If you own an apartment building on the Westside of Los Angeles, rent control is part of your operating reality. The LA Rent Stabilization Ordinance (RSO) governs how much you can raise rents, when and how you can terminate tenancies, and what you owe tenants if you do. It also has a direct impact on what your building is worth and how buyers evaluate it.
This guide covers the RSO, the Just Cause Ordinance, vacancy decontrol, capital improvement pass throughs, the Ellis Act, AB 1482, and how all of it affects building owners in Brentwood, West LA, Mar Vista, Palms, and Westwood. Every neighborhood in the City of Los Angeles falls under the same RSO rules (Santa Monica has its own separate system, which we cover in our Santa Monica Rent Control Guide).
We wrote this from the owner and investor perspective because that is who we work with every day. If you are thinking about selling, buying, or just trying to understand how the RSO affects your bottom line, this is for you.
Overview of the LA Rent Stabilization Ordinance
The City of Los Angeles adopted its Rent Stabilization Ordinance in 1979, making it one of the largest rent control systems in the country. The ordinance is administered by the Los Angeles Housing Department (LAHD, formerly HCIDLA) and covers approximately 650,000 rental units across the city.
Which Properties Are Covered
The RSO applies to most residential rental properties with two or more units that received a certificate of occupancy on or before October 1, 1978. This is the key date. If your building was completed and received its C of O by that date, it is almost certainly covered.
In practice, virtually every older apartment building in Brentwood, West LA, Mar Vista, Palms, and Westwood falls under the RSO. These neighborhoods were largely built out by the 1970s, so the vast majority of multifamily housing stock predates the 1978 cutoff.
Exempt Properties
- Buildings with a certificate of occupancy after October 1, 1978
- Single family homes (exempt under Costa Hawkins)
- Condominiums (exempt under Costa Hawkins, with some exceptions for rented units)
- Government subsidized housing where rents are set by a regulatory agreement
- Certain luxury accommodations and hotel units
- Buildings owned by government agencies
Note that the exemption for condos and single family homes comes from the state Costa Hawkins Act, not the local ordinance. If Costa Hawkins were ever repealed or amended, those exemptions could change. We cover Costa Hawkins in more detail in the vacancy decontrol section below.
Allowable Rent Increases
Each year, LAHD sets the maximum allowable rent increase for RSO units based on the percentage change in the Consumer Price Index (CPI) for the Los Angeles area. The increase applies to units where the same tenant is in place. You cannot bank increases from prior years that you did not take.
Current Increase: 4% (as of early 2026)
For the period beginning July 1, 2025, the annual allowable increase is 4%. Historically, the increase has ranged from 3% to 8%, though there were temporary freezes and reduced caps during the COVID period (2020 through 2023). The annual increase percentage is typically announced by LAHD in the spring and takes effect on July 1.
To implement the increase, you must serve a written 30 day notice to the tenant (for increases under 10% of the current rent). The increase can only be applied once every 12 months, measured from the date of the last increase.
Additional Surcharges
Beyond the annual general adjustment, there are a few other ways the RSO allows rent increases:
- Capital improvement surcharges: Approved by LAHD after an application process (covered in detail below)
- Primary renovation surcharges: For substantial rehabilitation of individual units, also requiring LAHD approval
- SCEP fee pass through: A portion of the annual registration fee can be passed to tenants
- Just and reasonable return petitions: If the general adjustment does not provide a fair return, owners can petition LAHD for an additional increase
One thing to keep in mind: the annual increase only applies to tenants in place. When a unit turns over, you reset the rent to market under vacancy decontrol. That is where the real income growth happens for most RSO building owners.
The Just Cause Ordinance
Under the LA RSO, you cannot terminate a tenancy for just any reason. The Just Cause Ordinance requires landlords to have a specific, enumerated reason to evict a tenant. This is one of the most significant aspects of rent control from an operations standpoint.
