Lease Agreements 101 – Part 2

In our previous article, we mentioned that lease agreements often contain some complicated provisions. And these require tenants to spend time to read each and understand them. 

There’s more. A lease agreement can be lengthened with house rules and other addendums. In this article, let’s take a deeper look at other important tenancy lease terms and landlord actions:

Prorated Rent

Since a tenant may not take possession of the premises on the 1st day of the month, the rent shall then be pro-rated. The pro-rated rent can be calculated as below:

(The Initial Monthly Rent)/ (The number of total days in the month being pro-rated) x (The actual number of days that tenant occupies the premises in the initial calendar month of the tenancy).

Security Deposits

In most cases, the landlord requests tenant to pay a security deposit of a certain amount at the time the lease agreement is executed. The security deposit must be refundable according to the California Law (in California)

In regard to the limit on the security deposit amount charged by the landlord, per California Civil Code Section 1950.5, the security deposit may not exceed 2 times the monthly rent if the premises is without furniture. The security deposit can go up to 3 times the monthly rent if the premises is furnished. 

The security deposit is to be refunded within 21 days and landlord is permitted to deduct reasonable amounts from the security deposit pursuant to applicable law. The amounts may be deducted to cover past due rent, to repair damages (not normal wear and tear) to the premises caused by tenant or tenant’s guests, to clean the premises in order to return the same level of cleanliness at move-in.

If one of the tenants named in the lease moves out, the landlord is not obligated to return partial of the security deposit until all residents move out of the premises. Thus, any refund due will eventually be made payable jointly to all tenants in the premises. 

Changing the Terms of Tenancy

1. Rental Amount

Landlord may adjust the tenant’s monthly rent. If the rent increase is 10% or less in a 12 month period, the landlord is required to provide the tenant with at least 30 days’ written notice. In some situations, a 60 days’ written notice must be provided. For instance, a 60 days’ written notice must be provided with resident if the rent increase is higher than 10% or a rent increase is implemented to a tenant who is a Section 8 voucher holder.

2. Other than rental amount

When the landlord makes material changes to terms of the tenancy, such as building policy or house rules, the landlord is responsible for providing the tenant a 30 days’ written notice. As a tenant, you are entitled to receive a written notice which is personally delivered by the landlord or the management agent.

If you are not available to receive a written notice in person, you can expect your landlord to leave you a copy of the written notice on your door and mail a copy to your address via first class mail.

It’s not unusual that your landlord may request you to sign the new lease agreement after he/she serves you the Notice of Change in Terms of Tenancy. As always, read the entire lease agreement and raise questions to your landlord for clarification if needed.

You may also seek legal advice from counsel to confirm if any significant change in laws or regulations may impact your tenancy.  If you have further questions regarding lease contracts and property management in California, please forward them to gordonl@managecasa.com.

See also: Property Management Software | Small Business Property Management Software | Best Property Management Software | Housing Market Forecast | Property Management Software | How to Increase Re-leasing | Rental Leases |  Property Management Software Comparison | Tenant Lease Renewals | UK Property Market Forecast | Property Management Apps | Landlord Apps |  Property Management Software Comparison | Property Management Companies | Tenant Management Tips |  Property Management Trade Shows| Phoenix Rental Property Market | Las Vegas Property Market | Property Management Trends| Housing Forecast for California