Before Signing a Rental Agreement
Below are some terms and procedures you may encounter while searching for housing and before signing your rental agreement:
Holding Deposits
A holding deposit is a deposit paid by the tenant/applicant (you) and held by the landlord to ensure the landlord will not rent the unit to anyone else while your application is being processed or once the landlord has approved the application and the parties have signed a rental agreement.
Ask the following questions before you pay a holding deposit:
- Will the deposit be applied to the first month’s rent or security deposit? If the answer is yes, ask the landlord for a receipt and written confirmation of this agreement. Applying the deposit to the first month’s rent is a common practice.
- Is any part of the holding deposit refundable if you change your mind about renting? Generally, if you change your mind, the landlord can keep some (and perhaps all) of your holding deposit. The amount that the landlord can keep depends on the costs that the landlord incurred in holding the unit such as additional advertising costs to find a new tenant or lost rent.
If you give the landlord a holding deposit when you submit your rental application, but the landlord does not accept you as a tenant, the landlord must return the entire holding deposit.
Application Fee and Credit Checks
Before renting to you, most landlords will ask you to fill out a written rental application. A rental application is different from a rental agreement. The rental application is like a job or credit application that the landlord will use to decide whether to rent to you.
A rental application usually asks for the following information:
- The names, addresses, and telephone numbers of your current and past landlords.
- The names, addresses, and telephone numbers of people whom you want to use as references.
- Criminal history information.
- Tax identification number, which may be Social Security number.
- Your driver’s license number.
Beginning in 2023, applicants will be able to submit a reusable tenant screening report with their applications instead of repeatedly paying for consumer background checks.
When you submit a rental application, the landlord may charge you an application screening fee to cover the cost of obtaining information about you, such as checking your personal references and obtaining a credit report about you.
The application screening fee cannot legally be more than the landlord’s actual out-of- pocket costs, including the cost of obtaining a consumer credit report, and the reasonable value for the time spent by the owner or the owner’s agent in gathering information concerning the applicant. The amount is adjusted annually commensurate with an increase in the Consumer Price Index.
Note: As of 2022, an application screening fee cannot exceed $59.67. The landlord must give you a receipt that itemizes the cost of obtaining and processing the information about you. The landlord must return any unused portion of the fee (for example, if the landlord does not check your references or does not run your credit).
When You Have Decided To Rent
Rental Agreements
Before signing a rental agreement or a lease, the parties should read it carefully so that each party understands all of its terms. Most landlords use printed forms for their rental agreements, however, printed forms may vary from form to form. There is no standard rental agreement.
If the rental agreement refers to a separate document, such as “tenant rules and regulations,” get a copy and read it before you sign the written agreement.
Do not feel rushed into signing. Make sure that you understand every term before signing the rental agreement. If you do not understand something, ask the landlord to explain it to you before signing it. If you still do not understand, discuss the agreement with an attorney, legal aid organization, tenant-landlord program, or law clinic before signing it.
What kind of terms should be included in the rental agreement or lease?
The written rental agreement should contain key terms, such as the following:
• The names of the landlord and the tenant.
• The address of the rental unit.
• The amount of the rent.
• When the rent is due, to whom it is to be paid, and where it is to be paid.
• The amount and purpose of the security deposit.
• The amount of any late charge or returned check fee.
• Whether pets are allowed. The law does not treat assistance animals and service animals as pets.
• The number of people allowed to live in the rental unit.
• Who is responsible for paying utilities (gas, electric, water, and trash collection).
• If the rental is a house or a duplex with a yard, who is responsible for taking care of the yard.
• Any promises by the landlord to make repairs, including the date by which the repairs will be completed.
• Contact information for reporting problems or necessary maintenance or repairs, including an emergency number.
• Other items, such as whether you can sublet the rental unit and the conditions under which the landlord can enter the rental unit.
Security Deposits
A security deposit is a deposit or a fee that the landlord requires the tenant to pay at the beginning of the tenancy. According to Civil Code Section 1950.5, a security deposit cannot be deemed “non-refundable.”