At Fault Just Causes
These are reasons related to the tenant's behavior or actions:
- Nonpayment of rent
- Violation of a material term of the lease after written notice to cure
- Causing or permitting a nuisance on the premises
- Using the unit for an illegal purpose
- Failure to sign a new lease with substantially the same terms as the expiring lease
- Refusal to provide the landlord reasonable access to the unit for repairs or inspections
- The tenant who signed the lease has permanently vacated and unauthorized occupants remain
- The tenant is subletting in violation of the lease
No Fault Just Causes
These are reasons not related to any fault of the tenant. No fault evictions require relocation assistance:
- Owner or relative move in (the owner or an immediate family member intends to occupy the unit as a primary residence)
- Withdrawal from the rental market under the Ellis Act
- Compliance with a government order that requires the tenant to vacate (such as a demolition order)
- Major capital improvement or rehabilitation that requires the unit to be temporarily vacated
- Conversion to affordable housing under certain programs
Relocation Assistance
When you pursue a no fault eviction, you are required to pay relocation assistance to the displaced tenant. As of early 2026, the standard relocation payment is approximately $9,050 for most tenants, with an additional payment of approximately $4,500 for qualifying tenants (elderly, disabled, tenants with minor children, or tenants who have lived in the unit for more than three years). This means a qualifying tenant could receive approximately $13,550 or more.
For Ellis Act withdrawals, relocation payments can be significantly higher, reaching approximately $22,600 for qualifying tenants. These amounts are adjusted annually. Always verify current amounts with LAHD before initiating any no fault eviction.
How LA Just Cause Differs from Santa Monica
While both cities require just cause for eviction, the specifics differ. Santa Monica's eviction protections are generally considered stricter, with a narrower list of permissible reasons and different procedural requirements. Relocation payment amounts are different between the two cities, and Santa Monica requires certain eviction actions to go through the Rent Control Board rather than directly through the courts. If you own buildings in both jurisdictions, make sure you are working with an attorney who understands both systems.
Registration Requirements
Every RSO property in the City of Los Angeles must be registered with LAHD. This is not optional. Registration is tied to the city's Systematic Code Enforcement Program (SCEP), which funds inspections of rental housing.
Annual Fees
As of early 2026, the annual RSO registration fee is approximately $43.32 per unit. This fee covers both the RSO registration and the SCEP inspection program. Owners can pass through a portion of this fee to tenants (approximately 50%, or about $21.66 per unit per year). The fee is billed annually by LAHD, and failure to pay results in late fees and penalties.
Penalties for Non Compliance
If you do not register your RSO property or fail to pay the annual fees, several things can happen. LAHD can assess penalties and late fees. More importantly, you may be unable to pursue legal actions against tenants (such as evictions) until your registration is current. During due diligence on a sale, buyers and their attorneys will check your LAHD registration status. Outstanding fees or compliance issues can delay or complicate a transaction.
The registration system also creates a public record of your building's units, rents, and any complaints or enforcement actions. Keeping your registration current and your building in compliance is basic good practice, especially if you anticipate selling in the next few years.
Vacancy Decontrol and Costa Hawkins
Vacancy decontrol is the single most important concept for RSO building owners to understand. It is the mechanism that allows you to bring rents to market over time, and it is the primary driver of income growth in a rent controlled building.
How It Works
Under the Costa Hawkins Rental Housing Act (a California state law passed in 1995), when a tenant voluntarily vacates an RSO unit, the landlord has the right to set the rent at any amount for the next tenant. There is no cap and no approval required. You simply re rent the unit at whatever the market will bear.
Once the new tenant moves in, their rent becomes the new base rent, and annual RSO increases are calculated from that new number going forward. This is why turnover is such a critical metric for RSO building owners and buyers. A building with high turnover will reach market rents faster. A building with long term tenants paying well below market may have lower current income but significant upside.
Re Control Upon New Tenancy
An important distinction: vacancy decontrol lets you set the initial rent freely, but once a new tenant occupies the unit, rent control applies again. The new tenant's rent is subject to the same annual increase caps as any other RSO tenant. Decontrol only applies between tenancies, not during an ongoing tenancy.
Costa Hawkins and the Political Landscape
Costa Hawkins has faced multiple repeal attempts. Proposition 10 in 2018 and Proposition 21 in 2020 both sought to weaken or eliminate vacancy decontrol, and both failed at the ballot. As of early 2026, Costa Hawkins remains intact and vacancy decontrol is still the law. However, owners should be aware that this is an ongoing political issue, and any future changes to Costa Hawkins could significantly affect RSO building values and operations.
