Costa-Hawkins single-family exemptions: what actually applies to your house
"It's a single-family home, so it's exempt." I've heard it at kitchen tables in Oakland, in a Berkeley escrow office, and from a Hayward listing agent about to cost her client the deal. Exempt from what? Almost nobody saying it knows.
There are two layers of rules and two exemptions. Confuse them and you can lose a sale in the last week of escrow.
The Costa-Hawkins layer
Costa-Hawkins is the state law, Civil Code sections 1954.50 and following, that limits local rent control. Two parts matter to a house owner. Cities can't cap rent on a dwelling that can be sold separately from any other unit, meaning a single-family house or a condo. And cities can't cap rent on units with a certificate of occupancy after February 1, 1995.
That's it. Costa-Hawkins says nothing about eviction. It doesn't stop a city from requiring just cause to end your tenancy, and Oakland, San Francisco, Berkeley and Richmond all do, for most single-family rentals. So your house is exempt from the local rent cap and not exempt from the local eviction rules.
The AB 1482 layer
Then there's the statewide law, AB 1482, in Civil Code 1946.2 and 1947.12. It caps annual increases at 5 percent plus local inflation, hard ceiling 10 percent, and requires just cause after 12 months of occupancy. It applies where no stricter local ordinance does, which makes it the rule for houses in Walnut Creek, Fremont, Daly City and most other Bay Area cities without a rent board.
AB 1482 has its own single-family exemption, and this is the one people mean when they say "exempt." It's conditional. The house has to be separately alienable, the owner can't be a corporation, a real estate investment trust, or an LLC with a corporate member, and the lease has to contain a specific notice. For tenancies starting after July 1, 2020 the notice must be in the rental agreement itself, in the statutory wording, saying the property isn't subject to the rent limits of 1947.12 or the just cause requirements of 1946.2 and that the owner isn't one of the excluded entities.
No notice, no exemption. I've read dozens of leases from owners who were sure they were exempt and never put the paragraph in. The California HCD posts guidance on the statute, and the C.A.R. legal pages are where agents get the form language. Some agents still don't know it.
The corporate-owner problem
The trust I worked for held title in a revocable family trust, and that's fine: a trust isn't a corporation. But a lot of small landlords were told at a seminar to put the house in an LLC for liability. An LLC owned by people is still fine. An LLC with a corporate member is not, and neither is a corporation. Move the house into the wrong entity and the AB 1482 exemption disappears the day the deed records, lease language or not.
A buyer's attorney will pull the vesting. If you've been raising rent past the cap under an entity that killed the exemption, that's an overcharge claim in the file, and it transfers with the house.
Units, ADUs and the house that stopped being a house
The exemption is for a dwelling that can be sold separately from any other dwelling. Build an ADU on the lot and rent it out, and you now have two dwellings on one parcel that can't be sold apart. Whether the main house keeps its Costa-Hawkins exemption is a live argument that varies by city; San Francisco's board has long treated a house plus a rented in-law as a multi-unit building. Ask your board first.
Same thing if the house was split into two units, permitted or not. A two-unit building isn't a single-family house, whatever the assessor calls it. Unpermitted units make it worse: covered by the ordinance and impossible to legally rent, at the same time.
Worked example. Say a house on Redwood Road with a converted basement rented for $1,600. The owner treats it as an exempt single-family home and raises the upstairs rent 12 percent. The buyer's inspection finds the basement unit, the buyer's lawyer finds the rent history, and the offer drops by more than the ADU ever earned. I've watched that happen twice.
Hayward and the newer ordinances
Hayward has run its own Residential Rent Stabilization Ordinance for years and tightened it in 2019, and the city housing page is where to confirm what it covers today. Houses are generally outside Hayward's cap, but just cause and AB 1482 still apply, with Hayward's own notice and filing requirements on top.
The list of Bay Area cities with their own ordinances keeps growing: Antioch, Concord and Alameda all have programs now. If you own in a city I didn't name, assume the rules changed.
How misreading the exemption blows up a sale
It happens in escrow. The buyer's lawyer asks for the lease, finds no AB 1482 notice, and asks for the rent history. The seller has been raising rent 9 percent a year since 2023 under an exemption that didn't exist. Now there's a refund owed to the tenant, the buyer wants a credit or a settlement before closing, and the tenant, who has just been told all this, stops cooperating with showings. Thirty days of escrow becomes ninety.
The state courts' housing self-help pages tell tenants how to pursue exactly this. Assume yours has read them.
This is general information from someone who managed houses, not legal or tax advice, and a house with an entity or an ADU in the picture deserves an hour with a real attorney, not a Facebook thread.
The owner's checklist before listing or taking an offer
Pull the deed and check the vesting. Person, trust, or an LLC without a corporate member is fine; anything else, stop.
Read the lease for the AB 1482 notice paragraph. If it isn't there and the tenancy started after mid-2020, the exemption isn't there either.
Count the dwellings on the lot. One house, one unit, no rented ADU, no basement tenant.
Check the certificate of occupancy date if the house is newer.
Confirm which local ordinance applies and whether the house is inside its just cause rules. In the four rent board cities it almost always is.
Reconstruct the rent history for the last three years and compare every increase with the cap that actually applied.
If the answer to any of that is "I'm not sure," the house isn't ready to list. Where the file is messy and the tenant is staying either way, I'd rather sell the duplex as-is, tenants and all, to a buyer who underwrites the tenancy and prices the mess, than fix it under escrow pressure with a lender on the phone.
And if what you're holding is an LLC you regret, an ADU you never permitted, or a rent history you can't defend, the move is to get out of a Bay Area rental without the listing circus. Have the lease, the rent ledger and the last three increase notices on the table before that call, because they're the first things any buyer asks for.