Tenant Protection Act of 2019-Part 1 of 2
(Statewide Rent Cap Law)

What is the Tenant Protection Act (TPA)? Effective 1-1-20, the TPA establishes, throughout all of California, a
maximum amount an owner may increase a residential tenant’s rent in a 12-month period. The cap is 5% plus
inflation, not to exceed 10%. There are exemptions.

Exemptions from the Rent Cap rules
● Housing that has been issued a certificate of occupancy within the previous 15 years (new housing);
● A duplex in which the owner occupies one of the units at the commencement of and throughout the tenancy;
● A single-family residential property (including condominiums) so long as:

1. The owner is not a corporation, not an LLC with at least one owner who is a corporation, and not a real
   estate investment trust (REIT) AND
2. The owner gives the tenant a legally required notice of this exemption. Ownership by individuals,
   partnerships, individual co-owners, trusts, and LLCs with no corporate owners, all qualify for the exemption.

Giving notice of the Rent Cap exemptions:
C.A.R. form “Rent Cap and Just Cause Addendum” (RCJC) (available December 2019) may be used as follows:
For month to month tenants: For new tenancies starting on or after January 1, 2020, incorporate the RCJC
into the rental agreement. For existing tenancies, incorporate the RCJC by using a change in terms of
tenancy, such as C.A.R. “Notice of Change in Terms of Tenancy” (Form CTT).
For Fixed Term Leases: For new tenancies starting on or after January 1, 2020, incorporate the RCJC into
the new lease. For existing tenancies, simply provide the form as a stand-alone notice. If not already
provided, incorporate the RCJC into the lease upon any renewal or extension of existing leases.

Can rent be raised more than the maximum before the effective date?
Yes, however, the maximum Rent Cap raise is linked to the rent charged as of March 15, 2019. If rent was increased
more than the allowable amount (5% + inflation) before 1/1/2020 it must be rolled back to the allowable amount as
of 1/1/2020. Amounts collected before then do not have to be refunded to the tenant.

Does the TPA preempt local rent control ordinances?
Local Government Rent Caps: If a city or county limits rent increases to an amount less than that authorized by the
TPA, then the local ordinance applies. If a government entity is not as restrictive as the TPA, then the TPA applies.

Does the TPA limit the rent that an owner may charge a new tenant?
No. The initial rental rate charged a new tenant is not subject to the Rent Cap in the TPA. Subsequent increases to
the new tenant will be subject to the TPA.

Is it necessary for an owner to hire a lawyer before attempting to raise rent or evict a tenant?
The application of the TPA and its many exemptions and requirements, as well as the interplay between the TPA
and local ordinances can be complicated, and failure to abide by the law can have severe consequences. For that
reason, it is recommended that a property owner consult with a qualified real estate attorney familiar not just with
the TPA but also with local law.

NOTE: Quick Guide Tenant Protection Act of 2019-Part 2 (Just Cause Eviction Law) provides information on
the Just Cause Eviction portion of the TPA.

Source: California Association of REALTORS®. October 22, 2019.  Link