Considering Renting Property? Here’s a Few Things Small Landlords Should Know. (Part 2 of 2)

By Rachel Grainger Puryear, the Free Range Lawyer

Welcome to part 2 of this post! The first post covered fair housing laws, and rent control and just cause eviction laws. This post will cover even more that small landlords should know – and again, this post may also be read as a guide to tenant rights.

Know the Civil Code Sections on Landlord-Tenant Laws:

Green “For Rent” sign dangling from a string on a wooden door.

A landlord has many responsibilities to a tenant (in addition to what has been previously covered in this set of posts). These include:

  • Making the rental unit habitable – meaning that the unit must meet certain standards of livability. For instance, the unit must have heat, protection from the elements, and means of securing doors and windows to keep out intruders. As maintaining a home is expensive and a landlord is obligated to properly maintain the rental unit, landlords should make sure that they have reserves for making necessary repairs. Here is more about habitability:

https://www.nolo.com/legal-encyclopedia/free-books/renters-rights-book/chapter7-2.html

  • Complying with rules on security deposits. For instance, in CA, landlords may not charge for a security deposit more than 2x the monthly rent for an unfurnished unit, and not more than 3x the monthly rent for a furnished unit (plus another half-month’s rent if the tenant has a waterbed). Security deposits must be returned within time limits along with an itemized statement of deductions, generally within 21 days in CA. Landlords are also obligated to hold the security deposits in trust until after the tenant moves out, and may not spend them on anything except as allowed by law (i.e., repairs and unpaid rent after a tenant moves out). Here is more about security deposits:

https://www.nolo.com/legal-encyclopedia/california-security-deposits-36199.html

  • Making required disclosures to tenants. Tenants have a right to know certain things, like information about local sex offenders, or whether there is toxic mold in the unit. Here is more about landlords’ required disclosures in California:

https://www.nolo.com/legal-encyclopedia/california-required-landlord-disclosures.html

  • Respecting the privacy of tenants. In California, landlords must provide at least 24 hours advance notice to tenants before entering the unit. (I.e., to make repairs, or to show the unit to potential new tenants.)
  • No retaliation. In California, landlords are prohibited by law from retaliating against a tenant who exercises a legal right, such as requesting that repairs be made. Retaliation could take the form of raising the rent, or evicting a tenant (if the action is motivated by the tenant exercising their legal right).
  • If a landlord wishes to terminate a tenancy or evict a tenant, the landlord must carefully follow proper legal procedures in doing so. If a landlord fails to follow proper procedures in trying to end a tenancy; the consequences for the landlord could include losing an eviction case, being liable for damages to the tenant, penalties, and more. As the eviction process is highly technical and courts will expect landlords to strictly comply with all eviction procedures, hiring an attorney for an eviction (at least on a consulting basis) is recommended. Here is more about the eviction process for landlords in California:

https://www.nolo.com/legal-encyclopedia/the-eviction-process-california-rules-landlords-property-managers.html

Consider whether to use a lease, or to rent month-to-month:

This image has an empty alt attribute; its file name is signing-a-lease.jpeg
Landlord and tenants signing a lease.

A lease agreement rents property to a tenant for a specific period of time, and neither party can terminate the rental before that time is up (except by mutual agreement, or where legally allowable such as an eviction). A month-to-month rental agreement rents property to a tenant for one month at a time, and the rental may be terminated by either party with proper notice.

Whichever arrangement is used, the tenants and the landlords still have the same basic rights and responsibilities. A written agreement is a good idea for either one, but is only required for a lease lasting more than one year. Written agreements can help clarify expectations, and make both parties feel more protected.

Companies like Nolo and Rocket Lawyer offer template rental agreements, but it is a good idea to have a lawyer at least review your agreement before you use it:

https://store.nolo.com/products/landlord-tenant/leases

https://www.rocketlawyer.com/form/lease-agreement.rl#/

Screen your tenants carefully, but know the limits of screening:

Many landlords require that tenants’ combined gross household income be 2.5 to 3 times the rental amount, in order to ensure that they can afford the rent. There is no legal requirement around that, but it a good guideline. Many landlords also perform credit checks. Note that very recent evictions may not show up on credit reports for about 30-60 days, and might not ever show up as landlords are not required to report evictions to credit bureaus.

California courts seal evictions from public record for 60 days after they are filed, and after that only unseal the record if the tenant had a judgment issued against them or violated a settlement agreement. Other states may also seal eviction records for a while, so know that recent eviction records might be hidden.

Getting references from tenants is also common. If a potential tenant is not on good terms with their current landlord, though, then that landlord has an interest in getting rid of that tenant – so be sure to also get references from previous (not just current) landlords.

Some landlords have had problematic tenants even after that tenant had a good credit report, proof of sufficient income, and good references. Other landlords have had great tenants without a credit report, and taking their word on their income, and with no references. While screening procedures can help weed out obviously risky tenants, they are far from foolproof. Seasoned landlords and businesspeople might be good at assessing people without external proof. Accordingly, renting is always a risky business, even though it tends to be profitable for most landlords.

As always, dear readers, thank you for following me. I hope you enjoyed this, and learned something valuable.

** Got a legal subject or question you are curious about? Email it to me at admin@freerangelaw.net. Your question may be discussed in a future blog post!

Please note that the above is offered for educational purposes, and as a means of encouraging intellectual curiosity about the law. The information presented may not take into account every exception, variation, or complication which could apply to someone’s legal matters. Accordingly, nothing in this post or blog is ever intended as, nor should be construed by or relied upon by anyone, as legal advice. If you need legal advice, please consult an attorney who can give you assistance specific to your needs.

Uncategorized