California Landlord Law Book V15

California Landlord Law Book V15
Attorneys David Brown & Janet Portman,
& Ralph Warner, J.D.
15th Edition
Unblighted by unnecessary legal jargon…this is as necessary
as a rent receipt book or a good repair person.”
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15th Edition
The California
Landlord’s Law Book:
Rights &
Responsibilities
Attorneys David Brown & Janet Portman,
& Ralph Warner, J.D.
LAW for ALL
FIFTEENTH EDITION MARCH 2013
Editor MARCIA STEWART
Cover Design SUSAN PUTNEY
Book Design TERRI HEARSH
Proofreading ROBERT WELLS
Index THÉRÈSE SHERE
Printing BANG PRINTING
ISSN 2163-0313 (print)
ISSN 2326-0114 (online)
ISBN 978-1-4133-1853-1 (pbk)
ISBN 978-1-4133-1854-8 (epub ebook)
This book covers only United States law, unless it specifically states otherwise.
Copyright © 1986, 1989, 1990, 1993, 1994, 1996, 1997, 2000, 2002, 2004, 2005, 2007, 2009,
2011, and 2013 by David Brown. All rights reserved. The NOLO trademark is registered
in the U.S. Patent and Trademark Office. Printed in the U.S.A.
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always point out situations in which we think that’s a good idea—consult an attorney
licensed to practice in your state.
About the Authors
David Brown practices law in the Monterey, California, area, where he has
represented both landlords and tenants in hundreds of court casesmost of which
he felt could have been avoided if both sides were more fully informed about
landlord/tenant law. Brown, a graduate of Stanford University (chemistry) and the
University of Santa Clara Law School, is the author of Fight Your Ticket & Win in
California, Beat Your Ticket: Go to Court & Win, and The California Landlord’s Law
Book: Evictions, and the coauthor of The Guardianship Book for California.
Ralph Warner is founder and publisher of Nolo, and an expert on landlord/tenant
law. Ralph has been a landlord, a tenant, and, for several years, a property manager.
Having become fed up with all these roles, he bought a single-family house.
Janet Portman, an attorney and Nolo’s Co-Executive Editor, received under graduate
and graduate degrees from Stanford and a law degree from Santa Clara University.
She is an expert on landlord/tenant law and the coauthor of Every Landlord’s Legal
Guide, Every Landlord’s Guide to Finding Great Tenants, Every Tenant’s Legal Guide,
Renters’ Rights, Leases & Rental Agreements, and Negotiate the Best Lease for Your
Business. Janet writes a nationally syndicated column on landlord-tenant issues,
“Rent It Right,” which appears in the Chicago Tribune and The Boston Globe, among
other newspapers.
Table of Contents
e California Landlord’s Legal Companion .................................................................. 1
California-Specific Legal Information ............................................................................................................ 1
California Legal Forms and Notices ............................................................................................................... 1
California Rent Control Rules ........................................................................................................................... 1
How (and Why) to Use is Book ................................................................................................................... 2
Evicting a Tenant .................................................................................................................................................... 2
Renting Out a Condo or Townhouse ............................................................................................................ 2
Who Should Not Use is Book ...................................................................................................................... 2
1
Renting Your Property: How to Choose Tenants
and Avoid Legal Pitfalls
........................................................................................................................ 5
Adopt a Rental Plan and Stick to It ................................................................................................................ 6
Advertising Rental Property .............................................................................................................................. 6
Dealing With Prospective Tenants ................................................................................................................. 7
Checking Background, References, and Credit History of Potential Tenants ...........................16
Choosing—And Rejecting—An Applicant ...............................................................................................22
Holding Deposits ..................................................................................................................................................26
2
Understanding Leases and Rental Agreements .......................................................29
Oral Agreements Are Not Recommended ...............................................................................................31
Written Agreements: Which Is Better, a Lease or a Rental Agreement? .....................................32
Foreign Language Note on California Leases and Rental Agreements ........................................35
Common Legal Provisions in Lease and Rental Agreement Forms ...............................................36
How to Modify and Sign Form Agreements............................................................................................54
Cosigners .................................................................................................................................................................. 58
Illegal Lease and Rental Agreement Provisions .......................................................................................60
3
Basic Rent Rules ..........................................................................................................................................65
How Much Can You Charge? ..........................................................................................................................66
When Rent Is Due ................................................................................................................................................66
Where and How Rent Is Due...........................................................................................................................68
Late Charges ...........................................................................................................................................................69
Returned Check Charges ..................................................................................................................................71
Partial Rent Payments ........................................................................................................................................ 71
4
Rent Control ..................................................................................................................................................75
Property Exempt From Rent Control..........................................................................................................77
Local Rent Control Administration .............................................................................................................77
Registration of Rental Properties ..................................................................................................................77
Rent Formula and Individual Adjustments ..............................................................................................78
Security Deposits .................................................................................................................................................79
Certification of Correct Rent Levels by Board .........................................................................................79
Vacancy Decontrol .............................................................................................................................................. 80
Tenant Protections: Just Cause Evictions ..................................................................................................80
Rent Control Board Hearings ..........................................................................................................................83
Legal Sanctions for Violating Rent Control ..............................................................................................86
5
Security Deposits ...................................................................................................................................... 89
Security Deposits Must Be Refundable ...................................................................................................... 90
How Landlords May Use Deposits ...............................................................................................................91
Dollar Limits on Deposits ................................................................................................................................. 91
How to Increase Deposit Amounts .............................................................................................................92
Last Months Rent ................................................................................................................................................92
Interest, Accounts, and Record Keeping on Deposits .........................................................................93
Insurance as a Backup to Deposits ............................................................................................................... 95
When Rental Property Is Sold ........................................................................................................................95
When You’re Purchasing Rental Property .................................................................................................96
6
Property Managers ................................................................................................................................. 99
Hiring Your Own Manager ............................................................................................................................100
Avoiding Legal Problems................................................................................................................................ 101
Management Companies ...............................................................................................................................111
An Owners Liability for a Manager’s Acts .............................................................................................. 112
Notifying Tenants of the Manager .............................................................................................................113
Firing a Manager .................................................................................................................................................114
Evicting a Manager ............................................................................................................................................114
7
Getting the Tenant Moved In ....................................................................................................117
Inspect and Photograph the Unit ...............................................................................................................118
Send New Tenants a Move-In Letter ........................................................................................................ 125
First Months Rent and Security Deposit Checks ................................................................................129
8
Lawyers, Legal Research, Eviction Services, and Mediation ......................131
Legal Research Tools ........................................................................................................................................132
Mediating Disputes With Tenants ..............................................................................................................135
Nonlawyer Eviction Services ........................................................................................................................ 136
Finding a Lawyer .................................................................................................................................................137
Paying a Lawyer .................................................................................................................................................. 138
Resolving Problems With Your Lawyer ....................................................................................................139
9
Discrimination...........................................................................................................................................141
Legal Reasons for Refusing to Rent to a Tenant ...................................................................................142
Sources of Discrimination Laws .................................................................................................................. 146
Forbidden Types of Discrimination ............................................................................................................147
Occupancy Limits ..............................................................................................................................................161
Legal Penalties for Discrimination ............................................................................................................. 163
Owner-Occupied Premises and Occasional Rentals ......................................................................... 164
Managers and Discrimination ..................................................................................................................... 165
Insurance Coverage for Discrimination Claims ................................................................................... 165
10
Cotenants, Subtenants, and Guests ................................................................................... 169
Renting to More an One Tenant ............................................................................................................170
Subtenants and Sublets ...................................................................................................................................171
When a Tenant Brings in a Roommate .................................................................................................... 173
If a Tenant Leaves and Assigns the Lease to Someone ......................................................................174
11
e Landlord’s Duty to Repair and Maintain the Property ...................... 177
State and Local Housing Standards .......................................................................................................... 179
Enforcement of Housing Standards ..........................................................................................................180
Maintenance of Appliances and Other Amenities ............................................................................ 183
e Tenants Responsibilities ....................................................................................................................... 184
e Tenant’s Right to Repair and Deduct .............................................................................................. 185
e Tenant’s Right to Withhold Rent When the Premises Aren’t Habitable ......................... 186
e Landlord’s Options If a Tenant Repairs and Deducts or Withholds Rent ....................... 188
e Tenant’s Right to Move Out .................................................................................................................191
e Tenant’s Right to Sue for Defective Conditions ......................................................................... 193
Avoid Rent Withholding and Other Tenant Remedies by Adopting a High-Quality Repair
and Maintenance System
.......................................................................................................................... 196
Tenant Updates and Landlord’s Regular Safety and Maintenance Inspections .................... 202
Tenants’ Alterations and Improvements ................................................................................................ 205
Cable TV ................................................................................................................................................................209
Satellite Dishes and Other Antennas ....................................................................................................... 209
12
e Landlord’s Liability for Dangerous Conditions,
Criminal Acts, and Environmental Health Hazards
...........................................215
Legal Standards for Liability ..........................................................................................................................217
Landlord’s Responsibility to Protect Tenants From Crime ............................................................. 224
How to Protect Your Tenants From Criminal Acts While Also Reducing Your Potential
Liability
............................................................................................................................................................... 229
Protecting Tenants From Each Other (and From the Manager) .................................................. 235
Landlord Liability for Drug-Dealing Tenants ......................................................................................... 237
Liability for Environmental Hazards ......................................................................................................... 240
Liability, Property, and Other Types of Insurance .............................................................................. 263
13
e Landlord’s Right of Entry and Tenants Privacy .......................................... 269
e Landlord’s Right of Entry ...................................................................................................................... 270
Entry by Others .................................................................................................................................................. 277
Other Types of Invasions of Privacy .......................................................................................................... 278
What to Do When Tenants Are Unreasonable .................................................................................... 279
Tenants’ Remedies If a Landlord Acts Illegally .....................................................................................280
14
Raising Rents and Changing Other Terms of Tenancy ................................... 283
Basic Rules to Change or End a Tenancy ................................................................................................284
Rent Increase Rules ...........................................................................................................................................284
Preparing a Notice to Raise Rent ................................................................................................................290
How to Serve the Notice on the Tenant ................................................................................................. 293
When the Rent Increase Takes Effect .......................................................................................................294
Changing Terms Other an Rent ............................................................................................................295
15
Retaliatory Rent Increases and Evictions .....................................................................299
Types of Prohibited Retaliation ...................................................................................................................300
Proving Retaliation ........................................................................................................................................... 301
Avoiding Charges of Retaliation ................................................................................................................. 302
Liability for Illegal Retaliation ......................................................................................................................305
16
e ree-Day Notice to Pay Rent or Quit .................................................................309
When to Use a ree-Day Notice to Pay Rent or Quit .....................................................................310
How to Determine the Amount of Rent Due .......................................................................................310
Directions for Completing the ree-Day Notice to Pay Rent or Quit .....................................313
Serving the ree-Day Notice on the Tenant ........................................................................................314
When the Tenant Offers to Pay Rent ........................................................................................................318
e Tenant Moves Out ....................................................................................................................................318
If the Tenant Won’t Pay Rent (or Leave)...................................................................................................319
17
Self-Help Evictions, Utility Terminations, and
Taking Tenants’ Property
...............................................................................................................321
Forcible Evictions ..............................................................................................................................................322
Blocking or Driving the Tenant Out Without Force..........................................................................323
Seizing the Tenant’s Property and Other Harassment ......................................................................324
Effect of Landlord’s Forcible Eviction on a Tenant’s Liability for Rent ........................................324
18
Terminating Tenancies .................................................................................................................... 327
e 30-, 60-, or 90-Day Notice .................................................................................................................... 329
e ree-Day Notice in Cities at Dont Require Just Cause for Eviction .......................... 337
Termination When Just Cause for Eviction Is Required ...................................................................344
Termination Without Notice ...................................................................................................................... 353
e Initial Move-Out Inspection Notice ................................................................................................ 353
19
When a Tenant Leaves: Month-to-Month Tenancies,
Fixed-Term Leases, Abandonment, and Death of a Tenant
...................... 357
Terminating Month-to-Month Tenancies.............................................................................................. 358
Terminating Fixed-Term Leases ...................................................................................................................360
Termination by Tenant Abandoning Premises ....................................................................................364
What to Do When Some Tenants Leave and Others Stay ..............................................................367
Death of a Tenant .............................................................................................................................................368
20
Returning Security Deposits ...................................................................................................... 373
Basic Rules for Returning Deposits ............................................................................................................ 375
Initial Move-Out Inspection and Tenant’s Right to Receipts ........................................................ 376
Final Inspection .................................................................................................................................................. 385
Deductions for Cleaning and Damages ...................................................................................................386
Deductions for Unpaid Rent ........................................................................................................................387
Preparing an Itemized Statement of Deductions ............................................................................... 389
Small Claims Lawsuits by the Tenant ....................................................................................................... 394
If the Deposit Doesn’t Cover Damage and Unpaid Rent .................................................................399
21
Property Abandoned by a Tenant ....................................................................................... 403
Handling, Storing, and Disposing of Personal Property ...................................................................404
Motor Vehicles Left Behind ..........................................................................................................................408
Appendixes
A
Rent Control Chart ...............................................................................................................................411
Reading Your Rent Control Ordinance ...................................................................................................412
Finding Municipal Codes and Rent Control Ordinances Online .................................................. 413
Rent Control Rules by California City .......................................................................................................415
B
How to Use the Interactive Forms on the Nolo Website ............................. 445
Editing RTFs .........................................................................................................................................................446
List of Forms Available on the Nolo Website .......................................................................................446
Index ...........................................................................................................................................................................449
e California Landlord’s Legal Companion
H
ere is a concise legal guide for people who
own or manage residential rental property in
California. It has two main goals: to explain
California landlord/tenant law in as straightforward
a manner as possible, and to help you use this legal
knowledge to anticipate and, where possible, avoid
legal problems.
California-Specific
Legal Information
This book concentrates on the dozens of state legal
rules associated with most aspects of renting and
managing residential real property. For example, we
include information on leases, rental agreements,
managers, credit checks, security deposits, discrimi-
nation, invasion of privacy, the landlord’s duty to
maintain the premises (and tenant rights if you don’t),
liability for tenant exposure to mold, how to deal with
bedbugs, how to increase the rent or terminate for
nonpayment of rent, what you can legally do with a
tenant’s abandoned property, and much more. This
book also covers key federal laws that affect landlords,
such as lead-paint disclosure rules, and highlights
important local rules, particularly rent control (see
below) and health and safety standards.
California Legal Forms
and Notices
We provide over 40 practical, easy-to-use, and legal
forms, notices, letters, and checklists throughout this
book, including rental applications, leases, repair
notices, warning letters, notice of entry forms, security
deposit itemizations, move-in and move-out letters,
disclosure forms, three-day nonpayment of rent
and other termination notices, and more. We clearly
explain what form you need for different situations,
with clear instructions on how to prepare the form
(including how to provide proper legal notice when
required). We also provide filled-in samples in the text.
All forms are available for download on the Nolo
website on a special companion page for this book as
described below.
TIP
Put it in writing. Using the forms, checklists,
and notices included in this book will help you avoid legal
problems in the first place, and minimize those that can’t be
avoided. e key is to establish a good paper trail for each
tenancy, beginning with the rental agreement and lease
through a termination notice and security deposit itemization.
Such documentation is often legally required and will be
extremely valuable if attempts at resolving disputes with your
tenant fail.
California Rent Control Rules
Many of you will own rental properties in areas
covered by rent control ordinances. These laws not
only establish how much you can charge for most
residential living spaces, they also override state
law in a number of other ways. For example, many
rent control ordinances restrict a landlord’s ability
to terminate month-to-month tenancies by requiring
“just cause for eviction.” We handle rent control
in three ways: First, as we explain your rights and
responsibilities under state law in the bulk of this
book, we indicate those areas in which rent control
laws are likely to modify or change these rules.
Second, we provide a detailed discussion of rent
control in Chapter 4. Third, we provide summaries
(see Appendix A) of key rent control rules, particularly
how they affect evictions, in 16 California cities with
rent control. If you own rental property in a rent
control city, it’s crucial that you have a current copy of
2
|
THE CALIFORNIA LANDLORD’S LAW BOOK: RIGHTS & RESPONSIBILITIES
the local ordinance. You can get a copy from your city
rent control board or online.
How (and Why) to Use is Book
This book provides a roughly chronological treatment
of subjects important to landlordsbeginning with
taking rental applications and ending with returning
security deposits when a tenant moves out. But you
shouldn’t wait until a problem happens to educate
yourself about the law.
With sensible planning, you can either minimize
or avoidthe majority of serious legal problems
encountered by landlords. For example, in Chapter 11
we show you how to plan ahead to deal with those
few tenants who will inevitably try to invent bogus
reasons why they were legally entitled to withhold
rent. Similarly, in Chapter 9 we discuss ways to be sure
that you, your managers, and other employees know
and follow antidiscrimination laws and, at least as
important, make it clear that you are doing so. We take
you through most of the important tasks of being a
landlord. Most of these tasks you can do yourself, but
we are quick to point out situations when an attorneys
help will be useful or necessary.
We believe that in the long run a landlord is best
served by establishing a positive relationship with
tenants. Why? First, because it’s our personal view
that adherence to the law and principles of fairness
is a good way to live. Second, your tenants are
your most important economic asset and should be
treated as such. Think of it this way: From a long-
term perspective, the business of renting residential
properties is often less profitable than is cashing in
on the appreciation of that property. Your tenants are
crucial to this process, since it is their rent payments
that allow you to carry the cost of the real property
while you wait for it to go up in value. And just as
other businesses place great importance on conserving
natural resources, it makes sense for you to adopt
legal and practical strategies designed to establish and
maintain a good relationship with your tenants.
Evicting a Tenant
This book, The California Landlord’s Law Book: Rights
& Responsibilities, is the first of a two-volume set. It
explains how to terminate a tenancy, but if you need
to evict a tenant, youll want to consult the second
volume, The California Landlord’s Law Book: Evictions.
The Evictions volume provides a step-by-step guide
and all the necessary forms and instructions for ending
a tenancy and doing your own evictions.
Renting Out a Condo
or Townhouse
If you are renting out your condominium or town-
house, use this book in conjunction with your
homeowners’ associations CC&Rs (covenants,
conditions, and restrictions). These rules may affect how
you structure the terms and conditions of the rental
and how your tenants may use the unit. For example,
many homeowners’ associations control the number
of vehicles that can be parked on the street. If your
association has a rule like this, your renters will need to
comply with it, and you cannot rent to tenants with too
many vehicles without running afoul of the rules.
