If you're planning to sell your Santa Monica apartment building this summer, waiting for September's rent adjustment can feel like an easy way to improve the price. The extra income is worth considering. Whether it's worth postponing the sale depends on how much your building can actually collect and what continued ownership costs you.

On June 11, 2026, Santa Monica's Rent Control Board adopted a 2.6% annual general adjustment, capped at $70 per month, effective September 1 for eligible controlled units.[1] The decision gives owners a specific increase to consider before a summer or fall sale. It doesn't mean the building's income, or its value, will rise by 2.6%.

I wouldn't delay a listing solely to put the higher rent on a new rent roll. A lawful increase with a clear start date can support the pricing discussion before it takes effect. Waiting is more useful when it resolves a problem that would otherwise leave a buyer uncertain about the income.

How much of the increase reaches your bottom line?

Buyers are buying income after operating expenses. Additional rent can help support value, but higher insurance, maintenance or other operating costs can absorb some of that gain. The adjustment also doesn't take care of deferred repairs that a buyer will have to fund. Its contribution to the asking price has to make sense alongside the building's condition and comparable sales.

Even the change in gross rent will vary by property. The adjustment applies to each eligible unit's Maximum Allowable Rent, or MAR, which is the controlled rent ceiling before permitted registration fee charges or property tax surcharges. The MAR can be higher than the rent you're charging, and a lawful charge isn't necessarily the amount a tenant has paid.[2][3]

The resolution increases an eligible unit's MAR by 2.6% or $70 per month, whichever is lower.[1] The official 2026 notice applies the $70 amount to existing MARs of $2,674 and above, with the new MAR rounded to whole dollars, rounding up at 50 cents.[2] That cap limits the percentage benefit for higher MARs. A unit must qualify before its adjustment can add income. Applying 2.6% to the entire building's rent ignores those limits and can overstate what this decision alone may add.

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Monthly cap

Economic effect: The MAR increase is limited to $70 per eligible unit.

Unit eligibility

Economic effect: An adjustment cannot add income while the unit is ineligible.

Rent charged and collected

Economic effect: A higher MAR alone does not produce additional cash.

Operating expenses

Economic effect: Higher costs can absorb some of the rental gain.

For an owner charging below the MAR, the difference can look like additional sale upside. But the gap isn't automatically collectible all at once. Increases toward an existing MAR are subject to separate limits under Regulation 3035(f); they aren't simply part of this year's general adjustment.[3] Have a Santa Monica rent control attorney review a proposed increase involving that gap and the required notice before relying on it as available income.

When September income is still uncertain

The September adjustment is future income as of this July briefing. Buyers can consider it without treating it as money the building already earns. A properly noticed increase for an eligible unit gives them a firmer basis than an increase that still depends on correcting a registration problem. After an increase takes effect, actual collections show whether the higher charge is translating into cash flow.

Eligibility is specific to the unit and the owner. The city's 2026 notice excludes tenancies that began September 1, 2025 or later, and Regulation 3035 also excludes certain recently established or Board-adjusted rents.[2][3] Proper registration, payment of outstanding fees and penalties, delivery of the required tenant information form, and compliance with the Rent Control Law are required. Uncorrected cited health, safety or housing violations can bar the adjustment. Violations confined to particular units affect those units; common area violations can have a broader effect.[3]

The 2026 registration payment deadline is August 3.[4][5] Late payment blocks the general adjustment until fees and penalties are paid. It generally also forfeits the separate registration fee charge to tenants for that fiscal year, subject to the regulation's exceptions.[4] Paying late can remove the payment bar to the rent adjustment without restoring that year's fee charge. Those are different effects on income.

Written notice and proper service under the applicable state requirements remain necessary, along with the certifications required by the city's rules.[2][3] September 1 is the earliest effective date for this adjustment, not a promise that every unit's rent will increase that day. A buyer shouldn't be asked to pay as though unresolved eligibility or notice issues have already been cured.

The buyer may lose income you're collecting now

For a longtime owner, the September increase can be only part of the change in the building's income after a sale. Some current receipts may not continue under the buyer.

Under Regulation 3120, property tax surcharges are barred when a parcel is reassessed because of a change of ownership occurring on or after March 1, 2018.[3] If the sale triggers that reassessment, the buyer cannot carry those existing surcharges into future income. The permitted registration fee charge is separate and follows its own payment, waiver and notice rules.[4]

That means additional rent from the general adjustment and the loss of existing tax surcharges can work in opposite directions. A price based only on the September increase can miss the income the buyer will lose. This is especially relevant when an owner has held the property long enough that those surcharges still form part of the monthly receipts. Our Santa Monica rent control and apartment sales guide explains the broader sale implications.

What would waiting accomplish for your sale?

If the adjustment is available and its timing is clear, a summer listing can give buyers a fair view of the coming income. You don't have to collect the first higher payment before discussing its value. You do have to allow for the time before it begins and any uncertainty about collection.

Waiting can make sense if the additional time will resolve a material eligibility issue or establish collections that are currently uncertain. Then the delay has a commercial purpose: it may give you a stronger income basis to defend in the sale. Simply reaching September doesn't accomplish that if the same problem remains.

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Lawful increase; timing is clear

What waiting may change: The coming income can already be discussed with buyers.

Eligibility or collections remain uncertain

What waiting may change: Resolving the issue may strengthen the income behind the price.

Continued ownership

What waiting may change: Rent received must be weighed against expenses, debt payments and necessary work.

During the wait, you still own the building. The rent you receive has to be weighed against operating expenses, debt payments and any work that can't be postponed. A hoped-for higher sale price isn't enough on its own to justify that cost or to override your reason for selling. The decision should turn on the improvement you can reasonably achieve before marketing, not the adjustment date alone.

If you're weighing a summer listing against waiting for the September adjustment, request a property valuation. We'll assess how much the increase changes your building's income and whether waiting would materially strengthen your position when we bring it to market.

This is for general informational purposes only. Consult with your CPA, tax advisor, and/or attorney for guidance specific to your situation.

Sources

[1] Santa Monica Rent Control Board Resolution 26-001. Adopted June 11, 2026; adjustment effective September 1, 2026.

[2] Santa Monica Notice of Change in Terms of Tenancy 2026. Official 2026 form; publication date not stated.

[3] Santa Monica Rent Control Regulations, Chapter 3, sections 3035 and 3120. Cited provisions effective before July 15, 2026.

[4] Santa Monica Rent Control Regulations, Chapter 11, section 11200. Cited provisions effective before July 15, 2026.

[5] Santa Monica 2026 notice instructions. Undated city explainer, retrieved September 30, 2026; corroborates the fee deadline under Regulation 11200.