Rental Agreement Laws
California has some of the most complex landlord-tenant laws in the nation. There are extensive protections for tenants, as well as separate rent-control laws in a number of municipalities such as San Francisco, Los Angeles, Sacramento, and others. Residential rental agreements must clearly communicate the terms of the tenancy and abide by all applicable laws.
Faulty or poorly drafted rental agreements can create all kinds of headaches for landlords and possibly provide an eviction defense for tenants. To minimize problems in the future, we highly recommend that property owners consult with a real estate attorney when creating their rental agreements.
Basic Terms of a Rental Agreement
Every rental agreement for a residential property should include these key terms at the very least:
- Names of All the Tenants – It’s also a good idea to include an occupancy limit and identify what happens if additional people come to live on the property without notifying the landlord.
- Physical Address of the Property
- Rental Period – Identify the time period the lease will last (commonly 6, 12, or 24 months). Also state whether it will become a month-to-month agreement after the initial period expires. Note that, under California law, the tenancy will automatically continue month-to-month if the landlord accepts rental payment.
- Rent Amount
- Rent Payment Details – Identify when the rent is due, where and to whom it should be paid, the method of payment, and late fees.
- Security Deposit Information – In California, the security deposit may not exceed the value of two months’ rent (three months if the property is furnished).
- Utilities Payment – Identify which party is responsible for the payment of utilities such as electricity and gas.
- Maintenance and Repairs – Identify which party is responsible for maintaining and repairing the property.
- Pet Policy – Clearly communicate the policy on pets, including what types of pets are allowed and the responsibilities of the tenant.
Tenant Protection Act
Passed in 2019, the Tenant Protection Act made significant statewide changes to California landlord-tenant law, including adding just-cause termination requirements and restrictions on rent increases. Here is a brief summary of the major changes.
Once a tenant has occupied a property for 12 months or more, the landlord may only terminate the tenancy for “just cause.” Just cause can include failure to pay rent, material breach of rental agreement terms, criminal activity, and more. There also “no-fault” causes to terminate, such as when the owner or the owner’s immediate family wishes to occupy the property.
Under the rent-increase provisions, in any 12-month period a landlord may not increase the rent by more than the rate of inflation (defined by the Consumer Price Index) plus 5%, or a total of 10%, whichever is lower. A number of dwelling types are excluded, such as single-family homes and buildings that are less than 15 years old.
Landlords must disclose these changes in the law to existing and new tenants by written notice or in an addendum to the rental agreement.
Consult a Landlord-Tenant Attorney
In this complex and always-changing legal landscape, it is crucial to have expert advice. Our team of Southern California real estate attorneys can help you draft a rental agreement that makes sure your interests and property are protected. Schedule an appointment today.