What Do Sacramento Landlords Need to Know About California Rent Control and Tenant Laws?

Many new investors assume Sacramento has no rent control. Statewide, that is not quite true, and the difference between “covered” and “exempt” can change what you are allowed to charge and how you can end a tenancy. As a 10-year veteran real estate agent and Broker at Greenside Properties with over 100 properties sold, I want you to understand the basics before you buy, not after your first tenant dispute.

Q: How much can a landlord raise rent in California?

For covered rentals, California limits rent increases in any 12-month period to 5% plus the change in local inflation, or 10%, whichever is lower. The law took effect in 2020 and runs through 2030, and the exact percentage is recalculated each year for your region, so check the current figure before you send a notice. Increases also generally require advance written notice, commonly 30 days for increases of 10% or less and 90 days for larger ones. Confirm the notice rules with a California attorney.

Here is a hypothetical to show the math. If the cap for your region were 8.5%, which is an assumption and not the current figure, a $2,000 rent could rise to no more than $2,170 over 12 months. The percentage changes each year, so do not rely on last year’s number.

Q: Which rentals are exempt from the statewide rent cap?

Common exemptions include buildings less than 15 years old, certain single-family homes and condos not owned by a corporation, a REIT, or certain LLCs when the owner gives the required written notice, and a duplex where the owner lives in one unit. Ownership structure and notice details matter, so have an attorney review how your property is classified.

Keep rent increases and terminations separate in your mind. Staying within the cap does not protect an improper termination, and a lawful termination does not excuse an improper increase. If a tenant disputes either one, an attorney who handles California landlord-tenant cases is worth the cost.

The 15-year exemption is one reason investors look at newer construction, because a building may fall outside the cap while it is under 15 years old and then become covered later. Browse Roseville new construction, Lincoln new construction, Folsom new construction, and Rocklin new construction, and read my new construction vs. resale comparison for the buyer side of that choice. Do not assume an exemption applies to a particular unit without confirming the build date, ownership structure, and notice.

The same law requires just cause to end many tenancies once tenants have lived in the unit for a period of time, commonly 12 months. SB 567, effective in April 2024, tightened the rules for no-fault terminations such as owner move-in and substantial remodel, with documentation requirements and penalties for violations. California also limits security deposits under AB 12. These are areas where mistakes can be expensive, so keep written records and use current California forms.

Local ordinances can be stricter than state law, so ask the city or county where the property sits about registration, inspection, or other requirements. Larger buildings are also where these rules matter most. Look at El Dorado Hills multi-family homes, Granite Bay multi-family homes, and Loomis multi-family homes, and check each property’s age and ownership before you model rents. For local pricing context, see the Fair Oaks market report, the Alta Sierra market report, and the Newcastle market report.

Tenants weigh these costs too. My guide to buying in Sacramento vs. renting in the Bay Area shows the renter side of the math, which helps you think about who your tenant might be and what they can afford. As both a real estate broker and a mortgage professional, I can also help you check financing for a rental purchase, and Blueleaf Capital’s application is the place to start.

Home values in Sacramento CA and achievable rents depend partly on these rules, because a covered property has limits on how fast income can grow. Buying in Sacramento CA 2026 as a landlord works best when you check classification, local ordinances, and notice requirements before you offer. That is the approach at Greenside Properties Sacramento CA, and Patrick Morgan real estate buyers can use it on any of the Sacramento CA homes for sale they are considering.