The state of California is in the midst of a housing crisis. In 2018 and 2019 it ranked among the lowest in housing units per resident. Major cities such as Los Angeles, San Francisco, and San Diego are in the top 10 areas with the highest median rents causing an increasing number of homeless citizens.
In an effort to take action, lawmakers recently approved a rent cap bill created to protect millions of tenants in California. Under the bill, the rent increase is limited to 5% after inflation.
With the shift in California housing laws, you must be knowledgeable about landlord rights in California. This is particularly crucial as you prepare to lease out any property.
Required Information
Landlords in California are required to make the following disclosures (usually in writing) at the start of a tenancy:
- No smoking policy
- Flooding
- Bed bug information
- Death on the property for the past three years
- Payment for utilities
- Ordinance location
- Toxic mold
- Notice of default
Security Deposit
There is a limit on how much a landlord in California can charge for a security deposit. Under the landlord-tenant laws in the state, a landlord may charge up to two months rent for a security deposit in an unfurnished residence and three months rent for furnished. It is forbidden for landlords in California to charge nonrefundable fees.
A landlord is obligated to return the security deposit within 21 days after the renter has surrendered the leased property. Certain cases would make it legal for the landlord to keep the security deposit, such as when the tenant defaults on rent payments or when there is damage to the property.
Landlord Access
California laws protect the privacy of tenants by prescribing the frequency, reason, and times that a landlord may enter a property. Under the
Civil Code 1954, a landlord may enter your unit only:
- In an emergency situation, such as a fire or busted pipe
- After reasonable advance notice has been given in written form (at least 24 hours) and then only:
- To inspect, repair, or show the apartment
- During normal business hours (8am-5pm)
- The landlord is liable for anything broken or stolen in the home if the tenant isn’t present
- If the tenant has surrendered or abandoned the premises
Rent Increases
Under Assembly Bill 1482, landlords in California can only increase their rent for a maximum of 5% plus inflation. Landlords are also limited to a once a year increase. The rent cap will take effect on January 1, 2020 and the details vary per city.
Late Payments/Evictions
Under
California law, landlords may serve their tenants with a three-day notice following a missed rent payment. The written notice serves as a formal warning to inform the tenant they have three days to pay in full or the lease agreement is canceled. If the tenant fails to pay before the deadline, they must move out. The landlord is then cleared to find a new renter and use the security deposit as the rent payment.
What if the tenant doesn’t leave? Evicting a renter in California is a
time-consuming process that requires multiple steps. If a tenant has not paid rent but refuses to move out, the landlord is forced to take legal action by filing a lawsuit. The proceedings could take months resulting in lost income.
It is vital to have insurance to protect against such unfortunate situations. With
Landlord Rent Default insurance from
Steady, landlords get reimbursed for lost rent resulting from tenant defaults. Additionally, Steady offers options and can cover from 6 weeks up to 6 months of lost rent per year. With this type of insurance, landlords are protected, no matter what happens with their tenants.
If you are a property owner or landlord in California, you should seriously consider getting rent default insurance. Contact
Steady now and start protecting your monthly cash flow.