Renting out a property in California can feel risky, especially with the new laws governing evictions, rental increases, and screening.
The best way to protect yourself and your investment is with a strong rental property agreement. The lease you sign with your tenants must include all the pertinent disclosures and information. It’s also an opportunity for you to document in writing what you expect and what each party is responsible for during the lease term.
Rental Agreements Establish Lease and Renewal Terms
To effectively protect the parties singing the rental contract, the lease agreement must include the effective date of the lease and the day that it ends. Most leases are one-year in length, but yours could be 18 months or six months. In addition to the lease term, your agreement should also reference the procedures that each party must follow when the lease is ending. This will keep you safe from tenants staying in the property longer than they’re permitted to reside there.
Written Security Deposit and Rent Collection Policies
Financial documentation is especially important in your rental agreement. Note the amount of security deposit that the tenants paid, and specify when it will be returned. California law limits the amount you can collect and requires that you return the deposit within 21 days of the tenants moving out.
Every lease agreement should include a rent collection policy. Make sure you’re clear about:
How much rent is due
When it is due
How it should be paid
What the consequences may be for late or unpaid rent
If you have a grace period, make sure your lease reflects that. Your lease must include information about rental laws. For example, you need to give your renters 30 days of notice before you raise the rent. You also need to provide a Pay or Quit Notice before you evict.
New statewide rent control laws require you to include whether your rental property is subject to or exempt from the limits on rental increases.
Protecting Yourself from Fair Housing and Discrimination Claims
Your lease agreement must comply with federal, state, and local fair housing laws. It must comply with the Americans with Disabilities Act and the Fair Credit Reporting Act. It has to include disclosures about flood zones and lead paint.
There is a lot to consider when you’re drafting a lease agreement for your California property, and you don’t want to leave any of it to chance. This is the contract that can best protect you and your investment. You’ll need specific terminology and written rental criteria that explains how you screen and evaluate tenants.
Clear Expression of Rules and Expectations
Beyond the required information, your lease should include everything you want the tenant to know about the expectations you have while they’re living in your property. Many landlords have non-smoking homes, which means tenants are not permitted to smoke inside the property. You might want to include limits to how long guests can stay in the property and the number of cars that can be parked in the driveway. Make sure you’re detailed and you cover everything because this is the first place you and your tenants will go if there’s ever a dispute.
If you’re unsure about whether your Del Mar rental contract is legally compliant and enforceable, contact our team at Harcourts Avanti, and we’ll be happy to take a look at it.
Harcourts Avanti is a full-service property management company that manages long term as well as vacation rentals in Del Mar, Encinitas, Carlsbad, Cardiff, Carmel Valley, Solana Beach, and the surrounding San Diego areas.