You need to be aware that an association rule
may be contrary to federal, state, or local law. For
instance, an association rule that banned all persons
of a certain race or religion from the property would
not be upheld in court. And owners of condominium
units in rent-controlled areas must comply with the
ordinance, regardless of association rules to the
contrary. Unfortunately, it’s not always easy to know
whether an association rule will pass legal muster. To
know whether a particular rule is legally permissible is
an inquiry that, in some cases, is beyond the scope of
this book.
Who Should Not Use is Book
Do not use this book or forms in the following
situations
•Renting commercial property for your business. Legal
rules and practices vary widely for commercial
rentals—from how rent is set to the length and
terms of leases.
•Renting out a space or unit in a mobile home park or
marina. Different rules often apply. For details,
check out the California Department of Housing
and Community Development publication, 2012
THE CALIFORNIA LANDLORD’S LEGAL COMPANION|3
Mobilehome Residency Law, available at www.hcd.
ca.gov/codes/mp/2012MRL.pdf.
•Renting out a live/work unit (such as a loft). While
you will be subject to state laws governing
residential units, you may have additional
requirements (imposed by building codes) that
pertain to commercial property as well. Check
with your local building inspector’s office for the
rules governing live/work units.
Get Updates, Forms, and More at This
Book’s Companion Page on Nolo.com
You can download the lease, rental agreement, and all
of the other forms and agreements in this book at:
www.nolo.com/back-of-book/LBRT.html
When there are important changes to the information
in this book, we’ll post updates on this same dedicated
page (what we call the books companion page). You‘ll
find other useful information on this page, too, such as
author blogs, podcasts, and videos. See the end of the
table of contents for a complete list of forms available
on nolo.com.
Abbreviations Used in This Book
We make frequent references to the California Civil
Code (CC) and the California Code of Civil Procedure
(CCP), important statutes that set out landlords’ rights
and responsibilities. We use the following standard
abbreviations throughout this book for these and other
important statutes and court cases covering landlord
rights and responsibilities. ere are many times when you
will surely want to refer to the complete statute or case.
See Chapter 8 for advice on how to find a specific statute
or case and do legal research.
California Codes
CC Civil Code
CCP Code of Civil Procedure
UHC Uniform Housing Code
B&P Business and Professions Code
H&S Health and Safety Code
CCR California Code of Regulations
Ed. Code Education Code
Federal Laws
U.S.C. United States Code
Cases
Cal. App. California Court of Appeal
Cal. Rptr. California Court of Appeal and
California Supreme Court
Cal. California Supreme Court
F. Supp. United States District Court
F.2d, F.3d United States Court of Appeal
U.S. United States Supreme Court
Opinions
Ops. Cal. Atty. Gen. California Attorney General Opinions
l
CHAPTER
1
Renting Your Property: How to Choose
Tenants and Avoid Legal Pitfalls
Adopt a Rental Plan and Stick to It ................................................................................................................... 6
Advertising Rental Property ..................................................................................................................................6
Dealing With Prospective Tenants ....................................................................................................................7
e Rental Application ........................................................................................................................................7
Credit Check and Screening Fees .................................................................................................................12
Terms of the Rental ..............................................................................................................................................12
Landlord Disclosures ...........................................................................................................................................13
Checking Background, References, and Credit History of Potential Tenants ...................... 16
Check With Previous Landlords and Other References .................................................................. 16
Verify a Potential Tenant’s Income and Employment .......................................................................17
Obtain a Credit Report From a Credit Reporting Agency ..............................................................17
See If Any “Tenant-Reporting Services” Operate in Your Area .................................................... 21
Check With the Tenant’s Bank to Verify Account Information .................................................. 21
Review Court Records ........................................................................................................................................ 21
Checking the Megans Law Database ........................................................................................................ 22
Do Not Request Proof of, or Ask About, Immigration Status .....................................................22
Choosing—And Rejecting—An Applicant ................................................................................................ 22
Record Keeping......................................................................................................................................................23
Information You Must Provide Rejected Applicants .........................................................................24
Holding Deposits ....................................................................................................................................................... 26
FORMS IN THIS CHAPTER
Chapter 1 includes instructions for and samples of the following forms:
• Rental Application
• Consent to Background and Reference Check
• Application Screening Fee Receipt
• Disclosures by Property Owner(s)
• Tenant References
• Notice of Denial Based on Credit Report or Other Information, and
• Receipt and Holding Deposit Agreement.
e Nolo website includes downloadable copies of these forms. See Appendix B for the link
to the forms in this book.
6
|
THE CALIFORNIA LANDLORD’S LAW BOOK: RIGHTS & RESPONSIBILITIES
A
ll landlords typically follow the same process
when renting property. We recognize that a
landlord with 40 (or 400) units has different
business challenges than a person with an in-law
cottage in the backyard or a duplex around the corner.
Still, the basic process of filling rentals remains the
same:
•Decide the terms of your rental, including rent,
deposits, and the length of the tenancy.
•Advertise your property.
•Accept applications.
•Screen potential tenants.
•Choose someone to rent your property.
In this chapter, we examine the practical and legal
aspects of each of these steps, with an eye to avoiding
several common legal problems. Because the topic
of discrimination is so important we devote a whole
chapter to it later in the book (Chapter 9), including
advice on how to avoid discrimination in your tenant
selection process.
RESOURCE
For comprehensive information and over
40 forms on advertising, showing your rental, screening
applicants, and accepting and rejecting prospects, see Every
Landlord’s Guide to Finding Great Tenants, by Janet Portman
(Nolo).
Adopt a Rental Plan
and Stick to It
Before you advertise your property for rent, you’ll
want to make some basic decisions, which will form
the backbone of your lease or rental agreement—how
much rent to charge, when it is payable, whether to
offer a fixed-term lease or a month-to-month tenancy,
and how much of a security deposit to require. You’ll
also need to decide the responsibilities of a manager (if
any) in renting out your property.
RELATED TOPIC
If you haven’t made these important decisions,
the details you need are in Chapters 2, 3, 5, and 6.
In renting residential property, be consistent when
dealing with prospective tenants. The reason for this
is simple: If you don’t treat all tenants more or less
equally—for example, if you arbitrarily set tougher
standards for renting to a racial minority—you are
violating federal laws and opening yourself up to
lawsuits.
Of course, there will be times when you will want
to bargain a little with a prospective tenant—for
example, you may let a tenant have a cat in exchange
for paying a higher security deposit (as long as it
doesn’t exceed the legal limits set by law). As a general
rule, however, youre better off figuring out your rental
plan in advance and sticking to it.
Advertising Rental Property
In some areas, landlords are lucky enough to fill all
vacancies by word of mouth. If you fit this category,
skip to the next section.
There is one crucial point you should remember
about advertising: Where you advertise is more
important than how you advertise. For example, if you
rent primarily to college students, your best bet is the
campus newspaper or housing office. Whether you
simply put a sign in front of your apartment building,
post a notice on Craigslist, or work with a rental
service or property management company, be sure
the way you advertise reaches a sufficient number of
the sort of people who are likely to meet your rental
criteria.
Legally, you should have no trouble if you follow
these simple rules:
Make sure the price in your ad is an honest one. If a
tenant shows up promptly and agrees to all the terms
set out in your ad, you may run afoul of the law if you
arbitrarily raise the price. This doesn’t mean you are
always legally required to rent at your advertised price,
however. If a tenant asks for more services or different
lease terms, which you feel require more rent, it’s fine
to bargain and raise your price. And if competing
tenants begin a bidding war, there’s nothing illegal
about accepting more rent—as long as it is truly freely
offered. However, be sure to abide by any applicable
rent limits in local rent control areas.
Don’t advertise something you dont have. Some large
landlords, management companies, and rental services
have advertised units that weren’t really available
in order to produce a large number of prospective
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7
tenants who could then be “switched” to higher-priced
or inferior units. This type of advertising is illegal, and
many property owners have been prosecuted for bait-
and-switch practices.
Be sure your ad can’t be construed as discriminatory. Ads
should not mention age, sex, race, religion, disability,
or adults-only—unless yours is senior citizens’
housing. (Senior citizens’ housing must comply with
CC § 51.3. Namely, it must be reserved for persons
over age 62, or be a complex of 150 or more units (35
in nonmetropolitan areas) for persons over age 55.)
Neither should ads imply through words, photographs,
illustrations, or language that you prefer or discriminate
against renters because of their age, sex, race, and so
on. For example, if your property is in a mixed Chinese
and Hispanic neighborhood and if you advertise
only in Spanish, you may be courting a fair housing
complaint. In addition, any discrimination against any
group that is unrelated to a legitimate landlord concern
is illegal. For example, it’s discriminatory to refuse to
rent to unmarried couples, because the legal status of
their relationship has nothing to do with whether they
will be good, stable tenants.
exAmple: An ad for an apartment that says
“Young, female student preferred” is illegal,
since sex and age discrimination are forbidden
by both state and federal law. Under California
law, discrimination based on the prospective
tenant’s occupation also is illegal, since there is no
legitimate business reason to prefer tenants with
certain occupations over others.
If you have any legal and nondiscriminatory rules on
important issues, such as no pets, its a good idea to put
them in your ad. This will weed out those applicants
who don’t like your terms. But even if you don’t
include a “no pets” clause, you won’t be obligated to
rent to applicants with pets. You can still announce the
policy at the time you interview a prospective tenant—
and you can use your discretion when deciding
whether their pets are acceptable.
Dealing With Prospective Tenants
It’s good business, as well as a sound legal protection
strategy, to develop a system for screening prospective
tenants. Whether you handle reference checking and
other tasks yourself or hire a manager or property
management company, your goal is the sameto
select tenants who will pay their rent on time, keep
their rental in good condition, and not cause you any
legal or practical hassles later.
TIP
Never, never let anyone stay in your property
on a temporary basis. Even if you havent signed a rental
agreement or accepted rent, giving a person a key or allowing
him or her to move in as much as a toothbrush can give that
person the legally protected status of a tenant. en, if the
person won’t leave voluntarily, you will have to file a lawsuit to
evict him or her.
e Rental Application
Each prospective tenant—everyone age 18 or older
who wants to live in your rental property—should fill
out a written application. This is true whether youre
renting to a married couple sharing an apartment or to
a number of unrelated roommates.
See the sample Rental Application below.
FORM
You’ll find a downloadable copy (both PDF and
RTF versions) of the Rental Application on the Nolo website.
See Appendix B for the link to the forms in this book. You can
use the PDF version (print as is and give it to your applicants)
or the RTF version. You can edit the RTF version and add or
delete questions, but be aware that extensive changes might
affect the form’s layout (the margins and available space for
answers).
Complete the box at the top of the Rental Application,
listing the property address, details on the rental term
and amounts due before the tenants may move in.
Ask all applicants to fill out a Rental Application
form, and accept applications from everyone who’s
interested in your rental property. Refusing to take
an application may unnecessarily anger a prospective
tenant, and will make him or her more likely to look
into the possibility of filing a discrimination complaint.
Make decisions about who will rent the property later.
The Rental Application form includes a section for
you to note the amount and purpose of any credit
Rental Application
Separate application required from each applicant age 18 or older.
THIS SECTION TO BE COMPLETED BY LANDLORD
Address of Property to Be Rented:
Rental Term: month to month lease from to
Amounts Due Prior to Occupancy
First month’s rent ............................................................................................................................................. $
Security deposit ................................................................................................................................................ $
Credit-check fee ................................................................................................................................................ $
Other (specify): $
TOTAL .......................................................................................................................................................... $
Applicant
Full Name—include all names you use(d):
Home Phone: Work Phone: Cell Phone:
Fax (By providing this number, I agree to receive Fax transmissions from the landlord or landlord’s agent):
Email: Social Security Number:
Driver’s License Number/State:
Other Identifying Information:
Vehicle Make:
Model: Color: Year:
License Plate Number/State:
Additional Occupants
List everyone, including children, who will live with you:
Full Name Relationship to Applicant
Rental History
Current Address:
Dates Lived at Address: Reason for Leaving:
Landlord/Manager: Landlord/Manager’s Phone:
178 West 8th Street, Apt. 6, Oakland, CA
3
March 1, 20xx February 28, 20xx
1,200
1,800
30
3,030
Hannah Silver
510-555-3789 510-555-4567
hannah@coldmail.com 123-000-4567
CA V123456
Toyota Camry White 2008
CA 123456
Dennis Olson Husband
39 Maple Street, Oakland, CA
May 2000 – date Wanted bigger place
Jane Tucker 510-555-7523
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Previous Address:
Dates Lived at Address: Reason for Leaving:
Landlord/Manager: Landlord/Manager’s Phone:
Previous Address:
Dates Lived at Address: Reason for Leaving:
Landlord/Manager: Landlord/Manager’s Phone:
y
Name and Address of Current Employer:
Phone:
Name of Supervisor: Supervisor’s Phone:
Dates Employed at  is Job: Position or Title:
Name and Address of Previous Employer:
Phone:
Name of Supervisor: Supervisor’s Phone:
Dates Employed at  is Job: Position or Title:
1. Your gross monthly employment income (before deductions): $
2. Average monthly amounts of other income (specify sources):
$
$
$
TOTAL: $
edit and Financial Information
Bank/Financial Accounts Account Number Bank/Institution Branch
Savings Account:
Checking Account:
Money Market or Similar Account:
Type of Account Account Name of Amount M
Credit Accounts & Loans (Auto loan, Visa, etc.) Number Creditor Owed Paymen
Major Credit Card:
Major Credit Card:
Loan (mortgage, car, student loan, etc.):
Other Major Obligation:
1215 Middlebrook Road, Palo Alto, CA
June 1997 – May 2000 New job in East Bay
Ed Palermo 650-555-3711
152 Highland Drive, Santa Cruz, CA
Jan. 1996 – June 1997 Wanted to live closer to work
Millie & Joe Lewis 831-555-9999
Argon Works, 54 Nassau Road, Berkeley, CA
510-555-2333
Tom Schmidt 510-555-2333
2000 – date Marketing Director
Palo Alto Tribune
13 Junction Road, Palo Alto 650-555-2366
Do r y K r o ss b e r 65 0 -555 -1111
1996 –2000 Marketing Associate
5,000
husband’s salary 4,000
9,000
1222345 Cal West Berkeley, CA
789101 Cal West Berkeley, CA
234789 City Bank San Francisco, CA
Visa 123456 City Bank $1,000 $500
Dept. Store 45789 Macy’s $500 $500
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9
Miscellaneous
Describe the number and type of pets you want to have in the rental property:
Describe water- lled furniture you want to have in the rental property:
Do you smoke? yes no
Have you ever: Filed for bankruptcy? yes no Been sued? yes no
Been evicted? yes no Been convicted of a crime? yes no
Explain any “yes” listed above:
References and Emergency Contact
Personal Reference: Relationship:
Address:
Phone:
Personal Reference: Relationship:
Address:
Phone:
Contact in Emergency: Relationship:
Address:
Phone:
I certify that all the information given above is true and correct and understand that my lease or rental agreement may be
terminated if I have made any material false or incomplete statements in this application. I authorize veri cation of the information
provided in this application from my credit sources, credit bureaus, current and previous landlords and employers, and personal
references. I understand that if I have initiated a “security freeze” on my credit information with any of the credit reporting
agencies, I will promptly lift the freeze for a reasonable time so that my credit report may be accessed by the Landlord/Manager;
and I understand that if I fail to do so, the Landlord/Manager may consider this an incomplete application. (CC § 1785.11.2.)  is
permission will survive the expiration of my tenancy.
Date
Applicant
Notes (Landlord/Manager):
No pets
None
X
X X
X X
Joan Stanley friend, co-worker
785 Spruce Street, Berkeley
510-555-4578
Marnie Swatt friend
785 Pierce Avenue, San Francisco
415-555-7878
Connie and Martin Silver Parents
123 Gorham Street, Princeton, N.J.
609-555-8765
Feb. 15, 20xx Hn Svr
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11
check fee. (Credit check fees are discussed below.)
If you do not charge credit check fees, simply fill in
“none” or “N/A.
Be sure all potential tenants sign the Rental
Application, authorizing you to verify the information
and references. (Some employers and others require
written authorization before they will talk to you.) You
may also want to prepare a separate authorization,
so that you don’t need to copy the entire application
and send it off every time a bank or employer wants
proof that the tenant authorized you to verify the
information. See the sample Consent to Background
and Reference Check, below.
FORM
You’ll fi nd a downloadable copy of the Consent
to Background and Reference Check on the Nolo website.
See Appendix B for the link to the forms in this book.
CAUTION
Don’t take incomplete rental applications.
Landlords are often faced with anxious, sometimes
desperate people who need a place to live immediately.
Some people tell terrifi c hard-luck stories as to why normal
credit- and reference-checking rules should be ignored in
their case and why they should be allowed to move right in.
Don’t believe any of it. People who have planned so poorly
that they will literally have to sleep in the street if they
don’t rent your place that day are likely to come up with
similar emergencies when it comes time to pay the rent.
Always make sure that prospective tenants complete the
entire Rental Application, including Social Security number
(or an alternative; see below), driver’s license number or
other identifying information (such as a passport number),
current employment, and emergency contacts. You may
need this information later to track down a tenant who
skips town leaving unpaid rent or abandoned property. (See
Chapters 19 and 21.)
Consent to Background and Reference Check
I authorize
to obtain information about me from my credit sources, current and previous landlords and employers, and personal references,
to enable
to evaluate my rental application. I authorize my credit sources, credit bureaus, current and previous landlords and employers,
and personal references to disclose to
information about me that is relevant to ’s
decisions regarding my application and tenancy.  is permission will survive the expiration of my tenancy.
Name
Address
Phone Number
Date Applicant
Jan Gold
Jan Gold
Jan Gold
Jan Gold
Sandy Meyer
4 Elm Road, Sacramento, CA
916-555-9876
May 2, 20xx Sndy Mer
12
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An Alternative to Requiring
Social Security Numbers
You may encounter an applicant who does not have an
SSN (only citizens or immigrants authorized to work
in the United States can obtain one). For example,
someone with a student visa will not normally have an
SSN. If you categorically refuse to rent to applicants
without SSNs, and these applicants happen to be foreign
students, you’re courting a fair housing complaint.
Fortunately, nonimmigrant aliens (such as people
lawfully in the United States who dont intend to stay
here permanently, and even those who are here illegally)
can obtain an alternate piece of identification that will
suit your needs as well as an SSN. Its called an Individual
Taxpayer Identification Number (ITIN), and is issued by
the IRS to people who expect to pay taxes. Most people
who are here long enough to apply for an apartment will
also be earning income while in the United States. and
will therefore have an ITIN. Consumer reporting agencies
and tenant screening companies can use an ITIN to
find the information they need to effectively screen an
applicant. On the Rental Application, use the line “Other
Identifying Information” for an applicant’s ITIN.
