Raising the Rent in Beverly Hills: Which Chapter, Which Cap, and What Has to Be in Place First

For Owners · Beverly Hills · October 2026 · 11 min read

Say you own a 1964 eight-unit building on a side street south of Wilshire. One tenant moved in last spring, another has been there since the 1980s, and the newest lease started in August. You want to send this year’s increases. In Beverly Hills that one building can hold units under two different chapters of the municipal code, each with its own formula, its own notice content and its own list of things that must already be true before the increase is lawful.

This guide walks through that sequence in the order you would actually work it: which chapter the unit is under, what the cap is, what else can be added to the rent, what the notice has to say, and what happens when a unit turns over. It is written for owners of houses, condos and apartment buildings inside the City of Beverly Hills. A 90210 or 90211 mailing address alone does not put a property inside the city, so check the parcel first.

Step one: find the chapter

The Beverly Hills Rent Stabilization Ordinance lives in Title 4 of the municipal code, split across Chapter 5 and Chapter 6. They do not overlap. A unit is under one, the other, or neither.

Chapter 5, the older and smaller category

Chapter 5 reaches dwelling units designed for rental use or actually rented at any time on or after May 31, 1978 (BHMC 4-5-101), and then carves out a long list of exemptions in 4-5-102. The ones that do the sorting in practice:

• Single-family residences are out.
• Units in a structure completed after September 20, 1978 are out.
• Units where validly existing rental agreements provide for rent above $600 a month are out, with an important limit: a unit that was ever subject to Chapter 5 or an earlier city rent law stays in, even if lawful increases have since carried the rent past $600.
• Units that are not the tenant’s primary residence are out.
• Condominiums that existed as of March 27, 1979, or were created later through a conversion that met the code’s requirements, are out, along with hotel-style lodging rented for thirty consecutive days or less, nonprofit cooperatives, and government-owned or legally exempt housing.

What is left is a narrow group: apartments in pre-September 1978 buildings whose rent has been regulated since the ordinance began. If your building is old enough, check each unit’s history rather than assuming.

Chapter 6, the two-or-more-unit category

Chapter 6 applies to all multiple residential dwellings of two or more units (BHMC 4-6-1). It then excludes three things: units already under Chapter 5; single-family homes, short-stay lodging, condominiums, cooperatives and government housing (the first five exemptions in 4-5-102, which 4-6-1 borrows); and units in any building whose certificate of occupancy was issued after February 1, 1995.

Read those two sections together and the practical picture comes out like this. Chapter 6 does not borrow Chapter 5’s exemptions for buildings finished after 1978 or for rents above $600. So a 1986 fourplex is under Chapter 6, and so is an apartment in a 1960s building that has always rented above $600. A house, a condo, or a building that got its certificate of occupancy in 1999 is under neither chapter.

The Chapter 6 annual increase

Section 4-6-3 sets four conditions.

• Frequency. One increase in any twelve-month period, and a full twelve months has to have passed since the last one.
• Amount. No more than the greater of 3% of the rent currently in effect, or the positive percentage change in the Consumer Price Index for the Los Angeles, Riverside and Orange County area, measured from May 1 of the prior year to May 1 of the current year. Because it is the greater of the two, 3% works as a floor on the maximum. The section does not write in a separate ceiling.
• Notice. Written notice to the tenant before the increase takes effect, given the way state law and the lease require.
• Compliance. An owner who is not in substantial compliance with the registration section, 4-6-10, cannot demand, accept or keep the increase.

For the current cycle, the California Attorney General’s rent-cap table lists Beverly Hills at 3.6% for July 1, 2026 through June 30, 2027. Apply it to the rent in effect now. On a $3,400 unit that is a maximum of $122.40 a month.

That last condition is the one that turns a routine notice into a refund. If the city’s registration file for the unit is incomplete, or fees and penalties are outstanding, the increase is not one you are entitled to collect. Our Beverly Hills property management page covers the registration cycle itself.

The Chapter 5 annual increase

Chapter 5 uses a different formula. For increases effective on or after December 15, 1981, section 4-5-303 caps the increase at the lesser of 8% or the CPI change as of the date of the notice. The CPI calculation compares the sum of the latest twelve monthly index figures for Los Angeles against the twelve before them. Because it is measured as of the notice date, the permitted figure moves month to month. The Apartment Association of Greater Los Angeles reported it at 3.33% effective June 12, 2026, and it has been updated since, so get the number from the city in the week you serve rather than reusing an old one.

