How AB 1482 Affects Selling Your Apartment Building in California

California's Tenant Protection Act of 2019 (AB 1482) fundamentally changed the landscape for apartment building owners statewide. If your building was constructed more than 15 years ago and is not already covered by a local rent control ordinance like LA's RSO, AB 1482 likely applies to your property. Understanding how this law impacts your building's value and marketability is essential before listing for sale.

What Is AB 1482?

AB 1482, signed into law in October 2019, established two statewide protections:

1. Rent caps: Annual rent increases are limited to 5% plus local CPI, with a maximum of 10% per year
2. Just cause eviction: Tenants who have occupied a unit for 12+ months can only be evicted for specified "just cause" reasons

The law applies to most residential properties built more than 15 years ago (rolling date -- as of 2026, buildings constructed before 2011). Key exemptions include single-family homes (if the owner provides proper notice), condos, duplexes where the owner occupies one unit, and buildings already subject to stricter local rent control.

AB 1482 vs. LA RSO: Key Differences

Many LA apartment owners are confused about which law applies. Here's the distinction:

Feature	LA RSO	AB 1482 (Statewide)
Applies to	City of LA buildings with 2+ units built before Oct 1, 1978	Most CA rentals built 15+ years ago not covered by local rent control
Rent increase cap	Set annually by LAHD (4% for 2025-2026)	5% + CPI (max 10%)
Vacancy decontrol	Yes (Costa-Hawkins)	Yes (Costa-Hawkins)
Just cause eviction	12 enumerated causes	At-fault and no-fault causes
Relocation assistance	Required for certain evictions ($9,050-$22,680)	One month's rent for no-fault evictions
Registration required	Yes (annual LAHD registration)	No
Expires	No expiration	January 1, 2030 (may be extended)

Important: If your building is in the City of LA and was built before 1978, LA RSO applies and supersedes AB 1482. If your building is in the City of LA but was built between 1978 and 2011, AB 1482 applies. Buildings in unincorporated LA County or other cities without local rent control are covered by AB 1482 if they meet the age requirement.

How AB 1482 Affects Your Building's Value

Positive Effects

• Predictability: Buyers know rent increases are capped, making underwriting straightforward
• Vacancy decontrol preserved: Costa-Hawkins still allows market-rate reset upon voluntary vacancy, maintaining the upside value driver
• Less restrictive than RSO: The 5% + CPI cap is typically higher than RSO allowable increases, and relocation requirements are simpler

Negative Effects

• Limits aggressive rent growth: Owners cannot implement large catch-up increases even if rents are significantly below market
• Just cause complications: Removing problem tenants is more difficult and time-consuming than before AB 1482
• Buyer perception: Some investors from non-rent-controlled markets view any rent regulation as a negative, potentially shrinking the buyer pool
• Sunset uncertainty: AB 1482 expires January 1, 2030. Extension or modification is likely but uncertain, creating valuation ambiguity

Net Impact on Pricing

In practice, AB 1482 properties typically trade at a modest discount (0.25% to 0.50% cap rate premium) compared to exempt new-construction properties. However, buildings with significant loss-to-lease still command strong pricing because vacancy decontrol is preserved. The biggest value impact is on buildings where the owner was planning aggressive rent increases to reposition the asset.

Just Cause Eviction: What Sellers Need to Know

AB 1482's just cause provisions fall into two categories:

At-Fault Causes (no relocation required)

• Nonpayment of rent
• Material breach of lease
• Criminal activity on premises
• Refusal to allow lawful access
• Subletting without permission

No-Fault Causes (relocation assistance required)

• Owner or immediate family member move-in (limited to one unit per building)
• Withdrawal from rental market (similar to Ellis Act)
• Government order to vacate
• Substantial remodel requiring vacancy (must be pre-approved by local authority)

For no-fault evictions, the owner must provide one month's rent as relocation assistance, payable before the tenant vacates.

Selling Strategy for AB 1482 Properties

Pre-Listing Preparation

1. Verify which law applies: RSO vs. AB 1482 vs. exempt. This affects underwriting, buyer pool, and pricing
2. Document rent history: Show the history of annual increases to demonstrate consistent income growth
3. Identify below-market units: Loss-to-lease analysis is just as important for AB 1482 buildings as for RSO
4. Review lease terms: Ensure all leases comply with AB 1482 disclosure requirements (addendum required)

Pricing Considerations

• Factor in the 5% + CPI annual rent growth cap when projecting income growth
• Highlight vacancy decontrol as the primary value driver
• Compare with both RSO and non-rent-controlled comps to establish the appropriate cap rate band
• Account for the AB 1482 sunset provision -- buildings may become fully deregulated in 2030

Buyer Targeting

AB 1482 buildings attract a specific buyer profile:

• Local operators who understand California's regulatory environment
• Value-add investors focused on natural turnover upside
• Out-of-state investors who are entering the CA market for the first time and need education on the regulatory framework
• 1031 exchange buyers who accept the regulatory framework in exchange for LA's fundamentals

Frequently Asked Questions

Does AB 1482 apply to my apartment building?

AB 1482 applies to most residential rental properties in California built more than 15 years ago (before 2011 as of 2026) that are not already covered by a stricter local rent control law. Key exemptions: single-family homes with proper notice, condos, owner-occupied duplexes, and buildings under local rent control like LA's RSO.

How much can I raise rents under AB 1482?

Annual rent increases are capped at 5% plus local CPI, with a maximum of 10% per year. For 2025-2026 in the LA metro area, this typically works out to approximately 8-9%. Vacant units can be reset to market rent under Costa-Hawkins.

Can a buyer evict tenants after purchasing my AB 1482 building?

Only for just cause reasons. At-fault causes (nonpayment, breach, criminal activity) do not require relocation assistance. No-fault causes (owner move-in, substantial remodel, withdrawal from rental market) require one month's rent in relocation assistance.

How does AB 1482 affect my building's cap rate?

AB 1482 properties typically trade at a 0.25% to 0.50% cap rate premium compared to exempt new construction. However, buildings with significant loss-to-lease still command strong pricing because vacancy decontrol is preserved under Costa-Hawkins.

Will AB 1482 expire?

AB 1482 is currently set to expire January 1, 2030. The legislature may extend or modify it before then. This sunset provision creates both risk and opportunity for sellers and buyers.

What is the difference between RSO and AB 1482 for my LA building?

If your building is in the City of LA and was built before October 1, 1978: RSO applies (stricter). If built between 1978 and 2011: AB 1482 applies. If built after 2011: currently exempt from both. Buildings outside the City of LA follow AB 1482 if they meet the age requirement.

Should I sell my AB 1482 building before the 2030 sunset?

It depends on your investment goals. If AB 1482 is extended or made permanent, values of regulated buildings may adjust. If it expires, your building's value could increase as restrictions lift. Our team analyzes both scenarios when pricing AB 1482 properties.

How do Glen Scher and Filip Niculete handle AB 1482 building sales?

We've closed 455+ multifamily transactions including numerous AB 1482 properties. We verify regulatory status, build complete loss-to-lease packages, target buyers who understand California's regulatory landscape, and price properties accounting for both current regulations and the 2030 sunset scenario. Call (818) 212-2808.