RENTING PROPERTY IN SAN DIEGO
Complete Guide to Renting Your Property
in Southern California
If you own property in Southern California, you’ve made a wise investment. In addition to the year-round temperate climate, beautiful beaches, and perks of urban life, Southern California also has one of the hottest housing markets in the country.
Strong demand and rising rents make Southern California an attractive place for real estate investors and property owners alike.
With so many people wanting to live here, developers are unable to keep pace with the ever-increasing demand, leading to extremely low vacancy rates. According to the SDCAA’s Spring 2017 Vacancy & Rental Rate Survey, the number of vacant apartments in the San Diego region hovered around 3.7%.
These rock-bottom vacancy rates combined with low inventory means property owners can command a premium for rent. The Spring 2017 Survey also showed that a typical one-bedroom apartment in the county will cost around $1,432. The SDCAAVacancy & Rental Rate survey is performed twice a year in early spring and autumn. The survey collects data from a variety of rental property types like single family homes, condos, townhomes, duplexes, and large multifamily apartment communities.
Whether you want to own a portfolio of investment properties across the city or San Diego, or rent out your Temecula condo, this guide contains a comprehensive list of what you need to know about renting your property in Southern California.
What You Should Know Before You Rent Your Property
Chances are, a significant reason you purchased a property has to do with the financial benefits. From tax breaks to home equity, investing in real estate is a smart way to add to your portfolio.
Here are a few of the biggest financial perks you’ll see from renting out your property:
- Passive Income: Collecting a monthly check from your tenants is extra money in the bank, especially if you don’t have a mortgage on your property. Rental properties are a great investment and serve as retirement income for many property owners.
- Home Equity: Real estate is one of the most common investments and with good reason. Home prices historically increase over time, giving you an extremely valuable asset. The tale of ever-increasing home values is particularly true in San Diego, where home prices in the city have surpassed the pre-recession peak to reach $543,500 in June 2017, according to the Union-Tribune.
- Tax Breaks: If you own a home, you already know about the most common tax deductions, like mortgage interest and real estate taxes. But did you know you can also deduct some of those costly operating expenses such as utilities, insurance, landscaping costs, and HOAfees? If you enlist the services of a property management company, you can deduct that, too.
Short-Term Rental or Long-Term Lease?
If you’re renting a single property, you might be unsure of whether to offer a month-to-month or long-term lease. Which type of lease is the best option for your property depends on a variety of factors, including the neighborhood rental market, the amount of time you wish to devote to finding tenants, and how much profit you expect to make on your investment.
A one-year lease is the most common type of rental agreement. For landlords and tenants seeking a degree of stability, an agreement with a fixed term is likely the ideal solution.
Benefits of fixed-term leases
- Lower risk:Reliable tenants are worth their weight in gold. When they live in your rental long-term, your job as a landlord becomes much simpler. Time-consuming and costly tasks such as marketing the property, vetting residents, and facilitating the move-in process becomes cut down to a yearly endeavor, if that.
- Stable income:Renting your property for longer time periods means less time your unit will be vacant — and you’ll be without rental income.
- Less turnover:The longer duration that residents live in your property, the less money you’ll spend on cleaning and repairs that need to be made after each tenant leaves, such as deep-cleaning the carpets and painting the walls.
Drawbacks of long-term leases
- Lower return on investment:When you offer a fixed-term lease, you can only raise the rent after the agreement expires. Because Southern
- California has low vacancy rates and strong demand, rental rates are rising at a rapid pace. Having fewer opportunities to raise the rent means you could be leaving money on the table.
- Removing Tenants:Unless a tenant violates the lease and you wish to pursue eviction, you cannot ask them to move. If you’re in a situation where, for example, you want the tenant to leave so you can move back into your property, you’ll have to wait until the lease expires.
For landlords and tenants who prefer flexibility, month-to-month leases work well. Moreover, many long-term leases also contain clauses in which they revert to a month-to-month agreement after the initial time period lapses.
Benefits of month-to-month rentals
- Higher Returns:Low supply and high demand in Southern California make it a landlord’s market. Opting for a month-to-month lease allows you flexibility to raise the rent as the market dictates — which can mean greater returns for your real estate investment portfolio.
- Ending A Lease:Month-to-month agreements make it easier to remove tenants with proper notice. Should you decide you to terminate a resident’s tenancy, you can serve them a 30 or 60-day notice to get them to move without starting the eviction process. (*Exception: “Just Cause” is required in the City of San Diego when serving a 60-day notice to a resident who has lived in a unit 2 years or more)
- Greater Flexibility:Changed your mind on allowing pets in your unit? Month-to-month leases offer more flexibility, meaning you can alter the agreement faster than with a longer lease.
Drawbacks of short-term leases
- Higher Turnover:Month-to-month leases aren’t just about flexibility for the landlord. Residents who prefer month-to-month leases are likely to move after a short period of time, meaning you may have to go through the lease-up process multiple times each year.
- More costs:Every time a property is vacated, you’ll need to spend money on renovations such as cleaning costs, paint, and other upgrades. As more residents rotate through your property, you’ll have to take care of this routine maintenance on a more frequent basis.
Should You Use A Property Manager or DIY?
Once you’ve decided to rent your property and how long you’d like to rent it for, it’s time to think about property management. Should you take it on yourself, or would it be more beneficial to hire someone? The answer depends on your individual situation and property portfolio.
The Role of a Property Manager
Property management companies can sometimes seem unnecessary, but hiring one could be the key to getting the highest possible return on your real estate investment.
Property managers do more than just collect the rent. They handle all aspects of renting a property, from marketing the rental and screening tenants to day-to-day maintenance and even handling evictions.
Depending on how many properties you own, this can be more cost-efficient than hiring your own staff. Property management companies are considered independent contractors, so you don’t have to worry about payroll taxes and other considerations that come with being an employer.
As a property owner, the biggest benefit of hiring a property manager is not having to worry about operations and maintenance issues. If you struggle with marketing your property and finding qualified tenants, you may also want to consider enlisting the services of a professional. If you live far away from your property, it may be nearly impossible to manage alone.
Property managers and management companies typically offer the following services:
- Marketing the rental
- Screening tenants
- Helping you determine fair rental value
- Handling maintenance and repairs
- Fielding calls after hours
- Responding to tenant complaints
- Handling evictions
- Operations work, such as collecting the rent and processing lease renewals
- Full knowledge and understanding of legal considerations, such as Fair Housing Laws
The cost you’ll pay typically depends on the rent amount for your property. Most companies charge 5-10% of your monthly rental rate. Should you choose to hire a property management company, SDCAAhas a directory of local property management companies that can manage your rental. Whether you decide to go it alone or hire a property management firm, we recommend that you join the SDCAAto keep yourself informed. At the end of the day, you are still responsible for the actions of the property management firm that represents you.
The Case For Going Solo
If you’re renting your condo because you didn’t want to sell when you upgraded, it could make more sense to handle landlord duties by yourself. If you live near your rental property, the cost of hiring a property management firm might not be worth it.
