Maximum Lawful Rent
The Rent Control Board announced a September 2022 General Adjustment (GA) of 6.0% for eligible units, with a maximum $140 increase for units with current maximum allowable rents of $2,325 and above. However, with Santa Monica voters’ passage of Measure RC in the November 2022 election, the Maximum Allowable Rents (MAR) for controlled rental units that were increased by the September 2022 GA were reduced.
Per Measure RC, effective February 1st, (absent an individual adjustment per a decision), MARs that were originally increased by either 6% or the $140 maximum (for MARs of $2,325 or more) were reduced to a 0.8% increase above the rent that was in effect on August 31, 2022, with a new maximum increase of $19.
Averaged over a one-year period from September 2022 – August 2023, this change results in an Adjusted General Adjustment of 3% or $70 monthly maximum increase for the period.
On December 8, 2022, the Rent Control Board adopted Regulation 3035(e), which allows an increase greater than 0.8% provided rent was increased less than 6% prior to February 2023 and if the rent increase for the period from September 2022 through August 2023 averages not more than 3% or $70 per month, whichever is less.
3035(e) Commencing February 1, 2023, the general adjustment during the period from February 1, 2023 through August 31, 2023, shall be 0.8% of the maximum allowable rent (MAR) in effect as of August 31, 2022, with a maximum dollar amount limit of nineteen dollars ($19) (“Adjusted GA”). Upon proper notice, the Adjusted GA may be increased above 0.8%, but no greater than 6%, if the August 31, 2022 MAR was increased by less than 6% during the period September 1, 2022 through January 31, 2023, so long as the average rent increase for the period from September 1, 2022 through August 31, 2023 does not exceed the lower of 3% or $70 per month.
Landlords must give notice to tenants of the reduction in rent that started February 1, 2023.
Click this link to download a Notice of Change in Terms of Tenancy - 2022 Adjusted GA to change rents per the 2022 General Adjustment. Detailed instructions for completing the form are here.
For Tenancies that began on or after March 1, 2018 or if a property has been sold or reassessed on or after March 1, 2018 you can use the simplified Notice of Change in Terms of Tenancy January 2023EZ form.
This page explains the total lawful rent that may be charged for any controlled rental unit. The rent control law limits the amount of rent that may be charged for controlled rental units. There are three amounts that can be added together to make up the Maximum Lawful Rent:
- the Maximum Allowable Rent (MAR)
- pass-through of one-half of the registration fee
- allowable surcharges from the property tax bill.
The Maximum Allowable Rent (MAR)
The MAR is the rent ceiling for a unit, not including a possible registration fee pass-through and/or surcharges. For tenancies that started before January 1, 1999, the MAR for a unit is in most cases determined by the amount of rent in effect on April 10, 1978 plus allowed increases or decreases authorized by the rent control law. Prior to January 1, 1999, the MAR remained controlled between tenancies. Since January 1, 1999, property owners have had the right to set the initial rent for most new tenancies. For tenancies started since then, the MAR is based on the rent in effect when the tenancy began plus allowed increases or decreases authorized by the rent control law. Property owners are required to properly register each new tenancy with the Rent Control Agency. You can look up the MAR for a controlled property by using our Look Up a Rent tool.
The Registration Fee
The Rent Control Board charges an annual Registration Fee for each rent-controlled unit to the owners of rent-controlled properties. Owners may pass up to 50 percent of the annual registration fee through to each tenant in equal monthly installments. For the 2022/2023 fiscal year, the annual registration fee is $228 per unit. This equates to $19.00 per unit per month, half of which ($9.50) may be passed through to tenants as a monthly fee with proper notice.
In some instances, in addition to the MAR and one-half of the Registration Fee, owners may charge tenants a pro rata (proportionate) share of some of the property taxes they pay. These property-tax-related surcharges are based on some of the charges that are included in the Annual Property Tax Bill that property owners receive each year from the County Assessor's Office. The surcharges are limited to five line-items on the owner's property tax bill, which result from ballot measures approved by Santa Monica voters in prior elections. Surcharges may be passed through if all the following are true:
- The tenancy began before March 1, 2018;
- The property value was not reassessed on or after March 1, 2018 due to a sale or voluntary improvements, and;
- The owner properly noticed the tenant which includes providing a copy of the property tax bill to the tenant - unless the only tax being passed through is the School District Parcel Tax (see below).
The five line-items from the property tax bill are:
- Community College Bond
- Unified Schools Bond
- Stormwater Management User Fee
- Clean Beaches and Ocean Parcel Tax
- School District Special Tax
In general, Property-Tax-Related Surcharges are calculated by dividing the line-items by the total number of units on a property, and then dividing that result by twelve months to get the monthly surcharge.
IMPORTANT! There are limits on property-tax-related surcharges. Surcharges are limited to the actual prorated amount per proper calculation; four percent of the MAR; or $35 per month - whichever amount is less. If the property value is reassessed on or after March 1, 2018 due to a sale or voluntary improvements, the owner may no longer pass through property-tax-related surcharges to any tenant.
Annual General Adjustment Rent Increases
Each year the Board announces an increase to the MAR portion of the rent, known as the General Adjustment (or GA). The GA is primarily based on 75 percent of the percentage change in the Consumer Price Index for the Los Angeles area for the 12 months ending in March. The annual GA increases the MAR for most controlled units, therefore increasing the Maximum Lawful Rent for a unit.
For more information regarding the current and past general adjustments, as well as the Rent Control regulations/resolutions and staff reports regarding annual general adjustments, please visit Chapter 3 of our regulations and this Historical General Adjustments Summary sheet.
A rent may be increased by the GA as of September 1 of each year only if:
- The tenancy started before September 1 of the previous year.
- All Rent Control registration fees and penalties for a property have been paid.
- The tenancy for the subject unit is properly registered.
- There are no uncorrected citations or notices of violation of health, safety, or housing laws for the property.
- The owner is in compliance with the Rent Control Law.
- The owner gives proper written notice to the tenant.