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

California, California
General Landlording & Rental Properties
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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 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 where due to 7 year ARM our mortgage went up recently by quite a big amount. 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 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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  • Rachid AbadliBusiness Member
    Investor · Sacramento, CA · Member since 2024 · 129 posts · 37 votes
    1mo

    Ana — a few things to untangle here.

    First, the exemption question. AB 1482 does exempt certain single-family homes, but the exemption isn't automatic just because you're an individual owner. You need to meet ALL of these:

    1. Not a corporation, LLC, or REIT (you're good as individuals).

    2. You provided the tenant with a written notice of the exemption at or before the lease was signed — using the specific statutory language from Civil Code §1946.2(e)(8).

    3. The property isn't part of a subdivision where the same person sold 2+ homes within 24 months.

    If you didn't provide that written notice at lease signing, the exemption doesn't apply — even if you'd otherwise qualify. That's the part most landlords miss.

    Second, the lease itself. You signed a 2-year fixed term at an agreed rent. That rent is locked until the lease expires — no amendment changes that. The good news: when the lease term ends, you can adjust to market rate (subject to whatever notice requirements apply — 90 days for increases over 10%).

    Third, the amendment idea. Sending an addendum now to "acknowledge" the exemption is risky. If you never provided the statutory notice at signing, retroactively adding it could look like you're trying to create a paper trail after the fact. A tenant's attorney would have a field day with that.

    My advice: ride out the current lease term. Before the renewal, consult a landlord-tenant attorney to make sure your exemption notice is bulletproof. When you offer new terms at renewal, include the proper AB 1482 exemption notice, all required disclosures, and your new rent.

    The $1,200–$1,500/month gap hurts — I get it. But trying to shortcut the process mid-lease creates more legal exposure than it solves.

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