LARSO: What Rent Increases May Be Made?

Before a Los Angeles landlord can raise rent on an annual basis under the Los Angeles Rent Stabilization Ordinance or LARSO the landlord must serve at least a 30-day Notice of the change of terms of tenancy.

Generally, under the 2018 LARSO published guidelines the landlord may increase the rent by three percent (3%) to eight percent (8%) every 12 months in accordance with the annual rent increase percentage, which is based on the Consumer Price Index (CPI) average for the twelve (12) month period ending September 30 of each year.

The annual adjustment may be applied once each year. The 3% to 8% annual increase is NOT cumulative or retro-active. The calculated annual increase percentage effective July 1, 2018 through June 30, 2019 is three percent (3%). For allowable rent increase amounts in previous years, refer to the table on the next page. This annual increase may be imposed only if twelve (12) months or more have elapsed since the last such rent increase.

Additionally, the landlord may also increase the following items:

1. An increase of 3% to 8% of the security deposit is allowed at the same time and by the same percentage as the annual rent increase.
2. An additional 1% for gas and 1% for electric service into the dwelling unit when service is provided by the landlord.
3. Nineteen percent (19%), plus 2% if the landlord provides the gas and electricity, for a rental unit which has not had a rent increase since May 31, 1976.
4. Thirteen percent (13%), plus 2% if the landlord provides the gas and electricity, for a rental unit which has not had a rent increase since May 31, 1977.
5. Ten percent (10%) for each additional tenant exceeding the number of tenants allowed by the original rental agreement. Owners must notify the tenants of the rent increase within 60 days of having obtained actual or constructive knowledge of the new tenant. A corresponding reduction in rent is required when the additional tenant vacates the unit. Security deposits may also be increased by 10% for the additional tenant/s.
6. A landlord may collect a monthly surcharge of $3.61 from the tenant to recover the paid Systematic Code Enforcement fee.
7. A $12.25 surcharge may only be collected in the month of August with advance notice to recover half of the $24.51 paid registration fee. Landlords are required to serve tenants with a written 30-day notice for rent increases that are less than 10% of the tenant’s rent, or a 60-day notice for rent increases over 10% of the tenant’s rent within a 12-month period.

ALLOWABLE RENT INCREASES

CHRONOLOGY OF ALLOWABLE RENT INCREASES SINCE 1979
DATE	PERCENTAGE   ALLOWED	DATE	PERCENTAGE   ALLOWED
5/1/79 – 6/30/85	7%	7/1/02 – 6/30/03	3%
7/1/85 – 6/30/86	4%	7/1/03 – 6/30/04	3%
7/1/86 – 6/30/87	5%	7/1/04 – 6/30/05	3%
7/1/87 – 6/30/88	4%	7/1/05 – 6/30/06	3%
7/1/88 – 6/30/89	4%	7/1/06 – 6/30/07	4%
7/1/89 – 6/30/90	5%	7/1/07 – 6/30/08	5%
7/1/90 – 6/30/91	5%	7/1/08 – 6/30/09	3%
7/1/91 – 6/30/92	5%	7/1/09 – 6/30/10	4%
7/1/92 – 6/30/93	5%	7/1/10 – 6/30/11	3%
7/1/93 – 6/30/94	3%	7/1/11 – 6/30/12	3%
7/1/94 – 6/30/95	3%	7/1/12- 6/30/13	3%
7/1/95 – 6/30/96	3%	7/1/13 – 6/30/14	3%
7/1/96 – 6/30/97	3%	7/1/14 – 6/30/15	3%
7/1/97 – 6/30/98	3%	7/1/15 – 6/30/16	3%
7/1/98 – 6/30/99	3%	7/1/16 – 6/30/17	3%
7/1/99 – 6/30/00	3%	7/1/17 – 6/30/18	3%
7/1/00 – 6/30/01	3%	7/1/18 – 6/30/19	3%

Can a landlord in a non-rent-controlled property increase the rent paid by the tenant?

Generally, in a rental property that is not governed by rent control the rental agreement should have a provision that controls the rent increases both in the amount and when the rent will increase. However, the following rules will also apply.

1. No rental increase in a fixed terms lease during the term of the lease unless set forth in the rental agreement.
2. If a month to month rental agreement the rent cannot be increased without reasonable Notice in writing to the tenant. If the rent is raised 10% or less, then a written 30-Day Notice of Change of Terms of tenancy must be given prior to the commencement date of the rent increase.
3. If the rent increase exceeds 10% a written 60 Day Notice of Rent increase must be given.
4. There is no law that sets limits on a landlord in terms of how much rent can be increased. This will be controlled by the rental market in the area.

Civil Code Section 827 governs procedure for increasing rent in non-rental control areas.

(a) Except as provided in subdivision (b), in all leases of lands or tenements, or of any interest therein, from week to week, month to month, or other period less than a month, the landlord may, upon giving notice in writing to the tenant, in the manner prescribed by Section 1162 of the Code of Civil Procedure, change the terms of the lease to take effect, as to tenancies for less than one month, upon the expiration of a period at least as long as the term of the hiring itself, and, as to tenancies from month to month, to take effect at the expiration of not less than 30 days, but if that change takes effect within a rental term, the rent accruing from the first day of the term to the date of that change shall be computed at the rental rate obtained immediately prior to that change; provided, however, that it shall be competent for the parties to provide by an agreement in writing that a notice changing the terms thereof may be given at any time not less than seven days before the expiration of a term, to be effective upon the expiration of the term.

The notice, when served upon the tenant, shall in and of itself operate and be effectual to create and establish, as a part of the lease, the terms, rents, and conditions specified in the notice, if the tenant shall continue to hold the premises after the notice takes effect.

(b) (1) In all leases of a residential dwelling, or of any interest therein, from week to week, month to month, or other period less than a month, the landlord may increase the rent provided in the lease or rental agreement, upon giving written notice to the tenant, as follows, by either of the following procedures:

(A) By delivering a copy to the tenant personally.

(B) By serving a copy by mail under the procedures prescribed in Section 1013 of the Code of Civil Procedure.

(2) If the proposed rent increase for that tenant is 10 percent or less of the rental amount charged to that tenant at any time during the 12 months prior to the effective date of the increase, either in and of itself or when combined with any other rent increases for the 12 months prior to the effective date of the increase, the notice shall be delivered at least 30 days prior to the effective date of the increase, and subject to Section 1013 of the Code of Civil Procedure if served by mail.

(3) For an increase in rent greater than the amount described in paragraph (2), the minimum notice period required pursuant to that paragraph shall be increased by an additional 30 days, and subject to Section 1013 of the Code of Civil Procedure if served by mail. This paragraph does not apply to an increase in rent caused by a change in a tenant’s income or family composition as determined by a recertification required by statute or regulation.

(c) If a state or federal statute, state or federal regulation, recorded regulatory agreement, or contract provides for a longer period of notice regarding a rent increase than that provided in subdivision (a) or (b), the personal service or mailing of the notice shall be in accordance with the longer period.