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California · Cal. Civ. Code §1947.12 · SF Rent Board Rules §4.12 · BMC §13.76.110 · LAMC §151.06.A

AB 1482 banking provision No banking under AB 1482 itself. Banking is allowed under SF §4.12 (with ceilings) and Berkeley BMC §13.76.110 (with limits). LA RSO and Oakland forfeit. Four banking models in one statewide calculator.

Banking — saving unused rent-increase capacity from one year to use in a later year — is the single most misunderstood concept in California rent-control compliance. The state-level rule (no banking under AB 1482) is one sentence. The local overlays produce four genuinely different banking models that operate on the same unit on the same notice cycle. Get the wrong model wrong and the increase is void. Below is the side-by-side.

State rule: AB 1482 forfeits unused capacity

Cal. Civ. Code §1947.12 caps annual rent increases at 5% plus regional CPI, with an absolute ceiling of 10%. The statute itself does not use the word "banking" and does not mention what happens to unused capacity. California's housing-department guidance and every appellate-level read of the statute treat the silence as forfeiture: a landlord who raised rent 3% in calendar year 2025 cannot stack the unused 5.8% (= 8.8% 2025 cap minus 3% used) onto 2026's 8.8% cap to produce a 14.6% increase. Each 12-month window starts fresh.

The forfeiture rule is administratively clean: it eliminates the need to track per-unit cumulative under-increases over multi-year windows, eliminates disputes over which capacity was used when, and aligns with AB 1482's stated purpose (limiting tenant-side rent shock). Local ordinances that allow banking generally come from rent-control regimes that pre-date AB 1482 and have their own institutional rationale.

San Francisco: full banking with two ceilings

San Francisco's Rent Board Rules §4.12 allow a landlord to bank any portion of the AGA (Allowable Annual Increase) that was not served as a rent increase in a prior rent year. The banked capacity persists indefinitely until used, transfers with the unit on sale, and survives changes in tenancy.

Two ceilings constrain how the banked capacity may be released:

  • The 7%/year ceiling. The total rent increase served in any single rent year (March 1 to February 28/29) cannot exceed 7%, even if banking math would allow more. The current AGA plus any released banking together cannot break 7%.
  • The 10%/notice ceiling. Any single notice of increase cannot move rent more than 10%, regardless of banked capacity. This is also the floor under Cal. Civ. Code §1947.12, so it operates as a redundant ceiling for SF units.

Worked example: a unit at $3,000/mo paid the SF 2024-25 AGA (1.4%) and skipped the 2025-26 AGA (1.4%) entirely. The SF 2026-27 AGA is 1.6%. The landlord may serve a 1.6% (current AGA) + 1.4% (banked) = 3.0% increase on March 1, 2026 — under both ceilings. If the landlord had skipped two prior AGAs (1.4% + 1.4% = 2.8%), the math would still permit only 1.6% + 2.8% = 4.4% on the current notice (under both 7% and 10% ceilings). Continued accumulation is retained for future notices.

§4.12(c) requires the notice to separately itemize the AGA portion and the banked portion. A notice that bundles them as a single percentage is defective and the banked portion is forfeited.

Berkeley: hybrid accumulation with petition gate

Berkeley's Berkeley Municipal Code §13.76.110 permits the AGA to accumulate from year to year without the per-notice ceiling SF imposes. But §13.76.110(B)(2) gates any accumulated increase that would push the unit's effective rent above the level it was at when first decontrolled — for that the landlord must file a Rent Board petition under BMC §13.76.150, which the Board can deny on tenant-hardship grounds.

BMC §13.76.080(F) imposes the same notice-itemization requirement as SF: the AGA portion and the accumulated portion must be disclosed separately. The factory's Berkeley deep-dive blog post covers the AGA-denial gate in detail.

LA RSO, Oakland, Santa Monica: forfeiture

LA RSO's LAMC §151.06.A explicitly forfeits any portion of the annual permitted increase that is not served. Oakland Municipal Code §8.22.070 and Santa Monica Charter Article XVIII §1804(a) operate on identical forfeiture principles. A landlord in any of these jurisdictions who underutilizes the cap in 2025 cannot make up the difference in 2026. The 2026 cap is the operative constraint, full stop.

