California has several legal requirements that landlords must adhere to when renting or leasing a property. Some of the new changes were recently enacted, and must be followed correctly to prevent problems with tenants:
- Tenant screening
- Rental agreements
- Security deposits
- Rent and rent control
- Late fees
Tenant screening is a major part of finding people that will be able to bring in the best tenants. California has specific laws pertaining to what a tenant can be asked when they are considered for the property. Landlords in California need to use the eviction and/or criminal background checks as part of the screening process, but they MUST disclose the intention of running the check. Potential tenants need to be given the ability to receive the background check within 3 days. Here are some of the things you are NOT allowed to ask per the Fair Housing Act:
- National origin
- Familial status
California property managers need to create a sign a rental agreement for any property that will exceed 12 months in length. The rental agreement must include certain information that must be provided to tenants prior to signing the agreement:
- Information about bed bugs
- Information related to flood hazards
- Risks associated with mold
- Information about carcinogenic materials such as radon and asbestos
- Megan’s Law information (sex offender information)
- Lead paint information for homes built prior to 1978
- Treatment and control of pests
- Contamination records for methamphetamine
- Permit application records for demolition plans
- Military base information (with information about ammunition and explosives nearby)
- Death records that occurred within the past three years
California does not require security deposits like other states do. The deposit amount is normally used by a landlord to aid in making sure funds are available for times when a tenant doesn’t pay. Normally the security deposit will equal a month’s rent, but landlords can ask for two months in most cities in California. If the unit has furniture, you are allowed to collect up to three month’s rent. San Francisco is one of the cities that does require landlords to pay interest on the security deposit money.
Withholding Security Deposits
A security deposit can be withheld for a number of reasons including:
- Failure of the tenant to pay rent
- Damage to the property by the tenant
- Dirty unit left by the tenant
If a tenant left the unit in good condition, they are entitled to receive their entire security deposit back within 21 days of departure from the unit. If you need to make repairs and then offer a portion of the security deposit back, you will need to complete these repairs within 21 days, and provide proof of receipts to the former tenant to show the cost as to why they are unable to receive their entire deposit.
Rent and Rent Control
California does not have specific rules related to how rent is paid, except you cannot require a tenant to pay cash if they have had bounced check in the past three months.
Rent can be increased as long as you are not in a rent controlled area in California. If you are planning to increase rent, tenants must be aware of the increase through a 30-day notice for anything less than 10% of the current rent. A 60-day notice is required for larger rent increases. Rising market value is the main reason to increase rent; it is illegal to increase rent to try and fore a tenant out.
Late fees are allowed, but they do have limits in California. Late fees must be a reasonable amount and it needs to be in the lease agreement.
Landlords do need to provide repairs for property needs including:
- Maintain building per state and local codes
- Maintenance needed for quality of life, meaning, keeping the property liveable
Landlords are exempt from the repairs if the tenant caused them such as damage from a pet or guest. If the landlord needs to make a repair, they have 30 days to make these repairs once the tenant has notified the landlord.
If a landlord feels they need to enter a unit, they must follow certain legalities in order to do this. Here are some of the situations when a landlord can enter the property with 24 hours notice:
- Water or gas leak or some emergency situation that occurs
- Repairs needed and agreed upon time
- Meeting with new or prospective units
- Abandoned property
- Court order for inspection of a waterbed (which could cause water damage)
Landlords can split utilities with all tenants, or have the tenants pay for their own utilities. As long as utilities are clearly defined in the lease, there will not be an issue with the tenants. If a tenant has failed to pay their utility bill, landlords cannot shut off utilities to force them to pay as it is deemed illegal. One new change to the utility law states that landlords must ensure the room can be heated to 68 degree from the hours of 5-11AM and 3-10PM.
California has very specific rules in relation to evictions and notices that are required. Working with a property management company is the best way to make sure you are meeting the local city’s eviction code requirements. Tenants that fail to pay rent can be given a 3-day notice to include information on what to do to catch up on the payment or face eviction at a specific date and time. The notice must be mailed to the tenant and posted to ensure they have received it. If the tenant doesn’t reply in 3 days, landlords can file for eviction.
A landlord cannot charge more than $35 for a rental application fee. If you do not run a background check and screening, the application fee must be refunded.
Keyrenter Property Management in Silicon Valley is here to provide you with help and assistance in moving with some of these legal notices required by landlords in California.