Should you choose to be a landlord, an organization like the San Diego County Apartment Association will help you stay abreast of all the moving pieces of property management.
Members receive access to a variety of resources, including:
- Access to legally compliant fill-in ready rental forms
- A mentorship program that will help you hone your leadership skills while growing your business
- Classes and workshops on topics such as fair housing laws, setting rental criteria, marketing your property, daily maintenance issues, and evictions
- InfoLink Resident Screening to help you find and screen qualified tenants
- Landlord advice from our operational advice counselors on common issues that may come up
When you decide to rent out your rental property, there are many laws you’ll need to understand. Virtually every aspect of renting your property, from choosing tenants to moving out is carefully regulated to ensure the landlord, residents, and potential residents receive a variety of protections.
The information on this site does not constitute legal advice nor do the authors and publishers engage in providing legal advice. For legal advice please see a list of our Attorney members on our supplier directory.
Overview of Fair Housing Act
If you’re renting your property, you’ll need to understand the Fair Housing Act. This 1968 federal law protects potential tenants from discrimination and works to ensure everyone has equal access to housing.
Under the FHA, landlords cannot refuse to rent to a person based on certain characteristics, known as protected classes. Landlords also cannot offer inferior terms because of one of these characteristics, such as charging a higher rent or larger security deposit because a family includes children.
Federal law prevents discrimination based on seven characteristics:
- Disability, including physical and mental
- Familial status (including pregnancy)
- National origin
California is one of many states that extends fair housing protections to include other protected classes. These additional characteristics include:
- Sexual orientation
- Gender identity and expression
- Marital status
- Genetic information
- Source of income
- Medical condition
Avoiding Potential Discrimination when Renting Properties
The best way to prevent potential discrimination is to avoid asking questions that may reveal a potential tenant to be a member of a protected class. When it comes to advertising, landlords should stick to descriptions of the property and its amenities, and leave out any language about who may or may not be a good resident.
In many cases, this is straightforward. It’s very clear that asking about or stating a preference for a particular race or religion, for example, are off-limits.But what about the areas that can overlap with information needed to thoroughly screen tenants, such as questions about income and number of occupants? For these situations, it is all about phrasing and making sure your criteria is the same for everyone.
Tricky Scenarios to Avoid
When screening tenants for your rental, you want to find someone who is able to pay the rent on time. For instance, many landlords include an income ratio of 2.5 to three times the monthly rent as part of their rental criteria. As long as this criteria is the same for everyone, you may ask how much money someone makes. You are also allowed to ask for income verification, such as check stubs, bank statements, or benefit statements. However, a landlord cannot consider income from programs such as Social Security different from income earned at a job.
If you’re renting an apartment, it’s important to know how many people will be living in a single unit. As a landlord, you also cannot ask how many children someone has, nor can you ask about their ages. You can, however, find out how many people would be living in the apartment and require any occupant over the age of 18 to complete a rental application.
When renting to a tenant who is disabled, landlords must allow for reasonableaccommodations. This means, for example, allowing a service animal in a building that is otherwise pet-free. Other examples include reserved parking spots or installing access ramps.
Landlords may request the tenant pay for any modifications, and they may require the property to be returned to its original condition upon moving out.
Landlords are allowed to ask for verification of disability or whether the requested accommodations are related to a disability, as long as the disability is not obvious. However, a landlord cannot request specific details about the condition.
Overview of Federal Credit Reporting Act
The second major law you’ll have to understand when renting your property is the Federal Credit Reporting Act. The FCRAis a federal law that sets guidelines for what information can be used for making decisions about potential tenants, along with how that information can be used.
For your purpose as a landlord, this law covers background checks and credit reports. Information included in these reports must be accurate, which means you must check that any services you use are FCRAcompliant. Additionally, landlords must certify to the report provider that they will only use the report for housing purposes.
Web-based public records search engines, such as Spokeo, are not vetted for accuracy and should not be used for researching a potential tenant. Services such as InfoLink Resident Screening and SDScreeningreport.com are designed to assist landlords vet applicants.
When screening tenants, if any information in the report causes you to deny the applicant, require a co-signer on the lease, or require larger payments in the form of additional or higher deposits, or higher rent, the law requires you to give a Notice of Adverse Action to this person. This notice is required even if the information in their background check played a small part in the decision.
The notice must give information including:
- Name, address, and phone number of company that supplied the report
- A statement that the company that supplied the report did not make the decision and cannot give specific reasons for it
- A notice of the person’s right to dispute the accuracy or completeness of any information within the report
- A notification that the person may get a free report from the company within 60 days, upon request
SDCAAmembers have access to InfoLink Resident Screening service. These reports are FCRAcompliant and contain information on potential tenants such as:
- Credit reports
- Social Security information
- Criminal records
- Evictions and civil records
- Employment verifications
Overview of California Landlord-Tenant Laws
In addition to laws that protect potential tenants from discrimination and ensure housing decisions are based on accurate information, there are many additional regulations landlords must understand. This section contains a brief overview of key landlord-tenant laws in California.
Liability for Repairs
All landlords must ensure their rental unit is habitable, meaning the structure is up to code and in good condition. Should damage occur where the home is not fit to live in, it is the landlord’s responsibility to repair any problems.
All rental agreements in California contain an implied warranty of habitability, which means the landlord is legally responsible for keeping the rental in good condition. However, this does not mean the landlord has to repair damages caused by tenant or their family, guests, or pets, according to the California Department of Consumer Affairs.
Some examples of problems that could make a rental considered uninhabitable include:
- Lead hazard that endangers occupants or the public
- Structural hazards
- Inadequate sanitation
- Nuisance that endangers the “health, life, safety, property, or welfare” of occupants or the public
To get more specific, the following examples would make a home considered uninhabitable under California law:
- Broken windows or doors
- Malfunctioning gas, heating, plumbing, or electrical systems
- Lack of running water
- Lack of working smoke detectors
While the landlord bears much responsibility for keeping a home habitable, tenants have responsibilities as well. They must, for example, keep the home clean and sanitary, and properly dispose of trash. Tenants must also exercise common sense and not do things like flush large foreign objects down the toilet or overload the electrical circuits.
Privacy and Access
In most circumstances, California landlords must provide 24 hours notice for entry. This includes routine inspections and showings. For initial move-out inspections, landlords most provide 48 hours notice.
The obvious exception is an emergency. If, for example, a pipe bursts in a unit, the landlord has a right to enter immediately.
Termination of Agreement
Under a month-to-month agreement, the landlord must give the tenant 30 days notice to end the lease. If the tenant has lived there for a year or longer, the landlord is required to give them 60 days notice. Additionally, “Just Cause” is required in the City of San Diego when serving a 60-day notice to a resident who has lived in a unit 2 years or more
For long-term leases, it is recommended that the landlord give tenants a Notice of non-renewal of lease at least 60 days in advance.
If a tenant does not pay rent, or violates the lease in another fashion, such as using the property for a criminal purpose, the landlord may evict the tenant. For example in the case of not paying rent, the process begins with serving them a three-day pay-or-quit notice. This notice informs the tenant they must pay the past-due rent or leave the unit.