The law limits the total amount that the landlord can require you to pay as a security deposit. The total amount allowed as security depends on whether the rental unit is unfurnished or furnished:
- Unfurnished rental unit: The total amount that the landlord requires as security cannot exceed two months’ rent.
- Furnished rental unit: The total amount that the landlord requires as security cannot exceed three months’ rent.
A landlord cannot require that a security deposit is nonrefundable. However, when you move out of the rental, the law allows the landlord to keep all or part of the security deposit for the following:
- You owe rent.
- You leave the rental less clean than when you moved in.
- You damaged the rental beyond normal wear and tear.
- You have made alterations and did not return the unit to the original condition.
- You fail to restore personal property (such as keys or furniture), other than because of normal wear and tear.
More information regarding security deposits can be found in the Tips and information section under “Security Deposits”.
Renters Insurance
Renter’s insurance protects the tenant’s personal property from losses caused by fire or theft. It also protects a tenant against liability (legal responsibility) for claims or lawsuits filed by the landlord or others alleging that the tenant negligently (carelessly) injured another person or damaged the person’s property.
Many landlords will require a tenant to have renter’s insurance, specifically liability coverage, and will set the minimum terms of coverage. Be sure to factor the cost of this insurance into what it will cost you to live at the property. We recommend that you please consider getting a renter’s insurance policy for coverage during the duration of your lease – even if your landlord does not require tenants to have one.
Moving In and Occupying a Residence
When you have found a rental property and signed a rental agreement, here are some tips and info you can follow to help you mitigate any issues you might run into during your time as a tenant:
Move In Checklist
Before signing the rental agreement it’s important to, if possible, inspect the property beforehand to spot any damages or major issues (water damages, insect infestations, insufficient water, and electrical supplies etc.).
Once you’ve signed the rental agreement it is a good practice for you and the landlord to do a joint walkthrough of the rental unit and note the condition of the items included in the checklist in the “Condition Upon Arrival” section. A template for the move in checklist can be found under the “Forms” section on the Law Clinic's website.
Some tips for filling out the move in checklist:
- Take photos of any damages or repairs that you note on your checklist and make sure to have the date and time function enabled on your photos if using a phone to photograph the damages.
- If you are conducting a joint walkthrough with the landlord, ensure to note of any damages or necessary repairs. When completed with the walkthrough make sure to the landlord and you sign and date the checklist.
- Once completed with the checklist ensure to keep a copy of the checklist in your records and to either mail a copy of it to your landlord or email a scanned version of it.
- You should complete the Inventory Checklist and take pictures of any issues even if the landlord does not want to complete a walk through with you.
Carefully completing the checklist at the beginning of the tenancy will help avoid disagreements about the condition of the unit when you move out possibly saving you from not getting any amounts of your security deposit back from your landlord.
Rent
When and how should I pay my rent?
Most rental agreements require that rent be paid at the beginning of each rental period. In a month-to-month tenancy, rent usually must be paid on the first day of the month. However, your rental agreement can specify any day of the month as the day that rent is due (for example, the 10th of every month in a month-to-month rental agreement)
The landlord or landlord’s agent normally cannot require you to pay rent in cash or to use electronic funds transfer. They must allow you to pay by some other means such as a personal check, a money order or cashier’s check.
For a landlord to require you to pay rent in cash, the landlord must first give you a written notice stating that your check was dishonored (a dishonored check is one that the bank returns without paying because you stopped payment on it or because your account did not contain sufficient funds.) and that you must pay cash for the period of time stated by the landlord. This period cannot be more than three months after you:
- ordered the bank to stop payment on the check.
- attempted to pay with a check that the bank returned to the landlord because of insufficient funds in your account.
If you pay rent in cash or with a money order, you should ask your landlord for a signed and dated receipt when you pay your rent. Legally, you are entitled to a written receipt whenever you pay rent.
The rental agreement must state the name and address of the person or entity to whom you must make rent payments. If you can show proof that you mailed the rent to the stated name and address (for example, a receipt for certified mail), the law assumes that the rent was received by the owner on the date of postmark. It is very important for you to pay your rent on or before the due date. Not paying rent on time might lead to a negative entry on your credit report, late fees, or even eviction.