Two more provisions in 4-5-303 matter. A lawfully collected security deposit can be raised by the same percentage as the base rent when the rent is recomputed. And, as in Chapter 6, an owner not in substantial compliance with the Chapter 5 registration section (4-5-801) cannot demand, accept or keep the increase.

What else can go on top of the rent

This is where the two chapters diverge most. Section 4-6-3 sets the Chapter 6 annual increase and says nothing about surcharges. Chapter 5, by contrast, has a full article of them.

Capital expenditure surcharge (Chapter 5, 4-5-304)

When the base rent is recomputed, the owner may add a surcharge for capital expenditures made since the last increase. The rules are specific:

• A capital expenditure is a permanent improvement or renovation allowable as such for IRS purposes, not ordinary repair or maintenance, with a useful life of at least five years. Exterior painting or texturing counts.
• Building-wide work is spread across all tenants by square footage and annualized on IRS straight-line depreciation schedules. Work that benefits particular units is charged only to those units.
• The surcharge cannot exceed 4% of the base rent in effect before the most recent allowable recomputation.
• Interior work inside a unit needs the tenant’s written consent unless the law requires the work. The tenant cannot unreasonably withhold it, but without consent there is no surcharge for that work.
• If the tenant asks, you must provide the documents behind the calculation. The surcharge is suspended until you mail them.
• No increase is allowed where the cost figure was arrived at collusively with a contractor or anyone else.

In practice that means keeping invoices, the depreciation schedule and the allocation math together in one file before the notice goes out, because the tenant can ask for them and the surcharge stops until you send them.

Additional tenants (Chapter 5, 4-5-307)

If the rental agreement sets a maximum number of occupants and does not name a dollar amount for adding someone, and at least one original occupant stays in the unit, the owner may raise the rent by up to 10% of the base rent for each additional tenant. When that person leaves, the rent comes back down by the same amount.

The others

Article 3 of Chapter 5 also contains sections on expenditures mandated by law (4-5-305), a utility expense surcharge (4-5-306), a water service penalty surcharge (4-5-308) and a refuse fee surcharge (4-5-309), and Article 4 has a hearing officer section on adjustments for tax increases (4-5-402). Each has its own mechanics. If you think one applies, read the section and confirm the calculation with the Rent Stabilization Division before it goes on a notice.

What the notice has to contain

Both chapters defer to state law for the notice itself. The AAGLA notice to owners on the city’s formula describes the requirement as thirty days’ notice before an increase takes effect, and our Beverly Hills page covers service. Chapter 5 adds content requirements of its own in 4-5-311:

• The notice has to state the basis for the increase.
• It has to tell the tenant that the records and documents supporting it are available for inspection on request, by the tenant or a representative.
• No otherwise-allowable increase can be imposed unless the owner’s or authorized agent’s name, address and telephone number are posted conspicuously in a common area such as the lobby or a hallway, and each tenant has received a written statement with the same information.

The same section deals with mistakes. A Chapter 5 notice that asks for more than the permitted level is not void for that reason alone. It takes effect at the permitted level, and the tenant can refuse to pay the excess. That protects the notice, but it also means any overcharge collected on it is money the tenant was entitled to withhold.

When a unit turns over

For a Chapter 6 unit, section 4-6-5 lets the owner and the new tenant agree on a new rent when every prior tenant vacated voluntarily, or after an eviction on certain of the grounds listed in 4-6-6. That agreed rent becomes the new base, and later increases follow 4-6-3. At least twenty-four hours before the lease is signed, the prospective tenant has to receive the city’s written notice covering the chapter and the allowable annual increase, among other topics, and acknowledge it in writing. Missing that notice carries a $500 administrative penalty. Our guide to ending a tenancy in Beverly Hills lists which grounds allow the reset and which do not.

Chapter 5 handles it in 4-5-312. When all tenants leave voluntarily, the chapter has no effect on the re-rental, and the unit comes back under the chapter once it is rented again unless an exemption applies. There is one exception worth knowing before a renovation: if the unit was vacated after a notice to demolish, convert to condominiums or remodel, it stays covered until the new tenant has lived there at least a year.

Houses, condos and newer buildings: the state cap

Property outside both chapters is not automatically uncapped. The Tenant Protection Act, California Civil Code 1947.12, limits increases on most rental housing more than fifteen years old to 5% plus the regional change in the cost of living, with a 10% maximum. The Attorney General’s table puts the Los Angeles area figure at 8.7% for increases starting between August 1, 2026 and July 31, 2027 (it was 8% for the twelve months before that).