Tenant’s Legal Rights in California
Just as landlords have the responsibility to provide adequate shelter, tenants have legal protections to ensure they receive a proper place to live. Tenants may contact authorities, withhold rent, move out without giving notice, file a lawsuit, or “repair and deduct” if a landlord does not make necessary repairs in a timely manner, like a broken water heater. The department of Consumer Affairs has a list of items for which a tenant can potentially withhold rent or repair and deduct.
Additionally, tenants are protected from retaliation for exercising a legal right, such as complaining about unsafe living conditions.
Tenants who are victims of domestic violence have additional protections under California law, including:
- Landlord can’t refuse to rent to victim
- Landlord has limited right to evict victim, but the landlord may evict the abuser.
- Domestic violence is a valid defense to an eviction lawsuit
- Victim has the right to have locks changed
- Victim has the right to provide landlord with a 14-day notice of termination of tenancy in either a fix term lease or month-to-month
This said, landlord is entitled to proof, such as a police report.
When creating a rental agreement for your property, there are many things a landlord must disclose, such as policies, laws, and facts about the property. These include standard facts, such as how much rent is due and when it must be paid. In addition, federal law requires landlord disclose any hazards related to lead-based paint within the unit.
States and local jurisdictions may require their own disclosures on top of federal law. For instance, California requires the following:
- Information on where to find a registered sex offender database online
- If the tenant is paying for utilities it must be disclosed how cost are allocated.
- Known locations of federal/state ordnance within 1 mile of rental
- Asbestos disclosure for properties built in 1980 or before
- Pest control information, including which pests are controlled, pesticides used, active ingredients, whether they’re toxic, and service schedule
- Listing a rental unit for sell
- Smoking policy – If landlord prohibits/limits tobacco products on the property, this must be detailed in the lease, include where smoking is prohibited.
- Landlords of single-family homes and properties of 4-units or less who have received a notice of default for the property, that has not been rescinded, must disclose to potential renters
Understanding the myriad of laws that cover housing is no small task. However, there are many resources at your disposal.
SDCAAmembers have access to a variety of resources, including white papers and fact sheets on specific issues, classes, and an operational advice hotline to answer any questions that may arise along the way.
What Makes a Good Rental Property?
Before you start advertising your unit and put a “for rent” sign out front, take a close look at your property. Are there any amenities you want to add or appliances you want to upgrade? The time before a tenant moves in is perfect for updating your property.
New appliances and a fresh coat of paint are simple projects that go a long way toward attracting tenants. An updated apartment will also be more comfortable to your residents, encouraging them to stay longer.
As for upgrades and maintenance projects to consider, here are a few tips to lure in excellent tenants and residents:
In-unit washer/dryers, dishwashers, and modern kitchen appliances are among the first things a renter usually looks at when seeking out a rental unit. In some cases, it’s just as important as the location. Seek out ways to improve the value of your unit by investing in appliances your potential residents will appreciate.
In addition to new appliances, consider placing ceiling fans throughout the unit. Fans are an inexpensive, low-maintenance upgrade that goes a long way toward making your unit more comfortable for residents.
2. Kitchen Look-and-Feel
Cabinets and countertops truly impress potential renters, and not only that, these upgrades offer long-term value to your kitchen. Cement and quartz are popular in the higher-end markets, but a good choice is always granite. Invest in durability, functionality and a style that will stand the test of time.
3. A Fresh Coat of Paint
Paint is one of the cheapest ways to freshen up a property. According to HomeAdvisor.com, “The cost to paint an average size room (10×12) ranges from $380-$790, not including ceilings, trim or cost of the paint. DIY, this can cost between $200-$300. When estimating the cost, painters will start with how much paint will be required to complete the job.” Compared to our other recommendations, this is one the highest returns on investment for any rehab budget.
Take a look at the Directory for Paint suppliers and painters. Some of the paint manufacturer members of SDCAAoffer professional color advising services and this goes along way to improving the appeal of the rental property. You can enjoy an even higher return on investment by buying paint in bulk.
How Much Should You Charge For Rent In San Diego County?
Once your property is updated, there’s one major detail you need to iron out before you advertise your rental. “How much should I charge for rent?” is one of the most common questions property owners ask.
Of course, there’s no one-size-fits-all answer to that question. Neighborhood, number of bedrooms, amenities, and many other factors determine the rental rate for your property.
After three years of rising rents, the average price of an apartment in San Diego County fell slightly in the first half of 2017 to reach $1,658, according to our Spring 2017 Vacancy and Rental Rate Survey. That figure is down 3.7% from the fall 2016 average of $1,719.
Breaking the data down by apartment size, the drop in rental prices can largely be attributed to the decline in prices of 1- and 2-bedroom units.
- Studio apartments increased slightly, from $1,129 to $1,158
- 1-bedroom units fell from $1,531 to $1,432
- 2-bedroom units decreased from $1,789 to $1,763
- Rental units with three or more bedrooms rose slightly from $2,323 to $2,330
Despite the slight dip in price, the overall cost has increased over the last two years — especially for home rentals. Our data shows the average cost to rent an apartment in San Diego County increased by 6.28% year-over-year.
According to city-wide data, San Diego rents have increased on average 2 percent every six months since 2000.
The Rental Application Process
Now that your property is ready for a tenant, you’ll want to make sure you have all the paperwork for the full process.
As you hold open houses and lead potential residents through showings, use the following resources to gather all of the information you need. Having all of the details in one place will make the tenant screening process seamless.
Also, make sure you offer an application to any resident who visits your property or inquires by phone or email. This will help avoid any potential fair housing issues.
Rental Application Forms
The first step of renting your property is the application process. In addition to a general application, forms such as an employment verification and screening disclosures ensure you receive the information you need, and potential residents understand how their information will be used.
Should an applicant not pass the screening process, you are legally required to send them a notice of adverse action. This form ensures the person receives all of the information they are entitled.
Move-In and Security Deposits
As your new tenant passes the screening process, you’ll likely collect deposits before you hand over the keys. This includes a security deposit, and other payments including prepayment of rent or pet fees.
Rental deposit forms detail the amount of and type of deposits required, along with the terms of any security deposit. For instance, this could include information on how a tenant may recover the security deposit when they move out.
California Rental Agreement
Our California rental agreement complies with all local, state, federal regulations and offers summaries of leasing laws as you quickly fill in your details.
We also offer addenda for many common situations such as pet policies, companion/service animals, bed bugs, pest control, and common area rules and regulations. The next section goes in-depth to cover everything you’ll need to create a lease.
California Guide to Residential Tenants’ And Landlords’ Rights And Responsibilities
The California Department of Consumer Affairs’ Legal Affairs Division publishes this guide to provide legal information for the landlord-tenant relationship. It provides guidance on how to handle the application process, maintenance, common rental issues, and many other common situations.
Your safest bet in getting the support you require is to become a member of our organization, SDCAA, which was created to cater to and represent the specific needs of San Diego property owners, managers, and landlords.
