As a landlord or rental property owner in California, you are sure to encounter your fair share of legal issues. Before getting into the landlord business, it’s a good idea to have a competent attorney by your side that you can call on for help should any issues arise. But, it’s also helpful to have your own basic understanding of California landlord tenant laws. This post lists some of the most important and common laws every California landlord should know to help you better understand your legal obligations and responsibilities when renting to tenants.
Limits on the Amount of a Security Deposit
This is one of the most basic laws every California landlord should know. You can’t just charge an arbitrary or excessive security deposit when a tenant moves in.
The maximum security deposit a landlord can charge in California is equal to 2 months rent, if the residence is unfurnished. For a fully furnished residence, a landlord can charge up to 3 months rent for a security deposit. And landlords can charge an additional 1/2 month rent if the tenant has a waterbed.
Also, it’s important to note that landlords cannot charge any nonrefundable fees as part of a security deposit.
Rent Rules that Landlords Must Follow
There are quite a few rules related to rent amounts, the collection of rent, and late fees that landlords should be aware of prior to renting out a place to a tenant. Here are the major things to keep in mind:
- the lease agreement must state the amount of rent owed each month
- the rent amount may be limited due to rent control restrictions in your area
- the lease agreement should clearly state when rent is due, including what happens if that date falls on a weekend or holiday, and how rent is to be paid (e.g. check, money order, online payment, etc.)
- a landlord can only charge a fee for late rental payment if the lease specifies that a fee will apply
- a late fee must be a reasonable amount estimated by the costs the landlord faces due to the late payment
- a landlord can charge a $25 fee for a bounced check the first time, and a $35 fee for each additional bounced check
- a landlord must give at least 30 days notice before increasing the rent, or 60 days notice if the amount of the total increase in rent over the past 12 months is more than 10% of the lowest rent charged in that time
- a landlord cannot increase rent in a discriminatory way (such as only for certain races) or in retaliation to a legal action taken by the tenant (such as complaining to a housing authority about issues with the building)
- if the tenant does not pay rent, the landlord must give the tenant at least 3 days to either pay or move out and the landlord cannot file for eviction until the 3 days has passed
Disclosures Landlords Are Required to Make
Before signing a lease with a new tenant, a landlord is required to make certain disclosures of information. Here is what a landlord must disclose:
- Notice of registered sex offender database – the following language must appear on the lease agreement: “Notice: Pursuant to Section 290.46 of the Penal Code, information about specified registered sex offenders is made available to the public via an Internet Web site maintained by the Department of Justice at www.meganslaw.ca.gov. Depending on an offender’s criminal history, this information will include either the address at which the offender resides or the community of residence and zip code in which he or she resides.” (Cal. Civ. Code § 2079.10a)
- Whether utilities are shared - the lease must state if multiple tenants share utilities such as gas or electricity and how the costs are apportioned. (Cal. Civ. Code § 1940.9)
- Locations of ordinances – the landlord must disclose any former federal or state ordinance locations within 1 mile of the rental unit. (Cal. Civ. Code § 1940.7)
- Toxic mold – the landlord must provide written disclosure of any known mold on the premises that exceeds health code limits and provide a consumer handbook explaining the health concerns of mold exposure. (Cal. Health & Safety Code §§ 26147, 26148)
- Pest control services – the landlord must provide notice of whether any pest control services have been used, including what the pest was, what pesticides were used, the health risks of pesticide exposure, and the frequency of treatments if they’re ongoing. (Cal. Civ. Code § 1940.8, Cal. Bus. & Prof. Code § 8538)
- Intention to demolish - the landlord must disclose if and when the rental unit will be demolished, if there is an intention to do so. (Cal. Civ. Code § 1940.6)
- Smoking policy – the lease agreement must state if smoking is prohibited in certain areas, and where those areas are. (Cal. Civ. Code § 1947.5)
When Tenants Can Withhold Rent
In some instances, a tenant can legally refuse to pay rent, deduct from their rental payments, or take other legal action against the landlord. Here are the circumstances you need to know about to understand your rights regarding rent collection:
- If a property does not meet structural, health, and safety standards (such as a leaky roof) the tenant can withhold rent or fix the problems themselves and deduct the cost from their rent
- It must be a serious problem, and not just a simple annoyance; i.e. anything that threatens a tenants health or safety would apply, but not just a leaky faucet
- The problem cannot be caused by the tenant or tenant’s guest through deliberate action or neglect
- The tenant must notify the landlord and give the landlord a reasonable chance to fix the issue
- The tenant cannot just deduct the entire rent amount – the amount deducted must be reasonable given the problem at hand
Being a landlord can be a rewarding and lucrative business, but it certainly comes with a number of legal issues that you must be aware of. Understanding these basic laws every California landlord should know is a great first step toward establishing a successful rental property management business.
Failure to observe these laws can lead to financial problems, unnecessary lawsuits, or foreclosure of the property should a landlord fail to make mortgage payments as a result. That’s why working with an experienced real estate lawyer that is familiar with California landlord tenant laws is a great first step on your way to becoming a successful rental property owner.