Updated August 16, 2026
You can take whatever increase the law allows on that specific unit, and for LA City rent-stabilized units in 2026 that is the annual adjustment of 3% — the same rate as the prior year. What you cannot do is manufacture a rent roll. Buyers underwrite what the registry, the leases, and the bank deposits show, not what a notice served sixty days before listing says, and a burst of increases immediately before going to market reads as exactly what it is. In most cases the honest answer is that a pre-sale increase moves the sale price far less than sellers expect, and the effort is better spent making the existing rent roll verifiable.
LA City RSO units. The annual allowable adjustment applies, once per twelve months per unit, with proper written notice and current registration. The 2026 rate is 3%. Additional pass-throughs and adjustments exist in narrow circumstances and have their own filing requirements.
Units covered by AB 1482 but not local rent control. The statewide cap is 5% plus the applicable regional CPI change, capped at 10% total, per twelve-month period.
Genuinely exempt units. Newer construction outside both regimes, and certain single-family and condominium situations, can be repriced at market on turnover. These exist in LA but are a minority of the older multifamily stock.
The threshold question is always which regime governs each unit. Owners get this wrong in both directions — treating an exempt unit as controlled and leaving money on the table for years, or treating a controlled unit as exempt and creating a rollback exposure a buyer will find.
Run the arithmetic. A 3% increase on a $1,500 rent is $45 a month, $540 a year. On a 12-unit building that is about $6,500 of additional annual income. Capitalized at a market cap rate, that is a meaningful but modest change in value — and it only holds if the buyer credits it fully, which they will only do if it is properly noticed, properly registered, and actually collected.
Compare that to the number sitting under most LA rent-stabilized buildings: the gap between in-place rents and market rents, which on a long-held building can be 40% or more. Sophisticated LA buyers are buying that gap. They are not paying for a 3% increase; they are paying for the fact that the building's rents are far below market and there is a long runway of upside. That is the story that prices the building, and it is a story about the rent roll you already have.
Timing collections correctly. A buyer capitalizes what the building collects, not what it bills. Chronic delinquency in the trailing twelve months costs more than a missed increase.
Documenting the rents you already charge. Registry current, leases organized, deposits reconciling to the rent roll. Verified income is worth more than claimed income.
Legally capturing turnover. Under vacancy decontrol, a unit that turns over on its own can generally be re-rented at market, and that resets the unit permanently. One genuine turnover typically outweighs the entire building's annual adjustment.
Fixing the things that cap the buyer pool. Deferred maintenance, an incomplete soft-story retrofit, or an unresolved compliance item narrows the bidders more than the rent roll does.
Do not serve increases you have not registered for. An increase taken while registration is not current is exposed, and a buyer's diligence will find it.
Do not stack increases to catch up. The annual adjustment is once per twelve months per unit. Retroactive catch-up increases are a rollback claim waiting to happen.
Do not pressure tenants into moving so units can be re-rented at market. LA's tenant anti-harassment rules exist precisely for this pattern, and a claim filed during escrow is a far more expensive problem than the rent gap it was meant to close.
Do not present projected rents as in-place rents. Show market rents as market rents in the marketing package. Every credible LA buyer reprices to the actual rent roll during diligence anyway, and the seller who blurred the two loses credibility on every other number in the file.
Take the increase you are legally entitled to, on schedule, with proper notice and current registration — that is simply good ownership, sale or no sale. But do not build a sale strategy around it. The value in an LA rent-stabilized building sits in the spread between in-place and market rents and in how verifiable your numbers are. A clean, documented, fully collected rent roll at slightly lower rents will out-price a stretched one almost every time.
What is the current LA RSO allowable increase?
3% for 2026, unchanged from the prior year, applied once per twelve months per unit with proper notice and current registration. Units under AB 1482 rather than the city ordinance follow the state formula of 5% plus regional CPI, capped at 10%.
If a tenant moves out before closing, can I re-rent at market?
Generally yes under vacancy decontrol, and that reset carries to the new owner permanently — which is why a genuine, tenant-initiated vacancy shortly before a sale is worth more than an annual increase. What matters is that the vacancy was genuinely tenant-initiated.
Should I leave units vacant to show the buyer market rents?
Almost never. Vacant units produce no income, and buyers underwrite in-place collections. A vacant unit invites a discount for lost income and questions about why it is empty, and in LA it can raise unnecessary questions about how it became vacant.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap.
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