Credit Check and Screening Fees
State law limits credit check or application fees you
can charge prospective tenants, and specifies what
you must do when accepting these types of screening
fees. (CC § 1950.6.) You can charge only “actual out-
of-pocket costs” of obtaining a credit or similar tenant
“screening” report, plus “the reasonable value of time
spent” by you or your manager in obtaining a credit
report or checking personal references and background
information on a prospective tenant. We cover credit
reports and other screening efforts below.
To determine the maximum screening fee you can
charge each applicant, go to the Consumer Price Index
website at www.bls.gov/cpi and search for the article,
“How to Use the Consumer Price Index for Escalation,
which refers you to a calculator. (As of 2013, you can
charge a screening fee up to $42.)
Upon an applicant’s request, you must provide a
copy of any consumer credit report you obtained on
the individual. You must also give or mail the applicant
a receipt itemizing your credit check and screening
fees. If you end up spending less (for the credit report
and your time) than the fee you charged the applicant,
you must refund the difference. (This may be the
entire screening fee if you never get a credit report or
check references on an applicant.)
Finally, you cannot charge any screening or credit
check fee if you don’t have a vacancy and are simply
putting someone on a waiting list (unless the applicant
agrees to this in writing).
In light of state limits on credit check fees, we
recommend that you:
•charge a credit check fee only if you intend to
actually obtain a credit report
•charge only your actual cost of obtaining the
report, plus $10, at most, for your time and trouble
•charge no more than $42 per applicant in any
case (unless you include an adjustment based on
the CPI)
•provide an itemized receipt at the same time you
take an individual’s rental application (a sample
receipt is shown below), and
•mail each applicant a copy of his or her credit
report as a matter of practice.
FORM
You’ll find a downloadable copy of the
Application Screening Fee Receipt on the Nolo website. See
Appendix B for the link to the forms in this book.
CAUTION
Nonrefundable move-in fees are illegal. Any
payment, fee, deposit, or charge” that is intended to be
used to cover unpaid rent or damage or that is intended to
compensate a landlord for costs associated with move-in, is
legally considered a security deposit and is covered by state
deposit laws. Security deposits are always refundable. (Chapter
5 covers security deposits.)
Terms of the Rental
Be sure your prospective tenant knows all your general
requirements and any special rules and regulations
before you get too far in the process. This will help
avoid situations where your tenant backs out at the last
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13
minute (he thought he could bring his three dogs and
your lease prohibits pets) and help minimize future
misunderstandings.
To put together a rental agreement or lease, see
Chapter 2. Once you’ve signed up a tenant and want
to clearly communicate your rules and regulations, see
Chapter 7.
Landlord Disclosures
California landlords are legally obligated to make
several disclosures to prospective tenants. You can add
the military, utility, and environmental disclosures to
the rental application or put them on a separate sheet
of paper attached to the rental application. A sample
form you can use to make written disclosures is shown
below.
FORM
You’ll fi nd a downloadable copy of the
Disclosures by Property Owner(s) form on the Nolo website.
See Appendix B for the link to the forms in this book.
You can also decide to make disclosures part of
your lease or rental agreement. (See Clause 27 in
Chapter 2.) The Megans Law disclosure must be on
the lease or rental agreement. (See Clause 26, State
Database Disclosure, in Chapter 2.)
Megans Law Database
Every written lease or rental agreement must inform
the tenant of the existence of a statewide database of
the names of registered sexual offenders. Members of
the public may view the state’s Department of Justice
website to see whether a certain individual is on
Application Screening Fee Receipt
is will acknowledge receipt of the sum of $ by
[Property Owner/Manager] from
[Applicant]
as part of his/her application for the rental property at
[Rental Property Address].
As provided under California Civil Code Section 1950.6, here is an itemization of how this $ screening fee will
be used:
Actual costs of obtaining Applicants credit/screening report $
Administrative costs of obtaining credit/screening report and checking Applicants references and background information
$
Total screening fee charged $
Date Applicant
Date Owner/Manager
42.00 Moe Manager
Terri D. Tenant
123 Polk Place #4,
Palo Alto, CA 94303
42.00
credit check and handling fee
25.00
17. 00
42.00
April 1, 20xx
Terri D. Tenant
April 1, 20xx Moe Manager
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THE CALIFORNIA LANDLORD’S LAW BOOK: RIGHTS & RESPONSIBILITIES
the list. You must use the following legally required
language for this disclosure:
Notice: Pursuant to Section 290.46 of the Penal Code,
information about specified registered sex offenders
is made available to the public via an Internet Web
site maintained by the Department of Justice at www.
meganslaw.ca.gov. Depending on an offender’s criminal
history, this information will include either the address at
which the offender resides or the community of residence
and ZIP Code in which he or she resides.
Chapter 12 explains your duties under this law
in more detail. The rental agreement and lease in
Appendix C include this mandatory disclosure (see
Clause 16).
Location Near Former Military Base
If your property is within a mile of a “former ordnance
location”—an abandoned or closed military base in
which ammunition or military explosives were used
you must notify all prospective tenants in writing.
(CC § 1940.7.) You can use the sample Disclosures by
Property Owner(s) form shown below to do this.
It is not necessary to warn prospective tenants of
the existence of current ordnance locations, such as
presently existing army or navy bases.
Although there are no penalties stated in the law
for failure to warn, and although the law applies only
to former ordnance locations actually known by the
owner, it’s only a matter of time before someone sues
their landlord for negligently failing to warn of a former
military base the landlord “should have known about.
Therefore, if you have the slightest idea your property is
within a mile of a former military base or training area,
check it out. You might start by asking the reference
librarian at a nearby public library or by writing a letter
to your local Congressional representative. If you have a
particular location in mind, you can also check with the
County Recorder, who will show you how to trace the
ownership all the way back to the turn of the twentieth
century for any indication the property was at one time
owned or leased by the government.
Periodic and Other Pest Control
Registered structural pest control companies have long
been required to deliver warning notices to owners and
tenants of properties that were about to be treated as
part of an ongoing service contract—but the warning
notice had to be issued only once, at the time of the
initial treatment. This meant that subsequent tenants
would not receive the warning. Now, the landlord must
give a copy of this notice to every new tenant who
occupies a rental unit that is serviced periodically. The
notice must contain information about the frequency of
treatment. (B&P § 8538; CC § 1940.8.)
Landlords who apply pesticides on, in, or near a
rental building or unit (including a children’s play area)
whose occupant is a licensed day care provider must
provide advance written notice prior to doing so. See
“Family Day Care Homes” in Chapter 2.
Shared Utility Arrangements
State law requires property owners to disclose to
all prospective tenants, before they move in, any
arrangements where a tenant might wind up paying
for someone else’s gas or electricity use. (CC § 1940.9.)
This would occur, for example, where a single gas or
electric meter serves more than one unit, or where
a tenant’s gas or electric meter also measures gas
or electricity that serves a common areasuch as a
washing machine in a laundry room or even a hallway
light not under the tenant’s control. We address this
issue in detail in Chapter 2. While you may use the
Disclosures by Property Owner(s) form shown below,
your lease or rental agreement is the more appropriate
place to disclose shared utility arrangements. (See
Clause 9 of our sample lease and rental agreement.)
Intentions to Demolish the Rental
If you plan on demolishing your rental property, you
or your agent must give written notice to applicants,
new tenants, and current tenants. (CC § 1940.6.) The
steps you must follow depend on whether you’re
notifying applicants, new tenants, or current tenants.
•Applicants and new tenants. If you have applied
for a permit to demolish their unit, you must
disclose this before entering into a rental agree-
ment or even before accepting a credit check
fee or negotiating “any writings that would
initiate a tenancy,” such as a holding deposit.
(CC § 1940.6(a)(1)(D).)
•Existing tenants (including tenants who have signed a
lease or rental agreement but havent yet moved in).
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15
Disclosures by Property Owner(s)
e owner(s) of property located at
make(s) the following disclosure(s) to prospective tenant(s) and/or employee(s):
Date Owner’s Signature
I have read and received a copy of the above Disclosures by Property Owner(s).
Date Signature
Date Signature
1234 State Avenue, Apartment 5, Los Angeles, California
Location near former military base. State law requires property owners to disclose to all prospective tenants,
before they sign any rental agreement or lease, if the property they are seeking to rent is within one mile of a
former ordnance area (military base) as defined by California Civil Code Section 1940.7.
Details regarding the former military base near the property listed above are as follows:
Between 19421945, the U.S. Army used the nearby area bounded by 6th and 7th Streets and 1st and 3rd
Avenues in the City of Los Angeles as a reserve training area. Unexploded rifle ammunition has been found
there.
9/19/20xx Dry Wt
9/19/20xx Susan Johnson
9/19/20xx Thomas Johnson
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THE CALIFORNIA LANDLORD’S LAW BOOK: RIGHTS & RESPONSIBILITIES
certain common areas. In Chapter 2, we explain how
to use Clause 25 to describe your policy.
Before you get to the point of negotiating a lease or
rental application with applicants, however, you may
want to tell them about your policy. You don’t want
complaints later from a nonsmoker who didn’t realize
that you permitted smoking in the common areas. Nor
do you want the complaint of a smoker who assumed
that smoking in an individual unit would be okay.
Local Disclosures
Check your local ordinance, particularly if your rental
unit is covered by rent control, for any city or county
disclosure requirements. To find yours, check your
local government website, or contact the office of your
mayor, city manager, or county administrator.
Checking Background,
References, and Credit History
of Potential Tenants
If an application looks good, the next step is to follow
up thoroughly. The time and money you spend are the
most cost-effective expenditures you’ll ever make.
CAUTION
Be consistent in your screening. You risk a charge
of illegal discrimination if you screen certain categories of
applicants more stringently than others. Make it your policy,
for example, to always require credit reports; don’t just get a
credit report for a single-parent applicant.
Here are six steps of a very thorough screening
process. You should always go through at least the first
three to check out the applicant’s previous landlords,
income, and employment, and run a credit check.
Check With Previous Landlords
and Other References
Always call previous landlords or managers for refer-
ences—even if you have a written letter of reference
from a previous landlord. Also, call previous employers
and personal references listed on the rental application.
To organize the information you gather from these
calls, use the Tenant References form, which lists key
These tenants are entitled to notice before you
apply for a demolition permit (but the law
doesn’t specify how much advance warning you
must give the tenant). The notice must include
the earliest approximate date that you expect
the demolition to occur, and the earliest possible
date that you expect the tenancy will terminate
(you cannot demolish prior to the estimated
termination date).
This disclosure requirement packs a punch—if you
fail to give written notification as explained above, a
tenant or prospective tenant can sue you for damages
(and attorney’s fees, which makes such a suit attractive
to a lawyer). You can be ordered to pay the tenant’s
actual damages (such as the cost of living in a motel
while looking for a new residence) and moving
expenses, as well as a civil penalty (payable to the
tenant) of up to $2,500.
Environmental Hazards
Federal law requires landlords to warn tenants about
the presence of asbestos and lead paint hazards in the
rental property. The subject of landlord liability for
environmental hazards is discussed in detail in Chapter
12, and a sample copy of the required lead-based paint
disclosure form is included there.
FORM
You’ll find a downloadable copy of the required
lead-based paint disclosure form on the Nolo website. See
Appendix B for the link to the forms in this book.
California landlords must also disclose the presence
of dangerous mold. If you know that a rental unit has
toxic mold levels exceeding California Department of
Public Health (CDPH) guidelines, you must disclose
that fact to current and prospective tenants. (H&S
§ 26147.) As of this writing, however, the CDPH has not
yet adopted these guidelines. When they do, they will
post them on their website at www.dhs.ca.gov. Chapter
12 discusses mold in detail.
Smoking
Landlords are free to specify that some parts (or all
of) their property will be smoke free. (CC § 1947.5.)
For example, you may want to prohibit smoking in
individual units, but permit it in common areas or
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17
questions to ask previous landlords, managers, and
other references.
See the sample Tenant References form, below.
FORM
You’ll find a downloadable copy of the Tenant
References form on the Nolo website. See Appendix B for the
link to the forms in this book.
Be sure to take notes of all your conversations
and keep them on file. This information will come in
handy should a rejected tenant ever ask why he wasn’t
chosen or file a discrimination charge against you.
(These issues are covered in the discussion of record
keeping, below.)
Bad tenants often provide phony references. Make
sure you speak to a legitimate landlord or manager, not
a friend of the prospective tenant posing as one. One
suggestion is to call the number given for the previous
landlord or manager and simply ask for the landlord
or manager by name, rather than begin by saying that
you are checking references. If the prospective tenant
has really given you a friend’s name, the friend will
probably say something that gives away the scam.
If you still have questions, consider driving to the
former address and checking things out in person.
Finally, if you have any doubts, ask the previous
landlord or manager to pull out the tenant’s rental
application so you can verify certain facts, such as
the tenant’s Social Security number. If the so-called
landlord can’t do this, you are perhaps being conned.
Verify a Potential Tenant’s
Income and Employment
You want to make sure that all tenants have the income
to pay the rent each month. Call the prospective tenant’s
employer to verify income and length of employment.
Again, make notes of your conversations on the Tenant
References form, discussed above.
Some employers require written authorization from
the employee. You will need to mail or fax them a
copy of the release included at the bottom of the
Rental Application form, or the separate Consent to
Background and Reference Check form.
If you feel that verifying an individual’s income by
telephone or accepting a note from her boss is not
reliable enough, you may require applicants to provide
copies of recent paycheck stubs. It’s also reasonable
to require documentation of other sources of income
(such as disability or other benefits checks). Where a
large portion of an applicant’s income is from child
support or alimony payments, you might want to
ask for a copy of the court decree for the support
payments. However, don’t go overboard by asking
for copies of tax returns or bank statements, except
possibly from self-employed persons.
How much income is enough? Think twice before
renting to someone if the rent will take more than
one-third of their income, especially if they have a lot
of debts. Be careful, however, if youre dealing with
an applicant who is disabled and who cannot meet
the “one-third” standard. If that applicant is otherwise
qualified and presents you with a cosigner, you will
need to evaluate the cosigner’s financial ability and
trustworthiness, despite any rules you may have against
dealing with cosigners. (Giebeler v. M & B Associates,
343 F.3d 1143 (2003).) Cosigners are discussed in detail
in Chapter 2; your duty to provide accommodations for
disabled renters is covered in Chapter 5.
Obtain a Credit Report From a
Credit Reporting Agency
Many landlords find it essential to check a tenant’s
credit history with at least one credit reporting
agency. These agencies collect and sell credit and
other information about consumersfor example,
whether they pay their bills on time or, if reported
by prior landlords, whether they’ve failed to pay the
rent. As long as you use the information only to help
you decide whether to rent to that person, or on what
terms, you do not need the applicant’s consent.
However, many people think that you must have
their written consent before pulling a credit report to
evaluate them as prospective tenants. For that reason,
we have explicitly called for applicants’ consent in
our application (and on a separate form). But there’s
another reason for our caution: This written consent
should help you if later, when the applicant is a tenant
(or an ex-tenant), you decide that you need an updated
credit report. For example, you may want to consult
a current report in order to help you decide whether
to sue a tenant who has skipped out and owes rent.
Without a broadly written consent, your use of a report
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Tenant References
Name of Applicant:
Address of Rental Unit:
Previous Landlord or Manager
Contact (name, property owner or manager, address of rental unit):
Date:
Questions
When did tenant rent from you (move-in and move-out dates)?
What was the monthly rent? $
Did tenant pay rent on time?  Yes No
Was tenant considerate of neighbors—that is, no loud parties and fair, careful use of common areas?  Yes No
If not, explain:
Did tenant have any pets?  Yes NoIf so, were there any problems?
Did tenant make any unreasonable demands or complaints?  Yes No If so, explain:
Why did tenant leave?
Did tenant give the proper amount of notice before leaving?
Did tenant leave the place in good condition? Did you need to use the security deposit to cover damage?
Any particular problems you’d like to mention?
Would you rent to this person again?  Yes No
Other Comments:
Will Berford
123 State Street, Los Angeles, CA
Kate Steiner, 345 Mercer Street,
Los Angeles, 310-555-5432
February 4, 20xx
December 2006 to date
$750
X
A week late a few times
X
X
Yes, he had a cat, contrary to rental
agreement
X
He wants to live someplace that allows pets
Yes
No problems
No
X Yes, but without pets
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Employment Veri cation
Contact (name, company, position):
Date:
Salary: Dates of Employment:
Comments:
Personal Reference
Contact (name and relationship to applicant):
Date: How long have you known the applicant?
Would you recommend this person as a prospective tenant?  Yes No
Comments:
Credit and Financial Information
Notes, Including Reasons for Rejecting Applicant
Brett Field, Manager, Chicago Car Company
February 5, 20xx
$60,000 + bonus March 2004 to date
No problems. Fine employee. Will is responsible and hardworking.
Sandy Cameron, friend
February 5, 20xx five years
X
Will is very neat and responsible. He’s reliable and will be a great tenant.
Michael is very neat and responsible. He’s reliable and will be a great tenant.
Mostly fine—see attached credit report
Applicant had a history of late rent payments and kept a cat, contrary to the rental agreement.
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at that time might be illegal. (FTC “Long” Opinion
Letter, July 7, 2000.)
Never order a credit report unless you are doing
so in order to evaluate a potential (or current or ex-)
tenant. If you ask for a report for any other reason
(such as a wish to check out the solvency of your
future son-in-law or the resources of your ex-business
partner whom you’re considering suing), you could
face a lawsuit and penalties of thousands of dollars.
Take Care Handling Credit Reports
Under federal law, you must take special care that credit
reports (and any information stored elsewhere that
is derived from credit reports) are stored in a secure
place where only those who “need to know” have
access. (“Disposal Rule” of the Fair and Accurate Credit
Transactions Act of 2003, known as the FACT Act, 69
Fed. Reg. 68690.) In addition, you must dispose of such
records when you’re done with them, by burning them
or using a shredder. is portion of the FACT Act was
passed in order to combat the increasing reports of
identity theft. It applies to every landlord who pulls a
credit report, no matter how small your operation. e
Federal Trade Commission (FTC), which interprets the
Act, encourages you to similarly safeguard and dispose
of any record that contains a tenant’s or applicant’s
personal or financial information. is would include the
rental application itself, as well as any notes you make
that include such information. For more information,
search “Disposal Rule” on www.ftc.gov.
