SB 1365: Emergency Rent Limits Now Cover Long-Term Leases in Concord and Fairfield
Short answer: Starting January 1, 2027, a lease longer than one year no longer keeps a rental outside California's emergency price-gouging law. SB 1365, signed September 30, 2026, removes that exemption from Penal Code Section 396. When a state of emergency is declared for an area, rents on covered housing generally can't go up more than 10% during the emergency period, no matter how long the original lease was. This is not a new everyday rent cap. It only applies when an emergency declaration is in effect, and it sits on top of AB 1482 and, in Concord, the city's rent ordinance.
Key takeaways
- The long-lease loophole is gone. Before SB 1365, Penal Code 396 only covered housing with an initial lease term of one year or less. From 2027 on, lease length doesn't matter.
- It only switches on in an emergency. Wildfires, floods, and severe storms can trigger a declaration. The restriction generally runs 30 days and is often extended.
- The limit is 10%, and the lower cap wins. Penal Code 396 does not let you charge more than AB 1482 or a local rent ordinance allows.
- Spending money is not an automatic defense. Repair and improvement costs can justify a larger increase only under specific conditions, and you need records to prove it.
- Violations are serious. A violation is a misdemeanor with fines up to $10,000 and up to a year in jail, plus civil exposure as an unfair business practice.
What SB 1365 changes
Penal Code Section 396 is California's price-gouging law. After the Governor, a county, or a city declares an emergency, it limits price increases on housing and other essentials in the affected area.
For housing, the law makes it unlawful to raise the rent advertised, offered, or charged by more than 10% during the emergency period. Until now, the law defined covered "housing" as rental housing with an initial lease term of no longer than one year. A two-year lease fell outside it.
SB 1365 removes that limit. Beginning January 1, 2027, the emergency restrictions can apply to rental housing regardless of the initial lease term.
How long the restrictions last
The rent restriction generally lasts 30 days after the declaration. The Governor, the Legislature, or a local official or legislative body can extend it, and after major disasters extensions are common. In practice, owners should treat the restriction as in effect until they confirm it has ended for their area.
Where emergency limits fit with the other rent rules
| Rule | When it applies | What it limits |
|---|---|---|
| AB 1482 (Civil Code 1947.12) | Year-round, on covered units | Rent increases over any 12 months: 5% plus local CPI, capped at 10% |
| Concord rent ordinance | Year-round, on covered units in Concord | Increases capped at 5% a year on multifamily units built before February 1, 1995 |
| Penal Code 396 (as amended by SB 1365) | Only during a declared emergency, in the affected area | Increases above 10% of the pre-declaration rent |
| Civil Code 827 | Every increase | 30 or 90 days of written notice, served properly |
When more than one rule applies, the strictest one controls. Penal Code 396 says outright that it does not authorize charging more than a local rent control ordinance allows.
What about repairs and improvements?
SB 1365 also updates the defense for increases tied to property costs. Under SB 1365, an increase above 10% may be defended if it is directly tied to costs for repairs or additions beyond normal maintenance incurred within the year before the declaration, and either:
- the home was rented, advertised for rent, or offered for rent when the costs were incurred, or
- the owner can prove that, within a year before the declaration, they already intended to offer it for rent within six months of the work.
An increase the tenant agreed to before the declaration is also a defense.
This is why documentation matters. Invoices, completion dates, lease records, and listing history are what separate a defensible increase from a price-gouging claim. Routine maintenance does not count.
Vacant units and new listings
The law also covers a home you are about to list. If the unit was rented or offered within the year before the declaration, the baseline is the last rent paid or offered. If it was not rented or offered in that year, the limit is generally 160% of HUD's fair market rent for the area (plus 5% if fully furnished). If you plan to list a vacant rental during an emergency, check the baseline before you set the price.
Evictions during an emergency
During the emergency period, it is also unlawful to evict a tenant and then re-rent the unit for more than the evicted tenant could have been charged. Evictions for lawful reasons are still allowed, and an eviction that started before the declaration can continue.
Concord and Fairfield specifics
Concord. Concord's rent ordinance caps increases at 5% a year on covered multifamily units. During an emergency, that lower cap still controls. Penal Code 396 adds the most for Concord homes the ordinance doesn't cover, such as single-family homes and newer buildings, and for vacant units being re-listed.
Fairfield and Solano County. Fairfield has no local rent ordinance, and many newer Fairfield, Suisun City, and Vacaville homes are exempt from AB 1482. For those homes, an emergency declaration may be the only rent limit that applies. Solano County has seen wildfire declarations before, so this is a practical risk, not a theoretical one.
What owners should do before January 1, 2027
- Stop treating long leases as an exemption. A 2-year or 3-year lease will be covered during an emergency starting in 2027.
- Add an emergency check to every rent increase and new listing. Before you send a notice or post a price, confirm whether a state, county, or city declaration covers the property.
- Keep cost records. Save invoices, dates, and listing history for any work beyond normal maintenance.
- Know your baseline. Write down the current rent, or the last advertised rent for vacant units, so you know where the 10% line sits.
- Layer the rules. Check AB 1482, Concord's rent ordinance where it applies, and notice rules every time, not just in an emergency.
How Legacy helps
Emergency declarations come fast, and they rarely line up with your renewal calendar. We track declarations in the areas we manage, check every rent increase and new listing against AB 1482, Concord's rent ordinance, and Penal Code 396, and keep the repair and listing records that support a defensible price. Our fee is a percentage of collected rent, so we only do well when your property is rented at a compliant, sustainable price, and we don't charge tech, vacancy, or marketing fees.
Related reading: 2026 rent increase limits for Concord and Fairfield and can you send a rent increase notice by email?.
Frequently asked questions
What is SB 1365?
SB 1365 is a 2026 California law that amends Penal Code Section 396, the state's price-gouging law. It removes the exemption for rental housing with an initial lease term longer than one year, starting January 1, 2027.
Is SB 1365 a new 10% rent cap?
No. The 10% limit only applies during a declared state of emergency, in the affected area, for the emergency period. The rest of the time, AB 1482 and any local rules apply as usual.
Does a two-year lease protect me from emergency rent limits?
Not after January 1, 2027. Lease length no longer matters under Penal Code 396.
Can I raise rent more than 10% during an emergency if I renovated the unit?
Possibly, but only under specific conditions. The costs must be for repairs or additions beyond normal maintenance, incurred within the year before the declaration, and the home must have been rented or offered for rent at the time, or you must be able to prove you already intended to rent it. Keep the records.
Does SB 1365 apply to my Fairfield home if it's exempt from AB 1482?
Yes. Penal Code 396 has its own coverage rules, separate from AB 1482. An AB 1482 exemption does not exempt you from emergency price-gouging limits.
Talk to us
Call our Concord office at (925) 262-8145 or our Fairfield office at (707) 317-9570. Request a free rental analysis.
