California has very detailed regulations regarding the landlord-tenant relationship. The regulation tends to be tenant-friendly, but still provides landlords with good opportunities to resolve matters fairly for all sides.
Are written rental agreements mandatory in California?
Yes. If the rental term is longer than a year or if the rental period is less than a year but expires more than a year after the agreement is signed, then a written rental lease agreement is necessary in the state of California.
What are the security deposit laws in California?
- You may request a security deposit of up to two months' rent for unfurnished units and up to three months' rent for furnished ones.
- There is no state-wide ordinance in California, but quite a few localities require paid accrued interest.
- The security deposit must be returned within 21 days after the tenant vacates the rental unit
- You may withhold the security deposit if:
- Rent, in total, has not been paid.
- You need to clean the unit to the equivalent level of cleanliness and hygiene as it was when the vacating tenant moved in.
- To repair damages, the tenant has caused. Not normal wear and tear
- To replace items that have been damaged or taken out of the apartment.
Do not forget that you must document an itemized list of damages and charges for which you are utilizing the security deposit. Finally, if you do not return the security deposit promptly, you maybe be liable for up to twice the original amount.
When and how can you evict a tenant?
California, based on a relatively new law called the Tenant Protection Act of 2019, limits the eviction processes.
You can evict a renter if:
- The tenant has not abided by your rental agreement. This allows for a three days notice to amend the violation.
- The tenant has not paid rent on the due date. You can give the tenant a three-day notice to pay the rent in full or evict. If the tenant does not pay, you may file an eviction lawsuit on the spot.
- There was criminal activity within the rental property.
- The tenant subleased the unit while the lease does not allow this. Here the relevant notice is called 'Three-Day Unconditional Quit Notice', where the tenants need to move out within three days and cannot undo the violation.
- The tenant will not sign a new lease with the same terms as the old one.
- You are denied entry into the property but have a legal right to enter.
Evicting a squatter in California
A squatter cannot be removed in California if they provide any proprietorship documentation that appears convincing.
The first step you can take to remove squatters is to pay them to leave. You can also rent the property to the squatter or give them written permission by you to bet here. Finally, if still the squatter remains without legal authority or compensation to you, you can file an eviction notice, one of the following:
- Nonpayment of rent - a three-day notice to pay
- No lease/End of lease - 30-day notice to quit, for a tenancy less than a year, or 60-day notice to quit for a tenancy longer than a year.
- Illegal activity - Three-day notice to quit
Should the squatter still refuse to leave your property, you can file an unlawful detainer with the California court, which will be heard within 20 days. If, however, the squatter does not respond to this, you can reclaim your property and can have the squatter removed.
Holdover Tenants
Holdover tenants are existing paying tenants who have decided to stay on the property, even if the lease term has ended. They are responsible for continuing to pay rent at the existing terms and rate. If you accept their ongoing rent, the tenants become 'tenants at will'.
If the Holdover Tenants do not leave after having been given a notice to move out, you can sue them for unlawful detainer. They will be considered, in this case, criminal trespassers and not squatters.
Rent and Payment laws
Rent in California is typically tenant-friendly. Tenants cannot be forced to pay rent in cash or through deposits only, rent late fees aren’t too high, and if there’s a yearly rent increase, it’s capped at ten percent.
Does California have rent control laws?
Yes. California implemented a cross-state rent control law in 2020.
- Rent increase is capped at 5% per year. This law is relevant to rental apartments and multi-family properties, while single-family homes and condominiums that are not utilized as investments are exempt.
- The law applies to cities in California that do not yet have rent control laws and for properties at least 15 years old.
- If the property is in an area without a rent control law, rent increments will be limited to 5% + local inflation rate (each city has a Consumer Price index stating the local inflation). The total should not be over 10%.
- If your city already has rent control in place, you currently do not need to change anything but abide by the law.
Can I charge late fees for rent payments in California?
Only if it is explicitly stated in the written lease agreement, if the rental agreement does not include any content regarding late fees, a landlord cannot legally request them. It is common for landlords to include a 5-6% fee for late rental payments.