When the same unit is governed by two regimes

The harder pattern: a unit governed by both AB 1482 (state) and a local ordinance with banking. Three sub-cases:

  1. SF unit, AB 1482-eligible building (post-1979 of-occupancy, some non-Costa-Hawkins-exempt sub-types). The local SF ordinance with §4.12 banking does not apply; AB 1482 governs with no banking. The §4.12 banking rule is only available for units covered by SF rent control (generally pre-June-1979 certificate of occupancy units or units that have opted in).
  2. Berkeley unit covered by BMC 13.76. The Berkeley AGA banking applies; AB 1482 layers as a 10% absolute ceiling. In practice the Berkeley AGA is far below the 10% AB 1482 cap (2026 AGA is 1.0%) so the AB 1482 ceiling rarely binds.
  3. LA RSO unit also covered by AB 1482. The LA RSO 3.0% (or 2.8% post-July-1) cap binds because Cal. Civ. Code §1947.12(b)(1)(B) defers to stricter local caps. No banking either way (LA forfeits, AB 1482 forfeits).

Practical sequence for landlords

Before serving any rent increase in a banking-eligible jurisdiction:

  1. Confirm the unit is covered by the local rent-control ordinance (not just AB 1482). Banking only applies to local-ordinance-covered units.
  2. Pull the prior 5+ years of notices for the unit. Calculate the per-year AGA the unit was eligible for vs the increase actually served. The difference is the running banked balance.
  3. Apply the local ceiling (SF 7%/year + 10%/notice; Berkeley petition gate above original rent level).
  4. Apply the AB 1482 10% absolute ceiling on top — applies to every California unit irrespective of local banking allowance.
  5. Itemize the AGA portion and the banked portion in the notice. Bundling forfeits the banked portion in SF and Berkeley.
  6. Apply the §827(b) notice-period rule — 30 days under 10%, 90 days at or above 10%. See the 90-day notice explainer for the cumulative-trigger trap.

How RentCeiling enforces this for you

RentCeiling's per-unit compliance log retains every prior notice, runs the banking calculation against the open rule-set for the relevant jurisdiction, and itemizes the notice automatically when banking is released. The SF notice generator produces a §4.12-compliant separate-itemization output. The Berkeley notice generator does the same for BMC §13.76.080(F). Run the California calculator to see the operative ceiling for your unit before drafting.

Run the California calculator (free)

Common questions

Does AB 1482 allow banking unused rent increases?

No. Cal. Civ. Code §1947.12 caps annual increases at 5% plus regional CPI (8.8% for 2026), but the statute is silent on banking and California courts read the silence as forfeiture. If you raised rent only 3% in 2025, you cannot stack the unused 5.8% onto 2026's 8.8%. You start each 12-month window fresh.

Which California cities allow banking?

San Francisco (SF Rent Board Rules §4.12) allows full banking with two ceilings — no more than 7% in any rent year and no more than 10% in any single notice. Berkeley (BMC §13.76.110) allows accumulation of unused AGA capacity with no per-notice ceiling but a Rent Board petition gate for any year that would push effective rent above what the unit was paying at decontrol. LA RSO (LAMC §151.06.A) explicitly forfeits unused capacity. Oakland, Santa Monica, and West Hollywood track LA on forfeiture.

If my unit is in SF and I banked 4% from 2024-25, can I serve a 5.6% increase in 2026?

Yes if it doesn't break either §4.12 ceiling. SF's 2026-27 AGA is 1.6%. Adding 4% banked = 5.6% total — under the 7%/year ceiling and under the 10%/notice ceiling, so the increase is lawful. The notice must separately disclose the AGA portion (1.6%) and the banked portion (4.0%) per SF Rent Board Rules §4.12(c).

Does the 10% AB 1482 hard cap matter for SF or Berkeley banking?

Yes. Even if SF or Berkeley banking math would allow more, no California unit can be increased more than 10% in any 12-month period under Cal. Civ. Code §1947.12(a)(2). For 2026 the AB 1482 effective cap is 8.8% (5% + 3.8% regional CPI), so the 10% absolute ceiling is rarely the operative constraint, but it's the floor on every banking calculation.

How do I prove banking compliance if a tenant disputes the math?

The notice itself is the primary record. SF Rent Board Rules §4.12(c) requires the notice to itemize the AGA portion and the banked portion separately. Berkeley BMC §13.76.080(F) requires similar itemization. Save the notice plus the prior 5+ years of notices to reconstruct the banked-amount-as-of-today calculation. RentCeiling's compliance log retains all of these automatically.