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Read further to learn more about residential lease agreements in California, such as what disclosures are required and what else should be included.
What is a Residential Lease Agreement?
A residential lease is a legally binding agreement between a landlord and a tenant who intends to rent a specific property. It is an all-inclusive document created to outline the expectations of both parties and address any special circumstances that may arise during the length of the agreement. It also clearly states the potential consequences for not adhering to the stated terms. For maximum legal credibility, it is critical that this document be produced in writing, reviewed and signed by both parties prior to occupancy.
Before reviewing and signing a residential lease agreement, a landlord will likely ask a potential tenant to complete an application form to begin a background and credit check. If these assessments are met with approval, then the process of renting the property may continue. Applicable rent, security deposits and fees will be paid by the tenant, and the residential lease will be signed by both parties. The tenant may take occupancy on the date indicated in the residential lease.
The sections that follow are necessary elements to a residential lease. Each section includes information that pertains specifically to lease agreements in California. All rental properties are unique and it is important for the landlord to tailor their residential lease to the unit or property being rented. This guide lists various circumstances for landlords to consider as they are drafting a residential lease agreement. Landlords need to include the components listed here to be legally compliant in the state of California.
Lease Introduction and Identification of Involved Parties
A lease introduction clearly states the full names of the tenant(s) and landlord(s), the date of the agreement and a detailed description of the rental property. It is critical to be as specific as possible when creating a lease introduction. The necessary components of a lease introduction are listed here:
- Names of the tenant and landlord: This is a small, yet crucial, piece of a residential lease agreement. The residential lease should include the full legal names of all adults living in the rental property. These names should be written or typed clearly. Shortened versions of names, abbreviations or nicknames should not be used. This ensures that involved parties are held accountable in the event of legal action.
- Date of the agreement: The date of the lease should be fully written, indicating the month, day and year. Dashes, slashes or abbreviations should be avoided to maintain clarity.
- Description of the rental property: This portion of the lease introduction makes it clear to both parties which features of the property are included in the lease. It should list all fixed and non-fixed features that are a part of the property. This may encompass:
- Interior boundaries
- Specific rooms
- Light fixtures
- Ceiling fans
- Air conditioning units
- Yard or other outdoor space
- Parking area
- Shed/additional storage
- Exterior fixtures
- Children’s play structure
- Furnishings, such as tables, chairs, beds, patio furniture or other items
Indicating these features in the lease introduction provides tenants with a list of items that they have access to throughout the duration of the lease and informs tenants which features are expected to remain on premises after the lease term is complete. It also protects the landlord’s property upon the termination of the residential lease agreement.
Terms and Limits of Occupancy
The term of a lease is defined as the length of time that the tenant will have access to the rental unit. Lease terms may span any amount of time deemed appropriate by the tenant and landlord. Some leases may operate on a month-to-month basis.
A month-to-month lease allows tenants to provide 30 days notice to terminate the lease without incurring any penalties.. While landlords often charge a higher monthly rent for this type of agreement, it allows significant flexibility for the tenant.
When putting the terms of a residential lease in writing, the following points should be included:
- Start date of the lease (sometimes referred to as the commencement date)
- End date of the lease (sometimes referred to as the termination date)
- Whether it is a month-to-month lease
- Possible courses of action upon lease termination. This may include signing a new residential lease agreement, enacting a month-to-month lease or vacating the premises.
- Possible consequences for remaining on property after the termination date in absence of a renewed agreement
The limits of occupancy clearly states the number of people that are permitted to reside in a particular unit. Federal, state and local laws regarding limits of occupancy are in place to ensure safety and prevent overcrowding. Regulations in the state of California base the limits of occupancy on what is considered a “reasonable” number of people to reside in a rental property. This is loosely defined as two individuals per bedroom, plus one additional tenant. For example, if the property in question has two bedrooms, a maximum of five people would be permitted to reside in the rental unit. Local regulations may have more specific limits on occupancy.
Landlords must consider the Fair Housing Act while creating a residential lease. The Fair Housing Act is a federal law created to prohibit discrimination of tenants by a landlord. This law applies mostly to families with children and creates some exceptions to limits of occupancy in these situations.