SDCAAprovides to its members a library of more than 65 rental forms, from setting your rental criteria to leasing, move-in information, and more.
Each year the forms are reviewed by member attorneys to ensure they remain current and compliant with California law and up-to-date with industry standards. Although designed for San Diego, Imperial and Riverside Counties, our rental forms have been licensed by others associations around the state.
The forms are available in multiple formats for SDCAAmembers.
PDFFillable Forms:The forms are available for downloading behind the member login. These are fillable pdf forms, and offer the most flexibility when used with Adobe Acrobat Pro or Adobe Acrobat Reader (not provided by SDCAA— To download Adobe Acrobat Reader, click here.)
InfoLink Screening Users:If you are an InfoLink Screening client, the forms are already available to you and you have the additional FREEbenefit of storing and populating forms with client information. Use of the rental forms with InfoLink Screening is free, but you must be signed up with InfoLink Resident Screening.
How To Create a Lease
If you’re a landlord in California, you need a California-specific lease or monthly rental agreement to make sure you’re following the highly specific laws that California has passed to not only protect tenants, but to also protect property owners and managers — like you.
At SDCAA, we offer up-to-date lease agreements on our website to members, and we are also available by phone during regular business hours to help answer our members’ questions on creating a lease agreement.
We want you and your potential tenant to get off on the right foot. Our forms are designed to comply with state and county law, and we are careful to point out where San Diego local law is explicitly different. In this regard, you’re not only receiving a California-specific lease, but one that also complies with the complex bylaws.
Each form we have for members here at SDCAAwas developed with the rental property owner and property managers in mind. Each year the forms are reviewed by California member attorneys to ensure they remain current and compliant with California law and up-to-date with industry standards.
Although designed for San Diego, we also offer leases specifically for Imperial and Riverside Counties, and our rental forms have been licensed by others associations around the state.
What To Include In Your Lease
1. Rent amount, term, late fees, security deposit
Most residential leases and apartment rental agreements in California require a security deposit. The deposit is an amount often equal to one month’s rent that’s intended to cover damage beyond normal wear and tear.
What’s most important for landlords, property owners and managers to understand is the specific California landlord-tenant laws that cover the use and return of security deposits. For instance, under California law there is a limit to how much a landlord can charge a tenant for a security deposit.
Under California landlord-tenant laws, a landlord “may charge a renter the equivalent of two months’ rent for the security deposit if the residence is unfurnished, and three months’ rent if the residence is furnished.”
Landlords may not charge non-refundable fees in California.
California landlords can also add an extra one-half month’s rent if the tenant has a waterbed, although in most lease agreements, property owners do have the right to exclude waterbeds from their property.
2. Security Deposits and Late Fees:
When a tenant moves out your from your property, it’s also important to know that there is a deadline under California tenant law for returning a security deposit back to the former tenant.
According to the California Department of Consumer Affairs:
Here are some guidelines from the current California Tenant Law for judging what’s reasonable and legal regarding Late Fees:
- The fee shouldn’t begin immediately. Normally, a late fee should not apply until at least three days after the rent due date.
- According to California Tenant Law, “A rental agreement cannot include a predetermined late fee. The exception to this rule is when it would be difficult to figure out the actual cost to the landlord caused by the late rent payment. Even then, the predetermined late fee should not be more than a reasonable estimate of costs that the landlord will face as a result of the late payment. A late fee that is so high that it amounts to a penalty is not legally valid.”
- The fee should be within a certain percentage of your rent. In general, a late fee should never exceed 5 percent of the rent. For example: If your tenant pays $1000 per month for their rent, that would be a $50 late fee incurral.
- Of course, if the rent is extremely late — say, ten days — a higher late fee, such as 10 percent of the rent, might be reasonable.
4. Helpful Tips on Handling Late Rent Payments
Oftentimes, you may have a tenant that consistently pays beyond the 3- to 5-day minimum to pay rent, and eviction can become a cause for alarm. See more info regarding California eviction rules here (member login required).
Under California law, property owners or managers have 21 calendar days or less after a tenant moves out, so you as a property owner or manager must either:
a. Send a full refund of the security deposit, or
b. Mail or personally deliver to you an itemized statement that lists the amounts of any deductions from the security deposit and the reasons for the deductions, together with a refund of any amounts not deducted.
California law specifically allows the landlord to use a tenant’s security deposit for four purposes:
a. For unpaid rent
b. For cleaning the rental unit when the tenant moves out, but only to make the unit as clean as it was when the tenant first moved in
c. For repair of damages, other than normal wear and tear, caused by the tenant or the tenant’s guests
d. If the lease or rental agreement allows it, for the cost of restoring or replacing furniture, furnishings, or other items of personal property (including keys), other than because of normal wear and tear.
e. A landlord can withhold from the security deposit only those amounts that are reasonably necessary for these purposes.
f. The security deposit cannot be used for repairing defects that existed in the unit before you moved in, for conditions caused by normal wear and tear during your tenancy or previous tenancies, or for cleaning a rental unit that is as clean as it was when you moved in.
g. A rental agreement or lease can never state that a security deposit is “nonrefundable.”
(See the PROTIPin the prior section.)
In addition to complying with California tenant-landlord laws on security deposit limits, and how (and when) the deposit must be returned to tenants, landlords in California must provide renters with advance noticebefore taking any deductions out of the security deposit, such as for the cost of repairs for damage to the property.
If you want to go right to the source and look up the California laws on security deposits — or if you’re writing a letter to your tenant and want to cite the applicable law the relevant statute(s) can be found at: California Civil Code § § 1950.5 and 1940.5(g).
For other useful information on security deposits in California, see: The California Tenant Law Handbook, or better yet, become a member with SDCAA, and let us handle the headaches associated with these issues. Our membership is one of the most comprehensive memberships for property owners and managers, as we stay abreast of any and all changes to tenant law in the counties of San Diego, Imperial and Riverside.
3. Late Fees
Late Fees are also a complex issue for landlords, and property owners or managers to understand. CaliforniaTenantLaw.com explains, “The law regarding residential late fees is almost 30 years old. In 1978, Civil Code 1671 was amended to outlaw virtually all late fees in residential rental agreements. The problem is that it didn’t use the word ‘late fees,’ but instead used the technical legal generic term ‘liquidated damages,’ which would functionally include a late fee by its meaning.”
Here’s what that actually means to you as a property owner or manager:
If you have a solid lease agreement, your obligation is make it abundantly clear when rent is legally due on the date specified in your lease or rental agreement (usually the first of the month). If your tenant or resident does not pay your rent when it is due, the you may begin charging you a late fee.
If your lease or rental agreement says nothing about late fees, you may not impose one, no matter how reasonable it is. For example, if your tenant or resident hands you a rent check two days late and you say that you will only accept it if you pay an additional $10, your tenant may refuse this fee unless your lease or rental agreement includes a late fee clause.
