Below are questions asked by rental property owners regarding California property management and resident manager laws followed by answers provided by Attorney Franco Simone.
Q: I am a landlord of a small apartment building. I am reviewing the new lease that I want to use this year. I want to make sure I can recover attorney’s fees if I have to evict my tenants. Can I require my tenants to pay my legal fees?
A: Yes, you can recover attorney’s fees from your tenant in an unlawful detainer action (eviction) if you have a clause in your lease that states the prevailing party will recover attorney’s fees and you win at trial. However, the attorney’s fees clause must be reciprocal and provide that the prevailing party recovers attorney’s fees, not just the landlord. This means that if you win at trial, then you will recover your attorney’s fees. However, if you lose at trial, then you will have to pay your tenant’s attorney’s fees. I suggest that you cap the amount of attorney’s fees that are recoverable. For example, most residential leases allow the prevailing party to recover attorney’s fees and costs up to a certain amount such as $500-$1,000. The capped amount is dependent on the landlord’s preference, but I advise to cap the attorney’s fees at $1,000 or lower.
Q: My tenants are constantly paying their rent late. I have a lease with a late fee clause that has a penalty that increases on a daily basis. How much can I charge the tenants per day?
A: Residential late fees should never exceed six percent of the monthly rent. If the landlord gives a daily late fee charge that exceeds six percent, then the tenant may be entitled to a refund of the overpayments of late fees. To avoid overcharging, it is best to charge a flat rate late fee equal to or less than six percent of the monthly rent. For example, if the rent is $1,200 per month, then six percent of $1,200 is $72, therefore the late fee may not exceed $72. If you have a daily late fee in your rental agreement, then you should not accept more than six percent of the rent per month as a late fee.
Q: I own a two-story home and I want to rent out different portions of my home to residential tenants to help cover my mortgage. I plan on closing off the top floor and renting out that space as unit 1 and a bedroom of the bottom floor as unit 2. Only unit 2 will have access to the kitchen so I am going to put a hotplate and refrigerator in the top floor unit. Can I do this?
A: No, you are not allowed to subdivide your property and create units without proper permitting. However, you may rent out rooms in your home, but the tenants must have access to the kitchen and a bathroom. If you choose to rent out rooms in your home, then your rental agreement should specifically describe the areas that the tenant rents out exclusively and the common areas that the tenant may access. You can limit the tenants’ access to certain areas, but you must allow the tenant access to the areas that make the property habitable, including a kitchen and a bathroom. For example, if you are renting the entire second floor of your home to a tenant, label the address as 123 Main Street, 2nd floor, San Diego, CA 92113 and provide in the contract that the tenant has access to the first-floor kitchen. Try not to use terms such as “unit” to describe the portion of the home you are renting out.
Q: I recently rented my condominium to a tenant for the first time. I want my tenants to use email and to communicate electronically with me. Can they sign their lease or month-to-month agreement with an electronic signature?
A: Yes, if your tenant agrees to sign electronically, then you may use an electronic signature on the lease or rental agreement. If you and your tenant prefer to communicate by email only or sign other documents electronically, then you may sign an agreement with your tenant authorizing electronic communications and signatures. If you choose to sign the agreement in this manner, you should choose to use a well-known and reputable program to do so.
Q: I just accepted a rental application for a large family to rent my single-family house. There are five adults and three children that are planning on occupying the property. Who should I require to sign the lease?
A: You should have all adult occupants sign the lease. Any individual that signs the lease is jointly and severally liable for every other signer. This makes the co-tenants jointly responsible to ensure the terms of the lease are being followed by everyone. Additionally, this creates a direct obligation between the signer and the lease terms.
Q: I am about to rent my condo in Mission Valley to new tenants. I anticipate that I might want to move into the condo in a few years. Is there anything I should include in my lease to make sure I am able to ask the tenant to leave because I want to move in?
A: Yes, under AB 1482, commonly referred to as the Tenant Protection Act of 2019, you are required to have a written provision allowing for termination due to owner occupancy. If you do not have this language in your lease or rental agreement and your tenant is currently on a month to month, you can serve the tenant with a 30-Day Notice of Change of Terms of Tenancy to add the term. Additionally, some rent control addendums include this language.
Attorney Franco Simone, of Simone & Blevins, has been doing evictions for over 28 years. He is also an adjunct law professor at the University of San Diego. Mr. Simone’s office is open Monday – Friday from 9:00 AM to 5:00 PM. Tel: 619-235-6180, website: www.landlordslegalcenter.com or email [email protected].