Month-to-month lease and rent increases (Orange County CA)

General Landlording & Rental Properties

Month-to-month lease and rent increases (Orange County CA)

Laguna Niguel, CA · Member since 2017 · 125 posts · 7 votes

Hi all,

I'm currently in an apartment complex in OC and received the documentation for lease renewal end of July. They outline the terms for 12mo as well as month-to-month and are saying if we don't renew we will just be put on a month-to-month lease, in which case the rent will be the same... However, what they don't mention is that month-to-month is subject to rent increases (I confirmed with the leasing office after receiving the letter). I was told that they can increase rents by a max of 5.69% here...

Can someone clarify what this actually means? My specific questions are:

1) how often can landlords increase rent on a month-to-month lease (can they, in theory, increase the rent month over month as long as they're giving notice each time)? Is there a limit or cap?

and

2) is there a max cap that landlords can increase rent by whether month-over-month or over the course of the year?

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Peter MckernanBusiness Member
Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
5y
Hey @Jeremy Lee
As the bill was passed beginning of 2020, the state has a cap of 5% including a 2.5% CPI, which is a total of 10% total of the current rent within a lease year.
The landlord/owner can only increase the rent 2 times over the course of a 12 month period even if you sign a new lease.
Yes; you can raise rent after the lease expires. Holdover tenants as you are, will be considered to have a month-to-month contract with the landlord. This means the landlord can increase rent by either 5% plus the local CPI or by 10%. The landlord must give the tenant 60 days notice and can only increase rent twice a year.
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Jeremy Lee
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Laguna Niguel, CA · Member since 2017 · 125 posts · 7 votes
5y
Originally posted by @Peter Mckernan:
Hey @Jeremy Lee
As the bill was passed beginning of 2020, the state has a cap of 5% including a 2.5% CPI, which is a total of 10% total of the current rent within a lease year.
The landlord/owner can only increase the rent 2 times over the course of a 12 month period even if you sign a new lease.
Yes; you can raise rent after the lease expires. Holdover tenants as you are, will be considered to have a month-to-month contract with the landlord. This means the landlord can increase rent by either 5% plus the local CPI or by 10%. The landlord must give the tenant 60 days notice and can only increase rent twice a year.

Thanks! So it sounds like if we go month-to-month after our lease is up in July, the landlord can raise rent by up to 5%+CPI OR 10% (how do they determine which though?) for that given year and they can only actually increase twice in that year (and provided 60 days notice)? For example: if the month-to-month term rate is $2000 beginning in July 2021, they could increase to $2100 say in November 2021 and then increase to $2200 in March 2022?
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Peter MckernanBusiness Member
Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
5y
Hey @Jeremy Lee
Here is a good link for you to review to calculate the CPI for your area and it explains everything.
https://www.sapling.com/624118...
And yes on your example of the month-to-mohth, 60 day notice, and they can increase 2 times a year if you are in a year lease as well.
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Jeremy Lee
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Laguna Niguel, CA · Member since 2017 · 125 posts · 7 votes
5y
Originally posted by @Peter Mckernan:
Hey @Jeremy Lee
Here is a good link for you to review to calculate the CPI for your area and it explains everything.
https://www.sapling.com/624118...
And yes on your example of the month-to-mohth, 60 day notice, and they can increase 2 times a year if you are in a year lease as well.

Ah thank you. I noticed when asking the office it was a figure of 5.69% so I was curious and factoring in CPI that makes more sense now.
So just to clarify: the increase cap (both the 5%+CPI or 10% and twice a year) would apply regardless of being on a month-to-month lease OR a 12 month lease? I thought I had read somewhere that if you're month-to-month/holdover, the landlord can raise rent with no cap (at least the # of times) provided they give proper notice...unless that was the law *prior* to the bill being passed last year?

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Peter MckernanBusiness Member
Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
5y
@Jeremy Lee the law for the rental cap still applies to owners of a property month-to-month, or year leases. That would put the landlords in the state in a great position and would always want to do month-to-month. Think about being a landlord and if the month-to-month lease was able to change every 60 days then $2000 rent would be changed to $2,600 by the end of a calendar year if we just used the 5% cap )30% increase in this case within 1 year) with no CPI. That would be amazing for a landlord and they would all want to go to month-to-month while risking that current tenant leaving due to the upside of the possible rent.
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Al Lee
Member since 2019 · 22 posts · 10 votes
5y
If you have an annual lease that states your rent is $xxxx for one year, then the landlord should not be able to increase the rent for at least one year, due to the lease terms.
However if you move to M2M, the landlord can increase your rent again with a 60 day notice as long as they are within cap specified.
Does anyone know how long this bill is in effect for?
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