On this page
- What the RSO covers, and what it leaves out
- How much can rent rise each year?
- When does a unit's rent reset?
- Who can be asked to leave, and on what grounds?
- What does the Ellis Act route involve?
- What do registration and SCEP require of an owner?
- How does a buyer underwrite a rent-controlled building?
- Rent control elsewhere in Los Angeles County
- How to prepare an RSO building for sale
- A City of Los Angeles rental unit in a building first certified for occupancy on or before October 1, 1978 is under the RSO unless an exemption applies, and a sale does not change that.
- The RSO's yearly increase is now pegged to 90 percent of average CPI, never below 1 percent or above 4 percent. For July 1, 2026 through June 30, 2027, LAHD set it at 3 percent.
- A unit's rent resets only at certain vacancies, so a buyer values each unit by its own tenancy rather than by the building's average.
- Evictions need a listed cause. The Ellis Act, the exit from the rental business, brings notice periods, relocation costs and re-rental limits that stay with the property.
What the RSO covers, and what it leaves out
Los Angeles's Rent Stabilization Ordinance is run by the Los Angeles Housing Department, LAHD, and it reaches rental units inside the City in buildings that received their first certificate of occupancy on or before October 1, 1978. Far more than apartment buildings qualify. LAHD's coverage page counts duplexes, rented condominiums and townhomes, two or more houses sharing one parcel, some accessory dwelling units, hotel and motel rooms rented for 30 days or more, and homes built into a commercial building.
Coverage is the first fact a buyer confirms, since it decides which increase limit every rent in the building lives under. The exemptions are narrow, and several exist only on paper LAHD issued:
- Units whose first certificate of occupancy came after October 1, 1978, except that units built after July 15, 2007 to replace demolished RSO units can be covered.
- A single-family house that is the only home on its parcel.
- Luxury units, but only where the landlord holds a Luxury Exemption Certificate from LAHD, which rests on proof of the rent charged on or before May 31, 1978.
- Substantially renovated units that received a certificate from the department.
- Housing owned or managed by a government agency, with proof.
- Adaptive reuse buildings converted to housing after October 1, 1978.
An owner who lives in one of the units can apply for a one-year exemption from registration and SCEP fees for that unit, limited to one unit per owner on title. It excuses fees, for that unit alone, and the rest of the building stays under the ordinance. Any exemption you plan to claim to a buyer needs checking first, so confirm the building's RSO status against LAHD's search, ZIMAS and the certificate of occupancy before you list.
How much can rent rise each year?
LAHD sets the allowable increase for a July-to-June year. For July 1, 2026 through June 30, 2027, it is 3 percent.
A new formula produced that number. Starting February 2, 2026, the City ties the increase to 90 percent of average CPI, and the result can go no lower than 1 percent and no higher than 4 percent. Under the old formula the floor was 3 percent and the ceiling 8 percent. Increases taken on or after February 2, 2026 also lost two add-ons, the extra percentage an owner could charge for paying a unit's utilities and the additional 10 percent for an added occupant.
For a buyer, those limits set the growth rate of the income being bought. With a 4 percent ceiling, an occupied unit far below market closes that gap slowly, if ever, while the tenant stays. Check the current figure on LAHD's renter protections page before quoting it to anyone, because it changes each July.
Notice runs on a separate rule. Civil Code section 827 requires 30 days' written notice for an increase of 10 percent or less, and with the RSO capped at 4 percent, every lawful RSO increase falls in that group.
When does a unit's rent reset?
A unit's rent resets only when it comes open in one of the ways state law and the RSO allow. The Costa-Hawkins Rental Housing Act lets an owner set the opening rent for a new tenancy, and the RSO works inside it. LAHD's rent bulletin permits a new rent once a tenant moves out voluntarily or is evicted for not paying lawful rent. From there the unit remains under the RSO, with the annual limit running again from the new figure.
Other vacancies reset nothing. Costa-Hawkins withholds the new-rent right where the owner ended the previous tenancy with a notice under Civil Code section 1946.1, or through a change in terms noticed under section 827. It also withholds it where a government agency cited the unit for serious health, safety, fire or building code violations that stayed unabated for at least 60 days before the vacancy. In Los Angeles, when a tenant leaves because the owner or a relative moved in, the next tenant does not get a decontrolled rent either.
