There are several benefits to becoming a landlord in California. But still, rental property management comes with many responsibilities and questions.
Like several California landlords, you could be wondering if a security deposit accrues interest or how to conduct tenant screening properly. Eviction notices, repair responsibilities, late rent payment are other issues that California landlords struggle with.
This guide by experts at RTI Properties, a well-reputed rental property management company in Southern California- discusses basic Landlord-Tenant Laws in California that govern the above issues and others related to rental properties.
Table of Contents
Rent Control in California
California’s statewide rent control law, known as Assembly Bill 1482 or the Tenant Protect Act of 2019, serves two purposes: limiting unreasonable rent increases and restricting landlords from evicting tenants without a cause.
In this section, we will focus on rent increase laws.
Tenant Protect Act of 2019 limits annual rent increase for qualifying units to 5% plus local cost-of-living adjustment, or 10% of the lowest amount of rent charged within 12 months before rent increase- whoever figure is the lowest. Still, you cannot raise the rent more than once within 12 months.
The cost of living adjustment is based on the Consumer Price Index(CPI) in each metropolitan area.
Some California communities, including West Hollywood, Santa Monica, and Beverly Hills, have local rent control laws which might apply to rental units not covered by Assembly Bill 1482.
Security Deposit Laws in California
California does not require a security deposit, but we recommend that you collect them anyway.
A security deposit helps you gauge a potential tenant’s finical stability, but most importantly, it helps you secure compensation for unpaid rent or property damage caused by the tenant.
A landlord or rental property management professional cannot charge more than two months’ rent as a security deposit for unfurnished rentals. For furnished units, the security deposit cannot be higher than three months’ rent. Still, you cannot charge tenants who are active service members more than two months’ rent for furnished rental and no more than a month’s rent for an unfurnished rental unit.
Bill 1482 allows you to withhold a security deposit in case:
- The tenant owes unpaid rent
- The tenant caused damage to the property beyond normal wear and tear.
- Apartment is dirty
However, you must provide the tenant with a written itemized list of how the security deposit covered costs- whether repairs or unpaid rent. The list should include paid receipts related to repairs and be provided to the tenant within 21 days of them vacating the premises.
If you have no reason to withhold the security deposit, the law demands that you return the deposit within 21 days of the tenant moving out. Note that some cities like San Francisco and Los Angeles require landlords to pay interest on security deposits.
Rental Application and Tenant Screening Laws
California law requires landlords to provide a lease agreement and any other legal paperwork for tenancies 12 months or longer. If the term is less than 12 months, landlords may consider oral agreements. However, it is hard to prove the terms and conditions with a verbal agreement. Written agreements can help quicken dispute settlements because it is easier to prove whatever the involved parties agreed on.
With over three decades of experience in rental property management, experts at RTI Properties always recommend landlords and tenants sign a written rental agreement, regardless of the rental term’s length.
In California, you may charge a nonrefundable application fee. But the fee should not exceed your actual out-of-pocket costs of things like screening services and the value of time spent in obtaining information about a prospective tenant. As of 2021, the highest application fee you can charge in California is $52.
In California, you have the right to run background checks on your potential tenants, including criminal history, rental history, and credit score. But you must do so in a nondiscriminatory manner; otherwise, you set yourself up for penalties.
However, some cities like Berkeley and Oakland have banned criminal background checks on tenants and rejecting candidates based on their past criminal convictions. Richmond and San Francisco have similar restrictions for affordable housing options.
Landlord Disclosures in California
California law requires landlords to disclose specific information to tenants. You must disclose whether gas or electricity servicing a tenant’s unit also serves other areas and how costs will be paid fairly.
You are not required to provide a move-in condition checklist for tenants to complete. But this document is helpful in the event an issue about physical damage to the unit escalates into a court case. You must also inform the tenant about any mold that exceeds permissible safety levels or poses health concerns.
If you have hired a pest control service for your rental property, you must disclose the pests being controlled, the pesticide and their active ingredients, and any other warnings related to them.
