COMMONLY ASKED QUESTIONS

Do landlords and/or property managers need to have a real estate license?

 A real estate license is generally required whenever someone manages property for others for a fee.  This includes activities such as negotiating leases and rental agreements, and collecting rents.  (Cal. Bus. & Prof. Code § 10131.01(a)(3)(D).)  Therefore property managers must possess a real estate license. 

What is the maximum amount a landlord may require a residential tenant to pay for a security deposit? 

 Residential property is broadly defined to include all dwellings. The amount a landlord may charge for a security deposit is highly regulated.  Residential landlords are limited to a maximum security deposit equal to two month's rent for unfurnished units and three month's for furnished units (Cal. Civ. Code § 1950.5(c)).  These limits cannot be waived by the tenant.  While the landlord may describe some of the security deposit as "last month's rent," "cleaning deposit" or “pet fee,” the landlord may not collect or demand any additional amounts for these categories.  (Cal. Civ. Code § 1950.5(c).)

However, a landlord is permitted to increase the deposit by one-half of one month's rent when a landlord is accepting a tenant with a waterbed.  In that situation, the landlord is also permitted to charge a reasonable fee for administrative costs.  (Cal. Civ. Code § 1940.5(g).)

In addition to the security deposit, a landlord may collect the first month's rent in advance.  Other than the first month's rent, advance rent payment may be required only if the amount pre-paid is six months or more rent.  (Cal. Civ. Code § 1950.5(c).)

Furthermore, landlords may also charge a nonrefundable application screening fee.  This permissible fee was limited to $30 (in 1996) but may be increased annually commensurate with an increase in the Consumer Price Index after January 1, 1998. The application screening fee may not exceed the “actual out-of-pocket costs of gathering information concerning the applicant” (Cal. Civ. Code § 1950.6(a).)

What is a "Notice to Pay or Quit" or a “Notice to Cure Default or Quit”?

Commonly known as the "Three-Day Notice," the “Notice to Pay or Quit” constitutes the first step in the eviction process.  The landlord must serve the tenant with notice that s/he has three days to pay the rent or vacate the premises.  (Cal. Code of Civ. Proc. § 1161(2).)  C.A.R. standard form, Notice to Pay Rent or Quit (PRQ) may be used.

Similarly, a Three-Day Notice may be given to a tenant who is not in default in the payment of rent, but who is violating another condition or covenant in the lease or rental agreement such as illegally selling or manufacturing controlled substances on the premises (Cal. Code Civ. Proc. § 1161 (3) and (4)).