Information covers the past seven to ten years. To
run a credit check, you’ll need a prospective tenant’s
name, address, and Social Security number (or other
identifying information, such as a driver’s license
number, ITIN, or passport number).
Some credit reporting companies also gather and
sell “investigative reports” or background checks about
a person’s character, general reputation, personal
characteristics, or mode of living. If you order one of
these background checks, federal law requires that you
disclose certain information to the prospective tenant.
(See “Background Checks Trigger Disclosures Under
the Fair Credit Reporting Act,” below.)
Background Checks Trigger Disclosures
Under the Fair Credit Reporting Act
Almost all background checks come under the
federal Fair Credit Reporting Act. (15 U.S.C. §§ 1681
and following.) If you order a background check on a
prospective tenant, it will be considered an “investigative
consumer report,” and you must:
• tell applicants within three days of requesting the
report that the report may be made, and that it
will concern their character, reputation, personal
characteristics, and criminal history, and
• tell applicants that more information about the
nature and scope of the report will be provided
upon their written request. You must provide this
additional information within five days of being
asked by the applicant.
If you own many rental properties and need credit
reports frequently, consider joining a local credit
reporting agency (they charge about $50 to $100 in
annual fees plus $10$25 per report). You can find
tenant-screening companies in the yellow pages of the
phone book under “Credit Reporting Agencies.” Or, if
you only rent a few units each year, see if your local
apartment association (there are about two dozen in
California) offers credit reporting services. With most
credit reporting agencies, you can get a credit report
the same day it’s requested.
Landlords who have accounts or other ongoing
business relations with the credit reporting agencies
need not supply an applicant’s date of birth (DOB)
in order to get a report—a name and Social Security
number or ITIN will suffice. However, consumers
ordering their own credit report must supply their
DOB; and, presumably, small-scale landlords, who
have no reason to set up an account with a credit
reporting agency, could order reports as if they were
the applicant, after asking the applicant for their DOB.
We urge you not to try this route, because once you
have a DOB, you open the door to a discrimination
claim if you reject an older applicant who decides to
impute age discrimination motives to your decision.
Instead, investigate setting up an account or join an
apartment association.
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Tenants With “Security Freezes”
on Their Credit Reports
Consumers in California may place a “freeze” on their
credit reports, preventing anyone but specified parties
(such as law enforcement) from getting their credit
report. (CC §§ 1785.11.2 and following.) Credit reporting
agencies must implement the freeze within five days
of receiving the request. However, the consumer can
arrange for specified persons—such as a landlord or
management company—to have access to their report;
or the freeze itself can be suspended for a specified
period of time. When a consumer arranges for a freeze,
the agency must give the consumer information on how
to arrange for selective access or how to lift the freeze.
(CC § 1785.15(f).)
If an applicant has placed a freeze on his or her
credit report, you’ll need access. Our Rental Application
advises applicants that they are responsible for lifting
the freeze so that you can receive a copy of their report.
If they fail to do so, the application will be incomplete,
which is grounds for rejecting that application.
(CC§ 1785.11.2(h).)
See If Any “Tenant-Reporting
Services” Operate in Your Area
Just as regular credit reporting agencies keep tabs on
retail purchasers’ creditworthiness, businesses such
as UD Registry of Van Nuys keep tabs on eviction
suits (called unlawful detainer, hence the “UD”)
filed against tenants. The fact that a tenant has been
involved in an eviction lawsuit, regardless of the
outcome, can be reported by the tenant-reporting
services. (These agencies will have a difficult time,
however, learning of eviction lawsuits that the tenant
won, as explained below.) Your local apartment
association may recommend other services of this
type. Tenant-reporting services charge from $50
to $100. As with credit reporting agencies, if you
don’t rent to an applicant because of information
from a tenant-reporting service, you must notify the
applicant of the nature of the report and provide the
name and address of the company.
Check With the Tenant’s Bank to
Verify Account Information
If an individual’s credit history raises questions
about financial stability, you may want to take
this additional step. If so, you’ll probably need an
authorization form such as the one included at the
bottom of the Rental Application, or the separate
Consent to Background and Reference Check form.
Banks differ as to the type of information they will
provide over the phone. Generally, banks will at
most only confirm that an individual has an account
and that it is in good standing.
Be wary of an applicant who has no checking
or savings account. Perhaps the bank dropped the
individual after many bounced checks.
Review Court Records
If your prospective tenant has lived in the area, you
may want to review local court records to see if
the tenant has been sued in a collection or eviction
lawsuit. Checking court records may seem like
overkill, but now and then it’s an invaluable tool if
you suspect a prospective tenant may be a potential
troublemaker. Since court records are kept for several
years, this kind of information can supplement
references from recent landlords. You can get this
information from the superior court for the county in
which the applicant lived.
Tenant-friendly legislation narrows your ability
to learn whether an applicant has been involved
in an eviction lawsuit. Courts are required to keep
records on eviction lawsuits secret and sealed for 60
days from the date the landlord filed the unlawful
detainer complaint. If the tenant wins the case
within that 60 days, the court must keep the records
sealed indefinitely. For eviction lawsuits following
foreclosure of rental property, the court must keep
the records sealed indefinitely, unless the new owner
obtains a judgment after trial against the tenant
within 60 days of bringing suit. (See Chapter 9, “Civil
Lawsuits Involving a Tenant.”)
You’ll need to go in person and ask the civil clerk
to show you the Defendants’ Index, often available
electronically at court terminals for public use, or in
microfiche form. If a prospective tenant’s name is
listed, jot down the case number so you can check
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the actual case file for details on the lawsuit and its
resolution. You can often determine if a prospective
tenant asserted a reasonable defense and if any
judgment against the tenant was paid off.
Checking the Megans Law Database
For many years, the California Department of Justice
(“DOJ”) has maintained a database on the names and
whereabouts of felons who have been convicted of
violent sexual offenses and offenses against minors.
The DOJ has made the information available on
its website, which should be viewed only by those
seeking to “protect a person at risk.” (Penal Code
§ 290.46(j)(1).)
Unfortunately, the law does not define the term
“at risk.” Common sense would suggest that women
and children fit within this category, and that, at the
very least, landlords who have multiunit properties
in which women and children already reside would
be permitted to check the database to protect these
tenants. But what about a landlord whose current
tenants happen to be men, but who correctly realizes
that it’s quite possible that subsequent tenants will
be women and families? (After all, it’s illegal to
discriminate against women or families.) Must this
landlord use the website to screen applicants in order
to protect future tenants? And suppose a landlord rents
a single-family residence, but there are women and
children next door or nearby? Can this landlord use the
website to look out for the safety of these neighbors?
We don’t know the definite answers to these
questions. The issue is troubling because the law
makes landlords liable for large money damages if
they knowingly or even carelessly expose tenants
to dangerous conditions, including dangerous
neighborsand to avoid lawsuits, smart landlords
check the backgrounds of prospective tenants very
carefully. For example, a landlord who rented to a
repeat pedophile and failed to check references might
be liable if that applicant later injured another tenant.
Yet landlords may also be liable if they deny housing
to someone whose name they’ve found on the website
database unless they are acting to protect someone at
risk. It seems that landlords are caught between their
duties to protect other tenants and also not to use the
website database for an illegal purpose.
You’ll need to evaluate each situation on its own,
keeping in mind that your duty to watch out for the
welfare of others begins with your own tenants and is
somewhat less with respect to neighbors or strangers
or future tenants.
CAUTION
e usefulness of California’s Megan’s Law
database is debatable. Investigative reports by journalists
suggest that the records are outdated and incomplete.
Although the Department of Justice is charged with updating
the website on an “ongoing basis,” there’s no guarantee that
the information going up will be current. e lesson for
landlords is clear: Make sure that you dont stint on checking
with references, prior landlords, and employers. orough
checking on all fronts will usually reveal the facts.
Do Not Request Proof of, or Ask
About, Immigration Status
Some of you may wish to make sure that every person
you rent to has a legal right to be in the United States.
However sensible you might think it is to know about
the legal status of your tenants or prospects, it is
illegal to ask them. (CC § 1940.3.) Do not, under any
circumstances, ask any actual or prospective tenants
about their immigration status, including whether they
are legally in this country or what kind of visa they
hold. Any local law that requires landlords to make
such inquiries has been invalidated by state law.
However, if you hire a tenant as an employee (such
as a resident manager) you must take certain steps to
determine whether the employee has the right to work
in the United States. Even then, all you can do is ask
an employee, once hired, to fill out IRS Form I-9. All
employers are required by federal law to check right-
to-work status by giving new hires this form to fill out.
Do not ask any questions about immigration status.
Just hand your employee the form and make sure that
the employee has shown you documents that appear
to satisfy the requirements on the form.
Choosing—And Rejecting—
An Applicant
After you’ve collected applications and done some
screening, you can start sifting through the applicants.
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23
Start by eliminating the worst risks: people with
negative references from previous landlords or a
history of nonpayment of rent, poor credit, or previous
evictions. Then make your selection.
Assuming you choose the candidate with the best
qualifications (credit history, references, income), you
should have no legal problem. But what if you have
several more or less equally qualified applicants? The
best response is to use an objective tie-breaker. Give
the nod to the person who applied first. But be extra
careful not to always select a person of the same age,
sex, or ethnicity among applicants who are equally
qualified. For example, if you are a large landlord who
frequently chooses among lots of qualified applicants,
and who always avoids an equally qualified minority
or disabled applicant, you are exposing yourself to
charges of discrimination.
See Chapter 9 for a detailed discussion on how
to avoid illegal discrimination when choosing an
applicant.
Record Keeping
A crucial reason for any tenant-screening system is to
document how and why you chose a particular tenant.
Be sure to note your reasons for rejection—such as
poor credit history, pets (if you don’t accept pets),
insufficient income relative to the rent, a negative
reference from a previous landlord, or your inability to
verify information—on the Tenant References form or
Federal Disposal Rule
All businesses, including landlords and employers, must
take steps to safeguard and eventually destroy applicants’
and tenants’ credit reports and any information the landlord
keeps that’s derived from these reports. is “Disposal Rule”
was issued by the Federal Trade Commission (FTC), which
was charged with implementing the Fair and Accurate Credit
Transactions Act (the “FACT Act”). e rule applies to all
businesses, even one-person landlords. Here are the important
rules:
Safe retention. Anyone in possession of a credit report
is legally required to keep these reports in a secure location,
in order to minimize the chance that someone will use the
information for illegal purposes, including identity theft.
Store these reports, and any other documents that include
information taken from them, in a locked cabinet. Give
access only to known and trusted people, and only on a
need-to-know basis. Use a closely guarded pass word if you
put reports (or informa tion derived from them) on your
computer or PDA (such as a BlackBerry).
Destroy unneeded reports. e FACT Act requires you
to dispose of credit reports and any information taken from
them when you no longer need them. Deter mine when
you no longer have a legitimate busi ness reason to keep an
applicant’s or tenant’s credit report. Unfortunately, you may
need these reports long after you’ve rejected or accepted an
applicant—they may be essential in refuting a fair housing
claim. Under federal law, such claims must be filed within
two years of the claimed discrimination, but some states set
longer periods. Keep the records at least two years and
longer if your state gives plaintiffs extra time to sue.
Destroy reports routinely. Establish a system for
dumping old credit reports. Don’t rely on haphazard file
purges to keep you legal. Establish a purge date for every
applicant for whom you pull a report and use a tickle
system to remind you.
Choose an effective destruction method. e
Disposal Rule requires you to choose a level of document
destruction that is reasonable in the context of your
business. For example, a landlord with a few rentals
would do just fine with an inexpensive shredder, but
a multiproperty owner might want to contract with a
shredding service.
Don’t forget computer files. You must delete computer
files that include credit reports or informa tion from them
when you no longer need them. Use a utility that will erase
the data completely, by deleting not only the directory, but
the text as well.
e Disposal Rule comes with teeth for those who
willfully disregard it—those who know about the law and
how to comply, but deliberately refuse to do so. You could
be liable for a tenant’s actual damages (say, the cost of
covering a portion of a credit card’s unauthorized use), or
damages per violation of between $100 and $1,000, plus
the tenant’s attorney fees and costs of suit, plus punitive
damages. e FTC and state counterparts can also enforce
the FACT Act and impose fines.
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separate paper. Keep organized files of applications,
credit reports, and other materials and notes on
prospective tenants for at least three years after you
rent a particular unit (but see “Federal Disposal Rule,
above, for your duties for disposal).
These Tenant References forms may become
essential evidence in your defense if a disappointed
applicant complains to a fair housing agency or sues
you for discrimination. With your file cabinet full of
successful and unsuccessful applications, you can:
•find the applicant’s form and point to the stated,
nondiscriminatory reason you had for denying
the rental. Of course, the rejection must be
supported by the facts—you can’t reject on the
basis of a negative employer reference if you
never called the employer, and
•pull out other applications that show that you
consistently rejected applicants with the same
flaw (such as insufficient income), regardless of
color, religion, and so on. This kind of documen-
tation will make it difficult for someone to claim
there was a discriminatory motive at work.
Another reason to back up your decisions and keep
applications on file is that a rejected applicant may
want you to explain your reasons, apart from any
claim of discrimination, as explained below.
TIP
Make sure you organize and update your
records after a tenant moves in. Set up an individual file for
each new tenant, including the tenant’s rental application,
references, credit report, signed lease or rental agreement, and
the Landlord/Tenant Checklist (discussed in Chapter 7). After
a tenant moves in, keep copies of your written requests for
entry, rent increase notices, records of repair requests and how
and when they were handled, and any other correspondence
or relevant information. A good system to record all significant
tenant complaints and repair requests will provide a valuable
paper trail should disputes develop later—for example, over
your right to enter a tenant’s unit or the time it took for you
to fix a problem. Be sure to keep up to date on the tenant’s
phone number, place of work, and emergency contacts.
You should also note the tenant’s bank. (You can get this
information from the monthly rent check.) If a tenant leaves
owing you money above the security deposit amount and you
sue and receive a court judgment, you may be able to collect
that money from wages or a bank account.
Information You Must Provide
Rejected Applicants
The Fair Credit Reporting Act, as amended by the
Fair and Accurate Credit Transactions Act of 2003,
requires you to give certain information to applicants
whom you reject (or take other negative action toward)
as the result of a report from a credit reporting agency
(credit bureau), a tenant-screening or reference service,
or any other third party (except your own employees).
(15 U.S.C. §§ 1681 and following.) Known as “adverse
action reports,” these notices must be given not only to
applicants who are rejected, but also to those whom you
accept with qualifications, such as requiring a cosigner
on the lease, a higher deposit, or more rent than others
pay based on the report. The federal requirements do
not apply if your decision is based on information that
you (or your employee) gathered on your own.
If you do not rent to someone (or you impose
qualifications) because of negative information (even
if other factors also played a part in your decision) or
due to an insufficient credit report, you must give the
applicant the name and address of the agency that
provided the credit report. You must tell applicants
that they have a right to obtain a copy of the file from
the agency that reported the negative information,
by requesting it within the next 60 days. You must
also tell rejected applicants that the credit reporting
agency did not make the decision to reject them as a
tenant and cannot explain the reason for the rejection.
Finally, you must tell applicants that they can dispute
the accuracy of their credit report and add their own
consumer statement to their report.
Use the Notice of Denial Based on Credit Report
or Other Information form, (see the sample shown
below), to comply with the federal Fair Credit
Reporting Act when you reject an applicant because of
an insufficient credit report or negative information in
the report.
FORM
You’ll find a downloadable copy of the Notice of
Denial Based on Credit Report or Other Information on the
Nolo website. See Appendix B for the link to the forms in this
book.
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25
Notice of Denial Based on Credit Report or Other Information
To:
Your rights under the Fair Credit Reporting Act and Fair and Accurate Credit Transactions (FACT) Act of 2003.
(15 U.S.C. §§ 1681 and following.)
THIS NOTICE is to inform you that your application to rent the property at
has been denied because of [check all that apply]:
Insu cient information in the credit report provided by:
Negative information in the credit report provided by:
e consumer-credit-reporting agency noted above did not make the decision not to off er you this rental. It only provided
information about your credit history. You have the right to obtain a free copy of your credit report from the consumer-
credit-reporting agency named above, if your request is made within 60 days of this notice or if you have not requested a
free copy within the past year. You also have the right to dispute the accuracy or completeness of your credit report.  e
agency must reinvestigate within a reasonable time, free of charge, and remove or modify inaccurate information. If the
reinvestigation does not resolve the dispute to your satisfaction, you may add your own “consumer statement” (up to 100
words) to the report, which must be included (or a clear summary) in future reports.
Information supplied by a third party other than a credit-reporting agency or you. You have the right to learn of the nature of
the information if you ask me in writing within 60 days of learning of this decision.  is information was gathered by someone
other than myself or any employee.
Date Landlord/Manager
Ryan Lester
1 Main Street
Vallejo, CA 94503
3 Field Street, Vallejo, CA 94503
3 ABC Credit Bureau, 310 Gonzales Way, Oakland, CA
94607; Phone: 510-555-1234; www.abccredit.com
3
10-01-20xx Jan McGillis
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Holding Deposits
Accepting a holding deposit is legal, but we don’t
advise it. This type of deposit is usually offered by
applicants who want to hold a rental unit pending the
result of a credit check, or until they can come up with
enough money for the rent and a formal deposit. Why
not take a holding deposit? Simply because it does you
little or no good from a business point of view, and all
too often results in misunderstandings or even legal
fights.
exAmple: A landlord, Jim, takes a deposit of
several hundred dollars from a prospective
tenant, Michael. What exactly is Jim promising
Michael in return? To rent him the apartment?
To rent Michael the apartment only if his credit
checks out to Jim’s satisfaction? To rent to Michael
only if he comes up with the rest of the money
before Jim rents to someone who comes up with
the first month’s rent and deposit? If Jim and
Michael disagree about the answers to any of
these questions, it can lead to needless anger and
bitterness. This can sometimes even spill over into
a small claims court lawsuit alleging breach of
contract.
Another prime reason to avoid holding deposits
is that the law is very unclear as to what portion of
a holding deposit a landlord can keep if a would-be
tenant changes his mind about renting the property or
doesn’t come up with the remaining rent and deposit
money. The basic rule is that a landlord can keep
an amount that bears a “reasonable” relation to the
landlord’s costs, for example, for more advertising and
for prorated rent during the time the property was held
vacant. Keeping a larger amount will amount to an
unlawful penalty.
If, contrary to our advice, you decide to take a
holding deposit, it is essential that both you and your
prospective tenant have a clear understanding. The
only way to accomplish this is to write your agreement
down, preferably on the holding deposit receipt,
including the amount of the deposit, the dates you will
hold the rental property vacant, the term of the rental
agreement or lease, and conditions for returning the
deposit.
