The cornerstone of running a rental property is the lease agreements that bind you and your tenant during the duration of their tenancy. The clauses you include in a rental agreement will legally dictate how you and your tenant must behave, and how you write those clauses is largely dictated by federal, state, and local laws.
California law can be complicated and stringent, we all know that. If you're one of many who own a rental in Pleasanton, you're bound to have a lot of questions as state law has continued to change. You don't want to be on the wrong end of a lawsuit from a tenant because you mistakenly wrote a lease clause incorrectly.
So let's talk about the current legal landscape in California for landlords and answer some of the most burning questions about leasing here.
Common Questions for Pleasanton Rental Property Owners
1. What is Required to Include in a Lease or Rental Agreement?
The first question on the minds of many landlords is going to be what is required to be in a new lease. The answer to that question is, well, quite a bit. To start, California leases must include the full legal names of the landlord and any property managers working on the property. It must also clearly specify the rental address where the tenant is staying, the amount and due date of their rent payments, and the start and end dates for the lease.
Additionally, you must include in writing the amount of the security deposit, the different methods by which the tenant can pay rent, and the rules you have for late rent payments as well as any fees they could be charged for being late on rent.
Utilities and services are a key component as well. Electric bills, water bills, and other utilities can be billed to the tenant, but sometimes the landlord or property manager pays these bills and factors in an average cost to the rent amount. What's included in the rent and what bills are the tenant's responsibility should be stated in the agreement.
Lastly, there is a long list of information you must disclose in writing before the tenant moves in. This includes contact information, rent amount, security deposits, and late fees which we mentioned. However, these disclosures also include but are not limited to:
Megan's Law: The California Department of Justice hosts a website known as Megan's Law that allows citizens to search for registered sex offenders in their area. Every lease agreement in the state must include a notice informing tenants of this publicly available database.
Pests and Bedbugs: If the rental property uses pest control services, they must disclose to the tenant what pesticides are used and how often pest control is done in the home or rental units. You also must inform them if a bedbug infestation has occurred within the last year.
No-Smoking: If you have a no-smoking policy for the rental property, you must disclose this in writing in the agreement. This also helps avoid disputes later.
Deaths on the Property: If someone has died on the property in the last 3 years, you must inform tenants of this.
There are also several required disclosures concerning things like asbestos and lead paint if your property is of a certain age. You can find a full list of required disclosures and their specific cases here.
2. What is the Maximum Security Deposit I Can Collect?
This is a question that Pleasanton landlords can easily slip up on since until recently, security deposits were not limited in California. But with the passing of AB12 into California law, this has changed. As of July 1, 2024, your rental business could be impacted by this security deposit cap.
Under this law, the maximum security deposit you can charge a prospective tenant is the equivalent of one month's rent for the rental unit. There are exemptions to this limit however if the landlord is a natural person, an LLC in which all members are a natural person, or the landlord owns no more than 2 residential rental properties that include 4 or fewer rental units collectively.
For more information on security deposits, check out our video blog.
3. Is Pleasanton Subject to Rent Control?
Yes, Pleasanton landlords are subject to follow statewide rent control measures in the form of the Tenant Protection Act of 2019. This specifically targets the ability of a landlord to institute rent increases on the property. The basics work like this:
When your property is subject to rent control, you cannot raise rent more than once a year. When you do raise the rent, that increase cannot be more than five percent of the current rent, plus the cost of inflation, which is set by the local Consumer Price Index.
The total amount of your increase cannot be more than 10 percent of the current rental amount.
This goes for any time you want to increase the rent for your rental unit, whether existing tenants want to re-rent the home or you want to increase the rent for new, prospective tenants. You must account for this when creating your leases.
This law also targets how a landlord can evict tenants. However, there are exemptions for the rent control side of this law as well. For more info, read our blog California Rent Control & Pleasanton Property Management.
4. Are There Protected Classes Specific to California?
We all know that there are 7 federally protected classes that a landlord cannot discriminate against when leasing out a property: Race, Color, Religion, Sex, Disability, Familial Status (having children under 18 years old, or being pregnant), and National Origin.
However, California takes this a step further and includes 19 classes in total that are protected from discrimination in housing. this is something you must take into account for your screening program when searching for tenants in Pleasanton, as a discrimination suit could be devastating for your business. The additional protected classes are:
Sexual Orientation
Gender Identity
Ancestry
Citizenship
Immigration Status
Primary Language
Gender Expression
Genetic Information
Marital Status
Source of Income (including Section 8 Housing Assistance)
Military or Veteran Status
Age
Resources for Landlords in the Bay Area
The legal landscape of California is always changing, and this leads to a highly dynamic rental market. Taking that on alone here in Pleasanton can get overwhelming.
Advantage Property Management Services is here to help. We are a property management firm that stands by being truly full service. Let us handle the rental management so you can focus on the investment.
You're bound to have more questions, so you can get started by checking out our Owner FAQs to learn more.
Ready for the next step? Reach out today for a free consultation.