Rent Increases
How much can rent be raised?
If you are covered by the Tenant Protection Act (State rent limits), which applies to a significant percentage of rental properties, the landlord can only raise rent in a 12-month period by 5% plus the inflation rate or 10 percent.
How often can rent be raised?
Typically for rental agreements with a fixed term (i.e., 6 months, 1 year, 2 years, etc.), the landlord cannot increase the rent during the rental term unless the rental agreement permits rent increases. Rent may be increased if the rental agreement is renewed.
For rental agreements with periodic terms (e.g., week-to-week or month-to-month), properties subject to the Tenant Protection Act require 30 days’ written notice prior to any proposed rent increase. If the property is exempt from the State rent limit and no local rent stabilization ordinances apply, the landlord must provide the tenant with either 30 days’ notice (if the rent increase is 10 percent or less) or 90 days’ advanced written notice (if the rent increase is more than 10 percent).
Note: Under these circumstances, there is no limit on how many times the landlord may raise the rent, except for the required advance written notice is required, and increases cannot be retaliatory or discriminatory.
Subleases & Assignments
Subleasing
Subleasing is the act of renting out all or part of a rental property to a third-party tenant, known as a subtenant. This type of arrangement can be beneficial for renters who need to move out of their rental property before their lease is up, but still want to maintain their lease agreement and avoid paying rent for an unoccupied unit.
Before subleasing a rental property, it's important to understand the laws and expectations involved. Here are some key points to keep in mind:
- Check your lease agreement: Before considering subleasing your rental property, make sure to review your lease agreement carefully. Some rental agreements may not allow subleasing at all, or may require the landlord's approval. It's important to comply with the terms of your lease agreement to avoid legal repercussions.
- Notify your landlord: If subleasing is permitted under your lease agreement, you should notify your landlord in writing of your intent to sublease. This notice should include the name and contact information of the proposed subtenant, the proposed rental period, and any other relevant details.
- Obtain written consent: Your landlord may require written consent before allowing you to sublease your rental property. Make sure to get this consent in writing and keep a copy for your records.
- Conduct a background check: Before approving a subtenant, you should conduct a thorough background check to ensure they are reliable and able to meet their rental obligations. This includes checking their credit history, rental history, and employment status.
- Maintain responsibility: Even if you sublease your rental property, you are still ultimately responsible for any damages or rental payments that are not made. Make sure to have a written agreement with your subtenant that outlines their obligations, and make sure to inform them of any rules or regulations they need to follow.
- Comply with fair housing laws: When subleasing a rental property, it's important to comply with fair housing laws to avoid discrimination. This means that you cannot refuse to rent to someone based on their race, gender, religion, national origin, or other protected characteristics.
Assignment
An assignment is a transfer of your rights as a tenant to someone else. You might use an assignment if you have a rental agreement for one year and need to move permanently before the term ends. Like a sublease, an assignment is a contract between the original tenant and the new tenant (not the landlord).
However, an assignment differs from a sublease in one important way. If the new tenant accepts the assignment, the new tenant is directly responsible to the landlord for the payment of rent, for damage to the rental unit, and so on. Nevertheless, an assignment does not relieve the original tenant of his or her legal obligations to the landlord unless the landlord explicitly releases the original tenant from his/her obligations. If the new tenant does not pay rent or damages the rental unit, the original tenant (unless released from his/her obligations by the landlord) remains legally responsible to the landlord.
For the original tenant to be relieved of his/her obligations under the original rental agreement, the landlord, the original tenant, and the new tenant all must agree that the new tenant will be solely responsible to the landlord under the assignment. This agreement is called a novation and must be in writing.
Remember: Even if the landlord agrees to a sublease or assignment, the original tenant is still responsible for the rental unit unless there is a written agreement (a novation) that states otherwise. For this reason, think very carefully about who you consider subleasing or assigning your rental unit to.
Note: This is information accessible to the public and does not constitute legal advice or counsel. For more information or to discuss this topic in depth, schedule a meeting with the Law Clinic.
