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If you're a landlord and are looking to rent a residential or commercial property in California, you may already know how important the lease agreement is. 

Overall, a California commercial lease agreement (or a residential lease agreement) sets the foundation for the experience you and your tenant will have.  

Because of this, the lease agreement must protect your best interest, and it should be able to tell prospective tenants everything they should know before moving into your rental property.

In California lease agreements, you must ensure you include all of the terms that you’d like to uphold for your rental unit, from landlord-tenant laws to other miscellaneous factors, including recurring fees, pet allowances and fees, termination terms, and more. 

The following page will outline everything a great California lease agreement must have, as well as tips about  how you can make your rental process much easier through property management software.

California Leases

To put it simply, a lease or rental agreement is a contract signed between the landlord and the unit’s prospective tenants. 

The document is supposed to state all the rules associated with inhabiting your rental unit, including but not limited to: monthly rent payments, the tenant's security deposit, recurring fees, and other important factors.

A rental unit's lease agreement must comply with current California landlord-tenant laws, which we'll cover briefly on this page. Tenants who  have a California sublease agreement must also adhere to these laws.

What to Include

Generally speaking, your lease agreement must include all of the rules that should be enforced while a tenant lives in your rental property. Let’s take a look at some of the most common ones:

Rent

California has a rent control system through the Tenant Protection Act (AB 1482). 

Here, the landlord can't charge tenants an unrealistic amount of rent for their rental property. 

On the other hand, landlords are allowed to increase rent without justification, although they may have to provide notice a certain amount of time before doing so.

According to California’s rent control laws, landlords can increase rent by 5% annually, plus a local cost-of-living adjustment of no more than 5%, for a maximum increase of 10%.

If the tenant refuses to pay rent for any reason, the landlord is able to take legal action.

Aside from outlining the rent amount and due dates, this part of the contract must also include guidelines for renewals and late fees for unpaid rent.

Security Deposit

The security deposit is one of the most vital parts of a rental property document, because it is a way to protect landlords in the face of damaged or lost property. 

Generally, the security deposits' maximum is used by the landlord to pay for any damage the prospective tenants cause to the property within a particular amount of time. For example, this damage can include:

  • Holes, cracks, or other structural damages in any part of the property
  • Painting any part of the property a different color than what it was upon move-in
  • Any damaged fixtures, like lighting units, switches, and door knobs
  • Stained, damaged, or discolored flooring
  • Unreasonable wear and tear due to pets, children, or any other damage
  • If the unit is furnished, the damage or disappearance of any furnishings

In California, landlords can charge up to two months' worth of rent as a security deposit. When the rental agreement ends, the landlord must return the money left from the security deposit to the tenant in under 21 days.

Warranty of Habitability and Repairs

The law states that all landlords in California must provide a property with the following basic elements:

  • Heating
  • Cooling
  • Plumbing
  • Sanitation  

Moreover, if there are any damages to the property that weren't the tenant's fault, the landlord has to provide repairs within a reasonable amount of time, which is usually within 30 days.

It's vital to note that if the landlord fails to take care of necessary repairs, the tenant may choose to withhold rent or take legal action.

Lease Termination Conditions / Evictions

In most monthly lease agreements, the landlord is legally able to terminate the contract at will as long as they provide at least 30 days' notice. 

However, if the landlord is working with a fixed-term lease, they may terminate it early with an early termination clause, as well as due to active military duty, a habitability violation, or any other problems.

Landlord's Right to Entry

According to California law, a landlord is able to enter their rental unit as long as they notify tenants within 24 hours with a valid reason to enter. 

However, the landlord may be able to enter the rental unit without any notice in cases of emergency.

Miscellaneous Rules

A residential lease agreement can include a wide range of rules and regulations for the prospective tenant, including but not limited to:

  • Pet rules, including pet size, types of allowed pets, and fees associated with pets 
  • "Party" rules
  • Smoking rules
  • Loud noise or disturbance rules
  • And any other regulations the landlord can think of. 

Here, the landlord may put anything they consider appropriate in their lease agreement, as long as it's reasonable under California law.

Download a Rental Contract Template for Free

If making a California roommate agreement or rental agreement seems too complicated for your residential property, you can download a template for free with the following resources: 

Make sure you check that the free form you use includes everything you need to get started with your lease agreement. If any property owner wants to adjust something to fit their needs, they're free to do it.

Mandatory Disclosure

Now that you know everything a property owner must include in their lease agreement to notify tenants of the rules, here's a list of mandatory disclosures every contract must have.

