As a professional real estate company managing multifamily and commercial properties in the North County area, including in Oceanside, Carlsbad, Vista, San Marcos, and Solana Beach, we have a good understanding of the laws and regulations pertaining to renting out property. For individual investors and landlords, it can be difficult and time-consuming to keep up with all the changes in real estate law that affect your investment.
There are a few major laws you need to be aware of if you’re going to rent out property, and the issues we’re discussing here are the areas where the most common mistakes are made.
Fair Housing Laws
Federal fair housing laws have been in place for decades. They’re designed to protect people from housing discrimination. Under the federal Fair Housing Act, there are seven protected classes against whom you may not discriminate when you’re renting out a property. You cannot discriminate based on color, race, national origin, religion, sex, disability, or familial status. In California, there are additional classes of people who are protected, and you cannot discriminate based on things like age, sexual orientation, or source of income.
It’s easy to make fair housing mistakes. You may not intentionally discriminate against someone, but if you say your property is perfect for families or close to churches, those phrases could be seen as discriminatory. Be careful with your marketing, screening, and leasing processes.
Security Deposit Requirements
California has specific security deposit laws, and if you violate them, it can cost you tens of thousands of dollars. There are limits to what you can collect. On an unfurnished property, you cannot collect a security deposit that’s more than two times the monthly rent. So, if your rent is $2,000 per month, the security deposit cannot exceed $4,000. On a furnished property, you can collect up to three times the monthly rent.
When you’re returning the deposit, you have 21 days to send the tenant the full deposit or a partial deposit with an itemized breakdown of where deductions were made. Make sure you have a detailed inspection report with photographs that justify the reason for those deductions.
You cannot evict a tenant who isn’t paying rent by changing the locks or turning off the utilities. There’s a legal process that must be followed, beginning with a Three Day Notice and ending with a Writ of Possession. Follow the eviction process through the courts, otherwise you could be in big trouble. Not only will your eviction take longer and be more expensive, you could be held liable for invalid and illegal eviction tactics.
Tenants have a lot of rights in California, and you need to understand and respect those rights. For example, you cannot enter a property without the proper written notice. You have to provide habitable housing, which means certain repairs must be made immediately. Your lease has to include some important disclosures.
We can help you stay up to date and compliant with all laws and regulations. Working with a professional property manager takes a lot of liability and risk off your plate.
Contact us at North San Diego Property Management if you have any questions or need any help.