 has taken effect.

What Happens If Nobody Signs a New Lease

If the fixed term expires and you keep paying rent that the landlord keeps accepting, Civil Code 1945 converts the tenancy to month-to-month on the same terms as the original lease.¹ Rent, rules, and other conditions carry over until one side moves to change or end them.

A signed renewal for a new fixed term locks in rent and conditions for the full period. Drifting into month-to-month leaves both sides more exposed to short-notice changes, which is why most tenants prefer to negotiate a written renewal rather than let the term lapse.

When a Landlord Can Decline to Renew

For most tenants who have been in the unit at least 12 continuous months, Civil Code 1946.2 requires a landlord to have a recognized just cause to end the tenancy, including by non-renewal.² The statute splits those reasons into two groups.

At-fault reasons involve tenant conduct: nonpayment of rent, breach of a material lease term after written notice and a chance to cure, criminal activity on the property or against the owner, nuisance or waste, unauthorized subletting, and refusing to sign a renewal when the landlord offers one with similar terms for a similar duration.

That last item catches many tenants off guard. If the landlord presents a renewal with substantially similar provisions and the tenant refuses to sign, the refusal itself becomes grounds to terminate.² “Similar provisions” is the qualifier that keeps a landlord from inserting drastically different terms and then claiming the tenant refused.

No-fault reasons sit outside the tenant’s control: an owner or close family member moving in, a substantial remodel requiring vacancy, or removal of the unit from the rental market. For a no-fault termination, the landlord must either pay relocation assistance equal to one month’s rent or waive the final month’s rent.³ Skipping that payment voids the notice.

Properties That Are Exempt

The just cause and rent cap rules do not reach every rental. Civil Code 1947.12 and 1946.2 carve out several categories:⁴

Units that received a certificate of occupancy within the previous 15 years, on a rolling basis. A building completed in 2012 loses its exemption in 2027.
Single-family homes and condos, but only if the owner is not a corporation, REIT, or LLC with a corporate member, and the owner has given the tenant the specific written exemption notice.
Owner-occupied duplexes where the owner lives in one of the two units.
Deed-restricted affordable housing already governed by affordability requirements.
Dormitories owned and operated by schools or colleges.

For single-family homes and condos, the written exemption notice is not optional. It has to use prescribed language stating that the unit is not subject to the rent cap or just cause rules and identifying the specific exemption. Without that notice, the exemption does not apply and the tenant has the full protections regardless of property type.

How Much the Rent Can Increase at Renewal

On covered properties, Civil Code 1947.12 caps the annual rent increase at 5% plus the local change in the Consumer Price Index, or 10% total, whichever is lower. The starting figure is the lowest gross rent charged for the unit at any point in the prior 12 months.⁴ The Attorney General’s office confirms the formula runs over any 12-month period, not only at renewal.³

Temporary discounts, concessions, and move-in specials do not reduce the base rent for cap purposes. If the tenant paid $2,000 a month with a $200 promotional discount for three months, the base for the calculation is $2,000, not $1,800. The lease or renewal must list gross rent and any discounts as separate line items.

The CPI figure comes from the Bureau of Labor Statistics for the applicable metropolitan area, with the California-specific CPI from the Department of Industrial Relations available as an alternative reference.³ Pull the current figure at the time the renewal is drafted.

Local Rent Control Can Set a Lower Cap

Cities with rent stabilization ordinances often cap increases below the state formula. Santa Monica, for instance, limits annual increases on rent-controlled units to roughly the inflation rate, which in some years comes in well under 5% plus CPI.⁵ Berkeley, San Francisco, Los Angeles, and Oakland run their own programs. Where a local ordinance is stricter, that number controls; the state cap is a ceiling, not a floor.

A rent increase above the applicable cap is unenforceable, and tenants can file with their local rent board or pursue the issue in civil court to recover the excess.

Disclosures to Refresh at Renewal

Several disclosures must be in or alongside the renewal, and any that have changed since the original lease should be updated. The California Department of Real Estate maintains the full list; the ones most often relevant at renewal:⁶

Lead-based paint, for buildings built before 1978. Federal law requires disclosure of known lead hazards and delivery of the EPA pamphlet “Protect Your Family From Lead in Your Home” before signing any lease or renewal, with a signed copy kept for at least three years.⁷
Bed bug information. Civil Code 1954.603 requires written notice on identification, prevention, and reporting in every new lease, and a landlord cannot rent a unit known to have an active infestation.
Flood hazard zones. If the landlord knows the property sits in a special flood hazard area or an area of potential flooding, Government Code 8589.45 requires written disclosure in each lease or renewal.⁸
Asbestos, for buildings built before 1981, where known or reasonably suspected.
Pest control contracts. Tenants must receive a copy of the notice describing the pesticides to be used if the property is under an ongoing contract.
Methamphetamine contamination. Any health officer order on meth contamination must be disclosed in writing before signing.