We’ve provided you with a sample Receipt and
Holding Deposit Agreement that you can adapt to
your situation—it will work for a lease or a month-to-
month agreement. If your agreement to rent property
to a particular individual is not contingent upon your
receiving a credit report and satisfactory references,
simply delete this sentence from the last paragraph of
the form.
FORM
You’ll find a downloadable copy of the Receipt
and Holding Deposit Agreement on the Nolo website. See
Appendix B for the link to the forms in this book.
ChApter 1 |RENTING YOUR PROPERTY
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27
Receipt and Holding Deposit Agreement
is will acknowledge receipt of the sum of $ by
(“Landlord”) from
(“Applicant”) as a holding deposit to hold vacant the rental property at
, until at .
e property will be rented to Applicant on a basis at a rent of $ per month, if
Applicant signs Landlord’s written and pays Landlord the fi rst months rent
and a $ security deposit on or before that date, in which event the holding deposit will be applied to the fi rst
month’s rent.
is Agreement depends upon Landlord receiving a satisfactory report of Applicants references and credit history. Landlord
and Applicant agree that if Landlord o ers the rental but Applicant fails to sign the Agreement and pay the remaining rent and
security deposit, Landlord may retain from this holding deposit a sum equal to the prorated daily rent of $
per day until the unit is rerented, plus a $ charge to compensate Landlord for lost rents and the time and
expense incurred by the need to rerent.
Date Applicant
Date Landlord
500 Jim Chow
Michael Blake
123 State Street, City of Los Angeles, California
February 5, 20xx 5 P.M.
month-to-month 2,000
rental agreement
2,000
67
50
February 2, 20xx Michael Blake
February 2, 20xx J Ch
l
CHAPTER
2Understanding Leases and Rental Agreements
Oral Agreements Are Not Recommended .................................................................................................31
Written Agreements: Which Is Better, a Lease or a Rental Agreement? ................................ 32
Month-to-Month Rental Agreement ........................................................................................................ 32
Fixed-Term Lease .................................................................................................................................................. 33
Variations on the Standard One-Year Lease .......................................................................................... 34
Foreign Language Note on California Leases and Rental Agreements .................................... 35
Common Legal Provisions in Lease and Rental Agreement Forms ............................................36
How to Modify and Sign Form Agreements ............................................................................................. 54
Before the Agreement Is Signed ................................................................................................................... 58
Signing the Lease or Rental Agreement ................................................................................................... 58
After the Agreement Is Signed ..................................................................................................................... 58
Cosigners ........................................................................................................................................................................ 58
e Practical Value of a Cosigner ................................................................................................................ 60
Cosigners and Disabled Applicants ............................................................................................................60
Accepting Cosigners ........................................................................................................................................... 60
Illegal Lease and Rental Agreement Provisions ...................................................................................... 60
Waiver of Rent Control Laws ........................................................................................................................ 60
Liquidated Damages Clauses ..........................................................................................................................61
Waiver of Repair-and-Deduct Rights ........................................................................................................ 62
Right of Inspection ............................................................................................................................................. 62
Provision at the Landlord Is Not Responsible for Tenant Injuries or
Injuries to a Tenant’s Guests ...................................................................................................................... 62
Provision Giving Landlord Self-Help Eviction Rights ......................................................................... 62
Waiver of Right to Legal Notice, Trial, Jury, or Appeal .................................................................... 63
Waiver of Right to Deposit Refund ........................................................................................................... 63
Restricting Tenants’ Access to Other Tenants’ Units for Distributing Literature .............. 63
Shortening the Termination Notice Period............................................................................................ 63
Requiring the Tenant to Give Notice on a Specific Day .................................................................. 63
Requiring the Tenant to Pay Rent in Cash or Online ........................................................................ 64
Other Illegal Provisions .................................................................................................................................... 64
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FORMS IN THIS CHAPTER
Chapter 2 includes instructions for and samples of the following forms:
• Fixed-Term Residential Lease
• Month-to-Month Residential Rental Agreement
• Attachment to Lease or Rental Agreement
• Attachment: Agreement Regarding Use of Waterbed, and
• Amendment to Lease or Rental Agreement.
e Nolo website includes downloadable copies of these forms (the lease and rental
agreement forms are in both English and Spanish). See Appendix B for the link to the forms in
this book.
ChApter 2 |UNDERSTANDING LEASES AND RENTAL AGREEMENTS
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31
I
t is essential that every landlord understand
California law as it applies to rental agreements and
leases. Let’s begin with the basics. There are three
legal ways to create residential tenancies:
•oral rental agreements
•written leases, and
•written month-to-month rental agreements.
We’ll look at each of these types of agreements in
detail and provide sample lease and rental agreement
forms with a description of each specific clause. We’ll
also point out illegal lease and rental agreement
provisions.
Oral Agreements Are
Not Recommended
Oral (spoken) leases or rental agreements are perfectly
legal and enforceable for month-to-month tenancies
and for leases for a year or less (although there’s some
information you must write down, as explained below).
(CC § 1624.) Typically, you agree to let the tenant
move in, and the tenant agrees to pay a set amount
of rent, once or twice a month or even weekly. Years
ago, the amount of notice that you needed to give a
tenant to raise the rent or terminate the tenancy was
pretty simple—it corresponded to the frequency of the
rent payment. Now, however, the notice periods vary
considerably, depending on the size of the rent raise
and, for terminations, the duration of the tenancy and
the identity of whos doing the terminating (landlord or
tenant). These complications (explained in Chapters 14
and 18) are powerful reasons to use our written rental
agreement, in which the rules are specified.
While oral agreements are easy and informal,
it is rarely wise to use one. As time passes and
circumstances change, people’s memories (including
yours) have a funny habit of becoming unreliable. You
can almost count on tenants claiming that certain oral
promises weren’t kept or “forgetting” key agreements.
Most landlords choose to impose conditions on
the tenancy, such as regulating or prohibiting pets
and subletting. In addition, landlords often include a
clause providing the landlord with the right to recover
attorney fees if it is necessary to evict a tenant.
Oral leases, while legally enforceable (for up to one
year), are even more dangerous than oral rental agree-
ments, because they require that one important term
the length of the leasebe accurately remembered
by both parties over a considerable time. If something
goes wrong with an oral agreement, the parties are all
too likely to end up in court, arguing over who said
what to whom, when, and in what context.
This book is based on the assumption that you will
always use either a written rental agreement or a lease.
Information You Must Provide
the Tenant in Writing
Even if every other aspect of your rental agreement or lease
is reflected in an oral agreement, you must write down
certain information and give it to the tenant:
• the name, phone number, and address of the
manager, if any
• the name, phone number, and address of the
owner or someone authorized to accept service
of process and all notices and demands from the
tenant
• the name, phone number, and address of the
person authorized to receive rent (if rent may be
paid personally, include the days and hours that
the person will be available to receive payments),
and
• the form in which rent may be paid, such as check,
money order, or cash.
e law also specifies how to deliver this information.
You can include it in a written document that you give
to the tenant (such as a lease, rental agreement, or
other writing), post it in an elevator and one additional
conspicuous place on the property, or post it in two
conspicuous places. is information must be supplied
within 15 days of entering into an oral agreement and
once a year, on 15 days’ notice, if requested by the
tenant. You must keep the information up to date. (CC
§§ 1962 and 1962.5.)
If you fail to give this notice, or to keep it current, you
will be barred from evicting a tenant for nonpayment
of rent that accrued during any period you were not in
compliance with this request.
After you’ve gone to the trouble of supplying this
written information (you could model your form on
Clauses 5 and 23 of our written agreements), you’ll
realize that you may as well use our written rental
agreement or lease, which provides places for you to
convey the details.
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Written Agreements:
Which Is Better, a Lease or
a Rental Agreement?
There are two kinds of written landlord/tenant
arrangements:
•rental agreements, and
•leases.
Written rental agreements provide for a tenancy for
an indefinite period of time, and can be terminated
by either party by the giving of a written notice, very
commonly 30 days. Where the rent is paid monthly,
these are called “month-to-month” tenancies. They
automatically renew each month (or other time period
agreed to in writing) unless one of the parties gives
the other the proper amount of written notice to
terminate the agreement. The notice period is 30 days
for a month-to-month tenancy that has lasted less than
a year, 60 days if the tenant has rented for a year or
more, and 90 days if the tenant’s rent is government-
subsidized under a contract between the landlord and
a housing agency (CC § 1954.535), or in some cases,
after a new owner has purchased the property at a
foreclosure sale. See “Rental Properties Purchased at
Foreclosure” in Chapter 18.
The rental agreements in this book are month to
month.
With a written lease, you fix the term of the
tenancy—most often for six months or a year, but
sometimes longer. At the end of the lease term, you
have a few options. You can:
•decline to renew the lease
•sign a new lease for a set period, or
•do nothing—which means your lease will
convert to a month-to-month tenancy if you
continue to accept monthly rent from the tenant.
There isn’t much legal difference between a lease
and a rental agreement—with the exception, of course,
of the period of occupancy. To decide whether a lease
or rental agreement is better for you, read what follows
and carefully think about your own situation.
Month-to-Month Rental Agreement
When you rent property under a month-to-month
rental agreement, these rules apply:
•On 30 or 60 days’ written notice, you may change
the amount of rent (subject to any rent control
ordinances). You may increase (or decrease)
the amount of rent in all areas that don’t have
rent control ordinances on 30 days’ notice. For
increases over 10%, 60 days’ notice is required.
(See Chapter 14 for guidance on understanding
the 60-day situation.) Cities with rent control
ordinances may restrict the amount of rent you
may charge or add requirements for notifying the
tenant of a rent increase. (See Chapter 4 for more
on rent control.)
•On 30 days’ written notice, you may change other
terms of the tenancy. You may make other changes
in the terms of the tenancy on 30 days’ notice,
such as increasing the deposit amount (if youre
not charging the maximum allowed by law),
adding or modifying a no-pets clause, or making
any other reasonable change. Again, however,
cities with rent control ordinances may restrict
your right to do this.
•You may end the tenancy with 30 (or 60 or 90) days’
written notice. You may end a tenancy at any
time on 30 days’ notice if the tenant has stayed
less than a year, and on 60 days’ notice if the
tenancy has lasted a year or more. However, there
are some widespread exceptions: Rent control
ordinances in some cities do not allow this type of
termination; and government-subsidized tenancies
require 90 days’ notice. (See Chapter 18 for more
information on the 60-day requirements.)
$
RENT CONTROL
Under just-cause eviction provisions of
rent control ordinances in cities such as Los Angeles
and San Francisco, you must have a good reason—one
of those listed in the ordinance—to evict a tenant. We
discuss rent control in detail in Chapter 4.
•A tenant who wants to leave needs to give you
only 30 days’ notice. A month-to-month tenancy
might mean more tenant turnover. Tenants who
know they may legally move out with only 30
days’ notice may be more inclined to do so
than tenants who make a longer commitment.
If you live in an area where it’s difficult to find
tenants, you may wisely want tenants to commit
for a longer time period, such as a year. But
as discussed below, a fixed-term lease can’t
guarantee against turnover, either.
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33
Fixed-Term Lease
With a fixed-term lease, these rules apply:
•You can’t raise the rent until the lease runs out. The
only exception is where the lease specifies a
specific increase in rent (and local rent control
laws don’t limit rent increases). It’s important
that the rent increase date and amount be stated
and certain (such as, “on June 1, 20xx, rent will
increase by $50”). A court will not enforce a
vague statement that the landlord has the right to
increase the rent.
•You can’t change other terms of the tenancy. A lease
is a contract whose terms are fixed for the lease
period. Changes are allowed only where the
lease says they’re allowed, or where the tenant
agrees in writing to a modification of the terms.
•You usually can’t evict before the lease term expires.
Unless the tenant fails to pay the rent or violates
another significant term of the lease, such as
repeatedly making too much noise or damaging
the property, youre stuck with the tenant until
the lease term runs out. (The eviction process
and rules are described in Chapter 18.)
•You may reduce your turnover rate. Many people
make a serious personal commitment when they
enter into a long-term lease, in part because they
think they’ll be liable for quite a few months’
rent if they up and leave.
This last reason merits some explaining. It used to
be that the major advantage of leasing for fixed terms,
such as a year or more, was that a landlord obtained
a fair degree of security. The tenant was on the hook
to pay for a greater length of time than provided by
month-to-month agreements. A tenant who broke
the lease and left before it expired was still legally
responsible for the rent for the entire lease term. And, if
the tenant could be located, the landlord could sue and
obtain a court judgment for the balance of the rent.
This is no longer true in most circumstances.
Nowadays, landlords who sue the departing (lease-
breaking) tenant for the rent due for the rest of the
lease term are required to “mitigate” (or minimize)
the financial consequences the tenant would suffer as
a result of the broken lease. That means the landlord
must use reasonable efforts to rent the unit to another
suitable tenant. If the landlord rerents the unit (or if
a judge believes it could have been rerented with a
reasonable amount of effort), the lease-breaking tenant
is off the hook except for the months that the unit was
vacant while the landlord searched.
This all adds up to a simple truth: A lease no longer
provides much income security to a landlord. Indeed,
a lease is now something of a one-way street running
in the tenant’s direction. This is because, especially in
a tight market, the mitigation-of-damages rule allows
a tenant to break a lease with little or no financial
risk. And, even if the tenant does end up owing the
landlord some money for the time the unit was empty,
collecting the money can be more trouble than it is
worth. (We discuss tenants’ moving out and breaking
leases in detail in Chapter 19.) Not surprisingly,
many landlords prefer to rent from month to month,
particularly in urban areas where new tenants can
often be found in a few days.
There can still be, however, practical advantages
to leasing for a fixed period, despite these legal rules.
You’ll probably prefer to use leases in areas where
there is a high vacancy rate or it is difficult to find
tenants. Remember, if you can’t find another suitable
tenant to move in, the former tenant whose lease
hasn’t expired is still liable for the rent. So, if you are
renting near a college that is in session only for eight
months a year, or in a vacation area that is deserted
for months, you are far better off with a year’s lease.
Remember, though, that a seasonal tenant is almost
sure to try to get someone to take over the tenancy,
and unless you have sound business reasons for
rejecting the substitute, youll be stuck with himor
you’ll lose your legal right to ask for more damages
from the departing tenant.
Offer a Lease in Palo Alto
e city of Palo Alto requires all landlords owning
buildings of two or more units (except duplexes in which
the owner occupies one of the units) to offer tenants
one-year leases at the outset, and upon expiration of the
previous lease. (Palo Alto Municipal Code §§ 9.68.010
through 9.68.050.) Tenants who don’t want a one-year
lease must decline it in writing. e landlord’s failure to
comply results in a defense for the tenant in an eviction
lawsuit, even one based on nonpayment of rent.
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THE CALIFORNIA LANDLORD’S LAW BOOK: RIGHTS & RESPONSIBILITIES
Tenants Who May Break a Lease
or Rental Agreement
Two groups of tenants have special rights to break a lease
without responsibility for future rent.
• e Servicemembers’ Civil Relief Act helps active
duty military personnel handle legal affairs. (50
App. U.S.C.A. §§ 501 and following.) Among its
provisions, it allows tenants who enter active
military service (or are called up to the National
Guard for more than one month at a time) after
signing a lease or rental agreement to break the
lease or agreement. Chapter 19 explains the
procedures.
• Victims of domestic violence, stalking, or sexual
assault may break a lease on 30 days’ notice.
(CC§ 1946.7.) Chapter 19 explains the procedures.
Tenants may also have the right to break a lease and
move out early due to defective conditions in the rental
premises (as discussed in Chapter 11).
Variations on the Standard
One-Year Lease
If youre planning to use a lease, chances are you’ll
select a standard one-year lease. But there are other
options available. Here are a few.
Long-Term Leases
Most leases run for one year. This makes sense, as
it allows you to raise the rent at reasonably frequent
intervals if market conditions allow. Leasing an
apartment or house for a longer period—two, three,
or even five yearscan be appropriate, for example,
if you’re renting out your own house because you’re
taking a two-year sabbatical.
One danger with a long-term lease is that inflation
can eat away at the real value of the rent amount. A
good way to hedge against this danger in all leases
of more than a year is to provide for annual rent
increases that are tied to Consumer Price Index (CPI)
increases during the previous year.
Here is a sample clause:
Landlord and Tenant agree that the rent will increase
on the day of the month of each year
by the same percentage as the regional and most local
Consumer Price Index has increased during the previous
twelve months.
The Consumer Price Index most commonly used
is the “All-Urban Consumers” for the nearby large
metropolitan area. The U.S. Department of Labor
publishes figures for the Los Angeles/Long Beach/
Anaheim/Santa Monica/Santa Ana area and the San
Francisco/Oakland/San Jose area each May. In Los
Angeles, the figure is published each May 30 by the
Community Development Department. Other cities’ rent
control boards keep records of the applicable figure,
even where the rent increase allowed each year isn’t
directly tied to the CPI. (See Chapter 4 on rent control.)
Stay on Top of the CPI
If you factor in a rent increase by tying it to the CPI,
you’ll need to get accurate information on the yearly
increase. Go to the Bureau of Labor Statistics website at
http://stats.bls.gov/news.release/cpi.toc.htm (or search
on the Consumer Price Index page at www.bls.gov/cpi).
For this sort of rent increase, no formal notice is
required. Simply send tenants a letter reminding them
of the lease term calling for the increase. Demonstrate
how you calculated the amount.
Options to Renew a Lease
An option to renew is essentially a standing offer to
renew the lease, offered by the landlord to the tenant,
which the tenant can accept or not in the manner and
time frame set forth in the option. The option-to-renew
concept is not commonly used in residential rentals,
but a tenant occasionally requests one.
We usually advise against using renewal clauses, for
several reasons. First, an option to renew a lease leaves
it entirely up to the tenant as to whether to continue
the tenancy. Without such an option, both the tenant
and the landlord must agree on a renewal. Remember,
by the time the lease is about to expire, you might
ChApter 2 |UNDERSTANDING LEASES AND RENTAL AGREEMENTS
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35
not want to continue the tenancy. Unless you receive
a very high guaranteed rent for the initial term, or a
lump-sum payment in consideration for including the
option clause, you have very little to gain and a lot to
lose by giving an option to renew.
