California Real Estate SalespersonPractice of Real Estate and DisclosuresHard
Under the California Tenant Protection Act of 2019 (AB 1482), a landlord wants to raise the rent on a covered unit currently at $1,800 per month. The regional CPI increase is 3.5%. What is the maximum allowable new monthly rent?
- A$1,953
- B$1,890
- C$2,000
- D$1,980
Show answer & explanationAnswer & explanation
Correct answer: A. $1,953
AB 1482 caps annual rent increases at the lesser of 5% plus the local CPI, or 10% total. Here, 5% + 3.5% CPI = 8.5%. 8.5% of $1,800 = $153, so the maximum new rent is $1,800 + $153 = $1,953.
Why the other options are wrong
- B. This reflects only a 5% increase, ignoring the CPI addition.
- C. This overstates the allowable increase beyond the 8.5% cap.
- D. This reflects an incorrect 10% flat increase, exceeding the calculated cap.
AB 1482 Rent Cap Calculation
California's statewide rent cap limits annual increases to the lesser of 5% plus local CPI or 10% total, for covered rental units.
- Applies to most multifamily units older than 15 years, with exceptions
- Formula: increase = lesser of (5% + CPI) or 10%
- Some properties (single-family homes owned by individuals, new construction) may be exempt
Memory trick: Five plus CPI, but never past ten — remember when