Capital Improvement Pass Throughs
When you invest money into your RSO building for major improvements, LAHD allows you to pass a portion of that cost through to your tenants as a monthly surcharge. This is separate from the annual rent increase and requires an application to the Rent Adjustment Commission.
How to Apply
The process starts with filing a capital improvement application with LAHD. You will need to provide documentation of the work performed, including contractor invoices, permits, and proof of payment. The work must be completed before you file. LAHD reviews the application and may schedule a hearing. If approved, the pass through is calculated based on the total cost of the improvement, amortized over the useful life of the improvement.
Amortization and Limits
Eligible improvements are amortized over different periods depending on their type. Structural work like seismic retrofitting or roofing might be amortized over 15 years, while less permanent improvements might be amortized over 5 to 7 years. The monthly surcharge per unit is calculated by dividing the total cost by the number of units and then by the number of months in the amortization period.
There are limits on how much can be passed through. Generally, the surcharge cannot exceed a certain percentage of the tenant's current rent (often around 5% to 10% of the monthly rent). If the cost exceeds the cap, the excess cannot be passed through. Once the amortization period ends, the surcharge is removed.
Common Eligible Improvements
- Roof replacement
- Plumbing and sewer line replacement
- Electrical system upgrades
- Seismic retrofitting (soft story and other)
- Common area renovations (hallways, landscaping, laundry rooms)
- Security systems and lighting
- Window replacement
- Elevator modernization
Capital improvements are different from routine maintenance and repairs. Painting, fixing a leaky faucet, or replacing a broken appliance are considered maintenance and are not eligible for pass throughs. The improvement must add value or extend the useful life of the building. Consult with your attorney before filing a capital improvement application.
How the RSO Affects Property Value
Apartment buildings are valued based on their income. The RSO constrains that income by limiting what you can charge existing tenants. This means the rent roll is the most critical document in any RSO building valuation.
Impact on Net Operating Income
A building with ten units renting at $1,500 per month when market rent is $2,500 has dramatically lower NOI than if those same units were at market. That gap directly reduces the building's value under the income approach. However, it also creates upside. Buyers look at both the current income (what the building produces today) and the projected income (what it will produce as units turn over to market rent).
Cap Rates by Neighborhood (as of early 2026)
Cap rates for RSO buildings on the Westside vary by location, condition, and rent roll. Here is what we are seeing in the market:
- Brentwood: 5.0% to 5.5% for stabilized buildings. Higher end of the range for buildings with significant deferred maintenance or heavy rent control.
- West LA: 5.5% to 5.75%. The range reflects the variety of building stock, from newer 1970s construction to 1950s era buildings.
- Mar Vista: 5.75% to 6.0%+. Higher cap rates reflect lower price per unit, but strong rental demand from younger professionals.
- Palms: 5.75% to 6.0%+. Among the best cash on cash returns on the Westside. High density neighborhood with strong tenant demand.
- Westwood: 5.0% to 5.5%. Proximity to UCLA drives consistent demand. Tenant turnover is relatively higher due to the student and young professional population.
How Buyers Evaluate RSO Buildings
Sophisticated buyers of RSO buildings do not just look at the current cap rate. They build a pro forma that projects income over 5 to 10 years based on assumed turnover rates. If a building has 12 units with an average rent of $1,400 and market rent is $2,400, a buyer might assume two units turn over per year and model the income trajectory from there. The higher the delta between current rents and market, the more a value add buyer will pay for the building, even though current income is lower.
This is why two identical buildings on the same street can have very different values. It comes down to the rent roll and the upside embedded in it.
Selling an RSO Building
Selling a rent controlled apartment building is different from selling a market rate property. The due diligence is more detailed, the buyer pool is more specialized, and the rent roll drives the entire pricing conversation.
What Buyers Look For
- Rent roll analysis: Current rents vs market rents for each unit. This is the first thing every buyer looks at.