In the case of bounced checks, intended for rental payments, you can legally charge up to 25$ for the first bounced check and 35$ for any following bounced checks. You also have the option to charge your tenant the equivalent of your bank’s charges for a returned or bounced check, up to 35$.
What are my tenant's duties and rights?
California landlord-tenant laws define the following rights for tenants:
- Safe conditions
- Habitable rental units
- Withholding of rent if the landlord does not provide essential services.
- Recovering attorney's fees if these may arise.
The tenant's responsibility in California:
- Maintain a safe and habitable environment
- Make sure they do not disturb other tenants in their surroundings
- Initiate repairs for minor damages
- Pay rent based on the time agreed upon in the lease agreement
- Follow and comply with the rental agreement.
What do I, as a landlord, need to disclose to my tenants?
- It is your responsibility to inform tenants whether or not a property's utilities are designed to serve only their unit or other sites and how those charges will be divided between the two.
- Before the lease signing, you must disclose any knowledge of mold on-site that poses a health risk.
- If you applied for a permit to demolish a rental unit, you need to let your tenant know in writing before accepting any monetary commitment.
- If the property is treated for pests, you have to disclose the pesticides used to the tenants.
- If a death occurred in the rental property in the last three years, this must be disclosed to the tenants.
- Most importantly, as a landlord in California, you must disclose a database with names of registered sexual offenders to your tenants. In order to be able to provide the most relevant details, you are required to include the following in the lease:
"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."
Additional rules and regulations
Accessing the rental property
In California, the landlord is usually not able to access the rental unit. The state of California provides very limited permission to legitimately enter the rental property. With that in mind, most landlords and tenants do have agreed upon instances where the landlord can enter the apartment, where both parties are happy to accommodate.
You can enter the apartment without prior notice to your tenant in the following occurrences:
- In an emergency like a fire or flood
- There is a valid court order
- The tenant has abandoned the unit
- The tenant has consented
In the case where you provided prior written notice to the tenants. California does not state a predefined time for access notice, but a reasonable notice is 24 hours before entry. You may enter the unit:
- For agreed-upon repairs
- To show the unit to potential buyers or mortgagers
- To show the unit to contractors or workers
- For a pre-move-out review to evaluate the unit's status and damages if any.
Do I need to rekey (change locks) between tenants?
No. California law does not require rekeying of the property between tenants, but most landlords do change the locks when one tenant moves out and before another moves in.
Pets
In California, you can decide if to allow pets on the property or not. In the case of service animals, under the Fair Housing Act, you may need to allow legitimate service animals - covering all assistance animals, also those of emotional support.
- You may charge a one-time pet deposit at the time of the lease signing that does not exceed the total amount of two months' rent.
- This is a refundable deposit to cover damage repairs and clea=ning related to the pet.
- In California, you also can charge 'pet rent', a legal amount, as long as both parties - landlord and tenants- agree upon it. This is a higher rent amount for tenants with pets.
California landlords may also choose to charge what's often known as "pet rent" - the landlord may specify a higher rent amount for tenants who own pets. This is legal as long as the total rent amount is agreed upon by the tenant and landlord in the lease and, of course, cannot exceed the California rent control laws; Exempt for service animals.
How does landlord insurance cover rental properties?
Landlord insurance can cover different scenarios and may be customized for your property needs:
- Liability coverage when a tenant is injured on your property
- Property damage: For example if a tenant causes any damage to the rental property, or in the case of fire, lightning, wind, hail or vandalism
- Loss of rental income
Can I buy Honeycomb landlord insurance in California?
Honeycomb's landlord insurance is available in California. It's a fully customizable landlord insurance for multi-family properties, all accessible online. It covers:
- Landlord property protection for repair from fire, lightning, wind, hail, vandalism, electric or gas failures, or tenant-caused issues.
- Landlord liability protection helps cover landlord expenses if found responsible when someone is injured on your property if you are accountable for another property's damage, and also legal defense expenses and court decisions.
