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California Rental Agreement Laws

A rental agreement is a contract that can be made in any one of several forms, including written, verbal, or even implied.

If you pay rent for your housing unit, you are considered to have a contract even if your rental agreement is not in written form such as a verbal agreement to pay rent.

If the owner should sell the property, you then have a contract with the new incoming owner. Simply by the act of paying the rent regularly (and the landlord’s act in accepting that rent), a contract is made that carries with the land even if the property is sold.

If you sign a year lease and it expires, the landlord can evict you without providing any notice so long as they don’t accept rent beyond the period in your lease under Code of Civil Procedure 1161(1).

You might however renew it for another full term, but it is more common to continue on a month-by-month basis. If no other arrangements are made, a rental lease automatically reverts to a month-by-month status (under Civil Code 1945) with all the same conditions and terms.

If you continue on a month by month basis after the expiration of a fixed term lease and you are a tenant for over 1 year you are entitled to a 60 day notice to terminate your tenancy.  You are still obligated to pay rent during these sixty days.

In the same way that you are considered to have a contract if you pay regular rent, you are also considered to have a contract if you cover the rent by performing a service. Said services might include management of the property, maintenance or construction work, property caretaking, or even in-home hospice care.

Lease Terms Implied Into the Rental Agreement By California Law

There are certain terms that are automatically part of any lease, even if they are not specifically laid out in writing in a rental agreement.

The first of these deals with your security deposit. Your landlord is required by law to return the deposit to you within three weeks of your vacating the premises. No landlord is permitted to make the security deposit non-refundable, and they can only deduct specified damages from that deposit when the property gets vacated.

Even if they use another name (like “last month rent,” “cleaning fee,” or “rental fee”) the law still considers this deposit as a security deposit.

Implied Warranty of Habitability

Another legal requirement for landlords, known as the “Warranty of Habitability,” specifies that in order to collect rent for the property, your landlord must be providing certain basic commodities legally required.

These include but are not limited to functioning doors and locks, electricity, water, and heat.

Even if the rental agreement doesn’t specifically list these things, your landlord is required to ensure them. Read the case Green v Superior Court (1974) 10 C3d 616, 638 for more information on the Supreme Court’s ruling on this issue.

Certificates of Occupancy are Mandatory

Every landlord is required to have a “Certificate of Occupancy” on the rental property in order to legally rent it.

The city usually issues these certificates, ensuring that the property is in compliance with all local zoning and building laws.

If any unit does not meet these standards and does not have a Certificate of Occupancy, the landlord cannot legally take rent moneys for that unit and cannot evict for non-payment of rent and get rent awarded in an eviction judgment.  See Espinoza v Calva (2008) 169 CA4th 1393,

Los Angeles Rent Control Certificate of Occupancy Law

In any city that has rent control such as Los Angeles, landlords must take certain steps before they even ask a tenant for rent. The rental unit must be registered, and the landlord is only permitted to ask for the amount of rent permitted by law.

In the case Carter v. Cohen, decided in 2010, the Court found that even though the lack of a Certificate of Occupancy rendered the agreement illegal BOTH the trial and appellate courts ruled that the purpose of LARSO was to allow the tenant to maintain a claim for excess rent against the landlord.

Age Discrimination is Prohibited

Although there used to be buildings that would rent to “adults only,” landlords can no longer discriminate against tenants with children.

Unless a property is specifically designated as a senior citizen complex, the landlord can no longer exclude children or families from moving in. They can place restrictions on the total number of occupants, but cannot specify the ages of those occupants.

Discrimination on the Basis of Nationality, Gender, Religion, and Race is Prohibited

Age Discrimination is prohibited

Additional protections exist to prevent discrimination on the basis of nationality, gender, religion, race, and other factors. Anyone who feels they have been illegally discriminated against can turn to the Fair Housing Council, which investigates and prosecutes discrimination cases in rental properties.

Requirements for the Landlord Before Offering the Property For Rent in California

Before offering a property for rent, a prospective landlord must secure the proper licenses and file requisite governmental paperwork. If any person rents out a property without complying with these requirements, that illegal landlord is prohibited from suing to collect unpaid rents from their tenants.

Under the Los Angeles Rent Stabilization Ordinance, Landlords are also restricted from suing for rent or evicting tenants if they fail to register a unit that is rent-controlled.

Many landlords operate under a business name rather than using their personal name on rental agreements or checks. If the landlord is using a DBA (“Doing Business As”) name, they are required to file the requisite documents with the county clerk to make that DBA usable as a legal business name.

If they do not do this (and do not keep the DBA renewed), then they are barred from filing any suit demanding back rent. The Business and Professions Code Section 17918 outlines these regulations, and this is another area where tenants have sometimes benefitted from the mismanagement of a landlord.

The same Business and Professions Code states requirements (section 10131) that property managers be properly licensed.

Except in the case of live-in managers, any person handling management of another’s property has to have licensing as a real estate broker.

Despite the requirement, there are plenty of people flouting the law to manage real property without the requisite license. They may have a contract with the property owner, and they may even have a signed and notarized Power of Attorney, but neither of these documents is sufficient under the law.

Tenant’s Right to Privacy in California

When you occupy a rental unit, you are essentially purchasing the possession of that unit, and the right of possession is exclusive to you.

