There are two ways to increase rent:
1. Get new tenants and charge whatever you want
If you have the opportunity to get new tenants, e.g. if your current tenants voluntarily leave or if you terminate their lease because of repeated violations, then you can charge new tenants whatever you want, e.g. the market rate.
2. Increase rent of existing tenants by 5% + CPI
AB 1482 (Assembly Bill No. 1482) took effect Jan. 1, 2020, and imposes rent increase limits of 5% plus CPI (Consumer Price Index) on most residential rental properties in the state per year. To find the CPI closest to Stockton for the most recent year, visit the Bureau of Labor Statistics. For example, for the West region, the Consumer Price Index for March 2021 increased by 2.4% from the previous year.
Therefore, beginning April 2021, you can increase rent by 5% + 2.4% = 7.4%.
So, if you currently charge $1000 for rent, then you can increase the rent to $1000 + ($1000 x 7.4%) = $1074 for a minimum of one year.
To determine CPI, read the detailed information on the Rent Control page.
90-day Rent Increase Notice
Effective January 1, 2020, California Civil Code Section 827 was amended to require the service of a written 90-day notice (instead of a 60-day notice) if the rent increase, either by itself or combined with any other rent increase in the 12 months prior to the effective date of the increase, is more than 10%.
30-day Rent Increase Notice
The required notice period for an increase of 10% or less (combining all prior increases within the 12 month period before the increase goes into effect) remains 30-days.
Extra 5 Days
If a rent increase notice is served by mail, the required notice period must be extended by an additional five days (i.e. If the increase exceeds 10% of the tenant’s rent and is served by mail, it cannot be effective less than 95 days after the date of mailing).
Example Rent Increase Notice
- Notice of Change of Terms (including rent) (Nolo) RTF Format
How to Serve The Notice to Tenants
Proper Service: Personal Service
You or anyone you designate age 18 or over may hand the notice to the tenant or any one of the tenants named on the notice on behalf of all tenants. If the tenant does not accept the notice, you can leave it down by the tenant’s feet and walk away.
Proper Service: Mail
You can mail the notice to the tenant. However, you then have to give a minimum 35 day notice to account for mail delivery time.
Once the tenant acknowledges receiving the notice or pays the increased rent, the tenant gives up the right to complain about any legal insufficiency in the manner the 30-day or 60-day notice was served, and the rent increase becomes effective, even if the service of the notice is technically improper. Therefore, you can email or text the tenant notifying them of the rent increase and as long as they acknowledge receiving the notice, then the rent increase becomes effective.