2026 didn’t just tweak the rules for LA landlords — it rewrote several of them. The City of Los Angeles overhauled its rent-increase formula. The statewide rent cap that covers most other units is on the clock to expire. And three new state laws took effect January 1 that quietly change what “habitable” and “advertised” legally mean. If your compliance checklist still says 2025, it’s already out of date.
Here’s a plain-English rundown of what actually changed this year — and what a growing LA portfolio should do about each one.
1. LA City tore up its rent-increase formula
This is the big one. Effective February 2, 2026, the City of Los Angeles rewrote the math behind its Rent Stabilization Ordinance (RSO) annual increase:
- The base dropped from 100% of CPI to 90% of CPI. Your allowable increase is now tied to nine-tenths of inflation, not all of it.
- The band moved from 3%–8% down to 1%–4%. The old floor was 3% and the ceiling was 8%. The new floor is 1% and the ceiling is 4% — so even in a high-inflation year, an RSO unit can’t go up more than 4%.
- The utility surcharge is gone. Landlords can no longer add an extra percentage for utilities on top of the annual increase.
- The added-dependent bump is gone. The 10% increase previously allowed when an additional dependent joined the tenancy is no longer permitted.
The current allowable RSO increase sits at 3% through June 30, 2027. But if you underwrote a building assuming you could push 8% in a hot inflation year — or that you could layer utility costs back onto rent — those assumptions are dead. For growing investors, this compresses the upside on every rent-controlled LA unit, and it needs to be in your pro forma now.
2. AB 1482’s clock is running out
California’s statewide rent cap, AB 1482, covers most units that aren’t under a stricter local ordinance. In the LA/Orange County region, the current cap is 8.7% (5% + regional CPI, capped at 10%) for increases effective August 1, 2026 through July 31, 2027.
The catch: AB 1482 was written with a sunset and is scheduled to expire in 2026. What replaces it is being debated in Sacramento — and the likeliest outcomes tighten the cap, not loosen it. If your acquisition models assume “5% plus CPI, forever,” that’s a planning risk worth pricing in today rather than discovering at renewal. This is exactly the kind of regulatory exposure that separates investors who scale smoothly from those who get caught flat-footed.
3. Three new statewide laws took effect January 1, 2026
Beyond the rent caps, three bills signed into California law now apply to most LA rentals. None of them are optional.
AB 628 — a working stove and refrigerator are now required
As of January 1, 2026, an operational stove and refrigerator are a habitability requirement in nearly all residential rentals. The requirement applies to new, amended, and renewed leases. If an inspector finds a missing or broken appliance, you’ll get a Notice to Comply and roughly 30 days to fix it before fines and administrative penalties follow. If you’ve historically rented units “no appliances included,” that model no longer complies in most cases.
AB 414 — security deposits go electronic
Security-deposit itemizations and returns must now be handled electronically when the tenant agrees to it. Practically, that means your move-out accounting and refund process needs a clean digital paper trail — which also happens to be your best protection if a former tenant disputes a deduction.
AB 747 — upfront fees must be disclosed in the ad
Every mandatory upfront fee now has to be disclosed in the listing itself, not revealed at lease signing. Application fees, and any other required charges, belong in the advertisement. Surprising a prospective tenant with fees at the table is no longer just bad practice — it’s a compliance problem.
Bonus: the Right to Counsel notice you may have missed
Slightly earlier but easy to overlook: since August 20, 2025, City of LA landlords must provide tenants a Notice of Right to Counsel at the start of a tenancy, attach it to any eviction or subsidy-termination notice, and post it in a common area. Serve an eviction notice without it and you’ve handed the tenant a procedural defense before the case even starts.
What a growing LA portfolio should do now
None of these changes are catastrophic on their own. The risk is cumulative — a wrong rent-increase figure here, a missing appliance there, an eviction notice without the right attachment — and it lands hardest on owners scaling across multiple LA jurisdictions, where the rules stack differently building by building. A few concrete moves:
- Reprice your rent-increase assumptions for every RSO unit against the new 1%–4% band.
- Audit every unit for a working stove and refrigerator before your next lease renewal, not after an inspection.
- Update your listing templates and lease-signing packet so upfront fees are disclosed in the ad and deposit handling is electronic.
- Check your eviction-notice process includes the Right to Counsel notice every time.
- Stress-test your underwriting for an AB 1482 successor that caps increases lower than today’s 8.7%.
Frequently asked questions
What are the biggest 2026 law changes for California landlords?
For LA owners, the four that matter most are: the City of LA’s RSO formula overhaul (effective February 2, 2026 — 90% of CPI, a 1%–4% band, and no more utility or dependent surcharges); AB 1482’s scheduled 2026 sunset; and three new statewide laws — AB 628 (working stove and refrigerator now a habitability requirement), AB 414 (electronic security-deposit returns), and AB 747 (upfront fee disclosure in advertising).
How much can I raise rent on an LA rent-controlled unit in 2026?
Units under the City of LA’s RSO are capped at 3% through June 30, 2027. Under the new formula, future increases are set at 90% of CPI within a 1%–4% band. Units covered only by AB 1482 can go up to 8.7% in the LA/Orange County region. Beverly Hills, West Hollywood, Santa Monica, and Culver City each set their own lower local caps.
Is AB 1482 going away?
AB 1482 was enacted with a sunset provision and is scheduled to expire in 2026. Whether — and how — it’s extended or replaced is being decided at the state level, with most proposals pointing toward a tighter cap rather than a looser one. Owners should plan for the possibility of lower allowable increases going forward.
Does my rental really need a stove and refrigerator now?
Yes. Under AB 628, effective January 1, 2026, an operational stove and refrigerator are a habitability requirement in most residential rentals, applied at each new, amended, or renewed lease. A missing or broken appliance can trigger a Notice to Comply, a 30-day cure period, and penalties if unresolved.
Don’t let a rule change become a liability
Every one of these changes is a small compliance task on its own — and a five-figure problem if you get it wrong across a growing portfolio. We handle BHRSO, WeHo RSO, LA RSO, and AB 1482 compliance in-house for every property we manage, track every formula change and deadline as it happens, and calculate the allowable increase for each unit, every year, on schedule.
Get a free property analysis → and we’ll flag exactly where your units stand against the 2026 rules — and what they could legally be earning.
This article is general information, not legal advice. Rent-control figures and compliance requirements change on each jurisdiction’s schedule; confirm the current rules for your specific unit before acting.
