HOME BUYING GUIDE: LANDLORD-TENANT LAWS

Understanding landlord-tenant laws in Sacramento is crucial for property investors. This includes rent control measures, security deposit regulations, fair screening processes, eviction protocols, and the tenant-friendly environment governed by California law. Knowledge of both state and local laws is necessary for informed decision-making and ensuring investment success.

Property owners should stay informed and adjust their strategies to comply with these regulations, optimizing their investment's potential within Sacramento's real estate landscape.

• 📉 Rent control caps limit rent increases to stabilize market fluctuations and protect tenants.
• 🏘️ Local rent controls may impose stricter regulations than those at the state level.
• 💸 Security deposit limits ease tenant financial burdens, making properties more appealing.
• 🔍 Fair screening laws ensure non-discriminatory practices in tenant selection.
• 🤝 Just cause eviction protections prevent arbitrary tenant removals.
• 🔗 It's important to understand local variations in eviction rules.
• 🏡 Real estate specialists can offer valuable insights into navigating these laws.

California’s Tenant Protection Act of 2019 placed caps on how much rent can be increased annually. For qualifying properties, landlords may increase rent by a maximum of 5% plus the local rate of inflation, though it cannot exceed a total of 10% within a 12-month period. Notably, during emergencies like wildfires, the state imposes strict anti-price gouging regulations limiting rent increases to no more than 10% of pre-emergency levels.

• 📉 Rent Increase Limitations: This regulation stabilizes rent fluctuations, safeguarding tenants against abrupt hikes while balancing landlords' ability to maintain market-rate returns.
• 🏘️ Local Rent Control: Cities such as Los Angeles may have additional restrictions, often more stringent than statewide controls. This could impact the strategy for property investors who should research local amendments and ordinances before purchasing.

For more on these protective measures, check the Tenant Protection Program of Sacramento here.

Recent changes to California law limit security deposits to one month’s rent for both furnished and unfurnished properties, effective from July 1, 2024. There are exemptions for small landlords or minor owners, allowing up to two months' rent if they hold no more than two residential rental properties with up to four total dwellings.

• 💸 Tenant Financial Relief: Lower deposits ease the financial burden on new tenants, potentially leading to higher property attractiveness and retention rates.
• 💼 Documentation and Compliance: Landlords are tasked with thoroughly documenting property conditions through meticulous move-in inspections to mitigate disputes at move-out.

Additional resources on security deposits can be found via the California Department of Consumer Affairs here.

Landlords in California need to adjust their screening processes while adhering to the restrictions imposed by the state's new screening laws, preventing discrimination based on credit history, especially for government-subsidized renters.

• 🔍 Fair Screening Process: While using credit histories, landlords must offer tenants alternatives to illustrate financial capability, fostering equal opportunity housing.
• ✨ Positive Reporting: Encouraging tenants to report on-time payments can build positive rental histories, benefiting both landlords with reliable tenants and renters with better credit profiles.

Details on fair housing and tenant rights are available from the California Department of Fair Employment and Housing here.

The Tenant Protection Act mandates "just cause" in evictions after a tenant has stayed for longer than a year. Unjust evictions are regulated, promoting tenant stability and requiring landlords to follow specific legal procedures to pursue evictions legally.

• 🤝 Eviction Protections: These requirements prevent landlords from capriciously evicting tenants to raise rents and prioritize substantial grounds for eviction.
• 🔗 Local Variations: Certain regions might have stricter eviction mandates, highlighting the essential nature of becoming familiar with local laws before purchasing rental properties.

In situations involving tenant eviction rights, check Nolo’s eviction guidance here.