If you have written a lease that has a late fee clause, and the process and reasoning for late fees — does this mean you can charge whatever cost you’d like? The short answer is no. Under general legal principles, you may not charge an unreasonably high late rent fee.
The forms you need are available in multiple formats for SCRHA members.
PDFFillable Forms:The forms are available for downloading behind the member login. These are fillable PDFforms and offer the most flexibility when used with Adobe Acrobat Pro (not provided by SCRHA— to download Adobe Acrobat Reader, click here).
In Print:Members can also order printed copies for a small fee using the order form found here.
InfoLink Screening Users:If you are an InfoLink Screening client, the forms are already available to you and you have the additional FREEbenefit of storing and populating forms with client information. Use of the rental forms with InfoLink Screening is free, but you must be signed up with InfoLink Resident Screening.
Parking is generally assigned in any and all lease agreements, and noted in the agreement by the landlord on where tenant or residents may park their vehicle. But interestingly, due to the modernization of the car industry, recent law were passed that you might want to be aware of:
According to a recent law passed, “California signed into effect by the Governor in September 2014, now give tenants rights to install charging stations for their electric vehicles. If tenants follow the letter of the law, a landlord is required to approve the installation and it could result in your tenant getting an assigned parking spot.”
Here’s what you need to know, in a nutshell:
1. Any lease that is executed, renewed or extended on or after July 2015 is subject to these new laws
2. If you require final sign-off for the installation or use of an electric vehicle charging station, the application for approval shall not be willfully avoided or delayed. The approval or denial of an application shall be in writing.
3. You are required to approve the installation if the tenant follows the law and meets your reasonable requirements.
4. If the tenant pays for the charging station, they have the right to have permanent access to it during the duration of their lease, even if you don’t assign parking spots to other tenants.
5. You are exempt from the requirements in this law, if:
a. You already have charging stations for your tenants that cover at least 10 percent of the available parking spots
b. You don’t provide ANYparking
c. You are renting a property with less than five parking spots
d. You have a rent-controlled property
e. Other exemptions apply to commercial properties, for more information, read the law
Oftentimes property owners/manager have some buildings with a single gas or electric meter which serves more than one rental unit. For instance, in other buildings, a tenant’s gas or electric meter may also measure gas or electricity used in a common area, such as the laundry room or the lobby. In situations like these, the landlord must disclose that the utility meters are shared before a tenant signs the rental agreement or lease.
According to California Law, “If you become a tenant, the landlord must reach an agreement with you, which must be in writing, about who will pay for the shared utilities. Rental units in older buildings may not have separate water meters or submeters. California law does not specifically regulate how landlords bill tenants for water and sewer utilities.”
In this case, it’s best to contact our leasing specialists at SDCAAto understand how best to craft your lease agreement to follow these confusing, yet specific bylaws regarding utilities.
7. Alterations, painting and maintenance
Landlords and property managers or owners should craft a lease or rental agreement that discludes alterations or repairs, such as painting the walls, installing bookcases, or fixing electrical problems without your permission.
One area regarding painting that should be addressed is regarding lead-based paint. As many of you likely know, many San Diego apartments and homes or duplex rental units were built during the eras wherein lead paint was legal. In making sure you’re keeping you and your tenants safe, California Tenant Law recommends the following:
Have your tenant sign a California Landlord Disclosures regarding Lead-based paint (available here) if the rental unit was constructed before 1978. You must comply with all of these requirements:
- The landlord must disclose the presence of known lead-based paint and lead-based paint hazards in the dwelling before the tenant signs the lease or rental agreement.
- The landlord also must give the tenant a copy of the federal government’s pamphlet, “Protect Your Family From Lead in Your Home.”
- A typical legal description of the implied covenant of good faith and fair dealing is that neither party will do anything that will injure the right of the other party to receive the benefits of the agreement.
- You can find more information regarding this by searching and reading 74 Civil Code Section 1940.9. This section also provides remedies for violations. Or you may contact: (800) 424-LEAD, or download the pamphlet online, before your tenant signs the lease or rental agreement.
- The landlord is not required to conduct any evaluation of the lead-based paint, or to remove it.
“The landlord has this duty to repair because of a California Supreme Court case, called Green v. Superior Court, which held that all residential leases and rental agreements contain an implied warranty of habitability. Under the ‘implied warranty of habitability,’ the landlord is legally responsible for repairing conditions that seriously affect the rental unit’s habitability. That is, the landlord must repair substantial defects in the rental unit and substantial failures to comply with state and local building and health codes.”
—Green v. Superior Court (1974)10 Cal.3d 616 [111 Cal.Rptr. 704].
8. Outside space and common areas (balconies, hallways, laundry rooms, yards)
As we discussed in the utilities section, much about common areas is something that should be outlined in your rental agreement quite explicitly and in detail. According to current California Tenant Law, your tenant must take reasonable care of the rental unit and any common areas that they use. The tenant must also repair all damage that they cause, or that is caused by anyone for whom they’re responsible for, such as family, guests or pets.
9. Pets, Service and Therapy Animals
Fair Housing Laws has distinct rules regarding pets and service or therapy animals. As a landlord, you should make certain to understand these guidelines to the letter of the law. Overall, normal pet rules are made on a case-by-case basis and landlords may request pet deposits and include breed or weight restrictions, unless it’s a therapy or service animal.
Under the FHA, a disability is defined as a: “physical or mental impairment which significantly limits a person’s major life activities.”
For instance, when drafting an advertisement or posting to rent your property, even if you note “no pets”, as a property owner or manager you are required to make what is called a “reasonable accommodation” to allow pets who serve as assistance animals, which includes animals who provide emotional support.
According to Federal FHAguidelines, assistance animals are not pets, and they actually fall under a completely unique legal classification. In most cases, you cannot refuse a tenant who wishes to gain an emotional support animal and you should waive any pet fees, as these animals are in a different legal classification than pets who are not assistance animals.
This is the reason why pet restrictions and fees are waived for them. Interestingly, breed and weight restrictions do not apply to assistance or service animals.
Definitions: Differences between service animals and assistance animals
1. Service animals are categorized as animals trained to do a specific task for their owner. The most common example is a guide dog.
2. Service animals are allowed in public accommodations because of the owner’s need for the animal at all times.
3. An assistance animal can be a cat, dog or other type of companion animal, and does not need to be trained to perform a service. The emotional and/or physical benefits from the animal living in the home are what qualify the animal as an assistance animal. A letter from a medical doctor or therapist is all that is needed to classify the animal as an assistance animal.
4. The fact the term “service animal” is often used by landlords and public housing authorities to refer to both service dogs and assistance animals often creates confusion.”
5. Some examples of assistance animals, according to the Humane Society of the United States:
a. A cat who can detect and alerts their companion of oncoming seizures .
b. A dog who alleviates a person’s depression or anxiety.
c. A cat who reduces a person’s stress-induced pain.
d. A bird who alerts their hard-of-hearing companion when someone has come to the door.
