California is well-known for its strict tenant protections and detailed rental laws. Sometimes, it can be challenging to keep up with these laws, especially considering that they change so frequently. Every year, it seems, we have new laws in place that require us to go back and change our lease agreements. If you’re renting out a property that’s covered by rent control, the amount that you can raise the rent will change every year. In 2024, there are new security deposit limits. Evictions are always getting a little more difficult to pursue.
If you’re renting out a property in Carson or anywhere in California, you must be up to date on the local, state, and federal rental laws.
At Real Property Management Choice, it’s our job as your Carson property management partner to make sure we’re learning about the laws, communicating them with our owners, and ensuring that all the properties we lease, manage, and maintain are compliant with those laws.
Here are some of the things that every Carson landlord should know to avoid expensive and frustrating legal mistakes.
Security Deposits for Carson Rental Properties
We’re starting with security deposits because as we mentioned already, there’s a new law that went into effect in July of 2024, limiting the amount of a security deposit you can collect. It’s now the equivalent of one month’s rent. That’s for both furnished and unfurnished rental properties. This is a serious change from the previous law, which allowed for up to two times the monthly rent for unfurnished rentals and up to three times the monthly rent for a furnished property.
There are exceptions to this law, and you may fall into one of the categories. However, even if you’re exempt from the one-month limit, you’ll find yourself at a competitive disadvantage by charging any more since that’s what most rental properties are going to require – up to but not exceeding the equivalent of one month’s rent as a deposit.
Exceptions are if you’re an individual landlord or an LLC and you own no more than two residential rental properties with no more than four dwelling units for rent. In that case, you can charge up to two months’ rent as a security deposit unless your tenant is a service member on active duty or in the reserves.
Even if you can take advantage of that exception because you’re renting out a home you once lived in yourself and that’s your only rental property, you likely won’t be charging more than the equivalent of one month’s rent as a security deposit. Make sure your lease agreement reflects this limit and the amount you’re collecting from tenants.
While we’re on the subject of what you’re permitted to collect as a security deposit, let’s not forget that there are a lot of laws around how you give that deposit back to your tenants. First, you have 21 days to do it. If you’re withholding all or part of that deposit, you need to send your tenants an itemized list of what you withheld and why. Include receipts and invoices for the work that was required to repair any damage that the tenant left behind. Remember, you can keep the deposit for tenant damage, unpaid rent, or reasonable cleaning fees. You cannot use your tenant’s security deposit to pay for wear and tear issues. That’s your responsibility as the landlord.
California’s Rent Control Laws and The Tenant Protection Act
Unless you’re renting out mobile homes, there’s no local rent stabilization ordinance in Carson. However, you’ll need to know if your Carson rental property is subject to the statewide rent control restrictions or exempt from them.
In 2019, California made headlines with the passage of Assembly Bill 1482, the Tenant Protection Act. It set statewide limits on rent increases and provided tenant protections across California. The law caps annual rental increases at 5% plus the local rate of inflation, or 10% of the prior year’s rent, whichever is lower. This law also included just cause eviction provisions, which means that rental property owners are now required to provide a valid reason for eviction, such as non-payment of rent or breach of lease terms, to evict tenants who have resided in the property for at least 12 months.
While California’s statewide rent control law generally applies to a wide range of rental properties, there are notable exemptions that Carson landlords and real estate investors should be aware of. Understanding these exemptions can help investors develop strategies to best navigate the regulatory landscape.
- Newly Built Properties
Properties that have been constructed in the last 15 years are exempt from the rent control provisions. This rolling exemption period intends to encourage the development of new housing and ensure an adequate supply in the market.
- Single Family Homes and Condominiums
Single-family homes and condos are exempt from rent control, provided they are not owned by a corporation, real estate investment trust (REIT), or a limited liability company in which at least one member is a corporation. This exemption acknowledges the unique nature of these property types and provides individual owners with more flexibility in managing their investments
- Owner-Occupied Duplexes
Owner-occupied duplexes, where the owner resides in one unit, are also exempt. This exemption reflects the more personal and small-scale nature of such arrangements, reducing regulatory oversight on properties closely managed by their owners.
- Temporary Housing
Temporary housing, such as hotels, motels, and short-term vacation rentals, is not subject to the rent control laws, given their non-permanent residential nature. This category also encompasses dormitories and transitional housing managed by institutions such as colleges and universities, which serve specific, short-term housing needs.
Investors focused on these exempt categories can leverage the flexibility they provide, potentially capitalizing on opportunities that are not constrained by the limitations of the rent control law. Make sure you know where your property falls before you invest.
California Fair Housing Laws
Following fair housing laws is a big part of renting out a property in Carson. These laws start at the federal level, with the Fair Housing Act. It establishes seven protected classes, which means you cannot make decisions about who rents your property based on those seven characteristics. You cannot deny a tenant with children just because you don’t want children on your property, for example.
It may not surprise you to learn that California’s state fair housing laws are even stricter than the federal laws. There are more protected classes, and this is the full list (which includes the federally protected classes):
- Age
- Race
- Color
- National Origin/Ancestry
- Religion
- Disability
- Sex/Gender
- Sexual and Gender Identification and Gender Expression
- Marital and Familial Status
- Genetic Information
- Source of Income
- Immigration Status
- Primary Language
- Citizenship
- Military/Veteran Status
You cannot make any leasing or management decisions based on those characteristics. This may seem easy enough, and maybe you are certain you would never knowingly. However, it’s easy to make a mistake when you’re marketing your property. You might use language that shows a preference for one type of tenant over another. Noting that your property is close to churches, for example, could be problematic. You don’t want to say it’s not good for children or older people. Focus on what makes your property appealing to everyone.
When we talk about fair housing laws, we’re also talking about:
- Section 8
You cannot deny an application to a prospective tenant who received Section 8 or other housing benefits. When we say that you’re not permitted to consider a source of income, the law recognizes housing vouchers as a source of income. When you have a tenant with Section 8 benefits applying for your property, you need to treat that application the same way you’d treat any application, and if they are otherwise qualified to rent your home, you have no legal reason to deny.
- Service Dogs and Emotional Support Animals
This is a part of fair housing law that can be tricky. You cannot prohibit a tenant with a disability who needs a service dog or an emotional support animal. These animals are need viewed by the law as pets. That means you have to accept them even if you don’t accept pets. You cannot charge a pet fee or pet rent.
While service dogs come with specific training, emotional support animals and companion animals do not. Recent California laws allow you to require a tenant who needs an emotional support animal to provide a letter from a medical professional whom they have seen in person.
These are only a handful of the most important laws that impact landlords in Carson, California. When you’re renting out a home here, you also have to be aware of the implied warranty of habitability. You have to understand that you cannot show up at an occupied property to inspect it; you need to have a reason for going inside, and you need to provide your tenants with proper notice. There are laws now around e-bike storage and organic recycling in multifamily buildings.
We want to protect you from making a legal mistake. If you’d like to talk about your own property and how to remain in compliance with all of these ever-changing laws, please contact us at Real Property Management Choice.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
