Ahhhh, California - the left coast, the best coast? Most people that live here think so!
But if you are a landlord or a tenant in California there are a lot of things both of you should know before signing a lease agreement.
The following Q&A session will hopefully enlighten you on your rental journey.
Q: How much can a landlord charge for rent?
A: There are many areas that are subject to rent control and rent stabilization guidelines, as well as eviction "control". These cities include: Beverly Hills, Campbell, East Palo Alto, Fremont, Glendale, Hayward, Los Angeles, Los Gatos, Oakland, Palm Springs, San Diego, San Francisco, San Jose, Santa Monica, Thousand Oaks and West Hollywood.
If you are a tenant or a landlord in one of these principalities, it would be prudent to investigate the rules of compliance with your local HUD office, the city's rent control board or a real estate attorney familiar with the laws in your area.
Q: What is the allowable fee for a rental application/credit check?
A: A landlord cannot charge any more than he or she pays to have your credit checked. And this fee cannot be more than $37. Basically, he or she cannot make any kind of profit on your application fee.
Q: What are the allowable fees for a late rent charge or returned check?
A: Both of these fees are negotiable and subject to what is known as the law of "liquidated damages". Liquidated damages are fees that can be collected for breaching a contract (such as a lease agreement). Although these are not subject to any laws as far as maximum amount chargeable, as a landlord you want to make them reasonable. A tenant sensing an unreasonable amount will likely be less willing to live under your other terms.
As a guideline, I charge $50 for a late fee and $25 for a returned check fee.
Q: How do security deposits work?
A: California does impose limits when it comes to the amount a landlord can charge as a security deposit. A landlord may not collect a security deposit more than two month's rent for an unfurnished apartment or three month's rent for a furnished apartment. This total amount must also include the amounts charged as a pet deposit, for locks, keys, carpets or anything else.
Security deposits are refundable just as long as the tenant doesn't do any damage above "normal wear and tear".
As a landlord, do I owe interest in a tenant's security deposit?
Some principalities, San Francisco and Berkeley to name two, legally require interest to be paid to the tenant.
Because these numbers change and are based in the CPI (Consumer Price Index), it is best for them to check with a knowledgeable attorney or their local housing authority for the specifics.
Q: When does a landlord have to return the balance of a tenant's security deposit?
A: Property owners have 21 days to return the balance of the security deposit and/or send an itemized accounting of all of the deductions coming out of the deposit. These deductions come out of the balance for damages above "normal wear and tear".
IMPORTANT: It is vitally important for every landlord to know the detailed procedures for what is deductible. These are outlined in California Civil Code Section 1950.5.
Q: What do landlords and tenants have to be on the lookout for when it comes to security deposits?
A: Property owners often try to "over-claim" what can be deductible. By that, I mean sometimes landlords claim deductions for things that are noted by the legal system as "normal wear and tear" and therefore NOT subject to a deduction.
It is also important to note that as a landlord you would do well to buy yourself a digital camera to take before and after pictures of a tenant's stay. Putting this into practice will save you immense amounts of headaches by objectively evaluating each deduction.
Q: How does one end a lease in California?
A: There are two types of leases: fixed term or a periodic lease.
A lease that is a fixed term begins and ends on specified dates. The most common type of fixed term lease is a year lease. In this case, a year lease would simply end one year after the lease began.
A periodic lease continues from term to term. The most common type of term-to-term lease is the month to month. A periodic lease remains in place until either the landlord or the tenant gives the other the specified amount of required notice. Usually, though not always, the amount of notice required is the same as the term. For example, a month-to-month lease would require one month's notice that a tenant was moving out.
In situations with subsidized housing, usually there is a 90-day notice required. However, you should check with your local housing authority for the laws in your principality. In addition, if your property is in a principality with eviction control, you must give "just cause" to end the lease agreement.
Q: Under what circumstances is a landlord required to let a tenant out of their lease agreement?
A: If a rental unit becomes uninhabitable or is damaged by fire or another reason not caused by the renter, the landlord is obligated to release the tenant from their rental agreement.
