California Lease Agreements: A Complete Guide

Landlords should have a deep understanding of California’s unique rental laws, a thorough review of their rental properties, and a thorough review of their own preferences for their commercial or residential rental property.

The aim is to reach an agreement that safeguards the rights of both the property investor and the prospective tenant, ensuring a hassle-free rental experience.

In this guide, we’ll look at how to create a fair lease agreement within California’s landlord-tenant laws.

Our goal is to equip you with the knowledge you need to make a legal and effective California rental lease agreement, fostering a smooth and beneficial relationship between landlords and tenants.

California-specific lease agreements

Landlord-tenant laws play a significant role in shaping California rental lease agreements. They outline the obligations and rights of landlords and tenants, which must be clearly reflected in the agreement.

For example, they provide guidelines on handling security deposits, specify the amount of notice required before a landlord enters the property, and stipulate eviction proceedings.

Landlords are also required to disclose the involvement of a pest control company on the premises to the tenants, including information about the pesticides used.

How to create a California lease agreement

While free lease agreement templates are available online, they may not be legally compliant with California’s specific landlord-tenant laws. Using a reliable source is important to ensure your lease agreement meets all legal requirements.

With Azibo, you can create a customized, state-specific lease agreement with all required disclosures and e-sign it online.

We have also partnered with local landlord associations, providing their members with access to essential legal forms and disclosures. Our digital forms experience streamlines lease generation and e-signature processes, ensuring a seamless experience for both landlords and tenants.

Interested in trying it out? Sign up and create your lease here.

Key components of a California lease agreement

Before creating your lease, it's important to know the key components of the agreement.  A comprehensive California lease agreement comprises numerous elements that dictate the terms and responsibilities of both parties involved, as well as what constitutes acceptable use of the rental property.

The key lease agreement components are:

1. Identifying parties: The California rental lease agreement should clearly identify the landlord (or the property manager) and the prospective tenant(s). This includes their full legal names and contact information. While it seems basic, these details must be accurate, as they determine who is legally responsible for obligations under the lease.
2. Duration of the lease: Clearly state the term or duration of the lease. This could be a specific length of time (such as one year) or structured as a month-to-month agreement. In California, if the lease agreement is for more than one year, it must be in writing to be legally enforceable.
3. Payment terms: The lease agreement must specify the amount of rent due, the payment deadlines (e.g., the first of the month), whether there are late fees, and your preferred payment method (e.g., check, bank transfer or an online rent collection tool).
4. Security deposits: Include details about the security deposit—the amount to be paid, when it must be paid, and under what conditions it will be returned at the end of the lease. Specify the maximum security deposit, which in California is typically one month's rent for unfurnished or furnished units.  You also may want to list what the landlord may legally use the security deposit for, such as to repair damages or cover cleaning costs caused by the tenant.
5. Maintenance responsibilities: The agreement should outline who is responsible for maintaining the property and making necessary repairs. In California, landlords are generally responsible for keeping the property habitable, while tenants are responsible for keeping the property clean and undamaged.
6. Pet policies: The lease should include a pet policy outlining any rules and restrictions. This might include a limit on the number, size, or breed of pets and any pet deposit or fee.
7. Early termination penalties: The lease agreement should specify what penalties, if any, apply if the tenant decides to end the lease early. In California, if a tenant breaks a lease, the property owner must make reasonable efforts to re-rent the property to limit losses and can only hold the tenant responsible for rent while the property remains vacant.

Required disclosures in California

California laws require landlords to make various disclosures within a lease agreement to provide prospective tenants with all the necessary information about their potential living space and the conditions of their tenancy.