- Tenant tenure: How long each tenant has been in place. Longer tenure often means lower rents but also more stability and fewer turnovers in the near term.
- LAHD compliance: Is the building properly registered? Are there any outstanding complaints, violations, or pending actions? Buyers will check this.
- Estoppel certificates: These are signed statements from each tenant confirming their rent, lease terms, and any agreements with the landlord. Buyers request these during due diligence to verify the rent roll.
- Operating expenses: Actual trailing 12 month expenses, not estimated. Buyers want to see real numbers for property taxes, insurance, utilities, maintenance, and management.
- Physical condition: Roof age, plumbing condition, electrical panel type, seismic status, and any deferred maintenance. A building with a long list of needed repairs will trade at a discount.
- Capital improvement history: What has been done to the building and when. This tells the buyer what expenditures they can expect in the near future.
Buyer Assumptions
When a buyer underwrites an RSO building, they are making assumptions about future turnover, market rent growth, expense growth, and their cost of capital. A buyer using all cash will underwrite differently than a buyer using 60% leverage. The interest rate environment directly affects buyer pricing because it changes the cost of debt and therefore the returns.
If you are thinking about selling your RSO building, getting a current Broker Opinion of Value is the first step. We can show you exactly where your building falls in the market based on comparable sales, your specific rent roll, and current buyer demand. There is no cost and no obligation. Request a free BOV here.
The Ellis Act in Los Angeles
The Ellis Act is a state law that gives property owners the unconditional right to go out of the rental housing business. In practice, it means you can withdraw all units in a building from the rental market. You cannot selectively Ellis individual units. It is all or nothing.
The Process
- 1.File a notice of intent to withdraw units with LAHD
- 2.Serve each tenant with a 120 day notice to vacate (one year for elderly tenants 62 and older and disabled tenants who have lived in the unit for at least one year)
- 3.Pay relocation assistance to each tenant
- 4.Record a memorandum of withdrawal with the county
- 5.Remove all units from the rental market
Relocation Payments
Ellis Act relocation payments in LA are separate from and often higher than standard no fault relocation payments. As of early 2026, base relocation payments for Ellis Act withdrawals are approximately $9,050 per unit, with additional payments for qualifying tenants (elderly, disabled, families with children) bringing the total to approximately $22,600 per unit. For a 12 unit building with several qualifying tenants, the total relocation cost can exceed $200,000.
Re Rental Restrictions
If you return units to the rental market within five years of withdrawal, you must offer them to the displaced tenants first, at their former rent (adjusted for any general increases they would have received). Between five and ten years, there are reduced restrictions. After ten years, there are no re rental restrictions.
How LA Differs from Santa Monica
Santa Monica's Ellis Act process has different relocation payment amounts, different notice periods, and is administered by the Rent Control Board rather than LAHD. Santa Monica relocation payments for Ellis Act withdrawals tend to be higher than LA's, and the Rent Control Board imposes additional procedural requirements. The re rental restrictions are similar in concept but differ in the specific timelines and conditions. If you own buildings in both cities and are considering an Ellis Act withdrawal, work with an attorney experienced in both jurisdictions.
AB 1482: California Tenant Protection Act
AB 1482, signed into law in 2019, is a statewide rent cap and just cause eviction law that applies to most residential rental properties in California. It caps annual rent increases at 5% plus the local CPI or 10%, whichever is lower, and requires just cause for eviction after a tenant has been in place for 12 months.
How It Interacts with the LA RSO
AB 1482 explicitly exempts units that are already covered by a local rent control ordinance with more restrictive rent increase caps. Since the LA RSO typically allows increases of 3% to 8% (4% as of early 2026), and AB 1482 allows up to 10%, the RSO is more restrictive in most years. This means RSO units are governed by the local ordinance, not AB 1482.
When AB 1482 Applies Instead
AB 1482 becomes relevant for properties that are not covered by the RSO. This includes:
- Buildings constructed after October 1, 1978, and at least 15 years old (the 15 year threshold is on a rolling basis, so in 2026 this covers buildings completed before 2011)
- Single family homes owned by a corporation (not an individual or trust), if the tenant has been in place for over 12 months
- Certain duplexes where the owner does not occupy one of the units
For owners in Brentwood, West LA, Mar Vista, Palms, and Westwood, this matters if you own a newer building (built between 1979 and 2011) that is not subject to the RSO but is subject to AB 1482. The rent cap and just cause requirements are less restrictive than the RSO, but they still limit your operations compared to a fully exempt building.
