A landlord can enter into a residential tenancy agreement with a tenant by oral agreement, unless the lease term is for more than one year, though a written agreement is always preferable. California law is very explicit regarding certain obligations of a landlord and what constitutes grounds for eviction.
There are always certain items that every residential lease agreement should contain:
- Names of the renters and landlord/property owner
- Identity and address of the landlord or other person authorized to receive legal documents
- Description of the property or premises
- Rental amount
- Date of the month when rent is due (otherwise it is due on the last day of each month)
- Starting date of the agreement
- The term of the lease; otherwise it is presumed to be month-to-month
- If late charges are imposed and the amount
- Landlord’s right to enter—24 hours’ notice and for purpose of making repairs, to show prospective tenants, for an emergency or pursuant to court order
Nonpayment of rent is always a reason or basis for terminating the lease, but if the landlord wishes to terminate it for some other reason, it must be for violating a provision in a written lease. Examples are:
- No pets clause
- No subletting clause
- Failure to pay late rent fees
- Use of the premises for certain prohibited activities
- Use of a waterbed
Leases for a fixed term terminate on the final day of the lease, giving the landlord the right to possession. The lease term automatically becomes month-to-month, however, if the tenant remains in possession and the landlord continues to accept rent.
A landlord may not include certain provisions in a lease that takes away certain remedies or rights of the tenant. You may not have the tenant waive a right to sue for personal injury or other cause of action or for violation of any other statutory or constitutional right. A tenant cannot waive certain procedural rights in litigation in any action involving the rights and obligations of a tenant.
Further, any act to punish a tenant for exercising a civil or constitutional right is considered retaliation and can subject a landlord to substantial civil penalties.
Discrimination in Renting
No landlord may discriminate against a potential tenant or current tenant on the basis of race, sex, color, national origin, religion, age, ancestry or disability. You are considered a business and must comply with state and federal laws including:
- Fair Housing Act
- Senior Citizen Housing
- Unruh Civil Rights Act (marital status, sexual orientation, medical condition)
- Americans with Disability Act
- Civil Rights Act of 1866 and as Amended
- You are also liable for sexual harassment claims brought by a tenant.
California law imposes certain obligations on landlords. For instance, if you own an apartment building with at least 16 units, you are required to have an on-site resident manager.
A property owner impliedly warrants that a premises will be habitable, or one that is fit for human occupancy, and must provide certain essential services, which must be up to code and in good condition:
- Weatherproofing of roof, exterior walls and windows
- Lighting and electricity
- Hot and cold water
- Garbage receptacles
- Grounds and building free of vermin
- Floors, stairs and railings in good repair
- Wiring for one phone line
- Smoke detector
- Carbon dioxide detector
- Depending on the municipal code, you may have to install certain locks or peep holes
A landlord may charge a non-refundable fee to any tenant applicant for the expense incurred in performing a credit check or other background check, which fee may not exceed $30. The applicant is entitled to a copy of any credit report received or viewed by the landlord.
Rent Provisions-Late Fees, Notice to Increase and Deduct
As landlord, you may charge whatever the market will bear unless you are in a rent-controlled city where you are limited under certain conditions in what you can charge. The following California cities have rent control ordinances:
Oakland, Berkeley, San Francisco, San Jose, Santa Monica, Thousand Oaks, Beverly Hills, Los Gatos, East Palo Alto, Cotati, Hayward, Palm Springs, West Hollywood and Los Angeles.
You can include a provision for late fees but it cannot be unreasonable. Most charge no more than 10% but the standard is that it must be no more than what reasonably compensates the landlord for accepting and processing a late payment. The rent control cities likely have limits on what you can charge for late fees if you have a rent control tenant.
Notices to Increase Rent
If you want to increase the rent, there are certain rules regarding the amount of notice that must be given to the tenant. Notice to the tenant can be by personal delivery or by first class mail to the premises and even to the tenant’s place of business. Substituted service may be done but it is advised that an affidavit of service be completed if done in this manner. If notice of the rent increase is by any method other than personal service, then the notice period is extended by 5 days.
For any rent increase of 10% or less that is cumulative over the previous 12-months, the notice period is 30-days. For any increase of more than 10% cumulatively over the previous 12-months, the notice period is 60 days.
Right to Deduct Rent and Repair
If the premises or unit becomes uninhabitable and the landlord is notified but fails to repair the condition, then the tenant may exercise the right to repair the condition and deduct the expense from the rent or choose to vacate the premises and have no further obligations under the lease. This does not apply to every condition but must be one where an essential service is not being provided or where a condition constitutes a hazard to the tenant’s health and safety. This latter standard may give the tenant the right to withhold rent until the landlord remedies the hazard, which must be substantial. Any attempt by the landlord to collect the rent for an uninhabitable premises can subject the landlord to substantial civil penalties and fines.
In the event the landlord wishes to evict the tenant regardless of the tenant’s assertions regarding the uninhabitable condition of the premises, then the trier-of-fact (judge or jury) will determine if the landlord substantially breached the implied warranty of habitability by ignoring or failing to repair or remedy a condition that endangered the tenant’s health and safety. If so determined, the court or jury fixes the percentage that the premises was devalued by the hazard and decreases the rent accordingly. The tenant has 5 days to pay the decreased rent or must vacate the premises.
You can call a deposit whatever you wish—rent, cleaning, waterbed, pet or anything else—but under California law, there is only a security deposit. This is a fee paid in advance of the initial rent, or simultaneously or at some point during the rental period, to compensate or reimburse the landlord for any rent default or for repair of damage to the unit. The damages must be not be for normal wear and tear but for that caused by the mistreatment, abuse or accident caused by the tenant or guest.
All deposits are refundable and may or may not be held in a separate account. Some jurisdictions require that the landlord add interest to the deposit when it is refunded. These cities include San Francisco, Berkeley, Hayward, Los Angeles, Santa Cruz, Santa Monica, Cotati, East Palo Alto, Watsonville and West Hollywood.
For unfurnished apartments, the security deposit cannot exceed 2 month’s rent. For furnished units, you may charge 3-month’s rent. If the tenant has a waterbed, you can add an extra ½ month’s rent.
Within 21 days after the tenant has vacated, the landlord has to either return the entire deposit, with interest if required, or provide a written accounting of the damage and the repairs with charges. The tenant needs to provide the landlord with an address or the landlord has to mail it to the last known address for the tenant. Should the landlord violate this obligation and is found to be in bad faith, the landlord must pay for any actual damages demonstrated by the tenant along with a statutory penalty of up to $600.
For any landlord wishing to lease a unit or property for residential purposes, consult an attorney regarding the provisions of your California residential lease agreement. Cities and towns have their own ordinances regarding certain provisions, interest on security deposits and even rent if you are doing so in a rent controlled jurisdiction.