Second, when the tenant exercises the option, the
new tenancy often continues on the same terms as
before, which may not be to your advantage. Heres
what happens: To be legal, option clauses must clearly
set forth the terms of the renewed tenancy, including
the new term, the rent (which can be different from
the rent for the first term if the option clause clearly
says so), and so forth. Most clauses do this by simply
referring to the initial lease terms. (An option clause
that leaves any significant term, such as rent or length
of term, to further negotiation, or words to that effect,
is of no effect and is not legally binding.) Since you
may be able to obtain a higher rent after the initial
term of six or 12 months, it’s obviously not in your
best interest to include an option that allows the tenant
to remain at the same rent. But since you don’t know
at the outset what a fair market rent would beor
whether you will become fed up with the tenant’s dogs
and decide to ban pets—you can’t provide for these
new terms.
Finally, drafting option clauses can be very tricky.
Even the slightest mistake may do you a great deal of
harm or, at the very least, render the option clause of
no effect and add uncertainty to the entire situation.
If you want to include a renewal or other option in a
lease, contact an attorney.
Options to Purchase
An “option to purchase” is a contract where an owner
leases a house (usually from one to five years) to a
tenant for a specific monthly rent (which may increase
during the contract term) and gives the tenant the right
to buy the house for a price established in advance.
Depending on the contract, the tenant can exercise the
option to purchase at any time during the lease period,
or at a date specified, or for a price offered by another
person who makes a purchase offer, subject to the
tenant’s “right of first refusal” to match the offered price.
If your property should be easy to sell, why share
your chance at future appreciation with a tenant? This,
in addition to the fact that drafting option clauses is
pretty difficult, should give you pause.
Here are some situations when you might consider a
tenant’s request for a lease option:
•you have a negative cash flow and think the
short-run return (initial option fee, higher-than-
normal rent, tax advantages) is worth it
•you plan to sell your property soon and think
that it might be difficult to sell, or
•you think your tenant will take better care of
your house, and perhaps even improve it.
Needless to say, never sign a purchase option,
whether included in a lease or not, without consulting
a lawyer. If youre thinking of selling, and a tenant
or prospective tenant asks for an option to purchase,
you might simply reply that youll consider selling at
the expiration of the lease. For a sample lease option
contract, see For Sale by Owner in California, by
George Devine (Nolo).
CAUTION
Don’t provide for an “automatic renewal” of the
lease term in your lease. Automatic renewals are valid only if
they are printed in boldface, 8-point type, directly above the
tenant’s signature. (CC § 1945.4.) But even if you do it right,
they are rarely a good idea. Tenants are likely to assume that
if they stay in the rental with your permission past the lease’s
ending date, they’ve become month-to-month tenants. (is
is, in fact, their legal status in the absence of a valid renewal
clause.) If you really want the tenant on the hook for a longer
period than specified in your lease, increase the lease term at
the outset instead of using a renewal clause.
Foreign Language Note
on California Leases and
Rental Agreements
If you and your tenant discuss your lease or written
month-to-month rental agreement primarily in Spanish,
Chinese, Tagalog, Vietnamese, or Korean, you must
give the tenant an unsigned version of the rental
document in that language before asking him to sign.
This rule does not apply (that is, you may present your
English version only) if the tenant has supplied his
own translator who is not a minor and who can speak
and read the particular language and English fluently.
If the translator is supplied by the tenant but does not
meet these two requirements, or if the translator is you
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THE CALIFORNIA LANDLORD’S LAW BOOK: RIGHTS & RESPONSIBILITIES
or someone in your employ or otherwise supplied by
you (for example, your fluent daughter), you will have
to present a foreign language version of your rental
document. (CC § 1632.)
Common Legal Provisions
in Lease and Rental
Agreement Forms
This section discusses each clause in the lease and
rental agreement forms provided in this book. The
instructions explain how to fill in the blanks and refer
you to the chapter that discusses important issues that
relate to your choices.
Except for the important difference in how long they
run (see Clause 4 in our forms), leases and written
rental agreements are so similar that they are sometimes
hard to tell apart. Both cover the basic terms of the
tenancy (such as amount of rent and date due). Except
where indicated below, the clauses are identical for the
lease and rental agreements included here. You should
use the one more appropriate to your rental needs.
A sample fixed-term lease is shown below; the only
clause that is different in the month-to-month rental
agreement (the term of the tenancy) is shown under
Clause 4, below.
FORM
e Nolo website includes downloadable copies
(in both English and Spanish) of the Fixed-Term Residential
Lease and the Month-to-Month Residential Rental Agree-
ment. See Appendix B for the link to the forms in this book.
CAUTION
Meet your legal responsibilities regarding
foreign language leases. If you use the Spanish language
version of the lease or rental agreement included on the Nolo
website, you will have to provide your own Spanish language
version of the information you add to the blanks. See “Foreign
Language Note on California Leases and Rental Agreements,”
above.
CAUTION
Choose your lease or rental agreement carefully!
In addition to the forms in this book, there are dozens of
different printed forms in use in California, and provisions
designed to accomplish the same result are worded differently.
Unfortunately, some of these agreements are written so
obtusely that it is hard to understand what they mean.
Ambiguous terms, fine print, and legalese will only lead to
confusion and misunderstanding with your tenants. Contrary
to what many form writers seem to believe, it is not illegal to
use plain English on lease and rental agreement forms. We
have done our best to provide clearly written agreements.
If you use a different form, be sure to avoid leases or rental
agreements with illegal or unenforceable clauses (more on this
below). You may need to use a special government lease if you
rent subsidized housing. (See Chapter 9.)
Clause 1. Identification of Landlord and Tenants
Every lease or rental agreement must identify the
landlord and the tenant(s)usually called the “parties”
to the agreement. Any competent adult—at least 18
years of age—may be a party to a lease or rental
agreement. (Teenagers under age 18 may also be a
party to a lease if they have achieved legal adult status
through a court order, military service, or marriage.)
Fill in the date you’ll be signing. Next, fill in the
names of all adults who will live in the premises,
including both members of a married couple or
registered domestic partners. If anyone else will be
financially responsible for paying the rent (even if they
won’t be living in the premises), list their names. See
the discussion of cosigners below.
In the last blank, list the names of all landlords
or property owners who will be signing the lease or
rental agreement.
The last sentence states that all tenants are jointly
and severally liable for paying rent and adhering to the
terms of the agreement. This means that each tenant is
legally responsible for the whole agreement and rent.
(How cotenants divide that rent among themselves
is up to them, not the landlord.) This protects the
landlord, who can legally seek full compensation
from any of the tenants (or terminate as to all for the
misdeeds of one) should a problem arise. Chapter 10
discusses the legal obligations of cotenants.
Clause 2. Identification of Premises
and Occupants
In this clause, you identify the property being rented
and who will live in it. The words “for residential
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purposes only” are to prevent a tenant from using the
property for conducting a business that might affect
your insurance or violate zoning laws.
In the first blank, fill in the street address of the
unit or house you are renting. If there is an apartment
number, specify that as well.
In shared housing situations, youll need to clearly
state, in your own words, what the rental includes.
exAmple: You are renting a small cottage in your
backyard that comes with kitchen privileges in
your house. You might fill in, “Back cottage at
1212 Parker St., Visalia, California, with kitchen
privileges in main house.
If you need more room, perhaps to explain exactly
what the kitchen privileges or other rental conditions
include, start by filling in the address of the property.
Then add the new information to the clause. Or
you can add the words “as more fully described in
Attachment 1 to this Agreement.” Next, prepare a
separate “Attachment 1” and define the particulars
of what you are renting. Staple the attachment to the
lease or rental agreement.
Note on garages and outbuildings. If any part of the
property is not being rented, such as a garage or shed
you wish to use yourself or rent to someone else,
make this clear by specifically excluding it from your
description of the premises. If you don’t, the tenant has
rented it.
exAmple: “Single-family house at 1210 Parker St.,
Visalia, California, except for the two-car garage.
In the last blank, list the names of any minor
children who will be living in the rental property, or
put “None,” as appropriate. If you are worried about
the possibility of overcrowding if the family has
more children, you should state the number of minor
children—“Two children, Adam and Amy.” But avoid
language that might be considered discriminatory
against children (for example, never write “and no
children,” or “… and only one child”).
You can legally establish reasonable space-to-
people ratios, but you cannot use overcrowding as an
excuse for refusing to rent to tenants with children.
Discrimination against families with children is illegal,
except in housing reserved for senior citizens only.
To avoid discriminating against families with
children, your safest bet is to adopt an across-the-
board “two-plus-one” policy: You allow two persons
per bedroom plus one additional occupant. Thus, a
landlord who draws the line at three people to a one-
bedroom, five to a two-bedroom, and seven to a three-
bedroom unit will be on safe ground in this regard.
(For a detailed discussion of occupancy limits and
discrimination, see Chapter 9.)
Clause 3. Limits on Use and Occupancy
This clause lets the tenants know they may not move
anyone else in as a permanent resident without your
consent.
When it comes to restricting how long guests may
stay, it usually makes sense to include a reasonable
time limit in your lease or rental agreement. The
agreements in this book allow up to ten days in any
six-month period. Even if you do not plan to strictly
enforce restrictions on guests, this provision will be
very handy if a tenant tries to move in a friend or
relative for a month or two, calling this person a guest.
It will give you leverage either to ask the guest to leave
or to request that the guest apply to become a tenant,
with an appropriate increase in rent (unless any rent
control ordinance forbids an increase). Restrictions
on guests may not be based on the age or sex of the
occupant or guest.
Clause 4. Defining the Term of the Tenancy
Clause 4 is the only clause that differs between the
fixed-term lease and month-to-month rental agreement
included in this book. See “Written Agreements: Which
Is Better, a Lease or a Rental Agreement?” above, for
details.
Lease Provision
The lease form contains the provision which sets a
definite date for the beginning and expiration of the
lease and it obligates both the landlord and the tenants
for a specific term. It also includes a warning that
explains the tenants’ liability for breaking the lease.
(See Chapter 19 for more details on tenant’s liability for
breaking a lease.)
In the blanks, fill in the starting date and the
expiration date. Leases usually last six, 12, or 24
months, but of course this is up to you and the
tenants.
See Clause 4 of the sample Fixed Term Residential
Lease shown below.
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Family Day Care Homes
Under state law (H&S § 1597.40), a landlord may not
prevent a tenant from using rental premises as a licensed
family day care home. A tenant who obtains a state license
to run a family day care home may do so legally—even
if your lease or rental agreement prohibits the operation
of a business on the premises, or limits the number of
occupants. Local zoning and occupancy limits don’t apply
to a state-licensed family day care home, though building
codes do, as explained further below.
A tenant who wants to run a child care operation must
obtain a state license to run a family day care home. Before
the county’s social services department will issue a license,
it will send a fire inspector or other official to examine the
space and determine whether the planned operation is
consistent with state law, as set out in the Uniform Building
Code (counties adopt this code, which is amended every
three years). e rules are as follows (2001 California Building
Code, California Code of Regulations Title 24, Part 2,
Volume 1):
Small family day care. ese are for eight or fewer
children (any children under ten who live in the rental
count toward the total). ese day cares are exempt from
state fire and life safety regulations. ough you must allow
them, state law does not regulate their placement in the
building, as is true for larger day cares.
Large family day care. ese are for nine to 14 children
(again, children of the tenant under the age of ten
count toward the total). ese operations are regulated
depending on the nature of the rental property:
• Single-family homes, duplexes, and townhouses.
Tenants may operate large day cares, but cannot
have children above the first floor unless the building
has fire sprinklers and a direct exit from the upstairs
to the outside. Large Family Day Cares must have
two exits remotely located from each other. e
exits can’t pass through a garage. Only one exit may
be a sliding door. Inspectors have denied a permit to
tenants in a townhouse whose second exit went to
an enclosed back patio area with no way out.
• Apartments and condominiums. Tenants cannot
operate a Large Family Day Care in rental units in
these buildings, but can operate a Small Family Day
Care, and can do so in upstairs units.
In addition to meeting the requirements explained
above, you may condition a day care operation on the
following reasonable and legal rules:
• e tenant must notify you in writing of his intent
to operate a family day care home—after having first
obtained a state license—30 days before starting the
child care operation.
• You may charge a tenant who operates a family day
care home a higher security deposit than you charge
tenants with similar units, without being liable for
illegal discrimination. e maximum dollar limits on
deposits—two months’ rent for unfurnished units
and three months’ rent for furnished units—still
apply. (See Chapter 5.)
If a tenant operates a day care facility, consider the
impact this may have on your insurance. If you have a
commercial policy (you’ll have one if landlording is your
business), chances are that there is no problem (confirm
this with your broker). But if you are renting out a home
that is insured under a homeowners’ policy, your policy may
not cover damage or claims that result from the tenant’s
business. Check with your agent or broker to find out.
(Unfortunately, you probably cannot require the tenant to
obtain his own liability policy, though no court case has
made this clear.)
A landlord who uses pesticides in a child care unit, in or
about the building, within ten feet of the building, and on
or near the day care facilitys play area, must issue a written
120-hour advance warning notice of the spraying or other
application of the pesticide. (Ed. Code § 17610(b).) is
notice must specify the pesticide’s name, manufacturer,
active ingredients, the federal EPA product registration
number, the date and locations of the application, and the
reasons you’re applying the pesticide.
is means that if you have reason to believe your tenant
is operating such a day care facility, you should probably
not apply any pesticides yourself, or have any manager or
other person do it, except through a licensed pest-control
company that can assure you such a notice will be delivered.
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39
Investigate Before Letting a
Tenant Run a Home Business
Millions of Californians run a business from their house
or apartment. If a tenant asks you to modify Clause 2
to permit a business, you have some checking to do—
even if you are inclined to say yes.
For one, you’ll need to check local zoning laws for
restrictions on home-based businesses, including the
type of businesses allowed (if any), the amount of
added car and truck traffic the business can generate,
outside signs, on-street parking, the number of
employees, and the percentage of floor space devoted
to the business. In Los Angeles, for example, dentists,
physicians (except for psychiatrists), and unlicensed
massage therapists may not operate home offices. In
addition, photo labs and recording studios are banned.
Keep in mind that you may not be able to restrict a
child care home business in California. See “Family Day
Care Homes,” above, for details. Also, if your rental unit is
in a planned unit or a condominium development, check
the CC&Rs of the homeowners’ association.
You’ll also want to consult your insurance company
as to whether you’ll need a more expensive policy to
cover potential liability of employees or guests. In many
places, a home office for occasional use will not be a
problem. But if the tenant wants to operate a business,
especially one with people and deliveries coming and
going, such as a therapy practice, jewelry importer,
or small business consulting firm, your insurance
coverage may become an issue. Also, you should
seriously consider whether neighboring tenants will be
inconvenienced. (Where will visitors park, for example?)
You may also want to require that the tenant
maintain certain types of liability insurance, so that you
won’t wind up paying if someone gets hurt on the rental
property—for example, a business customer who trips
and falls on the front steps. And you may want to insist
that you be added as “additional insured” on the tenant’s
policy, which will protect you if you are sued because
your tenant acted carelessly toward his customer or
client. (As noted earlier, you probably cannot make this a
requirement for a licensed day care business.)
Finally, be aware that if you allow a residence to be used
as a commercial site, your property may need to meet the
accessibility requirements of the federal Americans with
Disabilities Act (ADA). For more information on the ADA
check the ADA website at www.ada.gov.
Rental Agreement Provision
Clause 4 is the only clause that differs between the
fixed-term lease and month-to-month rental agreement
included in this book. See “Written Agreements: Which
Is Better, a Lease or a Rental Agreement?” above, for
details.
Here’s the language you’ll see for Clause 4 of the
rental agreement:
4. Defining the Term of the Tenancy. e rental will
begin on , 20 , and will
continue on a month-to-month basis. is tenancy
may be terminated by Landlord or Tenants and may
be modified by Landlord, by giving 30 days’ written
notice to the other, or 60 days’ notice by Landlord to
Tenant, in accordance with Civil Code Section 827 or
1946.1 (subject to any local rent control ordinances
that may apply).
In the blank, fill in the date the tenancy will begin.
With this clause, youll normally need to give tenants
30 days’ written notice before changing or terminating
their tenancy. (You’ll need to give 60 days’ notice for
a rent increase of more than 10% or to terminate a
tenancy that’s lasted a year or more, and 90 days to
terminate a government-subsidized tenancy.) (See
Chapters 14 and 18.) (CC §§ 827(b), 1946.1, 1954.535.)
While 30 or 60 days is the most common notice
period, you may want to agree that the tenants get a
longer notice periodsay 75 or 90 days; if so, change
the clause accordingly. Interestingly, when tenants
have stayed for a year or more, they need give only 30
days’ notice to terminate the tenancy—but the landlord
must give 60 days’. Some landlords report that they
file fewer eviction lawsuits when they give tenants
a generous amount of time in which to find another
place.
CAUTION
Don’t reduce the tenants notice period.
Agreements reducing the notice period for terminating
the tenancy to as few as seven days used to be legal under
CC§ 1946. We think such provisions are illegal as of January
1, 2007, when Section 1946.1 became effective. Section 1946.1
does not refer to the possibility of a shortened notice period.
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$
RENT CONTROL
A landlord’s right to terminate or change the
terms of a tenancy, even one from month to month, is
limited by local rent control ordinances. Such ordinances
not only limit rent and other terms of tenancies, but usually
also require the landlord to have a good reason to terminate a
tenancy. (We discuss rent control in Chapter 4.)
Clause 5. Amount and Schedule for
the Payment of Rent
In this provision, specify the amount of the monthly
rent and when, where, and to whom the rent is paid.
We discuss how to set a legal rent and where and
how rent is due in Chapter 3. Before you fill in the
blanks, please read that discussion.
Specify the amount of monthly rent in the first
blank. Then indicate when the monthly rent is to be
paid—usually on the first of the month, but you can
set another time frame. Next, specify to whom and
where the rent is to be paid.
5a. You need to specify what form of payment
you’ll accept, such as cash, cashiers check, money
order, or personal check. Be sure to check all boxes
that apply. If you check the “cash” box, youll also have
to check at least one of the other options, too. You
cannot demand that rent be paid only in cash, unless a
tenant has previously given you a bounced check, has
issued a stop payment on a rent check, or has given
you a cashiers check or money order that was not
honored and you gave the tenant written notice to that
effect. (In that event, your demand for cash only may
last no longer than three months. (CC § 1947.3.)) Since
the tenancy is just getting started, obviously none of
these events have occurred. See Chapter 14 for more
information on how to demand “cash only” rent, and
for a form to use when informing your tenant. (Neither
may you demand rent via online payment or electronic
funds transfer, unless you provide for an alternative
other than cash; see 5c, below.)
