No, mostly, with caveats. A California Court of Appeal ruled April 15, 2026 that LA can't require post-1995 apartment owners to pay relocation fees tied to lawful rent increases on Costa-Hawkins-exempt units. But the opinion is unpublished, meaning it signals judicial direction without binding other courts. Here's what changed, what didn't, and what to be careful about.
The case is Apartment Assn. of L.A. County v. City of L.A., docket B336071, decided by the 2nd District Court of Appeal, Division 7. Two parts to the ruling.
Struck down: LA's Relocation Assistance Ordinance as applied to Costa-Hawkins-exempt units. The court said LA can't require owners of post-1995 apartments, single-family homes, or condos to pay relocation fees when a tenant voluntarily vacates after a lawful market rent increase. Tying relocation to a lawful Costa-Hawkins rent increase frustrates what Costa-Hawkins was designed to protect: the landlord's right to set market rents on exempt units.
Upheld: LA's separate Threshold Ordinance, which requires unpaid rent to reach at least one month's fair-market rent before a landlord can file for unlawful detainer. The court found this one is consistent with state law and stays in force.
This is a mixed ruling, not a clean landlord sweep. Anyone framing it as "LA just legalized unlimited rent increases" is overreading.
The opinion is unpublished under California Rule of Court 8.1115. In practice, that means:
Translation: this is a strong signal about how the 2nd District reads Costa-Hawkins, but it's not the last word. Treat it as persuasive, not definitive. If you're making major operational changes based on this ruling alone, talk to a landlord-tenant attorney first.
Only Costa-Hawkins-exempt units. The test is simple:
If you own a pre-1978 walk-up in South LA, Koreatown, or Mid-City, the ruling changes nothing for you. LARSO rules all still apply. 1101 W 45th Street in South LA that I closed last year is pre-1978. Ruling is irrelevant to that building.
Three practical changes.
1. Raise rents to market on voluntary vacancies without triggering the LA relocation obligation. When a tenant on a post-1995 unit voluntarily chooses to leave after a lawful rent increase, you don't owe the LA Relocation Assistance Ordinance fee. The ruling invalidated that specific application.
2. Audit past relocation payments on Costa-Hawkins-exempt units. If you paid LA-mandated relocation assistance on a post-1995 building in the last 12-18 months where a tenant voluntarily left after a lawful rent increase, that payment may have been collected without legal basis. Whether you can recover it isn't addressed in the available reporting. Don't assume you can demand repayment. This is a conversation for a landlord-tenant attorney, not a broker.
3. Document the Costa-Hawkins exemption status of every unit carefully. If a tenant or the City challenges your non-payment of relocation assistance, you need to prove the unit is Costa-Hawkins exempt. That means certificate of occupancy date, unit configuration, and ownership structure clearly documented. Put this in every tenant file now.
The ruling is narrow. These relocation obligations stay in force for post-1995 units:
And pre-1995 stock remains fully under LARSO. No change there.
The LA decision isn't a surprise to anyone tracking California landlord-tenant law. It leans heavily on California Apartment Association v. City of Pasadena, decided in 2025, which struck down a similar Pasadena ordinance for the same Costa-Hawkins-preemption reasons. The California Supreme Court declined to review Pasadena on April 1, 2026, letting that ruling stand.
LA's ordinance was built on nearly the same theory. The 2nd District applied Pasadena's reasoning to LA and reached the same conclusion.
Expect other California cities with similar ordinances (Santa Monica, Beverly Hills, West Hollywood, Long Beach) to face challenges grounded in the same logic. This doesn't end here.
Two practical implications for anyone with a post-1995 LA apartment building in the market.
Buyers underwrite differently. A post-1995 asset without the LA relocation-fee overhang pencils differently than it did in March. Cap rates on post-1995 stock may tighten modestly as buyers factor in reduced operating friction on voluntary turnovers.
Disclosure matters more, not less. Sellers should update the OM to note the current legal context while also disclosing that the opinion is unpublished and non-binding. Buyers' attorneys will raise it in due diligence regardless.
