Tips for California Landlords
These tips can help your property management or landlord business run as smoothly as possible and potentially avoid lawsuits and legal disputes from tenants.
Screen Tenants Thoroughly
Do more than a credit check on potential tenants; check past references, verify employment, and check for past evictions. Haphazard tenant screening and selection is often the cause of problems, including tenants who pay late or stop paying, property damage, and tenants who allow friends to move in and destroy your property.
Be sure you adhere to the Federal Fair Housing Act that prohibits discrimination based on:
- Color or race
- National origin
- Familial status (or families with children)
In California, landlords are also prohibited from asking a tenant about their immigration status or asking for proof of citizenship, permanent residence status, or the authorization to work in the U.S.
Put Everything in Writing
Use a written lease or a month-to-month rental agreement that clearly documents important facts in the landlord-tenant relationship, including when and how tenant complaints and repairs will be addressed, notice you will give before entering a tenant’s unit, whether pets are allowed and any restrictions, the number of occupants allowed to live in the property, and more.
Important terms to include in the rental agreement:
- Names of all adult tenants
- Occupancy limits. This gives you grounds to evict a tenant if they sublet or move in someone else without permission
- Tenancy term
- Rent, including amount, when it is due, how it should be paid, acceptable payment methods, whether there is a late fee or grace period, and any fees for bounced checks
- Deposits and fees, including how the deposit may be used, when and how the deposit will be returned, and legal non-returnable fees like pet fees.
- Repairs and maintenance, including the tenant’s responsibilities, a requirement that the tenant inform you of defects and repairs, and restrictions on tenant changes and repairs
- Entry to the unit and how much notice you will provide
- Pet restrictions
- Restrictions on tenant illegal activity
- Any other restrictions that are legal, including restrictions on the type of business a tenant may operate from the unit
Handle Deposits Carefully and Legally
You must have a proper system for setting, collecting, holding, and returning rental property security deposits. Be sure the condition of the unit is inspected and documented before the tenant moves in and again when they move out to avoid disputes. California has very strict rules about how security deposits must be handled, including a limit on what you can require as a deposit and what must be done with deposits.
Basics to keep in mind include:
- Security deposits are limited to a maximum of two months’ rent for an unfurnished unit and three months’ rent for a furnished unit.
- Nonrefundable security deposits are not allowed.
- Deposits can be kept for unpaid rent, damages, cleaning costs, and future debt incurred as a result of a tenant’s lease violation
- Security deposits must be returned within 21 days of a tenant moving out
Perform Repairs Promptly
Be sure you stay on top of maintenance and repairs when necessary. You are required to provide and maintain a safe and habitable home to tenants and repair issues within 30 days of being informed by a tenant. If the proper is not kept in good condition, you will alienate your good tenants who can also withhold rent, deduct the cost of repairs from the rent, sue for injuries that result from defective conditions, or move out without being required to give notice.
Provide Notice Before Entering a Tenant’s Unit
Your tenant has the right to privacy. Be sure you give your tenants sufficient notice before entering the property to perform repairs or maintenance. The amount of notice you give should be included in your rental agreement.
Supervise a Property Manager
Select and supervise a property manager carefully as you may be financially liable if the property manager fails to do their job or commits a crime. Do a background check on the prospective property manager and clearly explain their duties to prevent issues.
Get Adequate Insurance Coverage
Make sure you have enough property and liability coverage to protect you from lawsuits by tenants for losses to your property from burglary or natural disaster, discrimination, or anything else. You will need commercial insurance designed for landlords, not insurance designed for residential property owners who live in the home.
Attempt to Resolve Disputes Without Attorneys
You will face disputes from time to time over repairs, deposits, rent, noise, and other issues. If the issue does not warrant an immediate eviction, do your best to resolve the problem informally with the tenant. If this is not successful, mediation by a neutral third party may be a good next step to reduce costs and legal issues. If the dispute is about money and you cannot reach an agreement, try to handle it in small claims court so you can represent yourself, especially if you are seeking money for property damage or unpaid rent.
Contact a Lawyer to Begin Eviction
If you need to evict a tenant, it’s important to work with an experienced landlord tenant attorney as California eviction laws require following very specific rules and procedures. Making even a simple mistake can be very expensive and draw out the eviction process.