Units first certified after February 1, 1995, and units that can be sold on their own such as condos, sit outside local rent limits altogether. The Costa-Hawkins vacancy rules sort each way a unit can empty by what it does to the next rent, and a buyer reads your rent roll the same way.
Who can be asked to leave, and on what grounds?
An RSO tenant can be evicted only for a reason listed in LAMC section 151.09. At-fault grounds turn on what the tenant did, such as unpaid rent, a lease violation, a nuisance or an illegal use. The seven no-fault grounds turn on what the owner or a government needs: occupancy by the owner, a relative or a resident manager, demolition or permanent removal under the Ellis Act, a government order to vacate, a sale by the federal government, demolition or conversion of a residential hotel, and affordable housing under a regulatory agreement. A private owner's sale is not one of them, so a buyer inherits every tenancy you have.
Owner move-in carries its own conditions under the RSO. Taking back a unit for yourself requires an ownership share of at least 25 percent, and taking one back for a relative requires at least 50 percent. The owner or relative must then live there as a primary residence for at least two consecutive years. You file a Declaration of Intent to Evict with LAHD before serving notice, and you pay relocation. Tenants who are 62 or older or disabled and have lived in the unit 10 years or more cannot be moved out this way, and neither can terminally ill tenants.
Every no-fault eviction under the RSO requires relocation assistance. LAHD sets the amount by whether the tenant is eligible or qualified, how long they have lived there, and their income, and it posts the figures on its relocation page. The money must be made available within 15 days of serving the termination notice.
Tenants outside the RSO have protections too. The City's Just Cause Ordinance protects most other City tenants once they have stayed six months or the first lease has run out, whichever comes first, and it requires relocation for no-fault evictions. State law in Civil Code section 1946.2 requires a just cause after 12 months of lawful occupancy, and since SB 567 took effect on April 1, 2024, an owner who reclaims a unit must move in within 90 days and stay 12 consecutive months.
What does the Ellis Act route involve?
The Ellis Act, Government Code section 7060 and the sections after it, is the state law that lets an owner take residential units off the rental market. In Los Angeles you start by filing a Notice of Intent to Withdraw with LAHD, and the units come off the market 120 days after LAHD receives it. A tenant who is 62 or older or disabled, and has lived in the unit at least a year, can push their own date out to one year after that delivery by telling you in writing within 60 days.
A buyer prices the costs and the limits that outlast the withdrawal:
- Relocation assistance for each tenant, made available within 15 days of the termination notice or paid through escrow.
- A memorandum of the notice, Form E1, recorded with the County Recorder, so the withdrawal shows up in the property's records.
- For five years, a unit rented again starts at the lawful rent in effect when the notice was filed, plus RSO increases.
- Unless the project falls under the Resident Protections Ordinance or the state Housing Crisis Act, displaced RSO tenants have a right to return for 10 years.
- An Annual Property Status Report to LAHD every year for 7 years.
Demolition has been its own question since February 11, 2025. The City's Resident Protections Ordinance treats units that were rent controlled within the past five years, or withdrawn under the Ellis Act within the past ten, as protected units. A project that demolishes them must replace them, affordable units included, and displaced tenants can return at their prior rent. Withdrawing units under the Ellis Act takes a filing, a relocation budget and a plan for the site that still works under those limits, so weigh it before you list.
What do registration and SCEP require of an owner?
RSO units are registered with LAHD every year, on a certificate that runs from July 1 to June 30. Registration is complete only once the fees are paid and the owner has reported each unit's rent and tenancy details to LAHD's rent registry. After a sale, the buyer has 45 days from the close of escrow, or from recording, to register the units, with the recorded deed as proof of ownership.
SCEP, the Systematic Code Enforcement Program, is LAHD's periodic inspection program. It applies to any parcel with two or more residential units where at least one is rented. Inspections come around about once every four years. LAHD charges the fee per unit, with no proration, and an owner who has paid it may pass the SCEP fee through to tenants after 30 days' written notice.
