If you own a 12-unit building in Santa Clara or a fourplex in Campbell, you have probably spent this fall watching local rent rules. Sacramento was busy too. In late September, Governor Newsom signed bills that change how owners can raise rents after an emergency and how they disclose pet policies, and an earlier eviction law is about to kick in. Most of these changes take effect in the first half of 2027.
None of them rewrites the basics of AB 1482 or San Jose’s Apartment Rent Ordinance. But each adds a compliance step that is easy to miss, and one carries criminal penalties.
The emergency rent cap now covers long leases
California’s price-gouging law, Penal Code Section 396, already limits rent increases to 10 percent after a declared emergency, such as a major wildfire or earthquake. Until now, it only applied to rentals with an initial lease term of one year or less.
SB 1365, by Sen. Ben Allen, removes that limit. Starting January 1, 2027, the cap applies to rental housing regardless of lease length, according to the bill summary on CalMatters’ Digital Democracy. The California Apartment Association, which asked the governor to veto the bill, notes that a violation is a misdemeanor punishable by up to a year in county jail, a fine of up to $10,000, or both.
The law also changes how exceptions work. An increase above 10 percent can still be defended if the tenant agreed to it before the emergency, or if it reflects repairs or additions beyond normal maintenance made in the year before the declaration. But these are now affirmative defenses, which means the owner has to prove them.
Pet policies must be in writing and shared up front
SB 1296, the Pet Policy Transparency Act, takes effect April 1, 2027. Multifamily Executive reports that owners will need:
- A written pet policy or pet addendum that spells out rules and restrictions
- That policy provided with rental applications, and on websites, digital ads, and listing platforms where applicable
- A refund of the application fee within seven business days if an applicant paid before seeing the policy and then is ineligible, or decides not to proceed, because of it
The law does not require you to accept pets or dictate what your policy says.
Eviction service rules tighten
AB 747, an earlier law, takes effect January 1, 2027. According to the Apartment Owners Association, it requires at least three good-faith attempts at personal delivery, on different days and at different times, before an owner can use substitute service or posting in an eviction case. The complaint must also state how the termination notice was served. Getting this wrong can mean a case that has to start over.
What this means for your building
For most small owners, the to-do list is short but worth finishing before year end:
- Keep dated records of repair and improvement costs. If an emergency is declared, that paperwork is your defense for any increase above 10 percent.
- Write down your pet policy now and add it to your application packet and listings.
- Confirm that your attorney or process server is set up for the new service rules, so a routine nonpayment case does not get thrown out.
There is a sale angle, too. Buyers review lease files, notices, and rent histories during due diligence. Clean, current paperwork makes a building easier to underwrite and easier to value.
The other side
These changes are mostly about process, not price. The emergency cap only applies after a declared emergency, and in a typical year most owners will never run into it. If you already run a tidy operation, little may change day to day. The larger point is cumulative: each year brings more rules, and for long-time owners who manage a small building themselves, that steady growth in paperwork is a fair thing to weigh when deciding whether to keep holding.
Frequently asked questions
Does the new emergency rent cap affect my building if there is no emergency? No. The 10 percent limit under Penal Code Section 396 applies only after an emergency is declared. The rest of the time, your usual rules apply, such as AB 1482 or a local rent ordinance if your building is covered.
Can I ever raise rent more than 10 percent after an emergency is declared? Only if you can prove a defense the law allows. Under SB 1365, that includes a tenant agreeing to the increase before the emergency, or costs for repairs or additions beyond normal maintenance made in the year before the declaration. Because these are now affirmative defenses, the burden is on you, so keep dated invoices and records.
Does SB 1296 mean I have to allow pets? No. The law does not require you to accept pets or tell you what your policy must say. It requires that your policy be in writing and shared with applicants up front, including with applications and in listings where applicable.
When would I owe an applicant a refund of the application fee? Starting April 1, 2027, if an applicant pays the fee before receiving your pet policy, then turns out to be ineligible under it or decides not to proceed because of it, they can request a refund. You must issue it within seven business days of receiving their written notice.
What changes about serving eviction papers in 2027? Under AB 747, starting January 1, 2027, at least three good-faith attempts at personal delivery, on different days and at different times, are required before substitute service or posting. The eviction complaint must also state how the termination notice was served.
These answers are general information, not legal advice. Talk with a landlord-tenant attorney about your specific situation.
Talk it through before January
If the new rules have you wondering whether to keep self-managing, upgrade your systems, or sell, it helps to talk with someone who works only with small apartment buildings in this county. Michael offers confidential conversations with owners about their options, along with a free Broker Opinion of Value so you know where your building stands before the new year.
Questions about this post, the market or your property?
Feel free to contact me.
Michael Shields, CCIM
Silicon Valley Multifamily Group
408-356-1900
michael@svmultifamily.com
DRE 01327546