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- Costa-Hawkins, Civil Code sections 1954.50 to 1954.535, lets you set a new tenancy's opening rent after most vacancies and keeps local limits off newer and separately saleable units.
- In Los Angeles, a voluntary move-out, a buyout and an eviction for unpaid rent each let you re-rent at a new price. An owner move-in, an Ellis withdrawal and a tenancy you ended by notice do not.
- A reset unit stays under the RSO, and the yearly limit starts over from the new rent.
- The act leaves eviction rules to the city, so a unit it frees on rent can still carry just-cause obligations.
What does Costa-Hawkins decide for an RSO building?
The Costa-Hawkins Rental Housing Act is the state statute every local rent law in California has to work inside, the RSO among them. Two of its sections matter to a seller. Section 1954.53 says when an owner may set a new rent at a vacancy. Section 1954.52 says which units a city may not hold to a rent limit at all.
The rent upside in an occupied RSO building runs through the first of those. A tenant who stays pays the RSO's allowable increase once a year, and under the formula in effect since February 2, 2026 that increase cannot exceed 4 percent, however far the unit sits below market. An occupied unit closes that gap only when it comes open in a way the law lets you reprice.
Which vacancies let you set a new rent?
Section 1954.53 hands the owner the opening rent on a new tenancy and then takes it back in named cases. LAHD's rent increase bulletin and its owner occupancy rules carry the same logic inside the City. Set side by side, the ways an RSO unit comes open sort like this:
| How the unit came open | Rent for the next tenant | What a buyer can count on |
|---|---|---|
| The tenant moved out on their own | You set it | The whole gap to market, on a date only the tenant picks |
| A buyout under LAMC section 151.31 | You set it, because LAHD's buyout program treats the move-out as voluntary | The gap, less the buyout payment and the cost of doing the filings right |
| Eviction for nonpayment of lawful rent | You set it | Nothing ahead of time, since no buyer can plan on a default |
| Owner or family move-in | Not decontrolled. It is the rent shown on your LAHD declaration, plus RSO increases | No reset, and the unit must be offered back to the evicted tenant if you re-rent it within two years |
| Ellis Act withdrawal | For five years, the lawful rent when the notice was filed, plus RSO adjustments | No reset for five years |
| A tenancy you ended by notice under Civil Code section 1946.1, or by a change in terms noticed under section 827 | No new rent under section 1954.53 | No reset |
| A government agency cited the unit for serious health, safety, fire or building code violations, left unabated for 60 days or more before the vacancy | No new rent under section 1954.53 | No reset on that turnover |
The buyout row needs the most care. It is the only reset you control. LAMC section 151.31 requires LAHD's disclosure form before any offer, gives the tenant 30 days after signing to cancel, and has the agreement filed with LAHD within 60 days. Until those 30 days pass, the vacancy you paid for can still come apart. LAHD runs the filings through its Tenant Buyout Notification Program.
A quieter rule covers subleases. Where the original tenants no longer live in the unit, section 1954.53 lets you raise the rent on a lawful sublessee or assignee who did not live there before January 1, 1996. It does not reach a partial change in occupancy, so one original occupant still in lawful possession keeps the old rent in place. Expect a buyer to ask who signed each lease and who lives there now, and know the answer before they do.
Which units does the act free from local limits?
Section 1954.52 lets you set the first rent and every later one, with no local cap, on a unit whose certificate of occupancy was issued after February 1, 1995. The same goes for a unit that can be sold separately from any other dwelling unit, such as a condominium or a single-family house.
The condo and house exemption has conditions of its own. It does not apply where the owner ended the preceding tenancy by notice under section 1946.1 or by a change in terms noticed under section 827. Nor does the section's exemption apply where an owner agreed by contract with a public entity, in exchange for a direct financial contribution or for assistance under Government Code section 65915 and the sections after it. Costa-Hawkins offers no way out of that kind of contract, so a buyer reads it before putting a number on the unit.
Inside Los Angeles the RSO's own cutoff of October 1, 1978 comes first, so a building first certified in 1985 is outside the RSO before the 1995 date matters. That date does its work where coverage runs later. Pasadena's Measure H, Culver City's rent cap and the County's ordinance for unincorporated areas all draw the line at February 1, 1995, and the rent programs in other LA County cities each set their own terms. A post-1995 building can still fall under the statewide cap in Civil Code section 1947.12, unless its certificate of occupancy is less than 15 years old or another exemption fits.
One sentence in section 1954.52 reaches further than it looks. Nothing in the section, it says, affects a public entity's authority to regulate or monitor the basis for eviction. So a unit the act frees on rent can still sit under a city's just-cause rules, and LAHD's coverage list names rented condominiums among the housing the RSO reaches.
What still applies after a reset?
A reset is one repricing, and then the slow slope starts again. The unit remains under the RSO at its new rent and takes the annual allowable increase from there, which LAHD set at 3 percent for July 1, 2026 through June 30, 2027. Buildings under the statewide cap work the same way. Section 1947.12 lets an owner set the initial rent once no tenant from the prior tenancy remains in lawful possession, and the cap governs every increase after it.
A sale does not open a unit either. An RSO tenancy ends only for a reason listed in LAMC section 151.09, and a private owner selling the building is not one of them. Your buyer takes every tenant in place at closing, each at the rent they pay that day.
AB 1620, from 2023, adds a case where a vacancy may not reprice at all. A local ordinance may let a tenant with a mobility-related disability move to a comparable or smaller unit on an accessible floor, keeping their rent and terms, when no working elevator serves their floor and the new unit is in the same building or on the same parcel, with at least four other units and the same owner. Where a city has adopted it, a vacancy on an accessible floor can go to a tenant already in the building, who keeps the old rent.
Has Costa-Hawkins been repealed?
No. Proposition 33 on the November 2024 ballot would have repealed the act and let cities and counties control rents on any housing, including when a new renter moves in. Voters rejected it, and the act remains in the Civil Code. The statewide cap held too. AB 1157, which would have lowered it, failed in the Assembly Judiciary Committee on January 13, 2026. A buyer today underwrites your building under the act as it stands.
How does a buyer price a reset that may never come?
Put the rules together and a rent roll holds contractual rents that rise by the RSO allowance, plus a gap to market that opens only when a unit turns over on terms the law allows. Nobody can put a date on that. A buyer pays for the first and discounts the second, and the discount grows with every unit whose gap depends on a tenant who shows no sign of leaving.
Your records decide how much of that argument you win. Document each voluntary move-out behind a rent you reset. Keep buyout agreements with proof of the LAHD filing. A unit re-let at a market rent after an owner move-in is carrying a rent the RSO did not allow. Find that one before the buyer's attorney does.
Whether a particular move-out was voluntary, or whether a notice you served ended the tenancy under section 1946.1, is a question for a landlord-tenant attorney, and Shaya is not one. He can show you how each answer moves the price a buyer will offer.