For many people, their first experience with becoming a landlord is a bit of an accident. They buy a new house and decide to lease out their former place until the housing market improves, or they may be moving for work and decide not to sell their home until things are more certain. Maybe the homeowner buys a duplex and decides to occupy one unit and lease out the remaining one. Regardless, more is involved in becoming a landlord than simply buying a pre-printed form lease online. For example:
- Does your city have a rent ordinance?
- Do you know what disclosures to make?
- Have you read the law regarding security deposits?
It isn’t just cities like San Francisco, Oakland and Berkeley which have city ordinances regarding rents. The City of Palo Alto has a rent stabilization ordinance that requires the landlord to register the rental units, provide additional disclosures to the tenant, and a mandatory one year minimum rental term. The City of San Jose also regulates rental increases for apartments and mobilehomes, capping annual increases.
Just like a seller has state mandated disclosures to make to buyers, so too are landlords required to make certain disclosures to tenants. For properties built before 1978, landlords must provide a lead-based paint disclosure to prospective tenants and a copy of the pamphlet “Protect Your Family From Lead in the Home.” Other mandatory disclosures to prospective tenants include situations such as when the owner has applied for a demolition permit or if the property has been found to have methamphetamine contamination.
Security deposits can also be tricky because sometimes landlords request a “pet deposit” thinking it is a separate or additional deposit, however, there is a maximum deposit amount allowed under state law for residential leases regardless of what the landlord calls it.
- If the security deposit is for a residential property without furniture, the security deposit may equal 2 times the rent.
- If the residence is furnished, the landlord may charge up to 3 times the rent.
Leasing out a property is a new business venture and as such, has its own set of laws and regulations which can present hurdles to the landlord. Gaining knowledge of the state and local laws governing leasing can assist the landlord before conflicts arise and litigation ensues.
Brewer Offord & Pedersen LLP has extensive experience in handling leasing disputes, both residential and commercial. If you need guidance in the pre-leasing negotiations or after a dispute has arisen, we are here to help and can be reached at 650.327.2900 or on the web at www.BrewerFirm.com.