California law gives tenants the right to quiet enjoyment of their property so long as they are not violating local laws or the lease. This generally means that your landlord cannot interfere with your right to have visitors. He or she may, however, establish visitor limits in your rental contract or intervene if your visitors are breaking local laws. Call our offices at SDCAAto inquire about recent AirBnB laws and other laws regarding guests, we’re here to help you make sure you follow the law and create an excellent relationship with your tenants!
As a landlord or property manager or owner, you have broad authority to add restrictions on tenant behavior to the lease agreement. That being said, the lease can, however, place restrictions on the number of guests a tenant can have or the amount of time visitors can stay. If your lease does not address the subject of guests, your rights to guests are determined by state and local laws.
For instance, your tenants do have a right to have guests in your rental unit. Tenants are authorized to treat rental units as their own homes so long as they are not violating local laws.
Your tenants cannot have 100 guests in a building that is only authorized for 50 people, but tenants can have periodic visitors within the authorized limit. Make sure you understand though, your tenants are not required to notify you of guests or seek your permission to have guests.
11. Guest Limitations
As the owner or manager of your property, you can require that your tenant add a guest who is living with them to the lease. Doing so protects you in case of a dispute, and it also gives liability to the additional tenant for any damages he/she could or may cause. Remember, as described in our section on security deposits, tenants are usually liable for damage caused by their guests, and these damages may be deducted from the security deposit.
12. Entering the Property During Tenant Residency
Your tenant has significant privacy rights under California law. As a landlord, property owner or manager, you can’t enter the property without 24 hours’ notice unless there is an emergency, such as a fire or a person in imminent danger. Also, it would be unwise to be elusive about your observance of the property itself, for instance, you can’t spy on your tenants or show up in the middle of the night to check on their behavior. If you choose to invade your tenant’s privacy to investigate, be smart about it: Contact the California Department of Consumer Affairs, a local renters’ assistance program, or a tenants’ rights attorney.
Which is Best: a Month-to-Month or Fixed-Term Lease?
Before even beginning the process of determining whether you’d like to rent your property or rental unit, you must decide between of two kinds of agreements: a periodic rental agreement, also known as a month-to-month, or a lease, also known as a fixed-term lease.
PERIODICRENTALAGREEMENT (or MONTH-TO-MONTH):
“A periodic rental agreement states the length of time (the number of days) between the rent payments – for example a week (seven days) or a month (30 days). The length of time between rent payments is called the rental period. A periodic rental agreement that requires one rent payment each month is a month-to-month rental agreement, and the tenancy is a month-to-month tenancy. The month-to-month rental agreement is by far the most common kind of rental agreement, although longer (or shorter) rental periods can be specified.”
- PROS:If the periodic rental agreement requires that rent be paid once a week, it is a week-to-week rental agreement and the tenancy is a week-to-week tenancy. This means you will acquire weekly revenue for your unit or property, which is oftentimes a nice perk for a property owner or manager.
- CONS:Collecting rent on a weekly basis can be time-consuming and cause a landlord or property manager to be forced to do weekly accounting tasks and bank visits, so this is something to consider.
- PROS:Remember, a periodic rental agreement expires at the end of each period for which the tenant has paid rent and is renewed by the next rent payment, so you must create a lease agreement with explicitly written terms so the tenant understands how long you’d like to agreement to last, otherwise, it continues to rotate month-to-month. This can be a perk for a landlord or property manager who would like more control over how long a tenant stays or if they’d like to rent the property further or not.
- CONS:A periodic or month-to-month rental agreement may not state the total number of weeks or months your agreement will be in effect. Remember: Your tenant can continue to live in the rental unit as long as the tenant continues to pay rent, and as long as you don’t ask the tenant to leave.
According to the Department of Consumer Affairs:
In a periodic or month-to-month rental agreement, the length of time between the rent payments (the rental period) determines three things:
- How often the tenant must pay rent.
2. The amount of advance notice that the tenant must give the landlord and that the landlord must give the tenant, if either decides to terminate the tenancy.
3. The amount of advance notice the landlord must give the tenant if the landlord decides to change the terms of the rental agreement other than the rent.
As we discussed in Section 1, a standard fixed-term lease clearly denotes the total number of months that your lease agreement will be in effect for. These are typically in two formats: six or 12 month terms. Remember, a lease lasting one year or more, must be in writing so steer clear of any oral agreements.
According to the Department of Consumer Affairs, it is important to understand that even though a fixed-term lease requires the rent to be paid monthly, your tenant or resident is, “bound by the lease until it expires (for example, at the end of 12 months).” In a nutshell, this protects you as a landlord or property manager because it ensures that your tenant must pay the rent and perform all of your obligations under the lease during the entire lease agreement duration.
CONS:If you choose a fixed-term lease, the rent cannot be raised while the lease is in effect, unless the lease expressly allows rent increases.
CONS:Most importantly, you cannot evict your tenant while the lease is in effect, except for reasons such as your damaging the property or failing to pay rent. See California Tenant Law Guidelines on Eviction here.
PROS:It gives you and the tenant the security of a long-term agreement at a known cost. Also, you could design a lease that allows rent increases but before you craft such language, you should contact us here at SDCAAfor help to learn more about how an SDCAAmembership can guide you on how to specify a limit on how much and how often the rent can be raised.
PROS:If your tenant suddenly decides to move and break their lease agreement before the lease ends, you may have the ability to file a claim against the tenant for the loss of rent for the rest of the lease term.
Moving In: Conducting a thorough move-in inspection
Before you and your new possible resident sign on the dotted line, it’s standard to complete a thorough walk-through or move-in inspection.
Documenting the condition of the unit at move-in establishes a baseline for you and your tenant, reducing the likelihood of security deposit disputes later on.
Here’s a rundown of some of the most commonly overlooked issues that landlords, property managers, and owners should check out before checking a new resident in, as well as the law pertaining to when you can perform your walk-through if the residence is still occupied by the tenant who is moving out.
One of the best ways to facilitate a walk-through is to break down each room into its own section on a print-out. For instance, if you start with the kitchen, check that all the appliances work properly; note if any faucets leaks or drip; what condition on a scale from 1-10 are each of these elements, including flooring, cabinets, and counters. If there’s grout issues, or tile cracks, make sure to note this, as the new resident will surely not want to feel responsible for a pre-existing damage. You’ll have a better understanding, year-over-year, whether it’s normal wear-and-tear for you to repair, or if it’s caused by a prior resident and needs to be deducted from the security deposit.
Included in your checklist should be the following:
- Room-by-room checklist of all areas (carpet; flooring; windows; window treatments; walls, et al.) on a scale of 1-10, with space for comments.
- Make note of any repairs needed to be made by you or caused by the prior tenant if you completed a walk-through in the past.
- If your property has something unique, such as a storage closet on the balcony, etc., don’t forget to note these areas that may not be top-of-mind, such as out-of-unit storage, common areas, and laundry areas.
- Make sure both you and your new resident sign and approve the inspection.
- Also, make sure to note how you want maintenance requests made and where the new resident can request such matters.
