Renting Out Your Property in California: A Landlord's Guide

Before renting your property, familiarize yourself with California's landlord-tenant laws, including the California Civil Code (particularly sections 1940-1954.05), the Fair Employment and Housing Act, and local rent control ordinances if applicable. Pay special attention to security deposit limits, notice requirements, and tenant rights. The California Department of Real Estate and Department of Consumer Affairs websites offer helpful resources.

Verify that your property is zoned for rental use and identify any local regulations specific to your city or county. Some California municipalities have rent control, just cause eviction requirements, rental registry programs, or short-term rental restrictions. Contact your local housing department or planning office to confirm compliance requirements.

Many California cities and counties require landlords to obtain a business license or rental permit. Check with your local government to determine if you need a license and the application process. This typically involves completing an application form, paying a fee, and possibly undergoing a property inspection.

Create a comprehensive rental application that collects information to screen potential tenants. Include sections for personal information, rental history, employment details, income verification, references, and authorization for background and credit checks. Ensure your screening process complies with California's fair housing laws and the 2020 tenant protection laws that limit the use of criminal history in tenant screening.

Create a legally compliant California lease agreement that includes all required disclosures and terms. Essential elements include: names of all parties, property description, rental term, rent amount and payment terms, security deposit details, maintenance responsibilities, utility arrangements, pet policies, and other house rules. California-specific provisions should address rent control if applicable, security deposit limitations (maximum of 2 months' rent for unfurnished units), and tenant rights.

California law requires several specific disclosures to tenants. These include lead-based paint disclosures for properties built before 1978, information about the California Department of Justice's database of registered sex offenders, flood hazard zones if applicable, military ordnance locations if within one mile, and any known toxic mold. Local ordinances may require additional disclosures.

For properties built before 1978, federal law requires landlords to disclose known information about lead-based paint and lead-based paint hazards. You must provide tenants with an EPA-approved information pamphlet and keep signed acknowledgment forms for three years. Even if you have no knowledge of lead-based paint, you must still provide the disclosure form stating this.

Develop a detailed checklist to document the condition of the property before the tenant moves in and after they move out. Include all rooms, fixtures, appliances, and exterior areas with space to note the condition and any existing damage. Take date-stamped photos to supplement the checklist. This documentation is crucial for security deposit disputes and complies with California's requirement to offer tenants an initial inspection before move-out.

Create a clear set of rules and regulations that will apply to your rental property. These should cover noise restrictions, maintenance expectations, parking rules, trash disposal, smoking policies, guest policies, and any other important guidelines. Ensure these rules don't violate any tenant rights under California law and are reasonable and non-discriminatory.

California law requires landlords to provide tenants with proper notice before entering the rental property (typically 24 hours written notice). Create a standardized form to use when you need to enter the property for repairs, inspections, or showing the unit to prospective tenants. The form should include the date and time of intended entry, purpose, and your contact information.

Establish procedures for collecting, holding, and returning security deposits in compliance with California law. Security deposits are limited to two months' rent for unfurnished units and three months' rent for furnished units. Prepare a receipt form that acknowledges the deposit amount and explains how it may be used. Remember that California requires landlords to conduct an initial inspection before move-out if requested by the tenant.

California law requires rental properties to meet specific habitability standards. Ensure your property has adequate weatherproofing, plumbing, heating, electrical systems, and is free from pests and garbage. All structural elements must be in good repair, and the property must have proper sanitation facilities. Consider hiring a professional inspector to verify compliance.

If your property is in a city with rent control (such as Los Angeles, San Francisco, Oakland, or Berkeley), register your rental unit with the local rent board. This typically involves completing registration forms, paying fees, and providing information about your rental units and tenants. Failure to register can result in penalties and may limit your ability to increase rent.

Secure appropriate landlord insurance for your rental property. This should include property insurance to cover the building, liability insurance to protect against tenant injuries, and loss of income coverage in case the property becomes uninhabitable. Consider requiring tenants to obtain renter's insurance as part of your lease agreement.

Establish a system for maintaining all rental-related records, including lease agreements, correspondence with tenants, maintenance requests and repairs, rent payments, and copies of notices. California has a four-year statute of limitations for written contracts, so keep records for at least this long. Good record-keeping is essential for tax purposes and in case of disputes.