Overview of California’s Rent Cap Law and 2025 Amendments

California established statewide rent and eviction controls with the enactment of the Tenant Protection Act of 2019 (TPA), now found in Civil Code Section 1947.12.  As of 2025, the law has undergone several amendments to further refine its scope and effectiveness. Following is a summary of the rent cap portion of the law, and the key provisions of the 2025 amendments.

TPA

Under the TPA, yearly rent increases are capped at 5% of the base rent plus the Consumer Price Index, not to exceed 10% per year.  If the same tenant remains in rental unit over any 12-month period, the rent for the unit cannot be increased in more than two increments over that 12-month period.

Certain properties are exempt from the rent control provisions of the statute, including single family dwellings and condominiums. This exception does not apply if the owner is a real estate investment trust, a corporation, or a limited liability company in which at least one member is a corporation. For this exception to apply the tenants must be provided with written notice that the residential real property is exempt.  Also exempt are duplexes in which the owner occupied one of the units as the owner’s principal place of residence at the beginning of the tenancy, so long as the owner continues in occupancy.

2025 Amendments

The 2025 amendments have expanded the coverage of the rent cap to include properties built before January 1, 2010. This extension aims to protect a larger segment of renters, particularly those in older buildings that are more likely to be subject to significant rent increases. 

To ensure compliance, the 2025 amendments introduced stricter enforcement mechanisms. Landlords who violate the rent cap provisions now face steeper penalties, including fines and potential legal action.

The 2025 amendments also introduce an annual adjustment mechanism for the rent cap, recognizing the fluctuating nature of the economy.  It allows for periodic reviews and adjustments based on economic conditions, ensuring that the cap remains fair and relevant.

Impact on Landlords

For landlords, the law presents both challenges and opportunities. While some landlords may view the rent cap as a limitation on their ability to maximize rental income, others recognize the benefits of stable, long-term tenancies. By fostering a more predictable rental market, the law can reduce turnover rates and associated costs, ultimately benefiting both landlords and tenants.

Please contact Lynx Legal with any questions regarding the above, and for all of your eviction needs.  We can be reached at 888-441-2355 or info@lynxlegal.com.  Our experienced professionals are standing by to take your order or answer any inquiries you may have.