If you limit or prohibit the smoking of tobacco products in your rentals, ensure the lease agreement highlights the areas where smoking is limited or prohibited.
Additional details you must disclose:
- Information about bed bugs, including their biology and behavior
- Methamphetamine contamination
- Death on the rental property within the past three years
- Flooding hazard
Rent Payment Rules in California
Rent payment grace period is not compulsory in California, and rent is due on the date specified in the agreement. But if the agreement gives the tenant a grace period for paying rent, you must honor it.
The law allows you to charge a tenant for bounced checks. The maximum you can charge for the first bounced check is $25. Each additional bounced check carries a fee of $35.
Landlords in California can charge a reasonable late rent fee. The law also requires property owners or rental property managers to include specific information about late fees in the lease or rental agreement.
There are two circumstances where you can demand a tenant to pay rent in cash:
- When the tenant’s check bounces
- If the tenant placed a stop payment on a check within the past three months
If you require cash payment, you must provide the tenant with a written notice stating that the payment failed and informing the tenant that they must pay rent in cash for a particular period (should not be longer than three months).
Also Read: California Property Management Laws
Rental Repair Laws in California
The tenant must take reasonable care of their unit. They are also responsible for repairing damages they or their family, guests, or pets cause to the unit.
Landlords are responsible for maintenance duties and repairing substantial defects in their rental properties.
But you can make different arrangements with your tenants outside the responsibilities discussed above. For example, you can take care of garbage removal and amenities repair while the tenant handles maintenance for a lower rent.
Tenants must notify the landlord or rental property manager of the needed repairs and give them a reasonable amount of time to perform the repairs. But should the management ignore the duty to repair for a reasonable time, tenants can pursue the following remedies:
- Repair and deduct: The tenant can repair conditions that pose a safety or health concern if the repair cost does not exceed a month’s rent.
- Abandon the apartment
- Withhold rent
- Call state or local health inspectors
- Sue the landlord
A tenant can withhold rent only when a condition poses a serious threat to their safety or health. However, they should not spend the withheld rent. Such disputes are likely to be resolved in court.
Notice of Entry
You may enter a tenant’s unit for the following reasons:
- Abandoned property- items left by a tenant
- Agreed upon repairs
- Showing the unit to a potential tenant
For most cases, you must provide written notice to a tenant 24 hours before entering their unit. Still, you should enter the rental at a reasonable time, particularly during regular business hours (between 8 am and 5 pm on weekdays).
The entry law does not apply to emergencies- situations where property or people are threatened (think of water leak or gas leak). Should the tenant believe that the landlord entered their unit illegally, the landlord will need to produce proof of the emergency, which could be a notice or gas report from the utility company.
Tenant Eviction Laws in California
California laws also specify when and how a landlord or rental property management company can terminate a tenancy.
The landlord must give the tenant written notice before ending a tenancy early. If the tenant has lived in the rental unit for less than a year, the landlord should provide a 30 days’ notice. A 60 days notice is applicable if the tenant has lived in the apartment for a year or more.
However, California laws allow landlords to provide Three-Day Notice if the tenant:
- Fails to pay rent
- Violates any lease/rental agreement provision
- Damages the rental property
- Significantly interferes with other tenants
- Stalked another tenant on the property
- Commits sexual assault or domestic violence
- Uses the unit for unlawful purposes
The tenant has the choice to vacate the apartment or resolve the issue causing the Three-Day Notice. If you, as the landlord, issues the Three-Day Notice because the tenant is behind on rent, accepting any rent payment from the tenant resolves the notice, and the eviction process gets halted.
The Bottom Line
There you have them, the primary landlord-tenant laws in California. Keep them on top of your mind to run things the right way and prevent potentially costly issues.
If you want to learn more about California’s landlord-tenant laws or need top-quality rental property management services in Southern California, RTI Properties is just a call away. Get in touch with us now at 310-532-5994.