When residents move in or out, it’s a best practice for all property managers to conduct a thorough inspection of the unit or property. This helps protect yourself, the property management company and/or your investment by notating formally all aspects of the property’s condition.
California Law Regarding Walk-Throughs and Entering the Property
Remember, if your resident that is leaving hasn’t left the property yet while you’re looking for a new tenant, you must make sure to give the proper notice, according to California Tenant Law.
California law states:
When the tenant requests an initial inspection, the landlord and the tenant must try to agree on a mutually convenient date and time for the inspection.
- The inspection cannot be scheduled earlier than two weeks before the end of the tenancy or lease term.
- In any event, the inspection should be scheduled to allow the tenant ample time to perform repairs or do cleaning identified during the initial inspection.
- The landlord must give the tenant at least 48 hours’ advance written notice of the date and time of the inspection whether or not the parties have agreed to a date and time for the inspection.
- The landlord is not required to give the 48-hour notice to the tenant if:
a. the parties have not agreed on a date and time, and the tenant no longer wants the inspection; or
b. the landlord and tenant have agreed in writing to waive (give up) the 48-hour notice requirement.
- When the tenant has moved out or has abandoned the rental unit.
Ongoing Property Management
Ongoing maintenance is an important issue to always keep tabs on when you rent or property manage a residence. There are certain things to remember, especially in regards to California Tenant Law, that make maintenance an important topic to be well-versed in.
Here at SDCAAwe work hand-in-hand with our members to help support correct adherence to these laws, as well as offering members our Referral Program which affords you access to vetted contractors and suppliers, as well as inspectors and emergency service providers.
SDCAAprovides a full suite of member support services to help with the ongoing management of your property, including:
- Rental forms compliant with current California law available to print or electronically fill in
- InfoLink Resident Screening Services that gives you access to high-quality credit, eviction, and criminal background checks
- Unlimited Operational Advice accessed by a quick phone call or email to our housing counselors
- White Papers and Fact Sheets on common operational topics to help keep you legally compliant
- Easy access to hundreds of supplier member companies waiting to bid for your business and provide you with the best in products and services for your property
It’s our mission to be a go-to resource for Members and non-members. Part of our dedication to maintaining an excellent relationship with our community of property owners and managers is to offer access to our SDCAA’s Buyer’s Guide. The companies listed here are vetted partners of the SDCAAand offer the best possible products and services for your rental property.
In addition, we offer a robust support for those first-time landlords that may only have one rental property. A good portion of the rental market holdings in San Diego are represented by those who may just have one to three homes they’re renting out. Our Independent Rental Owner Center is the perfect place to learn more about how to properly inspect, move-in, and move-out tenants with less friction and more ease.
When taking advantage of this aspect of our membership offerings, you’ll see it’s been crafted specifically for this unique property management style, as opposed to the management style used for larger-sized properties with full-time management. This program helps independent owners become more informed and educated about superior ways of managing their rental properties. With SDCAA, you can expand your network of independent owners to allow for greater communication and information flow by sharing, attending our Events and joining our conferences.
Common Lease Violations and How To Handle Them
Under the Fair Housing Association, or FHA, a disability is defined as a: “physical or mental impairment which significantly limits a person’s major life activities.”
For instance, when drafting an advertisement or posting to rent your property, even if you note, a “no pets” or restricts pets, as a property owner or manager, you are required to make what is called a “reasonable accommodation” to allow pets who serve as assistance animals, which includes animals who provide emotional support.
According to Federal FHAguidelines, assistance animals are not pets, and they actually fall under a completely unique legal classification. In most all cases, you cannot refuse a tenant who wishes to gain an emotional support animal and you should waive any pet fees, as these animals are in a different legal classification than pets who are not assistance animals. This is the reason why pet restrictions and fees are waived for them. Breed and weight restrictions do not apply to assistance or service animals.
Definitions: Differences between service animals and assistance animals:
Service animals are categorized as animals trained to do a specific task for their owner. The most common example is a guide dog. Service animals are allowed in public accommodations because of the owner’s need for the animal at all times.
An assistance animal can be a cat, dog or other type of companion animal, and does not need to be trained to perform a service. The emotional and/or physical benefits from the animal living in the home are what qualify the animal as an assistance animal.
A letter from a medical doctor or therapist is all that is needed to classify the animal as an assistance animal.
The fact that the term “service animal” is often used by landlords and public housing authorities to refer to both service dogs and assistance animals often creates confusion.
Some examples of assistance animals, according to the Humane Society of the United States:
- A cat who can detect and alerts their companion of oncoming seizures.
- A dog who alleviates a person’s depression or anxiety.
- A cat who reduces a person’s stress-induced pain.
- A bird who alerts their hard-of-hearing companion when someone has come to the door.
Unauthorized Tenants or Occupants
When you craft your lease to a tenant, it’s of utmost importance to add a “no subletting or no unauthorized tenants clause,” this is a standard practice Fair Housing recommends.
Including such a clause will ensure you have the opportunity to protect your property through screening all potential residents. Having a written policy also holds all residents accountable for any damages they may cause.
In addition, as an SDCAAmember, we offer rental forms that have been vetted by member attorneys with decades of expertise in California Tenant Law. You can access our forms here, and as a member, we will work with you to create a lease that helps you avoid the issues that could come if you don’t have this clause.
If a tenant has an unauthorized guest, which could mean a significant other moving in, or a friend staying for an extended period of time, it could be a straightforward fix.
“Talk to your tenant about the situation or leave him a note requesting that he remove the unauthorized tenant,” advises the California Courts Self-Help Center. In the case of a significant other, you may also ask the unauthorized resident to go through the screening process and be added to the lease.
This is a win-win situation because the tenant could have been ignorant to the law or the rules of their lease, and sometimes a quick face-to-face or certified letter can make a world of difference.
Otherwise, you may write a 3-day eviction notice, which the California Courts Self-Help Center notes, should “include the provision that the lease be upheld by removing the unauthorized tenant or you will escalate the eviction process.
Your notice must include the full name of the tenant on the lease, the address, the section of the lease violated, the date of the notice and your signature. Post the note visibly on the tenant’s door if you cannot deliver it to her personally.
These are obviously complex issues, which is why the SDCAAhelps our members through situations such as this by offering access to our Landlord Advice hotline. We know that small operational issues can become significant problems over time. We can help you by pointing you in the right direction.
The operational advice counselor is available to SCRHA Members Monday through Friday, 9:00 AM to 5:00 PM. For your operational advice needs contact the SCRHA office directly at 858.278.8070.
When you go it alone, you may have to visit your local courthouse and begin the process of eviction, especially if the tenant refuses to have the unauthorized tenant leave your premises or be added to the lease, which is yet another option you have to offer if the tenant wants the new unauthorized person to stay.
Typically, if all else fails, the process involves going to court. Landlords who need to resolve a dispute head to the Superior Court of California, County of San Diego – Small Claims Division. The website provides instructions and forms on how to file through Small Claims Court, other resources and description of the process.
In California, you don’t need an attorney for a small-claims case such as evicting a renter for having an unauthorized tenant on the property. However, you may choose to hire an attorney depending on the situation.
