Overview
Leases are the cornerstone of a successful landlord-tenant relationship, providing a legal framework for both parties to enter a harmonious agreement.
Every California lease agreement—including its structure, nature, and contents—is regulated by California landlord tenant laws. For this reason, it’s imperative to understand the intricacies of the law before constructing a lease.
This guide will walk you through the crucial components of a California lease agreement, ensuring you’re well-equipped to make informed decisions. And to make your journey easier, we’re offering a free California lease agreement template for download!
A California lease contract or California residential lease agreement is a legally binding document that outlines the terms and conditions governing the rental of a residential property within the state. This lease must adhere to California’s landlord-tenant laws, providing a clear framework for both landlords and tenants to follow and fostering a secure and transparent rental environment.
The following components should be included in every California home lease agreement. Note that these components primarily apply to residential leases; a California commercial lease agreement will necessarily have different requirements.
Lease Term
This section specifies the lease’s start and end dates, establishing the duration of the rental agreement.
Rent
Here, you’ll find details regarding the rent rate, due date, and the status of rent control.
California has state-wide rent control laws. The California Tenant Protection Act, (AB 1482), dictates that in any 12-month period, landlords cannot increase the rent more than the lesser of the following:
- 5%, plus the percentage change in the cost of living (determined by the Consumer Price Index)
- 10% of the lowest rent charged during the past year
For week-to-week and month-to-month tenancies, California landlords must provide 30 days’ notice to increase rent more than 10%, and they must provide 60 days’ notice for increases greater than 10% (Cal. Civ. Code § 827(b)(2-3)).
Additionally, California landlords are required to allow tenants to pay their rent and security deposits by at least one method besides cash or electronic funds transfer (ACH transfers or eChecks). This means a California home lease agreement must allow multiple ways for tenants to pay rent, one of which is by card, check, or another non-electronic, non-cash method (Cal. Civ. Code § 1947.3).
Note: There is an exception to the above requirement for tenants whose rent checks have bounced in the past. In this case, the landlord can require the tenant to pay in cash as the exclusive form allowed for up to three months.
Late Fees
If you want to be able to charge your tenants late fees for late rent, you must include your late fee policy in your California lease agreement. The penalties for missing rent payments should be clearly stated in the lease, as should any exceptions.
According to California law, late fees must be “reasonable” (usually around 5-10%) and representative of the actual damages suffered by the landlord for not receiving rent on time. There is no codified limit on late fee amounts in California law but remember that late fees must also be complaint with local rent control laws, which vary by city and county (Cal. Civ. Code § 1671).
Security Deposit
The maximum or limit for security deposits in California is regulated by state law. In California, security deposits cannot exceed two months’ rent for unfurnished units or three months’ rent for furnished units. The security deposit limit includes all cleaning and pet fees, and it should be clearly stated in all California lease agreements.
The process for returning a California security deposit is also regulated by state laws. In California, deposits must be returned within 21 days after the lease ends. You will be required to return the entire deposit to the tenant, except funds that are necessary and reasonable for damages that are not due to ordinary wear and tear. Additionally, at least 15 localities in California require landlords to pay tenants interest on their security deposits. Be sure you know the laws in your city and county as well as California’s state-wide legislation regarding security deposits.
Required Disclosures
This section covers the crucial required disclosures in California, which are information that must be disclosed to the tenant in the lease before they agree to rent the property. Required disclosures may be included in a California residential lease agreement or be provided as a separate written notice.
In California, there are many required disclosures:
- Lead-based paint – Landlords in all 50 states must disclose lead-based paint hazards in rental agreements for most properties built before 1978.
- Landlord/agent identity – California landlords must disclose the name, phone number, and address of anyone authorized to manage the premises or collect rent.
- Bedbugs – California landlords must give tenants information about bedbugs and how to prevent and report infestations.
- Pest Control – If you’ve previously hired a pest control service, you must disclose this to tenants and provide a copy of a notice from the company describing the pest and any pesticides used.
- Demolition – California landlords must disclose their intent to demolish a rental unit, when applicable.
- Flooding – If the property is in a flood hazard zone and the lease was signed after July 1, 2018, the landlord must disclose that the rental is in an area of potential flooding.
- Mold – If a California landlord is aware of mold growth in the unit, they must disclose it.
- Methamphetamine contamination – If the property has been contaminated by methamphetamine, the landlord must attach a notice of a remediation order to the rental agreement.
- Shared utilities – California landlords are obligated to disclose how utilities and utility costs are shared between units in multi-family properties.
- Smoking policy – California landlords must disclose the smoking policy in all leases signed in 2012 onward.
- Just Cause and Rent Limit – Most California leases must include information about the Tenant Protection Act (AB 1482) in every lease agreement.
- Ordnance locations – If the property is located within a mile of a former ordnance, the landlord must disclose this.
- Deaths on the property –California landlords are only required to disclose that a death occurred on the property within the past three years.
- Megan’s Law – Landlords must include a clause about the national sex offender registry made available by the Department of Justice in every California lease.
Landlord Right to Entry
In California there are specific laws governing when a landlord can enter a rental property. California landlords must provide at least 24 hours’ notice before entering a property for a non-emergency reason. The landlord’s right to entry should be included in the lease.
Repairs & Maintenance
This section outlines how and when tenants should submit maintenance requests and clarifies the process for addressing necessary repairs. California landlords should specific which repairs and maintenance concerns the tenant is responsible for as well as who they should call for emergency maintenance issues.
Lease Termination/Renewal Procedures
This section details the procedures for early lease renewals, termination, and breaking the lease, including eviction processes. In California, landlords must send at least a three-day notice before they can file for eviction due to a noncompliance. This notice period should be clearly stated in every California rental agreement. The lease should also state how the tenant should go about terminating the tenancy and how many days’ notice they must provide to do so.
The California eviction process is complex, so be sure to review the associated laws carefully before enforcing any lease termination policies you describe in your lease.
Joint and Severability Clause
This clause is for leases with multiple roommates and explains the legal consequences if one party fails to fulfill their obligations. It ensures that the entire lease isn’t invalidated due to one roommate’s breach.
Signatures
Both the landlord and tenant will sign the California rental lease agreement either on paper or electronically, ensuring a secure and convenient process.
California Lease Agreement Download
To make your leasing journey simpler, we offer a free, downloadable CA rental lease agreement form. This document is tailored to meet the specific requirements of California state law described above, so be sure to make use of this valuable tool to make leasing as painless as possible.
Conclusion
Understanding the nuances of a California residential lease agreement is vital for a smooth and legally sound tenancy. We hope this guide has provided you with a clear understanding of the components of a California rental agreement. To get started on the right foot, download our free CA rental lease agreement form and ensure a transparent, lawful, and satisfying rental experience.