Houses and condos owned by corporations are covered by that cap. A house or condo owned by an individual can be outside it, but only if the lease carries the notice language the statute requires. A building whose certificate of occupancy is less than fifteen years old is outside the state cap until it ages in. For a Beverly Hills owner, that means a 1999 building is now under the state cap even though the city ordinance never reaches it.

A checklist for this year’s notices

1. Confirm the parcel is inside the City of Beverly Hills.
2. Sort each unit: Chapter 5, Chapter 6, the state cap, or fully exempt.
3. Confirm registration is complete and paid for every covered unit. Without substantial compliance, the increase cannot be collected.
4. Check that twelve full months have passed since each unit’s last increase.
5. Get the current figure: 3.6% for Chapter 6 this cycle, the city’s current monthly figure for Chapter 5, 8.7% for state-cap units with increases starting on or after August 1, 2026.
6. For Chapter 5, decide whether any surcharge applies, and have its documents ready before serving.
7. For Chapter 5, confirm the owner or agent contact posting is up and every tenant has the written statement.
8. Draft the notice with the basis and the records-inspection language where Chapter 5 requires it, and serve it with the notice period state law requires.

Questions owners ask

If I skip this year’s increase, can I take a larger one next year?

Section 4-6-3 measures the Chapter 6 maximum against the rent currently in effect, one increase per twelve months, so each year’s figure applies to that year’s rent. The city’s Rent Stabilization Division can confirm how it treats a skipped year before you rely on a larger number.

Can I raise the rent on a Chapter 6 unit because I renovated it?

Section 4-6-3 provides only the annual increase. The capital expenditure surcharge in 4-5-304 is a Chapter 5 provision. Ask the Rent Stabilization Division and a landlord-tenant attorney what, if anything, is available for your Chapter 6 unit before you budget a renovation around higher rent.

My building has units under both chapters. Can I send one notice to everyone?

Not safely. The formulas, the current figures and the notice content differ. Chapter 5 notices need the basis and records-inspection language, and the contact posting has to be in place. Prepare each unit’s notice from its own chapter.

I sent a Chapter 5 notice above the cap. Do I need to start over?

Under 4-5-311(B) the notice is not void; it operates at the permitted level and the tenant can refuse the excess. Correct the amount you collect, and have an attorney review whether anything else about the notice needs fixing.

Does the state 8.7% apply to my rent-stabilized building?

No. Where the local ordinance sets a lower cap, the local rule controls. A Chapter 6 unit uses the city’s figure, currently 3.6%.

If you own in more than one city: the formulas do not travel. Culver City caps increases once a year against a posted figure, and Inglewood uses a two-tier cap with an online registry entry after the notice is served. Beverly Hills splits its stock across two chapters, and only one of them has surcharges. Our Los Angeles rent increase guide covers the City of LA and the state rules side by side.

Sources and disclaimer. Beverly Hills Municipal Code, Title 4, Chapter 5 (Rent Stabilization, Part I): section 4-5-101, Application; section 4-5-102, Exemptions; section 4-5-303, Annual Increases; section 4-5-304, Capital Expenditure Surcharge; section 4-5-307, Surcharge for Additional Tenants; section 4-5-311, Notices; section 4-5-312, Rerenting After Voluntary Vacancies; section 4-5-801, Registration; and the Chapter 5 table of contents for the remaining surcharge sections. Chapter 6 (Rent Stabilization, Part II): section 4-6-1, Application; section 4-6-3, Rental Increases; section 4-6-5, Vacancies. Code text as published by American Legal Publishing, current through Ord. 26-O-2938 (August 4, 2026). California Department of Justice, Office of the Attorney General, rent cap table (Beverly Hills 3.6% for 7/1/26 to 6/30/27; Los Angeles area statewide maximum 8% and 8.7%); California Civil Code section 1947.12. Apartment Association of Greater Los Angeles, Beverly Hills Updates Allowable Annual Increases (June 2026, Chapter 5 at 3.33% effective June 12, 2026) and City Council Approves Return to Existing Rent Increase Formula (thirty-day notice). Current as of October 2026. This article is general information for property owners from a California DRE-licensed property management company, not legal or tax advice. The Chapter 5 figure changes monthly and the Chapter 6 and state figures change annually. Confirm your unit’s chapter, the current figure and your registration status with the City of Beverly Hills Rent Stabilization Division, have a California landlord-tenant attorney review any notice before you serve it, and talk to your CPA about how capital improvements are depreciated.