California Emergency Rent Caps Under Penal Code 396: The 10% Rule, Tropical Storm Rachel, and SB 1365 - Bright Path Property Management blog article about california laws

October 19, 2026

Chris Formica

9 min read

California Laws

California Emergency Rent Caps Under Penal Code 396: The 10% Rule, Tropical Storm Rachel, and SB 1365

Penal Code 396 caps rent increases at 10% in a declared emergency. What it covers, Tropical Storm Rachel in LA, Orange, Imperial, and San Diego, and SB 1365 in 2027.

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In This Article

Usually not by more than 10 percent. When the Governor, the President, or a city or county declares an emergency, California Penal Code 396 makes it a crime to raise rent above that cap.

The cap covers rent advertised, offered, or charged, for current tenants and new applicants alike. It lasts 30 days, or longer if the emergency is extended.

It is in effect now in Los Angeles, Orange, Imperial, and San Diego counties after Governor Newsom's October 15, 2026 Tropical Storm Rachel proclamation. Starting January 1, 2027, SB 1365 also brings leases longer than one year under the cap.

Updated October 19, 2026

This is general information, not legal advice. Talk to a California landlord-tenant attorney about your specific property.

How the 10% emergency rent cap works

What triggers it

A state of emergency proclaimed by the President or the Governor, or a local emergency declared by an official, board, or other governing body with authority to do so in any city, county, or city and county (Penal Code 396(e)).

A local declaration can trigger the cap on its own, even with no statewide proclamation for your area.

How long it lasts

Who and what it covers

Who: "any person, business, or other entity." Individual owners are covered, not just large landlords.
What: rent "advertised, offered, or charged" to an "existing or prospective tenant." That means renewals, increases on current tenants, and the asking rent on a vacant unit, including at turnover.
Which housing (current law): rental housing with an initial lease term of no longer than one year, including spaces in mobilehome parks and campgrounds (Penal Code 396(j)(10)). This changes on January 1, 2027.

What the 10% is measured from

Penal Code 396(j)(11) sets the starting "rental price":

Rented within the year before the emergency: the actual rent the tenant paid.
Not rented at the declaration, but rented or offered within the year before: the most recent rent offered before the declaration.
Not rented or offered at all in the year before: 160 percent of the HUD fair market rent.
Furnished: add 5 percent if a unit previously offered unfurnished is now offered fully furnished. No other adjustments, such as for gardening or utilities.

What does not justify a bigger increase

None of these is a defense (Penal Code 396(e)):

The length of the rental term.
Adding goods or services, other than the furniture adjustment above.
An insurance company or other third party paying the rent.

The Attorney General says a landlord cannot charge or accept rent above the cap, even if a tenant or applicant offers to pay more.

The two exceptions under current law

The increase is directly attributable to costs for repairs or additions beyond normal maintenance, amortized over the rental term.
The tenant contractually agreed to the increase before the proclamation or declaration.

The owner has to prove either one. SB 1365 tightens the repair exception in 2027.

It is a ceiling, not a permission slip

Penal Code 396 does not authorize rent higher than a local rent control ordinance allows.

If the statewide AB 1482 cap or a city ordinance also covers your unit, the lower limit controls. See our guides to AB 1482 rent increase caps and notice rules and AB 1482 exemptions.

Evicting to re-rent higher is also illegal

During the emergency period, it is unlawful to evict a residential tenant and then rent or offer the unit to someone else for more than the evicted tenant could have been charged (Penal Code 396(f)).

Continuing an eviction lawfully started before the emergency is not a violation, and the law does not stop evictions for any lawful reason (Penal Code 396(f) and (m)).

Penalties

It can reach beyond the named counties

The Attorney General's position is that the law is not limited to the city or county named in the declaration.

It is also meant to prevent price gouging elsewhere in the state where the emergency increases demand, for example when people evacuate to a neighboring county.

Cities and counties can also have their own price gouging ordinances, and Penal Code 396(k) keeps those in place.

Tropical Storm Rachel: what is in effect now

As of October 19, 2026.

The proclamation: on October 15, 2026, Governor Newsom proclaimed a state of emergency in Imperial, Los Angeles, Orange, and San Diego counties due to Tropical Storm Rachel, which began affecting Southern California on October 11.
Who is covered: current tenants and new applicants, including when a unit turns over, according to the California Apartment Association.
Neighboring counties: if you own in Riverside or San Bernardino, keep the Attorney General's position in mind. The cap may apply where storm-displaced households increase demand for rentals.
Local declarations: city and county declarations can trigger the cap independently. Contact your city or county to find out whether one covers your property.

If storm water reached your rental, see our guide to an owner's duties when winter rain causes leaks.

What changes January 1, 2027: SB 1365

SB 1365 (Allen) is Chapter 1028, Statutes of 2026. It was approved by the Governor and filed with the Secretary of State on September 30, 2026, and takes effect January 1, 2027.

Leases longer than one year are covered

It changes the definition of "housing" in Penal Code 396 to "any rental housing," removing the limit to leases with an initial term of no longer than one year.

Multi-year leases will no longer fall outside the emergency cap.

The exceptions become affirmative defenses

The owner must prove one of these:

Pre-agreed increase: the tenant contractually agreed to the increase before the proclamation or declaration.
Repair or addition costs: the increase is directly attributable to costs for repairs or additions beyond normal maintenance incurred within the year before the proclamation or declaration, and either:
- the housing was rented, advertised, or offered for rent when the costs were incurred, or
- the owner can prove that, within a year before the proclamation or declaration, the intent to offer the housing for rent within six months of the repair or addition already existed.

Owner checklist for any declared emergency

Check first. Before sending a rent increase or setting an asking rent, check for active declarations on the Governor's website, the Cal OES price gouging list, and with your city and county.
Record your baseline. Write down each unit's current rent and most recent advertised rent as of the declaration date.
Stay within the cap. Keep any increase within 10 percent of that baseline, and within AB 1482 or any local rent control limit if it is lower.
No add-on justifications. Do not raise rent to cover added utilities, gardening, cleaning, or a shorter lease term, and do not accept offers or insurance payments above the cap.
Keep repair records. Save invoices and dates for any repairs or additions beyond normal maintenance in case you need the repair defense.
No evict and re-rent. Do not end a tenancy to re-rent at a higher price during the emergency period.
Nearby counties count. If you own outside the named counties but nearby, assume the cap may apply if displaced households are looking for rentals in your area, and get legal advice before going above 10 percent.
Plan for 2027. From January 1, 2027, treat leases longer than one year the same way.

How Bright Path can help

Bright Path manages Southern California rentals for a flat monthly fee: Standard is $99 a month and Plus is $199 a month. Shield adds quarterly inspections and no markup on vendor work (see current pricing).

Plans include rent collection, lease execution, and a dedicated property manager. Our $1,200 tenant placement includes weekly listing optimization with pricing adjustments.

If Bright Path manages your rental, ask your property manager to confirm whether an emergency declaration applies before any renewal increase or new listing price goes out.

For how we set rents in normal times, see our rent pricing guide and how much rent you can charge.

Questions about pricing a renewal or a vacancy right now? Talk to us or see our flat-fee plans.

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