Question on the rent cap for a family owned single family rental with mortgage

California, California
Legal & Legislation
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Question on the rent cap for a family owned single family rental with mortgage

Ana Vhan
Member since 2018 · 52 posts · 16 votes

If I understand correctly, since our Santa Clara, CA rental (primary converted to rental) is owned by me and my husband and not by an institution, we are exempt from the AB 1482 rent cap rule. Problem is, we weren't aware of this change and we used an old CA lease template to get a fixed term 2 years lease signed(newer template has this covered). The lease is signed in June 2026 for 2 years. We learned after that fact that this rental cap doesn't apply to us and that the rents in the area have gone significantly up and we are atleast $1200-$1500 behind per month in rent compared to the current market rent.

We still have a big mortage on this house which went up recently by quite a big amount due to 7 year ARM. It would be great if we can get better rent atleast when the 2 years lease is over.

Question is - Can we send an amendment(see below) to the current signed lease saying the AB 1482 doesn't apply to us and get it signed by the tenants so we can increase the rent when current lease is due for renewal. It seems only fair when your mortage goes up, cost goes up and the market allows higher rent.

“This addendum is being provided solely to update the rental agreement to reflect applicable California statutory disclosures. It does not change the rent, lease term, security deposit, maintenance obligations, or any other existing terms of the current lease. The current lease remains in full force and effect.”

Appreciate your guidance.

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  • Leo SteinBusiness Member
    Property Manager · Orange County, CA · Member since 2025 · 210 posts · 43 votes
    3w

    I manage rentals in Orange County and see this one a lot. The single-family exemption from AB 1482 generally only works if the required written exemption notice was given, and for a tenancy that started after mid-2020 the statute expects it in the lease itself. Whether a later addendum fixes a lease signed without it is a real gray area, so I wouldn't count on it. Two things help in practice: your fixed rent for the two-year term is set either way, and if you do send the addendum, keep it accurate and get the tenant's signature, not just a delivery. Before renewal, confirm with a California landlord-tenant attorney whether you're exempt, and check Santa Clara's own rules. If you end up covered, the cap is 5% plus CPI, never more than 10% a year.

    [email protected]949-391-1019
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  • Diana KhanPro Member
    Attorney · 10451 Mill Run Cir #755 Owings Mills, MD 21117 · Member since 2024 · 644 posts · 229 votes
    2w
    Quote from @Ana Vhan:

    If I understand correctly, since our Santa Clara, CA rental (primary converted to rental) is owned by me and my husband and not by an institution, we are exempt from the AB 1482 rent cap rule. Problem is, we weren't aware of this change and we used an old CA lease template to get a fixed term 2 years lease signed(newer template has this covered). The lease is signed in June 2026 for 2 years. We learned after that fact that this rental cap doesn't apply to us and that the rents in the area have gone significantly up and we are atleast $1200-$1500 behind per month in rent compared to the current market rent.

    We still have a big mortage on this house which went up recently by quite a big amount due to 7 year ARM. It would be great if we can get better rent atleast when the 2 years lease is over.

    Question is - Can we send an amendment(see below) to the current signed lease saying the AB 1482 doesn't apply to us and get it signed by the tenants so we can increase the rent when current lease is due for renewal. It seems only fair when your mortage goes up, cost goes up and the market allows higher rent.

    “This addendum is being provided solely to update the rental agreement to reflect applicable California statutory disclosures. It does not change the rent, lease term, security deposit, maintenance obligations, or any other existing terms of the current lease. The current lease remains in full force and effect.”

    Appreciate your guidance.

    @Ana Vhan, I can understand why you're looking into this, especially with your mortgage payments going up. I wouldn't assume that signing an addendum now will automatically allow you to increase the rent beyond the AB 1482 limits when the lease ends. The exemption has specific notice requirements, and the fact that the original lease didn't include them is something I'd want a California landlord-tenant attorney to review before making any changes.

    I'm a real estate attorney, broker, and investor based in Maryland, and I work with landlords on lease agreements, rent-related concerns, and other legal matters. One thing I've learned from working with property owners is that even a small missing provision in a lease can become important later. It's always worth checking whether an amendment actually addresses the legal requirement rather than just updating the paperwork.

    I appreciate you sharing this, @Ana Vhan. It's a good reminder of how easily something can be overlooked when using an older lease template. These kinds of lease questions come up in my work as well, so I'd be happy to stay connected!

    [email protected]240-266-0291
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