Here’s an exhaustive overview of these required disclosures:

• Landlord contact information: Landlords must include their full name, phone number, and address in all new leases or upon renewal if requested by the tenant. Changes in ownership require the new owner’s or manager’s contact information to be provided to the tenants.
• Rental agreement disclosure: Detailed information regarding rent, security deposits, payment methods, and late fees, as well as other relevant terms of the lease agreement, like non-smoking policies, must be included.
• Megan’s Law disclosure: All lease agreements must contain a notice that the California Department of Justice operates the “Megan’s Law” website, which provides information about specified registered sex offenders in California.
• Death in the rental property: Landlords are required to inform potential tenants if a death has occurred in the property within the last three years.
• Bedbugs and pest control: Landlords must disclose past year bedbug infestations and their pest control policies, including the chemicals used and the frequency of pest control measures.
• Asbestos disclosure: For properties constructed before 1981, landlords must disclose the potential presence of asbestos, a health hazard if disturbed.
• Proposition 65 warning: Landlords must warn about the presence of hazardous materials, such as lead-based paint, in properties built before 1978.
• Toxic mold disclosure: If a rental unit contains toxic mold in amounts that exceed health and safety limits, landlords must inform tenants and provide the state’s consumer handbook on toxic mold.
• Contaminant disclosure: Notification is required if there is known contamination from methamphetamine or fentanyl within the rental unit.
• No-smoking rules: Landlords must disclose any no-smoking policies to prospective tenants.
• Utility meter sharing: If tenants share a utility meter with another unit, this must be disclosed, along with how the utility bill will be allocated.
• Military training proximity: Landlords must inform tenants if the rental unit is within a mile of a military training area where explosives are used, as this may impact the living conditions.
• Property status disclosures:
• Demolition permit application: If there’s an application for a permit to demolish the property, tenants must be informed.
• Condominium conversion: Plans to convert rental units into condominiums must be disclosed.
• Pest control company involvement: Landlords must disclose the involvement of a pest control company on the premises, including information about the pesticides used and, if applicable, sharing a copy of the pesticides with the tenants.

Ensuring these disclosures are made helps prospective tenants make informed decisions about their housing and protects rental property owners by ensuring they meet their legal obligations. Compliance with these requirements promotes transparency and trust in the landlord-renter relationship.

Landlord-tenant laws in California

California's landlord-tenant laws significantly shape rental lease agreements. They outline the obligations and rights of landlords and tenants, which must be clearly reflected in the agreement.

For example, they provide guidelines on handling security deposits, specify the amount of notice required before a landlord enters the property, and stipulate eviction proceedings.

These laws ensure that both parties act fairly and appropriately, providing a framework for resolving any possible disputes. Let's take a closer look at key issues in California rental laws:

Security deposits

In California, regulations governing security deposits aim to balance the protection of tenant rights with landlords' needs to address damages or unpaid rent. The rules clearly define the amounts for security deposits, which are fully refundable. This ensures that although the deposits are held by the landlord, they remain the tenant's property throughout the duration of the lease.

2024 security deposit law changes

The days of saving two times the monthly rent for unfurnished units and up to three times for furnished units in California are over. The legal limits on security deposits recently changed on July 1, 2024.

The new California law caps security deposits to one month’s rent for both furnished and unfurnished units, establishing a clear security deposit maximum.

The new law provides an exception for certain small landlords. Property owners with no more than two residential rental properties, totaling no more than four dwelling units, can still collect up to two months’ rent as a security deposit.

To qualify, the owner must hold the property as a natural person, a limited liability company (with all members as natural persons), or a family trust.

This exception does not apply when the tenant is a military service member, who can only be required to pay one month’s rent as a deposit regardless of the number of the landlord’s properties.

The California Apartment Association has released resources to help landlords understand and comply with the updated security deposit regulations.

Deductions from the deposit

The deposit is used strictly by landlords to cover unpaid rent, repairs for damages beyond ordinary wear and tear, cleaning to return the unit to its initial condition, and restoring any personal property if the lease agreement permits.

Importantly, the law forbids using the deposit for pre-existing damages, unreasonable refurbishments, or natural wear and tear over time.

Before the move-out, landlords must offer a pre-departure inspection, affording tenants the opportunity to remedy any potential issues to avoid deductions.

Security deposit return

Following the tenant's departure, California mandates the return of any remaining deposit within 21 days, accompanied by a detailed statement of deductions.

For any work not completed within this timeframe, landlords must provide a good faith estimate, followed by a final statement and any residual deposit within 14 days after the completion of the work.

If a landlord improperly retains a security deposit, California law provides tenants with a robust legal recourse, including the possibility of suing for up to twice the deposit amount in cases of bad faith retention.