These charges arrive on LAHD's annual RSO, JCO and SCEP bill, and the current amounts are on its billing fee schedule. A buyer will ask whether they are paid. An open inspection order or an unpaid bill turns into a negotiating point late in escrow, when you have the least room to argue.
How does a buyer underwrite a rent-controlled building?
A buyer underwrites a rent-controlled building one unit at a time, because two identical apartments can rent for amounts far apart depending on when each tenant moved in. The building's average rent says little. What the buyer builds is a schedule of every unit, and it looks at these items:
| What the buyer looks at | Why it matters to price | What to have ready |
|---|---|---|
| Current rent and move-in date for each unit | The rent is the income, and the move-in date shows how long the unit has grown only by the annual limit | Rent roll, leases and rent registry filings |
| The gap between each unit's rent and what it would lease for now | That gap is what a lawful vacancy could recover | Nothing to hand over; the buyer forms its own view |
| How a vacancy would happen, if it happens | Voluntary moves and buyouts reset rent, and owner move-ins do not | A record of how each unit last turned over, and any buyout filings |
| Compliance | Unregistered units, unpaid fees, open SCEP orders and tenant complaints all cost a new owner money | LAHD registration and billing records, SCEP results, correspondence |
| Redevelopment potential | The Ellis Act and the Resident Protections Ordinance decide whether the land can be used differently, and at what cost | Zoning from ZIMAS, and any past Ellis filings on the parcel |
A buyer cannot count on vacancies. It has little reason to pay you in full for rent it may never collect. Clean records, on the other hand, are worth money, because every gap in them is a risk the buyer prices against you. Shaya does not buy buildings, so the buyer running these numbers is one he finds for you, on the open market or quietly.
A buyout is the only reset a seller can start before listing. In the City, paying an RSO tenant to move out goes through the Tenant Buyout Notification Program in LAMC section 151.31. LAHD's disclosure form comes before any offer, the tenant has 30 days after signing to change their mind, and the paperwork goes to LAHD within 60 days. LAHD's program counts a move-out under a buyout as a voluntary vacancy, and until the 30 days pass, the vacancy you paid for is not settled. Shaya is a real estate agent and not an attorney, so talk to a landlord-tenant attorney before you offer anyone money or file anything with LAHD.
Rent control elsewhere in Los Angeles County
The RSO ends at the City limits. Confirm the parcel is inside the City before you rely on anything above. At least ten other cities in the county run programs of their own, along with the County itself:
- Santa Monica, under a 1979 charter amendment administered by its Rent Control Board.
- West Hollywood, whose Rent Stabilization Ordinance has been in effect since 1985.
- Beverly Hills, which sorts covered units into two classes under its municipal code.
- Culver City, with permanent ordinances in effect since October 30, 2020.
- Pasadena, under Measure H, in effect since December 22, 2022.
- Inglewood, which aligned its cap with the state formula on January 1, 2025.
- Pomona, whose updated rent stabilization ordinance took effect January 1, 2026.
- Baldwin Park, Bell Gardens and Huntington Park, each with a rent stabilization ordinance of its own.
- Unincorporated Los Angeles County, under the County's Rent Stabilization and Tenant Protections Ordinance.
Coverage cutoffs run as late as February 1, 1995 in Pasadena, Culver City and the unincorporated County, so a building the RSO would miss can be covered across a city line. Rent control in other LA County cities differs in its increase formulas and registration deadlines too, and a buyer checks each one against the rent roll.
How to prepare an RSO building for sale
- Confirm each unit's status with LAHD's RSO property search and the Housing tab in ZIMAS, and pull the certificate of occupancy from LADBS if there is any doubt.
- Bring registration current, pay the annual bill, and check that the rent registry matches your ledger.
- Build a rent roll with each tenant's move-in date, current rent, the increases taken and the date of each notice.
- Write down how each unit last became vacant, since that decides whether its current rent was a lawful reset.
- Gather SCEP inspection results and proof that any cited items were fixed.
- Collect any buyout agreements, LAHD filings and records of relocation payments.
- Find out whether the parcel has any Ellis history, because a buyer's plans for the land depend on it.