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Creation of Tenancy, Rents and Rental Agreements

The following applies to California residential lease and rental agreements only, but not to agreements for transient accommodations such as hotels and motels. A tenancy is created by the rental agreement. The rental agreement may be either oral or in writing express or implied, for a fixed term or on a periodic basis, such as month to month or week to week. If for a fixed term of more than one year, the lease must be in writing. The written agreement should identify the parties, (the landlord must provide the tenant with his name and address or that of someone who is authorized to accept legal documents for him) {Civil Code Sec. 1943}, describe the property, specify the rent, state the rental period, starting date and rent due dates, late charges for rent, if any, be dated and signed by all. A landlord may not evict a tenant for breach of a lease provision other than failure to pay rent unless the provision breached is in a writing signed by the tenant. Therefore, if there are any restrictions, such as a no pet clause, no subletting, late charges, etc., these should be in a writing signed by the tenant. The amount of rent is left to the agreement of the parties and is based upon market conditions, except in certain rent control cities; Berkeley, Beverly Hills, Cotati, East Palo Alto, Hayward, Los Angeles, Los Gatos, Oakland, Palm Springs, San Francisco, San Jose, Santa Monica, Thousand Oaks and West Hollywood. Rent is presumed to come due at the conclusion of the term, not at the beginning {Civil Code Sec. 1947} In other words, in a month to month rental agreement, the rent for June would be due on June 30. If you want the rent due on the first of each month in advance, you need to have an explicit agreement with the tenant to that effect. If the rent due date falls due on a holiday, Saturday or Sunday, then the tenant has until midnight the next business day to pay {Civil Code Sec. 12a and 12b}. Late charge provisions should be in writing and are valid only if they are reasonably calculated to compensate the landlord for the cost of accepting and processing late payments. Late charges designed to deter the tenant from late payment are generally deemed inappropriate. Late charges of between 5 - 10% are generally held to be valid. Some rent control cities limit amounts that can be levied. The term of the rental agreement is presumed to be month to month, and you must specify a different term in your agreement (written or oral), if it is to be otherwise {Civil Code Sec. 1943}. The terms of a periodic tenancy (i.e., month to month, bi-monthly, week to week, etc.) may be changed by the landlord by written notice delivered at least as long before it takes effect as the term of the hiring itself. Such a notice may be delivered by personal delivery, substituted service and mailing, or posting and mailing depending on whether the tenant is at the residence or his usual place of business at the time. {Civil Code Sec. 827} Notices increasing rent are now a special case. All notices of rent increase may now be served by first class mail in addition to the ways mentioned in the previous paragraph, but if served this way, the notice period is extended by five days beyond the time frames given below. If the notice results in an increase of 10% or less cumulatively for the previous 12 months, then the notice period is 30 days. If the notice results in an increase of more than 10% cumulatively over the previous 12 months, then the notice period is sixty days. {Civil Code Sec. 827} The landlord may charge a non-refundable screening fee equal to his actual out of pocket cost, not to exceed $30 per applicant who is entitled to a copy of any credit report generated included in the charge. The parties are also competent to contract for the tenant to prepay not less than six months' rent arising out of a lease which is for an initial term of not less than six months { Code of Civil Procedure Sec. 1950.6} At the conclusion of a fixed term lease, if the tenant remains in possession and continues to pay rent, the tenancy is presumed to be renewed on a month to month basis, with all the terms of the original lease intact {Civil Code Sec. 1945}. Otherwise, the landlord is entitled to possession at the conclusion of the term and may bring eviction proceedings if the tenant fails to move out {Civil Code of Procedure Sec. 1161}. The law prohibits certain lease provisions. These prohibited items are listed at {Civil Code Sec. 1953}. Some local city rent control ordinances require certain provisions, or permit others which may be of value to the landlord. For example, the City of Palo Alto, has a non-rent control ordinance that requires each tenant be offered a one year lease. You should contact your local rent control board and obtain a copy of the ordinance and any supporting materials which will enable you to understand your local ordinance. A landlord you may require a co-signer to guarantee the performance of any written rental or lease agreement or lease. This guarantee must be in writing {Civil Code Sec. 2819}. The landlord is required to hire an on-site resident manager for an apartment building of 16 or more units {Cal. Code of Regulations, Title 25, Sec. 42} .

Security Deposits

There is no longer a formal distinction among tenant deposits, i.e., security, cleaning, last month rent, pet, key, waterbed deposits, etc. California recognizes only a unitary security deposit. This is defined as any advance payment to the landlord to be used to remedy defaults in rent payments, repair of damage to the premises exclusive of normal wear and tear, cleaning upon vacation by the tenant, or to restore damage to specified landlord personal property in the custody of the tenant where the rental agreement so provides. Landlords may not charge any non-refundable deposits or "fees" {Civil Code Sec. 1950.5}. The statute implies, but does not explicitly require, that this deposit be held separate by the landlord. Payment of interest is not required by State law, but several local jurisdictions do require it. Landlords who own rentals in Berkeley, Cotati, East Palo Alto, Hayward, Los Angeles, San Francisco, Santa Cruz, Santa Monica, Watsonville and West Hollywood must pay interest to tenants on deposits. Call the applicable rent board, city clerk or apartment association for further information or requirements. The security deposit may not exceed three months' rent if the premises are rented furnished, two months rent if they are rented unfurnished. An amount equal to an extra one-half months rent if the tenant has a waterbed {Civil Code Sec. 1950.5}. Within three weeks (21 days) of the date the tenant vacates the landlord must provide an accounting of any charges to the deposit in writing. The landlord may not charge for repairs, cleaning, etc., above and beyond reasonable wear and tear. The accounting may be mailed to the tenant's last known address together with any refund due. Failure to do this in bad faith subjects the landlord to any actual damage suffered by the tenant, as determined by the court, plus statutory damages of up to $600 {Civil Code Sec. 1950.5}. When the landlord sells the property, before title passes, he must elect to refund any unused portions of tenant deposits to the tenants, with an accounting similar to the one mentioned above, or to transfer the unused portions of such deposits to the new owner through escrow, together with such accounting. Failure to do so subjects the new owner to joint and several liability with the old owner to any aggrieved tenants for damages {Civil Code Sec. 1950.5}.