5b. Check this box if the tenant will pay the rent in
person at the address stated earlier in this clause. Under
state law, you must indicate the days and hours when
rent can be paid at this addressfor example, “Monday
through Friday, 9 a.m. to noon; 1 p.m. to 5 p.m.
5c. Check this box if you and the tenant decide that
rent will be paid via electronic funds transfer. This is
a convenient method that takes a bit of setting up, but
its steadiness is well worth the time and effort. You
cannot insist that tenants give you this option, unless
you provide for an alternative other than cash.
5d. Check this box if your tenants will move in
midway through the rental periodsay, on the tenth of
the month when rent will normally be due on the first.
This clause allows you to specify the prorated rent due
for that first, short month. (If the tenant is moving in
toward the end of the rental period, consider asking
for the prorated rent for those few days plus the next
month’s rent, as explained in Chapter 7.) Specifying
prorated rent will avoid any question or confusion
about what you expect to be paid. Specify the move-
in date and the ending date of that rental period, such
as “November 14, 20xx through November 30, 20xx.
Divide the monthly rent by 30 (even for 31-day months
or February—it’s easier) and multiply by the number of
days in the first rental period. For example:
$900 ÷ 30 days = $30
$30 × 22 days = $660.
Finally, fill in the prorated amount due.
New Ways to Pay the Rent
More and more owners, especially those with large
numbers of rental units, are looking for ways to ensure
that rent payments are quick and reliable. Here are two
common methods:
Credit card. If you have enough tenants to make
it worthwhile, explore the option of accepting
credit cards. You must pay a fee for the privilege—a
percentage of the amount charged—but the cost may
be justified if it results in more on-time payments and
less hassle for you and the tenants. Keep in mind that
you’ll need to have someone in your onsite office to
process the credit card payments and give tenants
receipts. And if your tenant population is affluent
enough, consider automatic credit card debits.
Automatic debit. You can ask for permission to have
rent payments debited automatically each month from
the tenant’s bank account and transferred into your
account. (CC § 1962(a)(2)(B)(ii).) Be sure to provide the
information necessary to establish an electronic funds
transfer—the names on your account and its number,
plus the name of your bank and branch, if any, including
the address and phone number. Tenants may be leery of
this idea, however, and it’s not worth insisting on.
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41
Fixed-Term Residential Lease
1. Identi cation of Landlord and Tenants. is Agreement is made and entered into on , 20 ,
between (“Tenants”) and
(“Landlord”).
Each Tenant is jointly and severally liable for the payment of rent and performance of all other terms of this Agreement.
2. Identi cation of Premises and Occupants. Subject to the terms and conditions set forth in this Agreement, Landlord rents
to Tenants, and Tenants rent from Landlord, for residential purposes only, the premises located at
, California
(“the premises”).  e premises will be occupied by the undersigned Tenants and the following minor children:
.
3. Limits on Use and Occupancy. e premises are to be used only as a private residence for Tenants and any minors listed in
Clause 2 of this Agreement, and for no other purpose without Landlord’s prior written consent. Occupancy by guests for
more than ten days in any six-month period is prohibited without Landlord’s written consent and will be considered a breach
of this Agreement.
4. De ning the Term of the Tenancy. e term of the rental will begin on , 20 and will expire
on , 20 . Should Tenants vacate before expiration of the term,
Tenants will be liable for the balance of the rent for the remainder of the term, less any rent Landlord collects or could have
collected from a replacement tenant by reasonably attempting to rerent. Tenants who vacate before expiration of the term
are also responsible for Landlord’s costs of advertising for a replacement tenant.
5. Amount and Schedule for the Payment of Rent. Tenants will pay to Landlord a monthly rent of $ ,
payable in advance on the day of each month, except when that day falls on a weekend or legal holiday,
in which case rent is due on the next business day. Rent will be paid to
at
, or at such other place as Landlord may designate.
a. e form of payment will be cash personal check certied funds or money order
credit card bank debit automatic credit card debit
b. [Check if rent will be accepted personally, not by mail.] Rent is accepted during the following days and hours:
c. [Check if rent will be paid by electronic funds transfer.] Rent may be paid by electronic funds transfer to account
number in the name of
at (institution),
(branch), a fi nancial institution located at
(bank address), and and can reached at (telephone number).
d. [Prorated rent.] On signing this agreement, Tenants will pay to Landlord for the period of ,
20 , through , 20 , the sum of $ as rent, payable in advance.
6. Late Charges. Because Landlord and Tenants agree that actual damages for late rent payments are very diffi cult or
impossible to determine, Landlord and Tenants agree to the following stated late charge as liquidated damages. Tenants will
pay Landlord a late charge if Tenants fail to pay the rent in full within days after the date it is due.  e late charge
will be $ , plus $ for each additional day that the rent continues to be unpaid.  e
total late charge for any one month will not exceed $ . Landlord does not waive the right to insist on payment
of the rent in full on the date it is due.
November 14 xx
Sharon and Hank Donaldson
Lionel Jones
123 Sendaro Street, Fresno
Jan Donaldson
November 14 xx
November 30
xx
900
1st
Lionel Jones
125 Sendaro Street, Fresno, California 93656
X
November 14
xx November 30 xx 660
five
10 5
35
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Clause 6. Late Charges
Late charges provide an incentive for tenants to
pay rent on time and make sense when used with
discretion. Unfortunately, landlords sometimes try
to charge excessive late fees and, by so doing, get
themselves into legal hot water and incur tenant
hostility. Your late fee must correspond as closely as
possible to the real monetary consequences you suffer
(called “actual damages”) when the rent is late. See
Chapter 3 for help in setting legal late fees.
$
RENT CONTROL
Some cities with rent control ordinances
regulate the amount of late fees. Check any rent control
ordinances or regulations applicable to your property before
establishing a late fee.
In the first blank, specify when you will start
charging a late fee. You can charge a late fee the first
day rent is late, but many landlords don’t charge a late
fee until the rent is two or three days late. Next, fill in
the late charge for the first day rent is late, followed by
the amount for each additional day. Finally, fill in the
maximum late charge.
Clause 7. Returned Check and
Other Bank Charges
It’s legal to charge the tenant an extra fee if a rent check
bounces—assuming you agree to accept checks. (If
you’re having a lot of trouble with bounced checks, you
may decide to change your agreement to accept only
cash or money order payments for rent. See Chapter
3.) As with late charges, bounced check charges must
be reasonable. You should charge no more than the
amount your bank charges you for a returned check
(such as $15 to $25 per returned item; check with your
bank), plus a few dollars for your trouble.
In the blank, fill in the amount of the returned
check charge. If you won’t accept checks, fill in “N/A
or “Not Applicable.
For more detail on returned check charges, see
Chapter 3.
Clause 8. Amount and Payment of Deposits
By law, any payment, fee, deposit, or charge that is
paid by the tenant “at the beginning of the tenancy”
(other than credit check fees; see Chapter 1) is a
security deposit, as long as the landlord intends to use
it for any of the purposes mentioned in (1) through (4)
of Clause 8. A fee that is intended to “reimburse the
landlord for costs associated with processing a new
tenant” also comes within this definition of a security
deposit. We think that this means that so-called
“tenant initiation expense reimbursement” fees (“TIER”
fees), which are up-front fees that cover the time spent
moving the tenant in and processing the paperwork,
are no longer legal.
In short, any “cleaning deposit,” “cleaning fee,
“security deposit,” or “last month’s rent,” or anything
paid by the tenant up front other than the first month’s
rent or a legitimate credit check fee, is a security
deposit (CC § 1950.5(b)), and subject to the laws that
control the amount and uses of security deposits.
The use and return of security deposits is a frequent
source of disputes between landlords and tenants. For
example, a tenant may assume that the deposit, if it is
equal to one month’s rent, is the same as “last month’s
rent” and try to apply it this way a month before
moving out. To avoid confusion, our lease and rental
agreements are clear on the subject. You should make
the point again in a move-in letter. (See Chapter 7.)
The amount and use of security deposits are limited
by state law. To determine the maximum amount of
security deposit you can charge, read Chapter 5 before
completing this section. Chapter 20 provides details
on returning deposits, including requirements that a
tenant be offered the option of an initial, pre-move-out
inspection and the opportunity to correct problems
before moving out, penalties for failing to return
deposits within the three weeks required by state
law, and a requirement that you provide receipts for
cleaning and repairs.
Once you’ve decided how much security deposit
you can charge, fill in that amount in the blank. Then
check either “a” or “b.” Check “a” if your property
is not located in a city that requires payment of
interest. Check “b” if interest payments must be made
or credited, and summarize the requirement. You
may copy the explanation from the chart of “Cities
Requiring Interest or Separate Accounts for Security
Deposits,” found in Chapter 5.
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43
TIP
Consider offering interest even if you arent
legally required to do so. Tenants will appreciate your
willingness to give them the interest their money has earned.
Since state law doesn’t regulate the manner in which you
should handle interest, you can choose any convenient and
fair method. For example, you might use the same rate as
offered by a major bank on savings accounts, and you could
give a rent credit at the end of six months’ residence.
Clause 9. Utilities
This clause helps prevent misunderstandings.
Normally, landlords pay for garbage (and sometimes
water, if there is a yard) to help make sure that the
premises are well maintained. Tenants usually pay for
other services, such as phone, gas, and electricity. In
the blank, fill in the utilities you—not the tenants
will be responsible for paying. If youll pay a portion
of the utilities, indicate that—for example, “all utilities
except phone” or “half of the electricity and half of the
gas.” If the tenant will pay all utilities, fill in “N/A” or
“Not Applicable,” or edit the clause accordingly.
As mentioned in Chapter 1, state law requires
landlords to notify all prospective tenants, before
they move in, if their gas or electric meter serves any
areas outside their dwelling. (CC § 1940.9.) This law
specifically applies where:
•there are not separate gas and electric meters for
each unit, and
•a tenant’s meter serves any areas outside his unit
(even a lightbulb not under the tenant’s control
in a common area).
If both these conditions apply, you are required to
do one of the following:
•pay for the utilities for the tenant’s meter
yourself, by placing that utility in your own name
•correct the situation by separately metering the
area outside the tenant’s unit, or
•enter into a separate written agreement with the
tenant, under which the tenant specifically agrees
to pay utilities on his own meter, knowing he’s
paying for others’ utilities, too.
We prefer the first and second methods above.
Regardless of how few dollars a month a tenant may
be paying for another tenant’s or the common area
utilities, a tenant faced with this sort of uncertainty
will usually demand a concession on rent; this will
probably cost you more in the long run than if you
either added a new meter or simply paid for the
utilities yourself.
Here are some examples of ways to handle shared
utility arrangements.
exAmple 1: “Landlord will pay for the utilities for
the Tenants’ meter, and will place that utility in
Landlord’s own name.
exAmple 2: “Tenants will pay for gas and
electricity charged to their meter, with the
understanding that they may be paying for others’
utility charges.”
In a situation where you share housing with the
tenant, or where there is only one meter for several
units, define who is responsible for what portion of
the utilities in more detail. If you do, replace Clause 9
of our form with these words: “Tenants shall pay for
utility charges as follows: [fill in the charges].”
Clause 10. Prohibition of Assignment
and Subletting
Clauses 1–3 spell out the total number of adult
occupants, and let tenants know that they may not
move anyone else in as a permanent resident. Clause
10 enforces this with an antisubletting clause, breach
of which is grounds for eviction.
Clause 10 won’t stop a tenant from bringing in a
spouse or child later; in fact, if you tried to do so, you
could be sued for illegal discrimination as discussed in
Chapter 9. You may not want to strictly enforce Clause
3’s restriction on guests, but it will be very handy to
have if a tenant tries to move in a friend or relative
for a month or two, calling her a guest. Restrictions
on guests may not be based on the age or sex of the
occupant or guest, as discussed in Chapter 10.
Clause 10 is designed to prevent your tenant from
leaving in the middle of the month or of a lease term
and finding a replacement—maybe someone you
wouldn’t choose to rent to—without your consent.
It also prevents a tenant from subleasing during a
vacation or renting out a room to someone unless you
specifically agree.
By including Clause 10 in your lease, you have the
option not to accept a sublet or assignment if you don’t
like or trust the person your tenant proposes to take
over the lease. If, however, the tenant wishes to leave
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early and provides you with another suitable tenant,
you can’t both hold the tenant financially liable for
breaking the lease and unreasonably refuse to rent
to another tenant who is in every way suitable. (We
discuss lease-breaking tenants in detail in Chapter 19.)
The issue of who is and who is not a tenant, and
legal liability for paying the rent and meeting all the
conditions of the lease or rental agreement, can be
very confusing and cause all kinds of problems. See
Chapter 10 for a discussion of this topic and how using
California’s “lock-in” option may limit your financial
losses when a tenant leaves early.
Clause 11. Condition of the Premises
Clause 11 makes it clear that if tenants damage the
premises (for example, by breaking a window or
scratching hardwood floors), it’s their responsibility to
pay for fixing the problem.
In the blanks after the words “except as noted
here,” clearly describe any defects or damages to the
premises. If there are none, state that. You and your
tenants may find it easiest to go through the rental unit
before the tenants move in and fill out a Landlord/
Tenant Checklist, describing what is in the rental unit
and noting any problems.
Chapter 7 provides details on the Landlord/Tenant
Checklist and other means to minimize disputes about
whos responsible for damage or repairs. If you decide
to use the checklist, fill in the words “See Landlord/
Tenant Checklist, attached.
FORM
You’ll find a downloadable copy of the Landlord/
Tenant Checklist on the Nolo website. See Appendix B for
the link to the forms in this book.
Clause 11 requires tenants to alert you to defective
or dangerous conditions. We can’t emphasize enough
the importance of establishing a system for tenants to
regularly report on the condition of the premises and
defective or dangerous conditions. This is covered in
detail in Chapter 11.
CAUTION
Don’t fail to maintain the property. If your
tenants or their guests suffer injury or property damage as
a result of poorly maintained property, you may be held
responsible for paying for the loss. Chapter 12 covers liability-
related issues.
Clause 12. Possession of the Premises
This clause explains that if the tenants choose not
to move in after they have signed a lease or rental
agreement, they will still be required to pay rent and
satisfy other conditions of the lease or rental agreement.
Of course, you would be legally required to begin
reasonable efforts to rerent the unit, and would be able
to collect rent from the original, would-be occupants
only until you rented the unit to someone else. (See
Chapter 19 for an explanation of the “mitigation of
damages” rule.)
This clause also protects you if youre unable, for
reasons beyond your control, to turn over possession
after having signed the agreement—for example, if a
fire spreads from next door and destroys the premises,
or if you can’t turn over possession because the current
tenant refuses to leave (and becomes a “holdover
tenant”). It limits your financial liability to new tenants
to the return of any prepaid rent and security deposits
(the “sums previously paid” in the language of the
clause). A disappointed tenant would not be able to
sue you for the cost of temporary housing while he
waited for you to evict a holdover tenant. And if the
only substitute rental the waiting tenant could find
was more expensive than the rent he would have paid
you, he could not sue you for the difference. You don’t
need to add anything to this clause.
Clause 13. Pets
This clause is designed to prevent tenants and their
guests from keeping pets without your written
permission. This is not to say that you will want to
apply a flat “no-pets” rule. It does provide you with
a legal mechanism to keep your premises from being
knee-deep in Irish wolfhounds. Without this sort
of provision, particularly in a fixed-term lease that
can’t be terminated on 30 days’ notice, there’s little to
prevent your tenant from keeping dangerous or non-
housebroken pets on your property (except for city
ordinances prohibiting tigers and the like).
Check “a” if you want to forbid pets. You have the
right to prohibit all pets, with the exception of trained
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7. Returned Check and Other Bank Charges. In the event any check off ered by Tenants to Landlord in payment of rent or
any other amount due under this Agreement is returned for lack of suffi cient funds, a “stop payment,” or any other reason,
Tenants will pay Landlord a returned check charge in the amount of $ .
8. Amount and Payment of Deposits. On signing this Agreement, Tenants will pay to Landlord the sum of $
as a security deposit. Tenants may not, without Landlord’s prior written consent, apply this security deposit to the last month’s
rent or to any other sum due under this Agreement. Within three weeks after Tenants have vacated the premises, Landlord
will furnish Tenants with an itemized written statement of the reasons for, and the dollar amount of, any of the security
deposit retained by the Landlord, receipts for work done or items purchased, if available, along with a check for any deposit
balance. Under Section 1950.5 of the California Civil Code, Landlord may withhold only that portion of Tenants’ security
deposit necessary to: (1) remedy any default by Tenants in the payment of rent; (2) repair damages to the premises exclusive
of ordinary wear and tear; (3) clean the premises if necessary to restore it to the same level of cleanliness it was in at the
beginning of the tenancy; and (4) remedy any default by tenants, under this Agreement, to restore, replace, or return any of
Landlords personal property mentioned in this Agreement, including but not limited to the property referred to in Clause 11.
Landlord will pay Tenants interest on all security deposits as follows:
a. Per state law, no interest payments are required.
b. Local law requires that interest be paid or credited, or Landlord has decided voluntarily to do so, which will occur as
follows:
.
9. Utilities. Tenants will be responsible for payment of all utility charges, except for the following, which shall be paid by
Landlord:
.
Tenants’ gas or electric meter serves area(s) outside of their premises, and there are not separate gas and electric meters
for Tenants’ unit and the area(s) outside their unit. Tenants and Landlord agree as follows:
.
10. Prohibition of Assignment and Subletting. Tenants will not sublet any part of the premises or assign this Agreement
without the prior written consent of Landlord.
11. Condition of the Premises. Tenants agree to: (1) keep the premises clean and sanitary and in good repair and, upon
termination of the tenancy, to return the premises to Landlord in a condition identical to that which existed when Tenants
took occupancy, except for ordinary wear and tear; (2) immediately notify Landlord of any defects or dangerous conditions
in and about the premises of which they become aware; and (3) reimburse Landlord, on demand by Landlord, for the cost of
any repairs to the premises, including Landlord’s personal property therein, damaged by Tenants or their guests or invitees
through misuse or neglect.
Tenants acknowledge that they have examined the premises, including appliances, fi xtures, carpets, drapes, and paint, and
have found them to be in good, safe, and clean condition and repair, except as noted here:
.
20
1,000
X
garbage and water
See Landlord/Tenant Checklist attached.
Fixed-Term Residential Lease (continued)
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animals used by physically or mentally disabled people.
You may not charge an extra pet deposit on account of
any trained service animal. (CC §§ 54.1, 54.2.)
To allow pets, check “b” and identify the type and
number of pets—for example, “one cat.” If you allow
pets, youre wise to spell out your pet rulesfor
example, you may want to specify that the tenants will
keep the yard free of all animal waste. You may also
want to charge a higher security deposit, if you aren’t
already requiring the maximum allowed by law.
