What To Include When Preparing A California Lease Or Rental Agreement

A well-drafted lease or rental agreement can be critical to your success in the property rental business. What goes into the agreement determines whether you profit or fail as a landlord. Leaving out important items lets tenants take advantage of you, and not including California and Federal law requirements subjects you to fines and penalties.

The goal is to create a contractual arrangement that contemplates as many scenarios as possible to protect yourself, your property, and your ability to evict your tenant if they violate any of the terms or conditions of the lease. This blog discusses some of the more common provisions that should be addressed in any lease or rental agreement.

Names And Contact Information For All Tenants

It is essential to include the names of all adult tenants in the agreement and to make sure that each tenant signs the agreement to ensure he or she is bound by its terms. The agreement should specify that each tenant is responsible for the full amount of the rent and for all of the other terms and conditions of the lease. Since all tenants are held jointly and severally responsible for abiding by the lease, a breach by one tenant will allow you to evict all of them for the violation.

For example, your lease might say no dogs or pets, but one of the tenants later keeps a dog on your premises. This can be grounds to evict all of the tenants if you find it necessary.

Restrictions On Occupancy

Relatedly, the agreement also needs to state clearly that the rental unit can be inhabited only by the adults named on the lease and their minor children. If the names of all the adults who live in the unit are on the lease, it will prevent them from allowing a friend or relative to move into the rental unit without your permission. Limiting the number of tenants to just those who sign and their children also precludes tenants from subleasing the property to someone else. This way, people may rent your property only with your permission. You retain the control of who resides at your property.

Term Of The Agreement

The Agreement needs to specify whether it is a month-to-month rental or a fixed-term lease. Rental agreements usually run from month-to-month and self-renew unless terminated by the landlord or tenant. Your rental agreement should specify:

• the date the agreement begins

• how much notice you and the tenant must provide to end the tenancy (it’s 30 days for both landlord and tenant, except for tenancies that last one or more years, in which case the landlord must give 60 days’ notice to end the tenancy), and

• how much notice you must give to change a clause of the rental agreement (you must give 30 days’ notice (or 60 days, in some circumstances involving a rent increase).

If you are using a lease, you will set a specific beginning and expiration date. A lease obligates both landlord and tenant to a specific term, typically a year, but it can specify a different duration which you and the renter agree on.

Rent

Your California lease or rental agreement should provide specific details on the rent, including:

• the amount of rent

• when it is due (typically, the first of the month), and whether there’s any grace period before rent is considered late • how rent payments are to be delivered, such as by mail or delivered to a specific address, such as your office, and the hours when rent can be paid at that address

• acceptable payment methods (such as personal check only, cash, or ACH transfer) • the late fees that will be due if rent is not paid on time and the amount of the fee, and

• any bounced-check fee you’ll charge if the tenant gives you a check that the bank will not honor. California law limits the amount to $25 for first checks, and $35 for subsequent rejected checks.

Security Deposits

Security deposits are governed by Civil Code 1950.5 and are frequently a source of conflict between landlords and tenants. The agreement needs to clearly specify the exact amount of the security deposit the tenant will pay. Under California law, landlords can ask for two times the rent unless it is a furnished unit. If it’s a furnished rental unit, landlords may have a security deposit three times the rent.

It is also important for you to specify how the security deposit would be used if necessary. Make sure to state that you can keep all or part of the security deposit to repair any damage the tenant caused. Also, stipulate what else the security deposit can be used for, such as to pay last month’s rent.

In addition, specify how and when the security deposit or any remaining part of it may be returned. Under California law, landlords must itemize and provide receipts for any work done to the unit for damage that the tenant caused. If any part of the security is left over, the remainder must be returned to the tenant within three weeks of moving out.

Illegal Activity Restrictions

Although this is substantially covered by California landlord tenant law, it’s always a good idea to include a lease clause that says the contract is terminated if you obtain evidence showing any illegal activity on the property, such as drug dealing. Also, in the lease prohibit disruptive behavior and require tenants to be respectful of other tenants. If they break any of these clauses, there are legitimate grounds for eviction.

Responsibility For Repairs and Maintenance

Another area of frequent conflict between landlords and tenants is repairs and maintenance. Protect yourself from legal fights by clearly delineating who is responsible for what in terms of repairs and maintenance.

Make sure that it is in the lease that the tenant must keep the property clean and sanitary and that the tenant will be responsible for damage that they cause through neglect or abuse. List restrictions on what alterations the tenant may do to the property without your written permission. For example, you can require tenants to get permission to paint the walls of the unit or have a security system installed.

You should also specify a procedure for reporting all repair claims and any dangerous living conditions, and detail how you, the landlord, will handle repair requests and complaint.

Entering the Property

Make sure the lease clearly specifies that you may enter the property with proper notice. Landlords are required to give at least 24 hours’ notice before entering the rental unit unless it is an emergency. Most landlords will give written notice even to make repairs or respond to a tenant’s complaints.

Pet Policy

Be certain you state explicitly in the lease agreement what your policy on pets is. If you allow pets, make certain your lease agreement covers important areas such as additional security deposit, the size and number of pets and any additional responsibilities the tenant has with respect to pets. Ask your tenant up front if they intend to have pets, especially dogs. Tell them, both verbally and in writing in the lease, that you will not tolerate dogs that bark excessively or create a nuisance to other tenants or neighbors.

According to law, all tenants have a Right to Quiet Enjoyment that they pay for as part of their lease. Write your lease so it respects your other tenants’ right to a quiet environment

Smoking

If you want to restrict or prohibit smoking inside or in the yard, you must include such a provision in your lease. State where and what tenants may smoke (cigars, pipes, cigarettes, pot, etc.). Although California legalized smoking marijuana, landlords maintain the right to prohibit or restrict where and what to smoke on the property.

Miscellaneous Federal And State Law Requirements

It is necessary for your lease agreement to comply with federal law require landlords to make certain lead-based paint disclosures before tenants move in. California also requires that landlords provide several other disclosures to tenants, including the availability of a state database of registered sex offenders and the presence of mold in the building.

In addition, you must inform tenants if the tenant’s gas or electric meter services areas beyond the tenant’s rented space, and provide details on how you will handle billing in this situation.

The lease must also conform to any state or California or local laws on safety and health codes, rules of occupancy and any anti-discrimination laws. There may also be restrictions on the type of business a tenant may conduct in his rental unit. There also may be local rules on parking and on the use of common areas on your property.

A well-written lease agreement, whether written by an attorney or by yourself, can help you avoid lawsuits that can cost a lot of time and money.

Please contact Lynx Legal Service with any questions on the above issues or if you are ready to start a case. We can be reached at 888-441-2355 or by email at info@lynxlegal.com. Our experienced representatives are standing by to answer any inquiries you may have.