Is my rental exempt from California's rent cap? A plain-English checklist
Updated November 1, 2026. Written for California owners, workers and freelancers; not legal or tax advice.
California's statewide rent cap doesn't cover every rental. Section 1947.12(d) lists the exemptions. Go through the questions below in order. If any answer puts you in an exemption, the statewide cap doesn't apply (though a city ordinance still might). Keep notes on why you decided each one.
1. Was a certificate of occupancy issued within the last 15 years?
Housing that got its certificate of occupancy within the previous 15 years is exempt (§1947.12(d)(4)). This is a rolling window, not a fixed date. A building first occupied in March 2012 lost the exemption in March 2027. Mobilehomes don't get this exemption.
2. Is it a single-family home or condo you can sell separately?
Property that can be sold separately from any other unit (a typical house or condo) is exempt only if both of these are true (§1947.12(d)(5)):
- The owner is not a real estate investment trust (REIT), a corporation, or an LLC with at least one corporate member. Individuals, most family trusts, and LLCs whose members are all individuals can qualify.
- The tenant got written notice using this exact statement:
“This property is not subject to the rent limits imposed by Section 1947.12 of the Civil Code and is not subject to the just cause requirements of Section 1946.2 of the Civil Code. This property meets the requirements of Sections 1947.12 (d)(5) and 1946.2 (e)(8) of the Civil Code and the owner is not any of the following: (1) a real estate investment trust, as defined by Section 856 of the Internal Revenue Code; (2) a corporation; or (3) a limited liability company in which at least one member is a corporation.”
For tenancies that began or renewed on or after July 1, 2020, the notice must be in the lease. Older tenancies could get it as a separate notice. No notice, no exemption, even if you otherwise qualify.
3. Is it a duplex where you live in the other unit?
A two-unit building is exempt if you lived in one unit as your main home when the tenancy began and you still do. This doesn't apply if either unit is an ADU or junior ADU (§1947.12(d)(6)).
4. Is it deed-restricted affordable housing?
Units restricted by a recorded document or government agreement as affordable for very low, low or moderate income households, or subsidized under such an agreement, are exempt (§1947.12(d)(1)).
5. Is it a school-owned dormitory?
Dorms owned and operated by a college or a K–12 school are exempt (§1947.12(d)(2)).
6. Does a stricter local rent-control law already cover it?
If a local ordinance limits annual increases to less than the state cap, the local law governs instead (§1947.12(d)(3)). If your city's ordinance exempts the unit (many exempt buildings built after a certain year), the state cap may still apply.
7. Was the property fully re-rented?
This isn't an exemption, but it matters: once all prior tenants have left, you can set the new tenancy's starting rent freely. The cap applies to increases after that.
A common mistake: the LLC trap
Many owners move a rental house into an LLC for liability reasons. If any member of that LLC is a corporation, the single-family exemption is lost. Check your operating agreement, and talk to your attorney before changing title.
Remember just cause
The same exemption notice covers the just-cause eviction rules in Civil Code §1946.2. If the notice is missing, both rent-cap and just-cause rules apply.
The Landlord Kit includes this checklist as a per-unit worksheet, with a place to record when and how the exemption notice was delivered.