Rent and Utilities in California
The monthly cost of living in a rental unit is critical information to a potential renter. This section of a residential lease is likely the first section that the tenant will read. It is important to address the following information pertaining to monthly rent:
- Monthly rental cost
- Specific utilities or services included in monthly rent
- The due date of the first month’s rent
- The due date of subsequent rental payments (i.e. the first day of the month)
- A grace period, if applicable
- Late fee if rent is received after the due date or grace period
- Potential consequences beyond a late fee if rent is not received (this could be anything from additional fees to eviction)
- Forms of payment accepted by the landlord (cash, check, money order)
- Who is to receive the rent payment
- Instructions for delivering rent (e.g., take to the leasing office, place in a drop box or postal mailing address)
- Landlord contact information
- Potential consequences if a tenant’s bank account has insufficient funds to cover a personal check
- Provisions for prorated rent, if the start date of the lease is in the middle of the month
Tenants need to understand what utilities are included in their monthly rent and what utilities they are responsible for paying separately. Some rental agreements combine this information with the rent section, while others specify utilities in a separate section. In any case, the following utilities should be clearly addressed within the rental lease agreement:
- Trash pickup
- Heating and cooling
- Phone service
- Cable television
- High-speed internet
In general, if a certain utility is separately metered (such as electricity), it is the responsibility of the tenant. If it is not separately metered (such as water), the cost is included in monthly rent.
Security Deposits and Additional Fees in California
A security deposit is an amount of money given to the landlord by the tenant at the commencement of the residential lease agreement and held for possible expenses. Security deposits financially protect the landlord if the tenant is in violation of the lease agreement. The amount of the security deposit may vary. California law lists these regulations regarding security deposits:
- A landlord may request a maximum security deposit of two months rent for an unfurnished unit or three months rent for a furnished unit.
- The security deposit must be refundable.
- Any unused security deposit funds must be returned within 21 days of the termination of the lease agreement.
- Unused security deposit funds must be returned with an itemized statement listing the original amount of the deposit, deductions and the final amount returned to the tenant.
- Tenants have the right to a walk-through inspection prior to lease termination. In this inspection, the landlord will walk through the premises and identify potential issues that would require use of the security deposit, giving the tenant an opportunity to correct those issues.
Under California law, a landlord may keep a portion or all of a tenant’s security deposit for the following reasons following termination of the lease agreement:
- Nonpayment of rent
- Excessive damage to the unit that exceeds normal wear and tear
- Cleaning costs to prepare unit for the next tenant
- To cover future costs related to breach of the lease
- Other violations related to the residential lease agreement
When drafting a residential lease agreement, the landlord should ensure that the section explaining security deposits addresses the following key points:
- The amount of the security deposit
- When the security deposit is due
- When the security deposit will be refunded
- Information about a walk through inspection, if desired by the tenant
- Conditions in which all or part of the security deposit will not be refunded
- What will happen to the security deposit refund if the tenant does not provide the landlord with a forwarding address
Maintenance, Alteration, and Repairs of Premises in California
It is important to determine responsibility for maintenance, alteration and repairs of the rental property to avoid conflict or potential legal action throughout the residential lease term. This section should include detailed information on how either party should initiate maintenance, alteration or repairs to the premises. It must also indicate which party holds financial accountability for these tasks.
Maintenance is defined as specific tasks performed to preserve the condition of the property. Some examples of maintenance services that must be addressed in a residential lease agreement include:
- General landscaping
- Calibration of appliances
- Cleaning the interior and exterior of the property
- Checking smoke and carbon monoxide detectors
- Fixing drain blockages
- Carpet cleaning
Alterations are modifications that change the structure or appearance of the property. Examples of alterations include:
- Painting the interior or exterior of the rental property
- Remodeling projects or upgrades
- Creating landscaping beyond what is originally present at the beginning of the lease
- Adding a satellite dish
- Installing a light fixture
- Installing an appliance
- Placing placards or signage in view of the public
Repairs fix problems in the unit. Some examples of repairs include:
- Stain removal
- Fixing non-working appliances
- Fixing non-working locks
- Fixing broken windows
- Addressing electrical problems within the unit
Landlords need to become familiar with California’s regulations regarding tenants’ rights, especially in the case of maintenance, alterations and repairs. California state law clearly advocates for a tenant’s right to a livable residence. This means that the rental property must be in livable condition, structurally safe and sanitary. If these basic needs are not met by the landlord, the tenant may have the right to withhold rent, repair the items in question and deduct the amount from monthly rent, contact a health inspector, sue or vacate the premises without notice. A clear and detailed section of a residential lease agreement may avoid these landlord consequences.
Access to Property/Notice of Entry in California
This section of a residential lease agreement outlines a landlord’s right to enter the premises, while respecting the privacy of the tenant. A comprehensive access to property/notice of entry section must include:
- All potential reasons that a landlord may need to enter the rental property.
- The amount of advanced notice that the landlord must provide to the tenant prior to entering the property.
- How much advance notice the landlord must provide to the tenant if the tenant must vacate the premises temporarily due to maintenance, alteration or repairs.
- Financial compensation to the tenant if they need to vacate the premises for an extended period of time.
- An addendum to specify the landlord’s right to entry in emergency situations.