A disclosure that was accurate at original signing but has since changed, such as a newly identified flood zone or a completed lead abatement, should be reflected in the renewal. The renewal functions as an amendment: original terms stay in force unless specifically overridden, so any change to house rules, parking, or pet policy needs to be stated plainly in the new document.

Written Notice and How to Deliver It

The notice rules depend on whether the tenancy is periodic and whether rent is going up. Civil Code 827 sets the timelines for changes to month-to-month tenancies:⁹

Rent increases of 10% or less measured against the prior 12 months require at least 30 days’ written notice before the increase takes effect.
Rent increases greater than 10% require at least 90 days’ written notice.

Those timelines apply to month-to-month tenancies, which is where most tenants land once a fixed term lapses under Civil Code 1945. A brand-new fixed-term renewal has no specific statutory notice deadline, but the rent cap still applies on covered properties, and landlords commonly begin the renewal conversation 60 to 90 days before the current term ends.

Notice can be hand-delivered or mailed, with extra time added for mail service under the Code of Civil Procedure. Keep proof of delivery, whether a signed receipt or certified mail tracking, in case the timing is later disputed.

Security Deposit Limits at Renewal

AB 12, effective July 1, 2024, caps most security deposits at one month’s rent regardless of whether the unit is furnished.¹⁰ A narrow exception lets small landlords, meaning individuals (not corporations or LLCs with corporate members) who own no more than two rental properties totaling four or fewer units, collect up to two months’ rent.

Two things to watch at renewal. A landlord who collected a larger deposit under the prior rules does not have to refund the excess on an existing tenancy, but cannot demand additional deposit money that would push the total above the new cap. And if the rent rises at renewal, the landlord can request a top-up only up to the new one-month limit based on the updated rent. A tenant whose rent moves from $2,000 to $2,100 could owe an additional $100 if the current deposit sits below the new rent figure.

Signing the Renewal

Electronic signatures are valid for California lease renewals. The California Uniform Electronic Transactions Act (Civil Code 1633.1–1633.17) gives e-signatures the same legal standing as handwritten ones, and platforms such as DocuSign and HelloSign are commonly used.¹¹ Both parties sign and date, and the landlord must give the tenant a fully executed copy.

Keep the signed renewal with the original lease. The two documents together are the complete record of the tenancy, and if anything was modified at renewal, like a new pet policy or an updated rent figure, having both makes it easy to see what changed and when. Tenants are entitled to request a copy of their lease once per calendar year.

Military Service Members

An active-duty service member who signs a California lease renewal can terminate it early without penalty under the federal Servicemembers Civil Relief Act after receiving permanent change of station orders or deployment orders longer than 90 days.¹² Written notice plus a copy of the orders must be delivered by hand, return-receipt mail, or a private carrier such as FedEx or UPS. Once notice is properly delivered, the lease terminates 30 days after the next monthly rent payment is due.

Watch for any clause asking the service member to waive SCRA protections. Signing one could eliminate the ability to break the lease penalty-free for military orders. If the renewal does not already contain a military clause, it is worth asking the landlord to add one.

Fair Housing and Credit Checks at Renewal

Federal and California fair housing laws apply at renewal just as they do at initial leasing. A landlord cannot refuse to renew or impose different terms based on race, religion, national origin, sex, familial status, disability, or any other protected class. For a tenant with a disability, the Fair Housing Act requires reasonable accommodations to lease terms when needed, which could include adjusting a renewal’s duration or modifying specific provisions when the tenant can show a disability-related need.

If a landlord pulls a new credit report at renewal and uses it to change the terms, meaning a higher deposit, higher rent than otherwise offered, or declining to renew, the federal Fair Credit Reporting Act requires an adverse action notice. The notice must identify the consumer reporting agency and tell the tenant about the right to a free copy of the report and to dispute inaccuracies within 60 days.

1
California Legislative Information. California Code Civil Code 1945
2
California Legislative Information. California Code Civil Code 1946.2
3
State of California – Department of Justice – Office of the Attorney General. Landlord-Tenant Issues
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California Legislative Information. California Code Civil Code 1947.12
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City of Santa Monica. How Rent Control and State Law AB 1482 Impacts You
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California Department of Real Estate. Landlord’s Disclosures
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U.S. Environmental Protection Agency. Real Estate Disclosures about Potential Lead Hazards
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California Legislative Information. California Code GOV 8589.45
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California Legislative Information. California Code Civil Code 827
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LegiScan. Bill Text CA AB12
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California Department of General Services. Electronic Signatures, Electronic Transactions and Electronic Record Management Policy
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Military OneSource. Military Clause: Terminate Your Lease Due to Deployment or PCS