AB 1482 is currently set to sunset on January 1, 2030. Whether it will be extended or made permanent is an open question in Sacramento. Consult with your attorney to understand which law applies to your specific property.
LA RSO vs Santa Monica Rent Control: Key Differences
Many Westside multifamily investors own buildings in both LA and Santa Monica. While both cities have rent control, the systems are separate and the differences matter. Here is a side by side look at the most important distinctions:
Administering Agency
Los Angeles
Los Angeles Housing Department (LAHD)
Santa Monica
Santa Monica Rent Control Board
Coverage Cutoff Date
Los Angeles
Certificate of occupancy on or before October 1, 1978
Santa Monica
Certificate of occupancy before April 10, 1979
Annual Allowable Increase (as of early 2026)
Los Angeles
4%
Santa Monica
2.3%
Vacancy Decontrol
Los Angeles
Yes, under Costa Hawkins. Full reset to market between tenancies.
Santa Monica
Yes, under Costa Hawkins. Full reset to market between tenancies.
Registration Fees (approximate per unit per year)
Los Angeles
$43.32 (partially passable to tenants)
Santa Monica
Varies, split between landlord and tenant
Relocation Assistance (no fault, standard)
Los Angeles
Approximately $9,050 to $13,550 per unit
Santa Monica
Higher amounts, set by Rent Control Board annually
Ellis Act Administration
Los Angeles
Through LAHD and courts
Santa Monica
Through Rent Control Board with additional procedural requirements
Eviction Enforcement
Los Angeles
Through LA Superior Court
Santa Monica
Through courts with Rent Control Board oversight
For a complete breakdown of the Santa Monica system, read our Santa Monica Rent Control Guide.
Frequently Asked Questions
LA Rent Control FAQ
Which properties in Los Angeles are covered by the RSO?
The LA Rent Stabilization Ordinance covers most residential rental properties with two or more units that received a certificate of occupancy on or before October 1, 1978. This includes apartment buildings, duplexes, and some condominiums that are rented out. Exempt properties include single family homes, condos (with certain exceptions), buildings constructed after October 1, 1978, and certain government subsidized housing. If your building is in Brentwood, West LA, Mar Vista, Palms, or Westwood and was built before late 1978, it is almost certainly subject to the RSO.
What is the current allowable rent increase under LA RSO?
As of early 2026, the allowable annual rent increase for RSO units in Los Angeles is 4%. This percentage is set each year by the Los Angeles Housing Department (LAHD) based on the Consumer Price Index (CPI). The increase applies to units occupied by the same tenant and requires a minimum 30 day written notice for increases under 10%. Historically, LA's annual adjustment has ranged from 3% to 8%, though it was temporarily capped at lower levels during the COVID era. Always verify the current year's percentage with LAHD before serving any rent increase notice.
Can I raise rent to market rate when a tenant moves out?
Yes. Under the Costa Hawkins Rental Housing Act, when a tenant voluntarily vacates an RSO unit, the landlord can reset the rent to any amount for the next tenant. This is called vacancy decontrol. Once the new tenant moves in, their rent becomes the new base rent and is subject to annual RSO increases going forward. Vacancy decontrol is the primary way owners of RSO buildings bring rents up to market over time. This right applies only when the tenant voluntarily leaves or is lawfully evicted for cause. It does not apply to certain situations involving family members who assumed the tenancy.
What are the relocation assistance amounts for no fault evictions in LA?
As of early 2026, relocation assistance for no fault evictions under the LA RSO ranges from approximately $9,050 to $22,600 per unit, depending on the tenant's circumstances. Elderly tenants (62 and older), disabled tenants, and tenants with minor children receive higher payments. These amounts are adjusted annually. For Ellis Act withdrawals, payments are higher and include additional relocation fees. Always verify the current amounts with LAHD, as they change each year. Relocation assistance must be paid before the tenant vacates or within a specific timeframe set by the ordinance.
