Happy New Year from the Taksa Investment Group team!
As we roll into 2026, California’s housing and rental law landscape is evolving in meaningful ways. The most recent legislative session introduced a range of new requirements and protections aimed at modernizing rental housing standards and creating clearer expectations across the market. For owners, landlords, property managers, and investors, understanding what’s ahead is key to staying compliant — and positioning assets for long-term success.
Below is a clear, concise guide to the most impactful changes taking effect in the new year.
1. Local LA Rent Regulation Updates
In Los Angeles, new rent control rules are set to take effect mid-2026:
Annual rent increases will be tied to 90% of the Consumer Price Index (CPI), with both a floor and a ceiling.
Certain previously permitted add-ons, such as utility surcharges or dependent-based increases, are eliminated.
For investors, this reinforces the importance of predictable cash flow modeling, expense management, and long-term planning within regulated markets.
2. New Habitability Standard: Stoves & Refrigerators Required
Beginning January 1, 2026, most rental units must include a working stove and refrigerator as part of the state’s habitability requirements. These appliances must be installed and maintained for new leases, renewals, or amended agreements. In certain cases, tenants may provide their own refrigerator by mutual agreement, but units will generally be expected to include both appliances and keep them in good working order.
For many owners, this aligns with existing market norms. For others, particularly those with older properties, it presents an opportunity to modernize units, enhance livability, and improve long-term leasing appeal.
3. Security Deposit Compliance Changes
Updates to California’s security deposit rules will affect daily operations across most rental properties:
Electronic refunds: When rent or fees are paid electronically, security deposit refunds will generally be returned electronically as well.
Notice and documentation updates: New guidance clarifies how notices are delivered and how refunds are handled in multi-tenant situations.
Flexible alternatives: Landlords and tenants may mutually agree to alternative methods for refunds and documentation.
Because nearly every lease involves a security deposit, these changes encourage more streamlined processes, clearer communication, and smoother move-out procedures.
4. Expanded Landlord Obligations Following Declared Disasters
New standards apply to rental properties impacted by declared disasters such as wildfires or floods:
Responsibilities include hazard mitigation, debris removal, and restoring habitability following remediation.
Tenants may have rights to return, and there are updated rules around rent during evacuation periods.
Proper documentation remains critical as these situations unfold.
For owners in disaster-prone areas, updating emergency response plans and documentation practices can help ensure smoother recovery and coordination.
5. Opt-Out of Internet Service Fees
Landlords must now allow tenants to opt out of bundled internet subscription services offered as part of their tenancy. If a tenant opts out but continues to be charged, they may deduct that amount from rent.
This change impacts how amenity fees and bundled services are structured, particularly in tech-enabled or newer buildings, and encourages clearer separation between rent and optional services.
6. Additional Tenant Protections & Eviction Considerations
Certain new provisions expand tenant protections in specific circumstances:
Temporary benefit interruptions: Interrupted Social Security payments may be raised as a defense in nonpayment eviction cases.
Additional procedural changes may continue to roll out through 2026 and beyond.
While these updates may affect eviction timelines in some cases, they also reinforce the value of proactive communication, thorough documentation, and consistent management practices.
7. Development and Zoning Shifts
Taking effect July 1, 2026, new state zoning laws allow for increased density and upzoning near transit corridors, overriding some local zoning limitations.
These changes are intended to support housing production and may unlock new development and redevelopment opportunities, particularly for investors focused on transit-oriented or infill projects.
Preparing for 2026
Kick off the new year by conducting a comprehensive compliance review with your legal and property management teams. Updating lease templates, internal checklists, and operating procedures now can help ensure a smooth transition as these 2026 regulations take effect.
With proactive planning, owners and investors can move into the year ahead prepared, informed, and well-positioned to adapt as California’s multi-family landscape continues to evolve.
Have questions about how these 2026 changes may impact your portfolio? Contact us today to discuss compliance considerations and opportunities in the year ahead!
Questions? Contact the TIG Team!
Click on a contact card below to email one of our team members directly.
