California Rental Laws Guide

California offers many temptations for both landlords and tenants. Generally, California’s rental laws favor the tenant. But given the demand for housing, weather, diverse cultures and amenities throughout the state, real estate investment remains lucrative. It is important for anyone who owns or is considering residential rental investment to know exactly which California communities have rent controls, including those in Los Angeles and Beverly Hills.   At a Glance: Late Fees: California residential leases may not contain a preset late fee. There is an exception detailed in the California Consumer Affairs Handbook and explained below. Security Deposit Limit: Two months for unfurnished and three months for furnished rental units. Returned Payment Fee Limit: This fee should either be equal to the fee the financial institution charges OR preset in the lease agreement for no more than $25 for the first incidence and $35 for each incidence after. Notice to Enter: 24 hours unless an emergency. (If the landlord provides pest control services, there are specific procedures to follow before entering the unit for treatment, that can be found in California’s Civil Code §1940.8.)   Late Fee: Late Fee Limit: California does not permit predetermined late fees, as it is considered a “penalty”.  An exception to this would be where circumstances exist that make it difficult to assess the exact cost of a fee. In this case, it is important to be sure that when assessing a fee, it is reasonable. Additionally, it should be kept in mind, the rough calculation of what the actual costs would be.   Security Deposits: In California any amount taken as a security deposit, no matter how used can total no more than either 2 months’ rent unless the rental is furnished and in that circumstance, 3 months is permitted. Even though there is no written statute or act determining the necessity of a separate bank account for a security deposit in California, it is definitely a good practice! California does NOT allow non-refundable deposits. As spelled out in California’s Civil Code § 1950.5, the security deposit must be returned within 21 days after the tenant’s move-out (or no earlier than 60 days before the end of a fixed-term lease). The landlord is required to send a statement of any deductions. Receipts or documentation of the work performed must accompany this list when deductions total $126 or more.   Maintenance: By and large, the landlord must assure that when renting a property to a tenant, that property must be safe and fit to live in. California law states that it must be habitable and anything that makes it uninhabitable falls under the landlord’s responsibility. In California Civil Code, Section 1941, there is a complete list of items that a landlord must comply with or make sure that the property includes.   Eviction: Notice first! In California the landlord must provide a three-day written notification before eviction. For non-payment of rent, the amount of the rent must be clearly stated in the notice along with the location and phone number of who to give the rent to, in-person payments should list available hours. A chance to either correct a problem or pay the rent (in circumstances where this is applicable) must be provided for in the notice OR that the tenant vacate the premises. *IMPORTANT: A landlord should NEVER take matters into their own hands with regards to eviction by shutting off utilities, changing locks, or removing tenant’s personal property. After proper notice is given to the offending tenant, the landlord will go to the courthouse and file the paperwork for eviction. Notices may be delivered by personal service, substituted service (this means that notice may be personally handed to the tenant at their place of employment or someone other than the landlord may deliver the notice to anyone of “suitable age and discretion”). If all else fails, the landlord may post the notice on the door or nearby the rental property in addition to mailing it.   Required Disclosures:

1. Lead Paint Pamphlet and statement for any residential rental unit that was built before January 1, 1978.
2. Megan’s Law
3. Smoke Alarm Compliance
4. Carbon Monoxide Detector Compliance
5. Meth Lab Clean-up Order, as applicable
6. Military Ordnance Location Ordinance if the landlord has knowledge that a former military ordnance where the ground may contain explosives if it is located within one mile of the rental property.
7. Gas/Electric Meters when meters are not separated per unit.
8. There may be additional requirements depending on the location of the rental unit, for instance, rent controlled units may have additional disclosure requirements.

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