Keep in mind that these aren't negotiable terms and must be included in every rental contract you make, whether it's a residential or commercial real estate property: 

  • Asbestos: If the unit was built before 1979, it may be at risk of asbestos exposure, which is a harmful insulating factor for anyone living there. If your property fits this criterion, it must be disclosed in the lease agreement. 
  • Mold: In case your property has mold, you must also disclose that information to the new tenant.
  • Lead-Based Paint: Any property built prior to 1978 must have a clause in the contract regarding the usage of lead paint and its hazards to physical health.
  • Registered Sex Offenders: According to California law, each rental agreement must include a clause that states that the tenant may find a list of specified registered sex offenders on the Department of Justice's website.
  • Pest Control: There must be regular pest control sessions disclosed in the agreement. Moreover, there must be a clause in the agreement that states tenants will receive a 24-hour written notice if they must evacuate the property for a pest control session. These sessions must be completed by a pest control company.
  • Flood Zone: Some areas in California are considered potential "flood zones." If the landlord's property is located in a flood zone, they must provide disclosure with a written notice. Such disclosure must include recommendations and resources for learning more about floods.
  • Methamphetamine and Fentanyl Contamination: This applies to any rental unit that has a possible drug contamination case. The landlord must provide the new tenants with information surrounding this and any remediation efforts to remove the contamination in a California rental application.
  • Demolition Permits: In case the landlord is planning to have a demolition soon, they must provide that information with the date of demolition on the contract. This works so that the tenant knows when the lease contract will end due to the demolition.
  • Military Ordinance: Any property located within one mile of military training grounds must include a clause in the contract surrounding this information for safety reasons.
  • Deaths: If there were any deaths within three years of the beginning of the current lease agreement due to any defect in the property, the landlord must disclose that information. This doesn't apply to deaths involving AIDS or HIV.
  • Shared Utilities: California landlords must inform the tenants about how utility charges are separated between two or more tenants; this is in cases where the rental unit is shared by multiple tenants.

Types of Agreements

There isn't a one-size-fits-all document for rental properties. Depending on your needs and the property’s condition, California landlords may be able to work with different documents. These include:

  • Standard Agreement: This is the "basic" version of a lease agreement. It includes all of the rental guidelines that both the tenant and landlord must follow to have a healthy rental relationship.
  • Monthly Agreement: The monthly agreement focuses on the same rules as the previous one. Overall, the main difference between the two is that this one focuses on monthly fees, whereas the standard agreement doesn't have a particular rent requirement.
  • Rental Application Form: This document is used by landlords for tenant screening purposes. The document includes vital information like income, rental history, criminal record, and any other factor that the landlord may deem important.
  • Roommate Agreement: A roommate agreement is a contract where the landlord gets two or more tenants to sign the document.
  • Sublease Agreement: In a sublease, the tenant rents the space to another tenant. This may only happen if the landlord accepts these terms.
  • Commercial Agreement: This document is very common in shopping malls or other commercial buildings. Here, the landlord (or landlords) rent commercial spaces to businesses.

Build Your Own

You can customize and build your own lease agreement, but keep in mind that some lease agreements must be unique and include particular rules according to the laws of the state in which the property is located.

If the "standard" version of a California lease agreement does not work for you, you may need to customize your agreement with specific terms. 

You can create a customized lease agreement document online. This specific tool offers a simple yet effective multiple-choice quiz that allows you to specify your needs for a specific lease. 

Once you've taken the quiz, a fully customized rental agreement will be generated, and you’ll be able to use it at any time.

Using DoorLoop

Even the simplest lease agreements can be a bit overwhelming to complete at first, especially since it’s so important to make sure that everything is perfectly correct. 

That’s where great property management software comes in.

DoorLoop allows you to upload customized lease templates in seconds, then auto fill them with all of the information you need. 

Moreover, you'll have access to tenant screening that can be completed in one click so that you can handpick the best tenants for your property with ease.

Once you've uploaded and customized your rental agreement, you can send it to your prospective tenants so that they can sign it electronically.

If you’re interested in seeing this at work for yourself, you  can start using DoorLoop immediately and request a demo, no credit card required.

FAQs

Are Tenants Protected Against Discrimination in California?

Yes. California has a "Fair Housing Act," which prevents the landlord from discriminating against any tenant based on their gender, religion, race, citizenship status, and more.

Can the Landlord Change the Locks of a Property?

Unless the tenant asks for it, the landlord is not legally allowed to change the locks as a way to evict the tenant.

Is a Verbal Agreement Legally Binding in California?

Although it's valid, it's always best to go for written documents to prevent any misunderstandings in the future.

Can a Landlord Evict a Tenant Even if There Isn't a Lease?

No, they can't. The landlord must provide at least 30 days of notice in case of monthly agreements.

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David Bitton

David is the co-founder & CMO of DoorLoop, a best-selling author, legal CLE speaker, and real estate investor. When he's not hanging with his three children, he's writing articles here!