How do I register my RSO building with LAHD?
All RSO properties must be registered with the Los Angeles Housing Department. Registration is done annually, and owners pay a per unit fee that funds the Systematic Code Enforcement Program (SCEP). As of early 2026, the annual fee is approximately $43.32 per unit. LAHD sends billing notices to property owners, and the fee is payable by the owner but may be partially passed through to tenants (currently up to $43.32 per unit per year, with the tenant responsible for approximately 50%). Failure to register or pay fees can result in penalties, late fees, and complications if you need to pursue any legal action against a tenant.
What is the difference between LA RSO and Santa Monica rent control?
The two systems are separate and administered by different agencies. LA RSO is run by LAHD and covers buildings built before October 1, 1978. Santa Monica rent control is run by the Santa Monica Rent Control Board and covers buildings with certificates of occupancy before April 10, 1979. Key differences: LA's annual allowable increase is typically higher (4% as of early 2026 vs Santa Monica's 2.3%). Santa Monica has stricter eviction protections and different relocation payment amounts. Registration systems and fees are completely separate. If you own buildings in both cities, you must comply with each system independently.
How does the RSO affect the value of my apartment building?
The RSO directly affects property value by constraining the income your building can generate. Buildings with long term tenants paying well below market rents will have lower net operating income (NOI) and therefore lower values under the income approach. However, the gap between current rents and market rents also represents upside that buyers will pay for. Sophisticated buyers evaluate RSO buildings based on both current income and the projected income as units turn over to market rent. In neighborhoods like Brentwood, West LA, and Mar Vista, cap rates for RSO buildings as of early 2026 typically range from 5.0% to 6.0%+ depending on the rent roll, building condition, and upside potential.
Can I pass through capital improvement costs to my tenants?
Yes, but the process requires LAHD approval. Owners can apply for a capital improvement surcharge through LAHD's Rent Adjustment Commission. If approved, the cost is amortized over the useful life of the improvement (typically 5 to 15 years depending on the type) and passed through as a monthly surcharge on top of the base rent. The surcharge generally cannot exceed a certain percentage of the tenant's rent. Common eligible improvements include new roofing, plumbing, electrical upgrades, seismic retrofitting, and common area renovations. The application process involves documentation of costs, contractor bids, and sometimes a hearing. Consult with your attorney before filing.
What happens to RSO protections if AB 1482 also applies?
AB 1482, the California Tenant Protection Act, provides statewide rent caps (5% plus local CPI, up to 10%) and just cause eviction protections. However, AB 1482 explicitly exempts units already covered by a local ordinance that is more restrictive. Since the LA RSO imposes lower rent increase caps and stricter eviction rules than AB 1482, most RSO units are governed by the local law. AB 1482 matters for properties not covered by the RSO, such as buildings constructed after 1978 but before 2005 (AB 1482 exempts buildings less than 15 years old on a rolling basis). Owners of newer buildings in Brentwood, West LA, and surrounding areas should understand which law applies to their specific property.
What is the Ellis Act and how does it work in Los Angeles?
The Ellis Act is a California state law that allows property owners to withdraw all rental units in a building from the rental market. In Los Angeles, the process requires filing a notice of intent with LAHD, providing tenants with at least 120 days notice (one year for elderly and disabled tenants), and paying relocation assistance. As of early 2026, Ellis Act relocation payments in LA can range from approximately $9,050 to $22,600 per unit, with higher amounts for qualifying tenants. If units are returned to the rental market within five years of withdrawal, they must be offered to the original tenants at their former rent. After ten years, there are no re rental restrictions. The Ellis Act process in LA differs from Santa Monica in payment amounts, timelines, and administrative procedures.
Disclaimer
This guide is for general informational purposes only and does not constitute legal, tax, or financial advice. Rent control regulations change frequently, and the specific figures cited in this guide (allowable increases, relocation payments, fees) are approximate and based on information available as of early 2026. Always verify current rules and amounts with the Los Angeles Housing Department (LAHD) and consult with your CPA, tax advisor, and/or attorney for guidance specific to your situation.