If you're a buyer underwriting a post-1995 building right now, this shifts the math slightly in your favor on voluntary-turnover assumptions. If you're a seller of post-1995 stock, it doesn't change your list price meaningfully, but it does clean up one operational friction that may have suppressed buyer interest.
Before changing anything operationally, three moves.
First, confirm your building's Costa-Hawkins exemption status in writing. The certificate of occupancy and construction completion date are the documents that matter.
Second, review any relocation payments you've made in the last 12-18 months. If they were tied to lawful rent increases on exempt units, document them but don't act yet.
Third, coordinate with your property management and legal counsel before updating any policy. The ruling is unpublished, and enforcement risk hasn't fully stabilized.
If you want a sanity check on what this ruling means for your specific asset, whether you're thinking about selling, raising rents to market, or just need perspective on relocation policy, that's a 20-minute conversation.
Request a free Broker Opinion of Value: property valuation form.
Or call or text me directly: 916-996-4421.
Not under the LA Relocation Assistance Ordinance as applied to Costa-Hawkins-exempt units, based on the April 15, 2026 Court of Appeal ruling in Apartment Assn. of L.A. County v. City of L.A. But the opinion is unpublished, which means it's persuasive but not binding on other courts. If you're withholding relocation payment based on this ruling, document the Costa-Hawkins exemption status of the unit carefully and consult a landlord-tenant attorney before changing your policy.
The ruling doesn't address retroactivity clearly, so there's no simple yes-or-no. If the ruling is deemed prospective only, past payments made in good faith under the ordinance likely stand. If retroactive, there may be a path to recovery. This is a question for a landlord-tenant attorney, not a broker. Don't assume you can reverse past payments without legal counsel.
No. The ruling applies only to Costa-Hawkins-exempt units: post-February 1995 multifamily, single-family homes, and condos. Pre-1978 buildings and most mid-century LA apartment stock are under LA's Rent Stabilization Ordinance (RSO) and still require relocation assistance, rent caps, and just-cause evictions. Nothing changes for RSO buildings.
RSO (LA's Rent Stabilization Ordinance) covers most 2+ unit buildings built on or before October 1, 1978 in the City of LA. It caps rent increases, limits evictions, and requires relocation assistance. Costa-Hawkins is the state law that exempts certain properties from local rent control: single-family homes, condos, and multifamily construction completed after February 1, 1995. Exempt units can be rented at market rates and aren't subject to local rent caps. Most post-1995 LA apartments are Costa-Hawkins exempt.
Yes. The City has approximately 60 days from filing (mid-June 2026) to petition the California Supreme Court for review. The Supreme Court accepts only a small fraction of petitions and may decline to review the case, in which case the Court of Appeal ruling becomes the final word in the 2nd District. The California Apartment Association has noted the possibility of further appeals on the Threshold Ordinance portion, which was upheld. As of this writing, no Supreme Court petition has been reported.
LA's Threshold Ordinance requires unpaid rent to reach at least one month's fair-market rent before a landlord can file for unlawful detainer (eviction for non-payment). The Court of Appeal found this rule doesn't conflict with Costa-Hawkins because it regulates the eviction process, not the rent amount. Landlords can still raise rents to market on Costa-Hawkins-exempt units. They just have to wait for the unpaid balance to hit the threshold before filing eviction papers. It stays in force.
Not under the LA Relocation Assistance Ordinance as applied to Costa-Hawkins-exempt units, based on the April 15, 2026 Court of Appeal ruling in Apartment Assn. of L.A. County v. City of L.A. But the opinion is unpublished, which means it's persuasive but not binding on other courts. If you're withholding relocation payment based on this ruling, document the Costa-Hawkins exemption status of the unit carefully and consult a landlord-tenant attorney before changing your policy.
The ruling doesn't address retroactivity clearly, so there's no simple yes-or-no. If the ruling is deemed prospective only, past payments made in good faith under the ordinance likely stand. If retroactive, there may be a path to recovery. This is a question for a landlord-tenant attorney, not a broker. Don't assume you can reverse past payments without legal counsel.
