A lease agreement in California is a written or oral agreement between the landlord and the tenant. Its main purpose is to protect the landlord's right to claim the rent and the tenant's right to live at the leased property.
Even if you are renting to a friend or if it’s a short-term lease, it is always good to have a lease agreement signed. Some of the most important benefits of having a lease agreement are that:
Each party will know its rights and duties.
It provides the opportunity for faster dispute resolution.
It protects the interests of both the landlord and the tenant.
It limits the liabilities of both parties.
It defines the house rules for using the property.
California Lease Agreement Required Disclosures
If you are renting a property in the state of California, you must make sure to include the required disclosures in your lease agreement. Below is the list of all the required disclosures applicable to California lease agreements:
Lead-based paint disclosure. The landlord must notify the tenant of any lead-based paint hazards at the leased property. (42 U.S. Code § 4852d)
Manager and owner disclosure. A person signing the lease agreement as the landlord has an obligation to disclose information about the property manager and owner. The disclosed information has to include their name, address, and phone number. (§ 1962)
Methamphetamine contamination disclosure. If the property was exposed to methamphetamine or fentanyl laboratory activity, the landlord must disclose such information in the lease agreement. Failing to do so can cause the landlord to incur civil penalties of up to $5000. (§ 25400.45)
Mold disclosure. The person leasing the property should inform the future or existing tenant of any presence of mold in the structure of the leased property. (§ 26147)
Flood area disclosure. The landlord has to inform the tenant if the leased property is located in an area with potential flooding or flood hazards. (§ 8589.45)
Sex offender registry notice. Provides the obligation of the landlord to notify the tenant about the sex offender registry available on the website of the California Department of Justice. (§ 2079.10(a))
Shared utility disclosure. If multiple residential units are sharing one meter, the landlord must provide guidelines on how the tenants will share these costs. (§ 1940.9)
Demolition permit disclosure. If the landlord has applied for the building's demolition, they have to notify any potential tenants of this fact before signing the lease agreement. (§ 1940.6)
Military base disclosure. If the leased property is located within 1 mile of the military base with heavy ordnance, the landlord must disclose this in the lease agreement. (§ 1940.7)
Bed bug disclosure. It has to be disclosed in the form of an addendum to any new or existing tenant. It contains information about bedbug infestations and the rules to follow in case of an infestation. (§ 1954.603)
Death in a rental unit disclosure. If any previous occupant of the property has died in the last 3 years, the landlord must disclose such information in the lease agreement. This rule does not apply in cases where the occupant has died from the HIV virus or AIDS-related complications. (§ 1710.2)
Pest control disclosure. The landlord must disclose the contract with the pest control company to the tenant. The pest control company will later inform the tenant of any pest control inspection or treatment at the leased property. (§ 1940.8)
California Lease Agreement Optional Disclosures
To further protect their rights and reduce liabilities, the landlord and tenant can also include these disclosures in their lease agreement:
Move-in checklist. Provides a list of all the items on the property and their condition. Signing this checklist will prevent any damage claims and disputes when the lease is over.
Unlawful activities addendum. Provides that the landlord can immediately terminate the lease agreement if any illegal activities are conducted at the property.
Pets and smoking addendum. Provides rules and regulations for keeping pets or smoking at the leased property.
Consequences of Non-Disclosure
The landlord can face a civil lawsuit if they fail to notify the tenant of the hazards present at the property. Such hazards include mold, asbestos, pests, and bedbugs.
According to federal law, if the landlord fails to notify the tenant about the lead-based paint hazard, they can be fined up to $19,507 (24 CFR § 30.65).
California Lease Agreement Security Deposits
Security Deposit Maximum
The landlord cannot take more than 3 months’ rent for a furnished property as a deposit. For unfurnished property, the limit is two months’ rent. (§ 1950.5)
Security Deposit Return
From the moment the tenant moves out of the property, the landlord has 21 days to return any remaining deposit. (§ 1950.5(g))
They also have to send an itemized list of deductions made for any:
Reasons for Deductions
Extensive cleaning that had to be done
Due rent that is left unpaid
When is Rent Due in California? (Grace Period)
Any date agreed upon by the parties and incorporated into the lease agreement will be considered the rent payment due date.
If the tenant is late on a payment, the landlord must send him a 3-day notice to pay or quit before starting the eviction procedure.
California Rent Late Fees
California state law does not provide any late fees in relation to the rent payment. However, the landlord cannot charge an unreasonable fee for the late rent. In practice, everything below 5% of the monthly rent is considered reasonable.
California NSF Checks
The tenant who used the bad check can be charged an additional $25 for the first bounced check or $35 for any subsequent bounced check. (CIV § 1719)
California Landlord’s Right to Enter
If it’s an emergency, the landlord does not have to notify the tenant before accessing the property.
In cases of maintenance and showing the premises to other potential tenants, the landlord has to give a twenty-four (24) hour notice to the tenant. (CIV § 1954)
The landlord must give a forty-eight (48) hour notice before the move-out inspection. (§ 1950.5)
California Lease Agreement FAQ
Yes, if signed by all parties, the California lease agreement is binding.
If the landlord fails to sign the lease agreement but allows the tenant to move into the property and accepts the rent payment, the lease agreement can be considered binding. It’s also binding if the tenant didn’t sign the lease agreement but has made the rent payment.
If the tenant didn’t sign the lease agreement but has made the rent payment, such a lease agreement is binding.
The best way to organize the California lease agreement is to follow this structure:
Enter the full name and address of each party.
Provide all the details about the leased property.
Insert the rent amount and methods of payment.
Set the tenancy duration.
Include all the mandatory disclosures and addendums.
Define all the rights and duties of the landlord and the tenant.
Include the date and place of the contract signature and signature sections.
The best way to ensure you comply with all the rules and regulations related to property leasing in California is to download one of the templates on our website. You can choose between multiple types of templates, depending on the type and duration of the lease.
After creating the lease agreement, make sure to:
Sign the lease agreement.
Notarize the lease agreement (optionally).
Inspect the property.
Sign the move-in checklist.
Settle the rent and deposit payment and property handover.