Additionally, service members may benefit from lower security deposit demands and specific eviction protections, acknowledging their unique circumstances.

While state law prescribes these general rules, local ordinances in some Californian cities and counties may impose additional requirements, such as the accrual of interest on held deposits, further safeguarding tenant interests.

This nuanced approach to security deposit regulations underscores a balance between tenant protections and landlords' rights, ensuring clear guidelines are followed throughout the tenancy period.

Landlord notices

In California, landlords can enter rental units for emergencies, tenant abandonment, and non-emergency matters such as inspections or repairs.

For non-urgent scenarios, landlords must provide written notice 24 hours in advance or 48 hours for an initial move-out inspection. This protects the tenant's right to privacy and the landlord's right to preserve their property.

If property owners wish to terminate the lease, they must provide a written notice stating the reason and the timeframe for tenant compliance or vacating. Tenants with less than a year's tenancy receive a 30-day Notice to Quit, while those with a year or more get a 60-day notice.

Multiple notices, like a "3-Day Notice to Pay Rent or Quit" and a "30-Day Notice to Quit," may be issued concurrently for persistent late rent payments. Proper delivery and completeness of these notices are essential, or a court could invalidate any eviction attempt.

These protocols ensure clarity and fairness in the landlord and renter’s relationship.

Dispute resolution

Disputes between property investors and tenants can arise from various issues, from disagreements over security deposit deductions to breaches of lease terms. California encourages landlords and tenants to resolve minor disputes amongst themselves whenever possible.

For more complex disputes, mediation or arbitration, in which a neutral third party can help facilitate a resolution, may be suggested.

Eviction

Breaching a California lease agreement can lead to a range of consequences depending on the severity and nature of the breach. A tenant might breach the lease by failing to pay rent, causing significant damage to the property, or violating the lease or rental agreement rules.

In these scenarios, property owners may serve a notice to correct the issue or quit the premises. If the tenant fails to fix the problem within the given timeframe, the landlord may proceed with California eviction proceedings.

On the other hand, if the landlord breaches the agreement (for instance, by failing to provide a habitable dwelling), tenants may have the right to withhold rent, repair and deduct, or break the lease agreement without penalty.

Eviction, or “unlawful detainer” in California, is a legal process that must be handled through the court system. And with evictions in many California cities outpacing pre-pandemic levels, landlords must understand the state eviction process from beginning to end.

Breaking a lease in California

Under California law, a tenant may legally leave a lease early without paying the remaining rent. This is called “breaking the lease.”

However, a tenant can only break their California lease agreement if the following situations occur:

1. Victim of domestic violence or specified crime: California law allows early termination for tenants who are victims of domestic abuse, sexual abuse, or certain other crimes. This applies to the tenant, household members, or immediate family members.
2. Active military duty: Federal law allows tenants to break their lease if they enter active military service after signing their lease. This includes the armed forces, the National Oceanic and Atmospheric Administration (NOAA) commissioned corps, the Public Health Service's commissioned corps, and the activated National Guard. The tenant must notify the landlord in writing, and the landlord must terminate the lease agreement within 30 days after the next rent due date. California state law also supports this.
3. Unsafe or uninhabitable rental: If you, as the landlord, fail to provide habitable housing, the tenant may be "constructively evicted," meaning that they can move out without further rent obligation. This only occurs if the situation is serious, such as the presence of mold that poses a health risk.
4. Landlord harassment or privacy violations: California law requires landlords to give reasonable written notice before entering a rental, typically 24 hours. Repeated violations of privacy, utility shutoffs, or lock changes can lead to "constructive eviction," allowing them to break the lease without further rent obligation.

What happens if a tenant illegally breaks their California lease agreement?

If a tenant doesn’t have a legal right to break their lease agreement in California, the following renter consequences may occur:

• The renter may lose their security deposit, which the landlord could withhold to cover unpaid rent.
• The renter could be required to pay rent for the remaining lease term unless the landlord finds a suitable replacement tenant.
• The landlord might sue the tenant for any unpaid rent.
• The landlord could provide a negative reference, making it difficult for the renter to secure future rentals.
• If the landlord reports the unpaid rent to a credit bureau or hires a collection agency to recover the debt, the renter's credit score may drop.

