Updated 12/31/24
Navigating rent increases under the Los Angeles Rent Stabilization Ordinance (LARSO) is essential for landlords aiming to comply with regulations and maintain positive tenant relationships. LARSO governs allowable rent adjustments for specific rental units in Los Angeles, ensuring fairness and transparency in the rental market.
Table of Contents
- Understanding LARSO and Its Applicability
- Annual Allowable Rent Increases
- Additional Permissible Rent Adjustments
- Notice Requirements for Rent Increases
- Rent Increase Regulations for Non-RSO Properties
- Frequently Asked Questions
Understanding LARSO and Its Applicability
LARSO applies to rental properties in Los Angeles built on or before October 1, 1978, encompassing various housing types such as apartments, condos, and townhomes. It excludes single-family homes, newer constructions, and government-subsidized housing. Landlords should verify if their property falls under LARSO to ensure adherence to its regulations.
Annual Allowable Rent Increases
Under LARSO, landlords can implement annual rent increases within specified limits. For the period from July 1, 2024, to June 30, 2025, the permissible rent increase is 4%. If the landlord provides gas and electricity, an additional 1% per utility can be added, allowing for a maximum increase of up to 6% in such cases.
It’s important to note that these annual adjustments are neither cumulative nor retroactive. Landlords may apply the increase once every 12 months, provided at least 12 months have elapsed since the last rent adjustment. Additionally, during the COVID-19 pandemic, annual rent increases were prohibited from March 2020 through January 31, 2024. As of February 1, 2024, landlords may resume permissible rent increases in accordance with LARSO guidelines.
Additional Permissible Rent Adjustments
Beyond the standard annual increase, LARSO permits landlords to implement specific surcharges and adjustments:
- Systematic Code Enforcement Program (SCEP) Fee: Landlords may collect a monthly surcharge of $3.61 from tenants to recover the paid SCEP fee.
- Registration Fee: A $12.25 surcharge can be collected in August, with advance notice, to recover half of the $24.51 paid registration fee.
- Additional Tenants: If additional occupants reside in the unit beyond those specified in the original rental agreement, landlords can increase the rent by 10% per additional tenant. This adjustment requires notifying tenants within 60 days of becoming aware of the new occupant. A corresponding rent reduction is necessary when the additional tenant vacates. Security deposits may also be increased by 10% for each additional tenant.
Notice Requirements for Rent Increases
Compliance with notice periods is crucial when implementing rent increases:
- Increases of 10% or Less: Landlords must provide tenants with a written 30-day notice before the rent increase takes effect.
- Increases Exceeding 10%: A written 90-day notice is required for rent increases exceeding 10% within a 12-month period.
These notice periods ensure tenants have adequate time to adjust to rent changes and seek alternative housing if necessary.
Rent Increase Regulations for Non-RSO Properties
For properties not covered under LARSO, California’s statewide rent control law, Assembly Bill 1482 (AB 1482), may apply. AB 1482 generally limits annual rent increases to 5% plus the local Consumer Price Index (CPI) change, capped at a maximum of 10%. For the period from August 1, 2024, to July 31, 2025, the maximum allowable increase in the Los Angeles area is 8.9%. Landlords must provide an advance 30-day written notice for all rent increases of 10% or less and 90 days if more than 10%.
Frequently Asked Questions
Can I apply multiple rent increases within a 12-month period under LARSO?
No, landlords are permitted to apply only one rent increase within a 12-month period under LARSO. Multiple increases within the same year are not allowed.
Are rent increases cumulative if not applied annually?
No, LARSO does not allow for cumulative or retroactive rent increases. If a landlord chooses not to apply an annual increase, they cannot “bank” it for future use.
How can I determine if my property is subject to LARSO?
To verify if your property falls under LARSO, you can visit the Los Angeles Housing Department’s website or use their online tools to check the status of your rental unit.
Understanding and adhering to LARSO’s regulations on allowable rent increases is vital for landlords in Los Angeles. By following these guidelines, providing proper notice, and maintaining open communication with tenants, landlords can ensure compliance and foster positive landlord-tenant relationships.