The landlord is opting for the rent money instead of keeping their own rights of possession, just as if the unit were sold to someone else. (A rental agreement doesn’t give you deed or title to that unit, but for the period of time for which the rental agreement is in effect, you have many of the same rights as owners.)

With that rule in mind, you should know that your landlord would actually be considered a trespasser if they entered your rental unit without permission.

There is, however, one important exception to that rule. The exception is stated are the grounds in a 24 hour notice to enter served under Civil Code Section 1954, and it lays out the circumstances in which a landlord IS permitted to enter your rental unit without your explicit permission.

The first exception is the case of emergency, such as a broken pipe or a fire or another state of emergency involving the property requiring immediate and present attention.

The second exception is that the landlord is permitted to show, repair, or inspect the apartment while you live there; however, the landlord must give you advance written notice, and can only insist on entry at the notified time and for the allowed purposes.

In such a case, the landlord may enter your rental unit without you being home, but note that they are entirely liable for any damage or theft that might occur during the entry.

Current law (Civil Code Section 1941.4) requires your landlord to provide adequate window locks as well as dead bolts for the doors on any rental unit that is considered residential. If your landlord refuses, the “Warranty of habitability” is considered violated, and you have several remedy options legally available to you.

Late Fees and Grace Periods in Lease Contracts

A late fee is a fine that is assessed when a tenant is past due on paying the rent. It is usually a flat fee or percentage of the rent, and such a fee is often built into a rental agreement to encourage or ensure timely rent payment.

In legal terms, a late fee is considered a form of “provision for liquidated damages,” which essentially means that is an amount arbitrarily set as a punishment for missing timely payment of the rent. The new Civil Code Section 1671 now states that a rental agreement for a residential unit is now permitted to contain liquidated damages provision. Exceptions to this ruling are only offered if it is prohibitively difficult to determine the precise amount of damages incurred by the contract breach (meaning the late payment).

Landlords and attorneys may make many arguments in favor of charging a late fee. They point to the administrative time and costs of phone calls, bank visits, and other inconveniences that may be caused by a tenant’s late payment. However, the truth is that the manager’s pay is not changed when payments are late, and the “extra work” is exaggerated in such accounts. In actual fact, the law clearly states what the permissible charge actually is; Civil Code Section 3302 states that the “penalty” for late payment is the actual owed amount, plus the legal rate of interest on that owed amount.

There generally is No “Grace Period” to Pay Rent if You Have an Agreement

There is not a legally designated “grace period” allowing for late rent payments. It is typical for rental agreements to state that a late fee will be applied if rent goes unpaid for five days past the due date.

There is a three-day notice required before the landlord can move to evict, so those three days could functionally be considered the grace period. Additionally, a tenant may have extra days due to holidays or bank holidays, or even weekends, which are never considered banking days.

If you foresee having difficulties with the payment due date relative to your paycheck, you might add a month’s rent up front to your security deposit. In that case, you will actually be a month ahead on your rent payments, so your landlord can’t hold you accountable for late rent even if you don’t hit the exact due date with your payments.

Civil Code 1962 Notice

A landlord is required by law to identify to you who is managing the property, who owns the property, and how and where you are to pay rent.

If this information is not in the lease, it must be posted. If rent can’t be delivered in person (meaning there is no physical address for rent payment), you can mail your rent, and you are considered to have paid on the date that the rent check is postmarked, even though it is delivered later.

In such a case, you want to be able to prove that you have mailed the rent, so you might choose to use registered or certified mail. Under Civil Code 1962, you may want to call the landlord to remind him that the check is, indeed, in the mail.

According to Civil Code 1962, there is also a requirement of adding this information to any three days’ notice to pay or quit. 

Such a notice must contain the name, phone, address and available hours of the person who can receive payment, or else the banking information.

Many landlords and their attorneys don’t know they have to include this information, which means their forms don’t include it. This often times prohibits landlords from evicting for failure to pay rent if the tenant raises it as a defense.

Shared Utilities

Some rental units get the utility bill for more utilities than those used by the rental alone. If your unit’s utility bill covers services to any other unit, or a garage or laundry room or common area, your landlord is required by Civil Code Section 1940.9 to tell you about the shared utilities.

They are required to tell you all about it when you rent the unit and have some agreement in place about dividing the expenses of that service, like you paying a certain percentage.

If the landlord has not done so, the tenant can sue in a small claims court to get reimbursed for the utilities used in violation of the law. (Civil Code Section 1940.9(b)(2))

Foreclosure RightsForeclosure Rights California Tenants

Just because a tenant’s been on time paying rent, doesn’t guarantee that a landlord has been doing the same with their mortgage.

It is not unheard of for rental properties to go into foreclosure, and a tenant can find themselves being turned out of the apartment through no fault of your own.

Following the Trustee’s Sale, which finishes up the foreclosure proceedings, the new owner (most often the bank that foreclosed) can’t take legal possession until they have gone through the legal procedure for evicting tenants.

This gives a tenant little time to sort out options and find new housing.

The former owner (presumably the landlord) is given a three-day notice, and their tenants are entitled to a longer notice before an eviction lawsuit can be filed.

Additionally, the Protecting Tenants At Foreclosures Act (PTFA) also protects certain tenants on an arms length fixed term lease from eviction.





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