It’s easy and common to make a mistake when you’re renting out a property in Eureka. California landlord and tenant laws are always changing, and this state takes tenant protections pretty seriously. Potential legal pitfalls are everywhere. 

Most rental property owners find it challenging to keep up with the laws and their constant changes and updates. It’s a great reason to work with a Eureka property manager; those potential risks and liabilities can be expensive and frustrating. 

Let’s take a look at some of the most common legal pitfalls that rental property owners in Eureka have to face, and how to avoid them.

Eureka Security Deposit Pitfalls

We’re starting with security deposits, and that’s because there’s a big change coming to the law effective July 1, 2024. Security deposits are a critical part of renting out your property safely and with minimal financial risk. You’re essentially holding your tenant’s money until the terms of the lease are fulfilled and the property is returned to you without damage. 

You’ll need to understand California’s security deposit laws, which outline the maximum amount that a landlord can collect and what you have to do when it’s time to return that deposit. 

Right now, a property owner can collect up to two times the amount of one month’s rent for an unfurnished property. For a furnished property, the limit is three times the monthly rent. However, that is changing. Beginning in July of 2024, you can only collect the equivalent of one month’s rent as a security deposit, regardless of if your property is furnished or unfurnished. There is an exception for small landlords, defined as a landlord who is a natural person or LLC and owns no more than two residential rental properties with no more than a total of four units offered for rent.

You’ll have 21 days after a tenant moves out to return the security deposit. If there are any funds being withheld, you’ll need to itemize what was withheld and why. 

To avoid legal issues, ensure that you follow the state laws closely and provide your tenants a move-in checklist to document damages or repairs before they move in. You also want to offer a pre-move out inspection.

Potential Fair Housing Problems in California

The federal Fair Housing Act protects people against discrimination based on race, skin color, religion, national origin, sex, disability, and familial status. 

California has fair housing laws with additional protections. As a Eureka property owner, you’re also prohibited from discriminating against tenants or applicants based on sexuality, age, gender identification, genetic information, veteran’s status, language, sources of income, and citizenship. 

It’s easy to make a fair housing mistake when you’re marketing your property and potentially using language that might cause others to believe you’re discriminating. Advertise why your home appeals to everyone, not specific groups of people. 

Fair housing pitfalls can also be found during the tenant screening process. You need to ensure you’re fair and consistent. Document your rental criteria and provide it to all applicants so they can decide whether they’re likely to be approved. You must show that everyone gets treated the same way.

Rent Control and Eviction

Eureka rental property owners need to know The Tenant Protection Act of 2019, which went into effect on January 1, 2020. This law established statewide rent control in California, even in cities that already had rent stabilization ordinances in place. 

First, you need to know if it even applies to your property. Most single-family homes and condos are exempt as long as you’re not a corporation. Many others have to comply with the rent control restrictions, especially if they’re multi-family properties and more than 15 years old. 

This law limits the amount that landlords can raise rent from year to year. If your rental property is not exempt from the rent control law, you’ll need to limit your rental increases to five percent plus the cost of living increase set by the Consumer Price Index. 

There are a lot of nuances to this law, and you’ll need to include specific verbiage in your lease to reflect whether you are bound to the rent control laws or exempted from them. 

Evictions have also changed, thanks to this law. You can still evict tenants with cause. If your residents are not paying rent or if they have violated the lease in some way or there’s evidence of criminal behavior at the property, you are entitled to evict them. But, if you simply don’t want to renew the lease or you have other plans for the property that requires you to remove them from the home, you’ll be required to pay a relocation fee that’s equivalent to one month’s rent. 

Habitability Standards in Eureka Rental Homes