California residential landlords are considered to be businesses within the meaning of the anti-discrimination statutes and are bound by them according to their terms. All persons in the state are deemed to be equal and entitled to equal accommodations, advantages, etc., despite their sex, race, color, religion, ancestry, national origin or disability {Civil Code Sec. 51} Age discrimination is specifically prohibited {Civil. Code Sec. 51.2}, although senior housing is permissible {Civil. Code Sec. 51.3}. Landlords are liable to their tenants under the sexual harassment statute {Civil. Code Sec. 51.9} State Laws; 1. Fair Housing Act (Rumford) {Govt. Code 12955} 2. Senior Citizen Housing {Civil Code 51.3} 3. Handicapped Rights {Civil Code 54} 4. Unruh Act {Civil Code 52-53} Discrimination in violation of these statutes may subject the landlord to substantial penalties {Civil. Code Sec. 52} Federal laws; 1. Civil Rights Act of 1866 2. Fair Housing Act of 1968 3. Fair Housing Act Amendment (1972) 4. Fair Housing Amendment Act (1988) 5. Americans with Disability (1992)

Pets and Waterbeds

Landlords may refuse to rent to any tenant with a pet except properly trained dogs of any one of the protected disability classes of tenants. These tenant groups are the blind, visually handicapped, deaf or physically disabled {Civil. Code Sec. 54.1} A landlord may not charge an additional security deposit for such qualified dogs {Civil. Code Sec. 54.2} New law on the horizon may include senior citizen tenants keeping pets in certain public housing programs. Landlords may not refuse to rent or continue to rent to tenants, with waterbeds or liquid filled furniture, who are residing in any structure built after 1972. Landlords are protected and have the right to be present at the time of waterbed installation to inspect for the proper installation, require minimum waterbed component standards, including conformity to the floor weight load limits of the local building code and most importantly require the tenant show proof of insurance for a minimum amount of $100,00.00 {Civil. Code Sec. 1940.5}.

Condition, Maintenance and Repairs

The landlord is under an obligation to put and keep his rental units in a condition fit for human occupancy, except for those conditions caused by his tenant's want of ordinary care {Civil Code Secs. 1929, 1941} A building fit for human occupancy must have at least the following characteristics {Civil Code Sec. 1941.1}. 1. Effective weatherproofing of roof, exterior walls, and unbroken windows 2. Plumbing up to code and in good condition 3. Water supply up to code providing hot and cold water 4. Heating facilities up to code and in good condition 5. Electrical lighting up to code and in good condition 6. Building, grounds and appurtenances clean and free of vermin at the time of renting 7. Adequate receptacles for garbage 8. Floors, stairways and railings in good repair Install and maintain locks 9. Conforming locks {Civil Code Sec. 1941.3} The landlord's obligation to repair dilapidations in the characteristics of habitable dwellings does not arise if the tenant violates his own legal obligations as to maintenance, provided these violations substantially interfere with the landlord's ability to do the repairs {Civil Code Sec. 1941.2} The landlord is obligated to wire the premises for at least one telephone line {Civil Code Sec. 1941.4} Some local jurisdictions have enacted ordinances requiring certain types of locks, exterior doors, "peep holes," smoke detectors, etc. Although a tenant may not waive his right to the foregoing habitability requirements, he can agree in writing to maintain, improve or repair these items as part of the consideration of his lease {Civil Code Sec. 1942.1}. The tenant's obligation is to maintain his rental household in a clean, sanitary and undamaged condition {Civil Code Sec. 1941.2} The landlord having the duty to maintain the premises, has the countervailing right to enter the premises to do so {Civil Code Sec. 1954}. Where the landlord fails to maintain the premises as above (i.e. the tenant requests a repair and it is not resolved in a timely manner (30 days is presumed reasonable), then the tenant has a number of remedies. He may do the repair himself and deduct it from rent under certain circumstances, or vacate and be discharged from further obligations under his lease {Civil Code Sec. 1942} He may also withhold the rent until the repairs are done, if the landlords breaches are substantial and have affected the tenant's health and safety. A landlord may not collect rent on a premises which are substantially in breach of his obligations to maintain the premises (usually referred to as a breach of the implied warranty of habitability), and may be legally penalized if he does {Civil Code Sec. 1942.4} Acts in retaliation for a tenant exercising his legal rights may also subject the landlord to substantial legal penalties {Civil Code Sec. 1942.5}. The breach of the implied warranty of habitability usually comes to a head where the tenant has failed (or refused) to pay the rent, the landlord has given a three day notice to pay or vacate, then initiated an eviction action and placed the matter before a judge or jury. Where this occurs, and the tenant can show that the landlord's failure to maintain was a substantial breach of the implied warranty affecting his health and safety, the court or jury will determine the degree to which this breach devalued the rental value of the property to the tenant, usually expressed as a percentage, i.e., -15%, -25%, etc. This factor will then be applied to the lease's rental rate and the rental rate reduced by that amount. The tenant will have the opportunity to pay the past due rent less the percentage earlier found within five (5) days of entry of Judgment. If the tenant does so, the tenant wins. If the tenant fails to pay, the tenant is evicted {Code of Civil Procedure Sec. 1174.2}

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