California's rental housing laws have undergone major updates in recent years, especially under the Tenant Protection Act (AB 1482) and Assembly Bill 12. These changes impact how landlords approach rent increases, security deposits, and property standards. Whether you're a seasoned investor or a new landlord, staying compliant is essential to protecting your investment and avoiding costly penalties.

AB 1482: Exempt vs. Non-Exempt Properties

Properties Covered by AB 1482

AB 1482 limits annual rent increases to 5% plus the local Consumer Price Index (CPI), or 10%—whichever is lower. For example, from August 1, 2024, to July 31, 2025, the allowable increase in Orange County is 8.9%.

Additionally, covered properties are subject to "just cause" eviction protections, meaning landlords must provide a legally valid reason to terminate a tenancy.

Exempt Properties

• Single-family homes and condos (if owned by a non-corporate entity and proper disclosure is provided to tenants)
• Buildings constructed within the past 15 years (rolling exemption)
• Owner-occupied duplexes
• Deed-restricted affordable housing or government-subsidized housing

Security Deposit Law Change: AB 12 (Effective July 1, 2024)

AB 12 limits security deposits across most residential rentals in California:

• Landlords may only collect a security deposit equal to one month's rent, regardless of whether the unit is furnished or not.
• Small landlords (those owning no more than two properties totaling four or fewer units) may charge up to two months' rent unless the tenant is a military service member.

Small Landlord Exemptions

California law provides several exemptions and exceptions for small landlords:

• Security Deposits: As mentioned, small landlords may collect up to two months' rent in deposits under AB 12.
• Rent Reporting: Starting April 1, 2025, landlords of 15+ unit properties must offer tenants rent-reporting options. This does not apply to landlords with fewer than 15 units unless they are incorporated entities.

Basic Habitability Requirements

Under California Civil Code §1941.1 and the implied warranty of habitability, all rental units must meet the following minimum standards regardless of exemption status:

Structural and Safety

• Weatherproof roof, windows, and exterior walls
• Deadbolt locks on all exterior doors and functional locks on windows
• Safe stairs and handrails
• Working windows and doors

Plumbing, Electrical, and Heating

• Functional toilet, sink, and tub/shower with hot and cold water
• Water heater secured to earthquake standards
• Safe electrical systems with functional lighting and outlets
• Working heating system (air conditioning is not required, but heating is)

Health and Safety Devices

• Smoke alarms in all sleeping areas, outside sleeping areas, and every level
• Carbon monoxide detectors in units with gas appliances, fireplaces, or attached garages at each level
• Emergency exits that allow safe escape in case of fire

Pest Control

Units must be free of infestations at move-in. Landlords are responsible for pest control unless the infestation is caused by tenant negligence.

What to Expect: Future Rent Cap Adjustments

The rent increase cap under AB 1482 is adjusted annually and varies by region, based on CPI data from April to April. Each August, the new cap becomes effective for the following 12-month period. Landlords should check their specific region's CPI index annually to determine the allowed increase. Expect updated guidance around August 2025 for the next rent cap window for EJ Properties.

Summary Table

Work with a licensed, experienced, and knowledgeable property manager: EJ Properties.

Frequently Asked Questions

What is the rent increase limit under AB 1482?

AB 1482 limits annual rent increases to 5% plus the local Consumer Price Index (CPI), or a maximum of 10%, whichever is lower. The cap is adjusted annually each August based on regional data.

What is the new security deposit limit in California under AB 12?

Effective July 1, 2024, landlords may only collect a maximum of one month's rent for a security deposit, regardless of whether the residential unit is furnished or unfurnished.

Who qualifies for the small landlord exemption for security deposits?

Small landlords who own no more than two properties totaling four or fewer units may charge up to two months' rent for a security deposit, unless renting to a military service member.

What are the basic habitability requirements for a rental unit?

California rental units must meet minimum standards, including weatherproof roofs and walls, functional plumbing with hot/cold water, safe electrical systems, working heating, and installed health and safety devices like smoke and carbon monoxide alarms.