It is important to educate tenants from the start that
you will not tolerate dangerous or even apparently
dangerous pets, and that as soon as you learn of a
worrisome situation, you have the option of insisting
that the tenant get rid of the pet (or move). You
may want to use the space under part “b” to advise
tenants that their pets must be well trained and non-
threatening; or you could set out your policy in your
Rules and Regulations, if you have them. As long as
you or your management follow through with your
policy—by keeping an eye on what goes on and
listening to and acting on any complaints from other
tenants or neighborssuch a clause will help you evict
if you discover a dangerous pet on your property. Your
policy might look something like this:
“Tenant’s pet(s) will be well behaved, will be under
Tenant’s control at all times, and will not pose a threat
or apparent threat to the safety of other tenants, their
guests, or other people on or near the rental premises.
If, in the opinion of Landlord, tenant’s pet(s) pose such
a threat, Landlord will serve Tenant with a Three-Day
Notice to Cure (remove pet from the premises) or Quit
(move out).”
CAUTION
Enforce no-pets clauses. When faced with tenants
who violate no-pets clauses, landlords often ignore the situation
for a long time, then try to enforce it later when friction
develops over some other matter. is could backfire. In general,
if you know a tenant has breached the lease or rental agreement
(for example, by keeping a pet) and do nothing about it for a
long time, you risk having legally waived your right to object.
You can preserve your right to object by promptly giving the
tenant an informal written notice as soon as the pet appears,
then following through with a ree-Day Notice to Perform
Covenant or Quit. See Chapter 4 for details on rent control and
Chapter 18 for a discussion of three-day and 30-day notices.
Renting to Pet Owners
Project Open Door, an ambitious program of the San
Francisco Society for the Prevention of Cruelty to
Animals (SPCA), seeks to show landlords how to make
renting to pet-owning tenants a satisfying and profitable
experience. e SPCA offers landlords:
• checklists to help screen pet-owning tenants
• pet policy agreements to add to standard leases
and rental agreements, and
• free mediation if landlords and tenants have
problems after moving in, such as neighbor
complaints.
For more information, contact the San Francisco
SPCA at 201 Alabama Street, San Francisco, CA 94103,
415-554-3000, or check their website at www.sfspca.org/
program-services/open-door.
Should You Require a Separate
Security Deposit for Pets?
Some landlords allow pets but require the tenant to pay
a separate deposit to cover any damages caused by the
pet. is is legal only if the deposit charged for the pet,
when added to the amount charged for the security
deposit, does not exceed the maximum amount that
can be charged for a deposit. (See Chapter 5.)
Separate pet deposits are usually a bad idea because
they limit how you can use that part of the security
deposit. For example, if the pet is well behaved but the
tenant trashes your unit, you can’t use the pet portion
of the deposit to clean up after the human. If you want
to protect your property from damage done by a pet,
you are probably better off charging a slightly higher
rent or an undifferentiated security deposit to start with
(assuming you are not restricted by rent control or the
upper security deposit limits). It is also illegal to charge
an extra pet deposit for legally disabled people with
service animals.
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Clause 14. Landlord’s Access for
Inspection and Emergency
The law limits your right to enter property in the
tenant’s absence or without the tenant’s permission.
Although these limits apply regardless of what an
agreement or lease says, it’s best to put the limits in
writing to avoid problems later on.
This clause makes it clear to the tenant that you
have a legal right of access to the property to make
repairs or show the premises for sale or rental,
provided you give the tenant reasonable notice, which
is presumed to be 24 hours. However, the notice
period is 48 hours if the purpose of the entry is a
move-out inspection requested by the tenant regarding
possible security deposit deductions. (See Chapters
5 and 20 for information on collecting and returning
deposits.) Chapter 13 provides details on a landlord’s
right to enter rental property and notice requirements.
Clause 15. Extended Absences by Tenants
This clause requires that the tenants notify you when
leaving your property for an extended time.
In the blank, fill in the number of consecutive
days that youd like to be notified of. Fourteen days is
common, but you may opt for an altogether different
period of time. For example, if you live in Truckee or
anywhere else where it snows, checking your property
on a daily basis during a snowstorm may be prudent,
to make sure the pipes haven’t burst.
Waste and Nuisance: What Are They?
In legalese, waste is the causing of severe property
damage to real estate, including a house or apartment
unit, which goes way beyond ordinary wear and tear.
Punching holes in walls, pulling out sinks and fixtures,
and knocking down doors are examples of “committing
waste.”
Nuisance means behavior that prevents neighbors from
fully enjoying the use of their own homes. Continuous loud
noise and foul odors are examples of legal nuisances that
may disturb nearby neighbors. So, too, are selling drugs
or engaging in other illegal activities that greatly disturb
neighbors.
Clause 16. Prohibitions Against Violating
Laws and Causing Disturbances
This type of clause is found in most form leases
and rental agreements. Although it’s full of legal
gobbledygook, it’s probably best to leave it as is,
since courts have much experience in working with
these terms. If the tenant causes a nuisance, seriously
damages the property, or violates the law—for
example, deals drugs—you may be able to evict even
without such a provision in the agreement. It will,
however, be easier to evict if you can point to an
explicit lease provision.
If you want to add specific rules—for example, no
loud music played after midnight—add them to Clause
25: Additional Provisions.
Take a moment to look again at the first sentence
in this clause, which states that tenants are entitled
to “quiet enjoyment.” As just explained, this means
that neighboring tenants are entitled to peace and
quiet—and if the tenant who’s signing this document
seriously interferes with this right, you have the power
to terminate his tenancy. It also means that you are
promising to maintain an atmosphere of peace and
quiet. So, if the tenant who signs this lease comes to
you with credible proof that a neighboring tenant is
making it impossible to reasonably enjoy his rented
home, you must, according to your promise in the
lease or rental agreement, take steps to calm things
down (or clean them up). If you don’t, your aggrieved
tenant can point to your violation of this clause as
grounds for breaking the lease (with no liability for
future rent).
Clause 17. Repairs and Alterations
The first part of this clause forbids the tenant from
rekeying the locks or installing a burglar alarm system
without your consent, and provides that you are
entitled to duplicate keys and instructions on how
to disarm the alarm system. See Chapter 12 for more
information on your responsibility to provide secure
premises, and Chapter 13 for information on your right
to enter rental property in an emergency.
The second part of Clause 17 makes it clear that
alterations and repairs without the landlord’s consent
aren’t allowed. The “except as provided by law”
language is a reference to the “repair-and-deduct”
remedy the tenants may use to repair health- or safety-
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12. Possession of the Premises. If, after signing this Agreement, Tenants fail to take possession of the premises, they will be
responsible for paying rent and complying with all other terms of this Agreement. In the event Landlord is unable to deliver
possession of the premises to Tenants for any reason not within Landlord’s control, including, but not limited to, failure of prior
occupants to vacate or partial or complete destruction of the premises, Tenants will have the right to terminate this Agreement.
In such event, Landlord’s liability to Tenants will be limited to the return of all sums previously paid by Tenants to Landlord.
13. Pets. No animal, bird, or other pet may be kept on the premises without Landlord’s prior written consent, except properly
trained dogs needed by blind, deaf, or disabled persons and:
, under the following conditions:
.
14. Landlord’s Access for Inspection and Emergency. Landlord or Landlord’s agents may enter the premises in the event of an
emergency or to make repairs or improvements, supply agreed services, show the premises to prospective buyers or tenants,
and conduct an initial move-out inspection requested by tenants. Except in cases of emergency, Tenants’ abandonment of
the premises, or court order, Landlord will give Tenants reasonable notice of intent to enter and will enter only during regular
business hours of Monday through Friday from 9:00 a.m. to 6:00 p.m. and Saturday from 10:00 a.m. to 1:00 p.m. e notice
will include the purpose, date, and approximate time of the entry.
15. Extended Absences by Tenants. Tenants agree to notify Landlord in the event that they will be away from the premises for
consecutive days or more. During such absence, Landlord may enter the premises at times reasonably necessary to maintain
the property and inspect for damage and needed repairs.
16. Prohibitions Against Violating Laws and Causing Disturbances. Tenants are entitled to quiet enjoyment of the premises.
Tenants and their guests or invitees will not use the premises or adjacent areas in such a way as to: (1) violate any law or
ordinance, including laws prohibiting the use, possession, or sale of illegal drugs; (2) commit waste or nuisance; or (3) annoy,
disturb, inconvenience, or interfere with the quiet enjoyment and peace and quiet of any other tenant or nearby resident.
17. Repairs and Alterations
a. Tenants will not, without Landlord’s prior written consent, alter, rekey, or install any locks to the premises or install or
alter any burglar alarm system. Tenants will provide Landlord with a key or keys capable of unlocking all such rekeyed or
new locks as well as instructions on how to disarm any altered or new burglar alarm system.
b. Except as provided by law or as authorized by the prior written consent of Landlord, Tenants will not make any repairs
or alterations to the premises. Landlord will not unreasonably withhold consent for such repairs, but will not authorize
repairs that require advanced skill or workmanship or that would be dangerous to undertake. Landlord will not authorize
repairs unless such repairs are likely to return the item or element of the rental to its predamaged state of usefulness and
attractiveness.
18. Damage to the Premises. In the event the premises are partially or totally damaged or destroyed by re or other cause, the
following will apply:
a. If the premises are totally damaged and destroyed, Landlord will have the option to: (1) repair such damage and restore
the premises, with this Agreement continuing in full force and eff ect, except that Tenants’ rent will be abated while
repairs are being made; or (2) give written notice to Tenants terminating this Agreement at any time within thirty
(30) days after such damage, and specifying the termination date; in the event that Landlord gives such notice, this
Agreement will expire and all of Tenants’ rights pursuant to this Agreement will cease.
b. Landlord will have the option to determine that the premises are only partially damaged by re or other cause. In that
event, Landlord will attempt to repair such damage and restore the premises within thirty (30) days after such damage.
If only part of the premises cannot be used, Tenants must pay rent only for the usable part, to be determined solely by
Landlord. If Landlord is unable to complete repairs within thirty (30) days, this Agreement will expire and all of Tenants’
rights pursuant to this Agreement will terminate at the option of either party.
X
one cat
10
Fixed-Term Residential Lease (continued)
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threatening defects. By law, landlords must maintain
and repair their rental property in accordance with
certain minimum standards. (CC § 1941.1.) If a landlord
refuses to do so, after reasonable notification by
the tenant, a tenant may arrange for certain repairs
and deduct the cost from the next month’s rent. (CC
§ 1942.) The tenant always has the right to use this
statutory procedure, no matter what a lease says. (See
below.) If you don’t keep the property in habitable
condition, tenants may also have the right to withhold
rent and even sue. (See Chapter 11.)
If mutually agreeable to you and the tenants, the
tenants may agree in writing to perform necessary
repairs or maintenance such as mowing the lawn in
exchange for a rent reduction. See below for more
details on this type of arrangement.
Section b in this clause makes it clear that alter-
ations and repairs without your written consent aren’t
allowed. If you wish, you may authorize a tenant
improvement or alteration, such as the installation
of a bookshelf or plantings in the backyard. Use the
Tenant Alterations to Rental Unit form, which is fully
explained in Chapter 11.
Clause 18. Damage to the Premises
This clause addresses what will happen if the
premises are seriously damaged by fire or other
calamity. This provision places responsibility on
tenants for damage caused by their acts or by people
they’ve allowed in the premises. Basically, it seeks
to limit your risk to 30 days’ rental value, even if
the damage was your responsibility. You don’t need
to add anything to this clause. (See Chapter 11 for
a discussion of liability for rent if the premises are
partially or totally destroyed.)
Clause 19. Tenants’ Financial Responsibility
and Renters’ Insurance
This clause forces the tenants to assume responsibility
for damage to their own belongings. It also suggests
that tenants obtain renters’ insurance.
One change you may wish to make in this clause
involves requiring renters’ insurance. If you absolutely
wish to require insurance, substitute the following
paragraph for the last sentence of Clause 19:
Optional Insurance Paragraph for Clause 19
Landlord assumes no liability for such loss and requires
Tenants, within 10 days of the signing of this Agreement,
to obtain insurance that will:
a. reimburse Landlord for cost of fire or water damage
and vandalism to the premises
b. indemnify Landlord against liability to third parties for
any negligence on the part of Tenants or their guests or
invitees and
c. cover damage to Tenants’ personal possessions to a
minimum of $ . Tenants will provide
Landlord with proof of such insurance.
Your move-in letter (see Chapter 7) is the place to
highlight your policy on renters’ insurance.
Clause 20. Waterbeds
Whether you can refuse to rent to a tenant with a
waterbed depends on when the property was built.
Here are the rules.
Property built before January 1, 1973. If your propertys
certificate of occupancy” (final approval of initial
construction by local building department) was issued
before January 1, 1973, you may legally refuse to rent
to a tenant who has a waterbed. This isn’t to say that
you should ban waterbeds if your property was built
before 1973. Wooden floors built to current standards,
or even the standards 20 or 30 years ago, can with-
stand pressures of at least 60 pounds per square foot,
and a typical queen-sized waterbed exerts about 50
pounds per square foot. (Poured concrete floors, of
course, pose no problem.)
Property built on or after January 1, 1973. If your
property was built after 1973, you may have no choice.
State law prohibits landlords of such property from
refusing to rent to (or renew leases with) tenants
because they have waterbeds, or refusing to allow
tenants to use waterbeds, if:
•the tenant obtains a replacement-value $100,000
waterbed insurance policy
•the pressure the waterbed puts on the floor does
not exceed the floor’s pounds-per-square-foot
weight limitation (as stated above, this should be
no problem for dwellings constructed after 1973)
•the waterbed is held together by a pedestal or
frame
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•the tenant installs, maintains, and moves the
waterbed in accordance with the standards of
the manufacturer’s retailer or state, whichever are
more stringent
•the tenant gives the landlord at least 24 hours’
written notice of his intention to install, move, or
remove the waterbed, and allows the landlord to
be present when this occurs
•the waterbed conforms to construction standards
imposed by the State Bureau of Home Furnishings
and displays a label to that effect, and
•the waterbed was constructed after January 1,
1973. (CC § 1940.5.)
If your property was built before 1973 and you wish
to ban waterbeds, you may cross off or delete the
words “without Landlord’s written consent.
If you choose to allow waterbeds, or your property
was built in 1973 or later and your tenant plans to have
a waterbed, check the box, fill in the number of the
attachment, and complete the self-explanatory fill-in-
the-blanks Attachment: Agreement Regarding Use of
Waterbed, a sample of which is shown below.
FORM
e Nolo website includes a downloadable copy
of the Attachment: Agreement Regarding Use of Waterbed.
See Appendix B for the link to the forms in this book.
TIP
Security deposits may be increased. You can
charge a higher security deposit for tenants with waterbeds,
equal to an additional one-half months rent. (See Chapter 5.)
Clause 21. Tenant Rules and Regulations
Many landlords don’t worry about detailed rules and
regulations (“R and Rs”), especially when they rent
single-family homes or duplexes. However, in large
buildings, rules are usually important to control the
use of common areas and equipment.
Check the box if you plan to use tenant rules, and
fill in the attachment number. Remember to also label
the rules and regulations with the attachment number.
This clause gives you the authority to evict a tenant
who persists in seriously violating your code of tenant
rules and regulations.
The final sentence in Clause 21 gives you the
right to vary your rules and regulations, and to do
so without needing to give notice. A word of caution
here: Don’t be tempted to push key provisions of
the rental into your R and Rs, thinking that doing so
enables you to change them at will (which you can’t
do when the provision is in a lease or rental agreement
attachment). A judge will see this ruse for what it is
and will side with a tenant who protests when, for
example, you ban pets in your R and Rs (but the
tenant’s lease says nothing about pets). Instead, use
your R and Rs to spell out day-to-day details of how
your building works, as explained below in “What’s
Covered in Tenant Rules and Regulations.
What’s Covered in Tenant
Rules and Regulations
Tenant rules and regulations typically cover issues such as:
• elevator safety and use
• pool rules
• garbage disposal and recycling times and places
• parking garage regulations
• lockout and lost key charges
• security system use
• excessive noise
• pet behavior
• use of grounds
• maintenance of balconies and decks (for instance,
no drying clothes on balconies)
• display of signs in windows, and
• laundry room rules.
Clause 22. Payment of Attorney
Fees in a Lawsuit
Many landlords assume that whenever they sue a
tenant over the interpretation of the lease (or to
enforce it) and win, the court will order the losing
tenant to pay the landlord’s attorney fees and court
costs, such as filing fees and deposition costs.
However, this is true only if a written agreement
specifically provides for it, or if the law underlying the
landlord’s winning case specifically provides for the
loser to pay the winners costs and fees. This is why it
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Attachment: Agreement Regarding Use of Waterbed
Landlord and Tenants agree that Tenants may keep water-fi lled furniture in the premises located at
,
subject to the legal requirements of Civil Code Section 1940.5, key provisions of which are summarized as follows:
1. Insurance
Tenants agree to obtain a valid waterbed insurance policy or certicate of insurance for property damage, with a minimum
replacement value of $100,000. Such insurance policy shall be furnished to Landlord prior to installation of the waterbed and
shall be maintained in full force and e ect until the waterbed is permanently removed from the premises.
2. Weight Limitation
e pressure the waterbed puts on the fl oor shall not exceed the fl oors pounds per square foot weight limitation.  e
weight shall be distributed on a pedestal or frame which is approximately the same dimensions as the mattress itself.
3. Installation, Moving, and Removal
Tenants shall install, maintain, and move the waterbed in accordance with the standards of the manufacturer, retailer, or
state, whichever are most stringent.
4. Notice to and Inspection by Landlord
Tenants agree to give Landlord at least 24 hours’ written notice of their intention to install, move, or remove the waterbed,
and shall allow Landlord to be present when this occurs. If anyone other than Tenants installs or moves the waterbed,
Tenants shall give Landlord a written installation receipt that states the installers name and address and any business
affi liation.
5. Waterbed Construction Standards
e waterbed shall conform to construction standards imposed by the State Bureau of Home Furnishings and shall display a
label to that eff ect.  e waterbed must have been constructed on or after January 1, 1973.
6. Security Deposit
Landlord may increase Tenants’ security deposit in an amount equal to an additional one-half months rent.
Landlord or Manager Date
Tenant Date
Tenant Date
Tenant Date
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THE CALIFORNIA LANDLORD’S LAW BOOK: RIGHTS & RESPONSIBILITIES
can be important to have an “attorney fees” clause in
your l