Key Clauses to Include in Your California Lease Agreement
In order to avoid misconceptions between a landlord and his or her tenants, it is vital to have key clauses in your California lease agreement.
By Faraaz Hashmi
Detailed lease agreements benefit tenants and landlords alike. Adding key clauses and using the right terms prevent future misunderstandings. There is no such thing as a lease agreement that covers too much.
It is important to remember that you cannot hold your renter responsible for something that was not outlined in the agreement.
Let’s say your tenant allows a friend to move in with them. Your lease agreement needs to contain a clause on occupancy limits. Otherwise, you will not have the grounds to evict them if they move people in without your permission.
In this article, we will examine some of the key items you should include in your California lease agreement.
#1: Is it a Lease or Rental Agreement?
- You need to set a beginning and expiration date.
- This document binds both sides to a specified term.
- In many cases, the term is 12 or 18 months.
- You need to set a beginning date.
- This document contains the notice period both sides need to end the tenancy. For both landlords and tenants, the period is at least 30 days. When tenancies last for a year or more, landlords need to give at least 60 days of notice.
- Also, you should add a clause for the notice period to change a clause in the rental agreement. The minimum period is 30 days. Under specific rent increase circumstances, it is a 60-day period.
#2: Names of Tenants
Every adult tenant needs to be named in the agreements. This ensures that all of your tenants hold legal responsibility for the lease terms, such as paying rent and avoiding damages.
Should one of your tenants violate an important clause in the agreement, you can terminate the tenancy for all renters on that lease. Missing even one adult name from the lease agreement could result in future complications.
#3: Occupancy Limits
Your California lease agreement should have a clause about the limits on occupancy. This means specifying that the rental unit is the residence of only the signed tenants and their minor children.
With this clause, you can take proper action when your tenant invites more people to live on your property. You will have the grounds for an eviction in case of any illegal subletting activities.
Covering the rent in your lease agreement is much more than putting down the amount. There are many details to consider, including the following:
- How should your tenants pay the rent? For example, by mail or delivered to your working place. The latter should include the hours when they can pay the rent at this particular address.
- What are the acceptable payment methods?
- When is the rent due?
- How long is the grace period (if there’s any at all)?
- What are the bounced-check fees? (In California, the fee limit is $25 for the first rejected check. Subsequently rejected check fees are limited to $35.)
- What are the late fees?
Note that California has communities that run rent control. Prepare to provide additional clauses in the lease agreement if your rental property is located in these areas.
#5: Pet Rules
Do you allow pets in your Orange County rental property?
Make sure to spell out any restrictions, including the number of pets allowed and any size or breed requirements.
Any pet deposits or fees should be clearly noted in the agreement. If you do not allow pets, your lease agreement has to reflect this as well. Keep in mind that keeping your property pet–free could raise the vacancy rate.
#6: Security Deposit
Security deposits are a common source of conflict. It is important to detail the security deposit rules in your California lease or rental agreement. Let’s take a look at the key details:
- The dollar amount of the security deposit
– You can charge up to two months’ worth of rent in California.
– Is the property furnished? In this case, it is up to three months’ rent.
– You may add an extra one-half months’ rent if your tenant has a waterbed.
- The use of the deposit
– You could use it for repairing damages that your tenant is held responsible for.
– You may specify situations that are not covered by the security deposit, such as failure to pay the rent.
- The return of the deposit
– You have to itemize and return the deposit within 21 days of a move-out in California.
- Interest payments
– In some cities, you have to pay interest payments on your tenant’s security deposit. Present all the details in the document.
#7: Entry to Your Property
The rental document should define the legal right of access to your property. In order to avoid claims of unauthorized entry, you need to state the time period of advance notice.
California uses the term “reasonable notice.” Emergencies aside, your advance notice should be at least 24 hours before entering. However, it is 48 hours if you conduct a move-out inspection that your tenant requested. The latter has to be connected with possible security deposit deductions.
The Bottom Line: what to include in your California lease agreement
Your California agreement provides a legal basis for any tenancy-related actions you would pursue in the future.
Start off by defining whether the rental document is a lease or rental agreement. Move on by collecting the adult tenant names and setting the occupancy limits.
Take extra care when covering rent and security deposits. Details matter.
Note that this article covered the basics of key clauses in your lease agreement. Other clauses include:
- Repairs and maintenance
- Important rules and policies
- Disclosures based on federal, state, and local laws
If any of this seems daunting to you, do not hesitate to contact a professional property management company to guide you through the process.