In the state of California, general inspections to a rental property are not permitted. According to California law, a landlord may only enter a tenant’s dwelling for the following reasons:
- Emergency situations
- Necessary repairs
- Showing to potential tenants or buyers
- Reasonable suspicion of abandonment
- Court order
- Waterbed inspection
- Smoke detector inspection
California law states that a landlord must provide a tenant with “reasonable notice” prior to entering a property. The amount of reasonable advance notice may vary, depending on the circumstances. In many instances, 24 hours is generally regarded as reasonable. In the event of an emergency, the landlord does not need to provide advance notice. Circumstances which require the tenant to vacate the property may require notice beyond 24 hours.
While drafting the access to property/notice of entry section of a residential lease agreement, it is important to remember that California law prohibits entry into the rental property beyond normal business hours, generally regarded as Monday through Friday, between the hours of 8:00 a.m. and 5:00 p.m.
Pet Addendums in California
California law allows landlords the option to create a policy to restrict or deny all or certain pets in a rental property. If a landlord decides to permit all or certain pets, they have the right to charge an extra security deposit to cover potential damage incurred by the pet.
When a landlord develops a pet policy, they must consider the following points and clearly outline them in the residential lease agreement:
- Types of pets allowed
- Breeds allowed, if applicable
- Weight limit on pets
- Restriction on the number of pets
- Amount to charge for a pet deposit
- Amount to charge for non-refundable pet rent (if applicable)
- Conditions which might require a pet to be removed from the premises permanently
When determining an acceptable amount of money to charge for a pet deposit, the landlord must remember that a pet deposit is considered a type of security deposit. Therefore, California law states that the combined security deposit and pet deposit may not surpass two months rent for an unfurnished apartment. Like a traditional security deposit, the unused portions of the pet deposit are fully refundable at the end of the lease agreement.
While the pet policy outlined in the lease must be applied uniformly, the landlord does have the right to revoke permission to keep a particular pet on premises if the animal in question is an extreme nuisance or a danger to others on the property.
Even if a landlord does not allow residents to keep pets on the premises, the Federal Fair Housing Act states that service animals must be permitted to reside with residents that need them. An exception may occur if the service animal is deemed likely to cause property damage or be a danger to others on the premises.
Legal Considerations in California
A residential lease agreement must include several important pieces of legal information. It should provide applicable guidance for either party to take legal action. It should also include a statement addressing Megan’s Law.
While it is expected that the tenant and landlord will willingly abide by the residential lease agreement enacted at the commencement of the lease term, this is not always the case. In the event that legal action needs to be taken by the tenant or landlord, it is important to clarify the following points:
- Attorney fees: If one party involved in the agreement must take legal action against the other party, it is important to determine who is responsible for incurred attorney fees in the lease agreement.
- Mediation proceedings: The residential lease agreement should state whether mediation is required prior to taking court action on a complaint by the landlord or tenant.
In the event that a tenant’s security deposit is wrongfully held by a landlord, California law states that the tenant has the right to sue the landlord for the return of the security deposit, up to $10,000.
In California, all residential lease agreements must contain language pertaining to Megan’s Law. Megan’s Law requires that the location of registered sex offenders be made available to the public. This information is present on an online database. The lease agreement should provide tenants information about how they can obtain a list of registered sex offenders so that they can make an informed decision about their intent to reside at the property in question prior to signing the lease.
Required Disclosures in California
California law requires the statement of several specific disclosures in a residential lease agreement. The following points must be addressed:
- Utility disclosure: The landlord must state whether utilities are being shared among other tenants or serving other areas and state how utility costs will be divided.
- Ordnance disclosure: The landlord must specify any state or federal ordnance within one mile of the rental property.
- Toxic mold disclosure: The landlord must state any awareness of toxic mold levels that could negatively impact health, either at commencement of the lease agreement or throughout the duration of the lease agreement. Landlords must also provide tenants with a copy of the State Department of Health Services handbook describing the risks of excessive mold exposure.
- Pest control service disclosure: At the commencement of the lease, the landlord must provide the tenant with information about any pest control services the property receives. This information must include the type of pest, type of pesticides used (including active ingredients), a warning about the potential toxicity of pesticides and the frequency of treatment to the premises.
- Demolition disclosure: If a landlord plans to demolish a rental unit, they must provide written notice to the tenant(s) prior to making a commitment to the action.
- Smoking policy: If smoking is restricted or prohibited on the premises, the residential lease agreement must state the specific areas of the rental property where smoking is not allowed.
- Notice of default: If a landlord has received a notice of default, they must disclose this to potential tenants prior to signing a lease. This disclosure applies to rentals that include four units or less, or single-family homes.
- California Flood Disclosure: Each residential lease agreement needs to contain an addendum disclosing whether the property is located in a known flood zone and recommending the separate purchase of flood insurance by the tenant.