Reviewing rental contracts, market rents, and annual inspections is work our property managers handle year-round. As part of that, we implement rent increases where appropriate for properties currently below market rent — always in compliance with California Civil Code 1947.12 and the statewide Tenant Protection Act.

But what is Civil Code 1947.12, and how does it affect your property? And do the same rules apply to single-family homes and apartments? Civil Code 1947.12 addresses tenant and landlord rights with respect to California’s rent cap, using the current Consumer Price Index (CPI). Because these rules can change and the details get confusing, below are a few common questions and answers owners have about rent cap and how it may apply to their rental property.

Common Questions and Answers Regarding Rent Increases:

Q1: What are Civil Code 1947.12 and CPI? Civil Code 1947.12 limits how much rent can be increased on some residential California properties within any 12-month period. CPI is the percentage change in the cost of living over a 12-month period, determined by the Consumer Price Index for the region where the property is located.

Q2: How much can rent be raised under this law? Under the Tenant Protection Act, the allowable annual increase is 5% plus the regional CPI — but the combined total may not exceed 10%. Because the CPI figure changes over time, your property manager confirms the current allowable percentage at the time of any increase.

Q3: How do I know what my maximum rent increase would be? A maximum rent increase worksheet is used to calculate CPI plus 5% and determine the new maximum gross rent. Your property manager has access to this worksheet and can calculate the maximum increase for the current period.

Q4: Are there any exemptions to this law? Yes. Under the Tenant Protection Act of 2019 (the statewide rent cap law), several exemptions apply:

Housing issued a certificate of occupancy within the previous 15 years (new construction).
A duplex in which the owner occupies one unit at the beginning of, and throughout, the tenancy.
Single-family homes (including condominiums), so long as:
1. the owner is not a corporation, not an LLC with at least one corporate member, and not a real estate investment trust (REIT), and
2. the owner gives the tenant the legally required notice of the exemption. Ownership by individuals, partnerships, individual co-owners, trusts, and LLCs with no corporate members generally qualifies.

Q5: Where can I find current and past CPI figures? Current CPI figures are published by the California Department of Industrial Relations at dir.ca.gov, and San Diego–specific CPI data is available from the Bureau of Labor Statistics at data.bls.gov.

If you have questions about whether a rent increase applies to your property, reach out to your property manager — we stay current on local and state requirements so you don’t have to.

Please note: This article is for general informational purposes only and should not be relied upon as a complete summary of all changes in local, state, or federal law. It does not replace legislative services or membership in trade associations. If you need legal advice, please consult a legal professional. Laws may have changed since this article was published.