The only other time this can happen is if the tenant is deceived by misrepresentations made by a landlord.
Q: What do I do if I have a tenant that was supposed to leave his apartment and doesn't?
A: If a tenant decides to stay in a unit without the landlord's permission after the expiration of the lease agreement or the lease agreement's termination, the owner may bring about an "action for possession".
Note: If the property is in a jurisdiction that employs eviction control, you would be wise to consult the local housing authority or a qualified attorney.
Q: How does the eviction process work?
A: A 3-day written notice is required before a landlord can file for eviction in court. However, notices may differ based on the situation.
Situation:
(1) Non-payment of rent: a landlord must serve the tenant with a written notice stating how much back rent is owed. The total cannot include any other charges such as late fees, interest, or damages. This notice gives the tenant three days to "pay or quit" - which essentially means: pay your rent or leave the premises.
(2) Lease agreement violations: a 3-Day Notice to "Perform Covenants or Quit" is given to the tenant. Landlords use this type of notice if the renter fails to uphold any of the terms on the lease agreement and the problem cannot be rectified. For instance, if a tenant is subletting the unit without the landlord's approval, not keeping the apartment clean, or any other terms of the agreement, this notice asks the tenant to correct the violation within three days or leave the premises.
(3) On-going nuisance or criminal activity: A 3-Day "Notice to Quit" can be served if there have been recurring problems with a renter who causes a "nuisance" in his or her unit or on the property, or if he or she is conducting criminal activity in or around the property. This also includes situations when a tenant's actions threaten the safety or health of other residents.
As soon as the 3-day period terminates and if the tenant is still not complying, the landlord can file a suit in court for eviction. Again, if your property is subject to eviction control, please check with your local housing authorities for guidelines.
Q: How do these notices have to be served?
A: Notices should be personally delivered to the tenant when possible. If the tenant is not home at the time of service, the landlord can leave a copy with another adult person if available.. If you are unable to locate the tenant and no one is there to receive it, you may leave a copy in a conspicuous place at his unit. Personally, I recommend mailing the notice certified and with a return receipt required so that you can prove the tenant was indeed given the proper warning should you have to go to court. This eliminates any chance of the tenant denying you served him personally.
Q: What does the landlord do if the tenant ignores his initial notice?
A: The first thing the landlord should do is go to the courthouse and file the paperwork to proceed with an unlawful detainer lawsuit.
Q: What is an unlawful detainer lawsuit?
A: It is when a hearing is held where both parties (landlord and tenant) can present their point of view and share their evidence.
If the court should decide in favor of the landlord, the court issues what is called a "writ of possession." This allows the sheriff to force the tenant to vacate the premises. At this time, the tenant has 5 days from the date the "writ" is served to leave the premises under his or her own will. If they do not vacate by the 5th day, the sheriff is allowed to physically remove the tenant and his or her possessions. The landlord is not entitled to take possession of the unit until the sheriff has completed this task should it be necessary.
Q: How many days does it take to complete the eviction process in California?
A: The complete eviction process can take anywhere from 2-8 weeks depending on a variety of factors. These factors include what kind of eviction is taking place and whether or not the tenant decides to defend themselves and/or leave willingly.
Q: What does it mean if a tenant "skips out"?
A: This is also referred to as a tenant "abandoning" his unit- leaving and not telling anyone. Although California doesn't clearly define the terms of abandonment, as a landlord, it is a smart move to take pictures and document your findings just in case you have to prove yourself in court.
Q: What happens if my tenant files for bankruptcy?
A: It is best to consult with an attorney as this is somewhat of a tricky area. Usually, all rent collection and eviction efforts must cease though there are certain circumstance that a court will grant an exception.
Q: Do I need to be licensed or registered in order to be a landlord?
A: Some principalities do require a landlord to register for a business license. Some places, like Berkeley, require registration of the rental property with the local rent board or housing authority. If you are a first time landlord, you should check with your local housing authority to clarify all of the requirements.
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