California Property Management Laws

Property management laws are often complicated to understand, even if you’re an expert in real estate. However, if you live in California, you’re in luck as property management laws in the State are relatively easier to understand than in other states. Even though the laws are comprehensive, you might need an assistant or a professional real estate attorney to navigate them.
The property management laws in the State are closely related to fundamental real estate laws. In general, all property managers must work under a licensed and certified real estate broker. It is one of the Californian State’s major requirements, especially if a property manager doesn’t hold a license.

Moreover, there are many laws the State requires property managers to follow in California. Most of these laws provide security to tenants. That makes having sufficient working knowledge of California property management laws mandatory.

Whether you want to increase your knowledge of property management license or broaden your understanding of tenants’ rights laws, the article may help you. It includes information pertaining to what property managers can or cannot do in California and the rules they must follow.

2021 California Property Management Laws

For anyone wanting to enter a property business and manage properties on behalf of the homeowners, a property management license is a must in California. According to the 10131-b regulation, no one can buy, sell, or lease a property without a license. In many cases, property management companies hire unlicensed agents. But they assign them limited duties to perform under licensed brokers.
A professional property management company in Southern California needs to follow the given criteria of laws to obtain a license in the State.

  • Your minimum age must be 18 years
  • You must be a legal citizen of the USA
  • You must not have any criminal record and pass the licensing exam
  • You must complete three-level courses recommend and approved by the real estate department of California

Laws for Rental Application

As a landlord or property manager, you need to take the following aspects into account when searching for potential tenants to rent or sell a property:

» Tenant screening process

– According to the Department of Fair Employment and Housing Laws, property managers cannot deny a tenant’s application on the bases of their:

    Race

    Ancestry

    Religion

    Marital Status

    Sexual Orientation

    Medical Conditions/ physical impairment

    Gender and sex identity

» Screening Fee

– Rental Application law allows property managers to collect screening fee. However, it should not be more than the out-of-pocket cost of collecting information about the applicant. Note that property managers or landlords cannot charge a screening fee greater than $30 from an applicant.

Related Article: Southern California Rental Market Outlook

Laws for Security Deposit

Amount Range for Security Deposit – Property management companies or landlords cannot exceed the following security deposit as per the legislative code of Californian Real Estate.

  • Two months rental charges for an unfurnished house
  • Three months rental charges for a furnished house

Californian legislative code (section1905.5-1) further mandates that property managers and landlords must refund the unused security deposit within the span of 21 days of the renters leaving the property.

However, if there is any unpaid rent or repair and cleaning cost on account of tenants, the property owner has a right to withhold a portion or all of the deposit. In such cases, property owners need to provide a detailed itemized receipt to explain how he used the funds.

The law allows the tenant to sue his landlord if he/she fails to pay a security deposit refund or provide an itemized receipt. The tenant can also claim the court charges if the sum of the total amount goes up to $10,000.

Laws for Leasing Property

Legislative code’s section 1946 of the property management laws permits both month-to-month leases and fixed-term. Violation of lease-related laws by tenants may result in property eviction. Tenants need to take corrective measures within three days.

However, there are some exceptions mandated by Section 1946.7, which terminate the lease without penalty. For instance, the law terminates lease if the renter:

  • has suffered domestic violence
  • The landlord breach privacy rights
  • Has just begun military duty
  • The landlord fails to maintain or provide a habitable residence

California’s 2020 Rent Control Law caps annual rental raise at 5 percent plus inflation. It should not exceed a total sum of 10 percent.

The law has certain exemptions that include:

  • Buildings or properties constructed in 15 years
  • Single-family properties and condos, unless a real estate investment trust or a corporation owns them
  • Duplexes in which the landlord resides in one unit

Summing Up

All in all, thoroughly traversing property laws is necessary to step into and manage the property business. Most importantly, having an in-depth understanding of property management laws can help you avoid legal troubles and penalties. Contact RTI Property Managers for more insight on property management laws and property management services in the best area of Southern California. RTI Properties provides property management in Los Angeles and Orange County for small apartment buildings, single and multi-family homes, HOA’s, and large apartment complexes throughout Southern California – as well as most popularly in the Los Angeles area limits. Call today at (310) 532-5994 for more information.