If the judge rules in your favor and the tenant still doesn’t leave the property, you will have to call the police to have the person removed.
Should the judge rule against you, you may file an appeal or accept the decision.
This area of California Law has evolved immensely over time. A recent landmark case set precedence and protected landlords if their tenants engaged in criminal behavior [Castaneda v. Olsher (2007) 41 C4th 1205].
That being said, it’s still of utmost importance to attempt to keep your tenant safe, as well as the residents surrounding your property. This can be a sticky situation for a landlord. A loss of income occurs during an eviction process, oftentimes, when neighbors bicker, landlords might try to stay out of it.
That is why having a professional legal opinion from an expert in tenant law is oftentimes integral. SDCAAmembers have access to our list of referral attorneys whom we personally recommend for situations that seem as though they could go from bad to worse. From illegal drug use or selling drugs on your property, to storing firearms on your property, to arrests, these can all pose issues to landlords if not handled properly.
According to Calif. Civil Code §1714(a):
To keep tenants and visitors safe from harm, residential landlords are required to use ordinary care in managing the condition of their property. Landlords need to take safety precautions for unsafe conditions that are reasonably foreseeable.
This duty to assure the safety of others occurs when:
- prior occurrences exist (such as assault or robbery due to unsafe conditions);
- the unit lacks ordinary security installments, such as adequate door locks and lighting; or housing and building codes specify safety measures to be taken by the landlord.
When the lease expires, as a property owner or manager, you have several choices in how to proceed.
The first option is to approach the resident and ask if they’d like to sign a new lease agreement, whether that’s a six-month agreement or a 12-month.
Your other option, if the resident has not taken good care of the property or other issues arise and you’re not ready to sign a renewal lease, you can notify the tenant that once the lease they have ends, you’ll no longer collect rent and the lease is thereby expired. Meaning the tenant has to vacate the premise immediately when the old lease is up.
Now, if you’re unaware of your rights as a landlord, or property owner, you may not sign a new lease, and let’s say the tenant sends you their monthly rent check after the lease expires. By accepting payment, you’ve converted the previous lease to a month-to-month agreement. In this sense, you now have to abide by the California Law as it pertains to month-to-month agreements. At SDCAA, we offer our members access to legal support that can take you through the process of renewals, expired leases, and eviction.
Regarding month-to-month leases, California Tenant Lawstates the following:
“A landlord can end a periodic tenancy (for example, a month-to-month tenancy) by giving the tenant proper advance written notice. Your landlord must give you 60 days advance written notice that the tenancy will end if you and every other tenant or resident have lived in the rental unit for a year or more.
However, the landlord must give you 30 days advance written notice in either of the following situations:
- Any tenant or resident has lived in the rental unit less than one year; or
- The landlord has contracted to sell the rental unit to another person who intends to occupy it for at least a year after the tenancy ends.
- In addition, all of the following must be true in order for the selling landlord to give you a 30-day notice
- The landlord must have opened escrow with a licensed escrow agent or real estate broker, and
- The landlord must have given you the 30-day notice no later than 120 days after opening the escrow, and
- The landlord must not previously have given you a 30-day or 60-day notice, and the rental unit must be one that can be sold separately from any other dwelling unit. (For example, a house or a condominium can be sold separately from another dwelling unit.)
- The landlord usually isn’t required to state a reason for ending the tenancy in the 30-day or 60-day notice.”
If you do decide to keep your tenant after their lease expires, you may want to make some changes in the renewal of their lease. Some changes that may arise could be regarding pets, outside area maintenance or possibly raising the rent. Raising the rent is a question our experts at SDCAAreceive quite often. Depending on the situation, the question always requires a professional opinion. Especially in regards to issues regarding pets, defining pets (which we’ve discussed in an earlier section) or security deposits, etc.
Security Deposits and Damages
Security deposits are just a normal part of the rental process of bringing in a new tenant, as well as refunding it to the prior tenant.
As a landlord or property owner, you can use the security deposit for a variety of issues that could arise, such as loss of rent, damage done to the rental unit—beyond normal wear and tear—or if your prior tenant didn’t clean the property before vacating and left the unit in a lesser-condition than when they moved in.
Under California law, a lease or rental agreement cannot say that a security deposit is “nonrefundable.” This means that when the tenancy ends, the landlord must return to you any unused part of your security deposit or the whole amount within a set amount of time. There are, according to Tenant Law, only four purposes upon which you as a landlord, or property manager, may withhold the security deposit:
- For unpaid rent
- For cleaning the rental unit when the tenant moves out, but only to make the unit as clean as it was when the tenant first moved in
- For repair of damages, other than normal wear and tear, caused by the tenant or the tenant’s guests
- If the lease or rental agreement allows it, for the cost of restoring or replacing furniture, furnishings, or other items of personal property (including keys), other than because of normal wear and tear.
If you discover the unit, during the move-out inspection, has damages beyond wear-and-tear or violate your lease agreement terms in any way, you are allowed to withhold the security deposit but you must send the former tenant an itemized statement with all receipts attached to let them legally know why you’re taking X amount of dollars off the return of their security deposit. Oftentimes, this can cause some rancor if these deposit issues turn into disputes. As an SDCAAmember, you’ll have access to all the forms and guidance you need and we’ll walk you through the process.
One thing to remember is that your initial walk-through inspection becomes extremely important in helping to identify ‘normal wear-and-tear’ as you’ll be able to have documentation of the original condition of the unit before they signed the lease and moved in.
According to California Tenant Law, the landlord may make a deduction from the tenant’s security deposit to repair a defect or correct a condition:
1. That was identified in the inspection statement and that the tenant did not repair or correct.
2. That occurred after the initial inspection
3. That was not identified during the initial inspection due to the presence of the tenant’s possessions
Overview of Eviction Process
One of the most difficult issues landlords or property owners face is if their current tenant will not voluntarily move out after the landlord has properly given the required notice to the tenant. As we have aforementioned, once a lease is completed and not renewed and you do not accept any further rental payments, you can legally evict the tenant by filing an unlawful detainer lawsuit in superior court.
“The court-administered eviction process assures the tenant of the right to a court hearing if the tenant believes that the landlord has no right to evict the tenant. The landlord must use this court process to evict the tenant; the landlord cannot use self-help measures to force the tenant to move. For example, the landlord cannot physically remove or lock out the tenant, cut off utilities such as water or electricity, remove outside windows or doors, or seize (take) the tenant’s belongings in order to carry out the eviction. The landlord must use the court procedures.” —Civil Code Section 789.3., California Tenant Law
To begin the process of eviction, the California Courts require you fill out the following forms:
- Summons – Unlawful Detainer-Eviction (Form SUM-130)
- Complaint – Unlawful Detainer (Form UD-100)
- Civil Case Cover Sheet (Form CM-010).
- Your local court also may require you to fill out other local forms, so make sure you check with the your court’s clerk’s office to make sure you have filled out all the necessary papers.
- SDCAAmembers can access many of these forms here
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