If a tenant lacks legal grounds to break their lease, they might still avoid paying the full remaining rent. California law requires landlords to make reasonable efforts to re-rent the unit, regardless of the tenant's reason for leaving, rather than holding the tenant responsible for the entire remaining term of the California lease agreement.

If you, as a landlord, don't try to mitigate your damages and instead sue the tenant, they can defend themselves by claiming you failed to mitigate. To succeed, the tenant must prove you didn't make reasonable efforts to re-rent the unit and could have found a suitable tenant if you had.

Tips for creating a comprehensive rental agreement

Landlords should keep these tips in mind when creating their rental agreements.

Clear language

The key to a strong California lease agreement is using clear and concise language. Avoid legalese as much as possible and ensure the landlord and prospective tenant can understand all terms and conditions without ambiguity. This helps to prevent disputes and misunderstandings down the line.

Even with a seemingly straightforward lease, consulting with a legal professional is always a good idea. Laws governing rental properties vary significantly by location, and specific terms and conditions might be unlawful.

Communication tips

Strong communication is key in any relationship between a landlord and renter. Keeping lines of communication open and updating the rental agreement as necessary is important.

If the property rules are changed, both parties should agree, and the California lease agreement should be updated accordingly.

Addressing issues promptly can prevent them from becoming major problems. This approach also fosters a positive relationship between the landlord and prospective tenant, which can lead to a more stable, long-term rental situation.

Navigate California lease agreements with confidence

Creating a robust and legally sound lease agreement in California cannot be overstated. As a rental property owner, it's not just about filling out a form; it's about understanding and navigating the state-specific rental laws, the rights and responsibilities of all parties involved, and the implications of each clause in the agreement.

The primary aim of a California rental lease agreement is to safeguard both the landlord's and tenant's rights, creating a blueprint for a mutually advantageous and conflict-free rental experience. Clear, precise, and fair lease terms, fortified by legal advice, are key to achieving this. Whenever in doubt, seek advice from a legal expert to ensure your interests are protected.

Azibo helps simplify this process by offering state-specific lease agreements that comply with all necessary regulations. Save time, reduce errors, and ensure legal compliance with Azibo’s efficient and organized lease creation and management tools. 

Create your custom lease here and navigate California lease agreements with confidence.

Lease agreement California FAQs

What is the standard California rental lease agreement for residential and commercial properties?

The standard lease agreement in California, whether for residential or commercial property, is a legal contract between the property owner and the prospective tenant. It outlines the terms under which the tenant can occupy and use the rental property.

California lease agreements are comprehensive documents that include specifics such as monthly rent, security deposit amounts, lease duration, and the responsibilities of both the landlord and prospective tenant.

For residential properties, this might mean a California residential lease agreement, whereas for business-related rentals, a California commercial lease agreement would apply. These agreements ensure clarity and legal compliance for both parties. Similar to other leases, a California residential lease agreement encompasses everything from rent payments to maintenance obligations and rent limits imposed by California law.

Lease agreement templates are available to help both parties understand the typical provisions included in such contracts, including those specific to California rental lease agreements. Additionally, landlords can team up with a number of California property manager associations.

Azibo partners with property owner associations across the country, enhancing landlords' experiences. Sign up with your California association and easily access their lease agreements. Build your California residential lease agreement through your association and get it e-signed – all through Azibo.

Let Azibo show you how.

What is required to be on a California lease?

A lease or rental agreement in California must legally include several key elements to protect both the landlord and the tenant. These include the full names and contact information of the landlord and any managing property management agents, the rental property address, the monthly rent amount, and the lease agreement’s duration.

The security deposit maximum, rental terms for payment, and late fees must be clearly outlined.

California leases also require specific disclosures such as pest control policies, Megan's Law notifications regarding registered sex offenders, and lead-based paint disclosure for older properties.

Additionally, California lease may need to specify rules around rent withholding for repairs, rent limits, and procedures for notifying tenants about changes such as rent increases or lease violations.

Information on the security deposits, procedures for withholding rent, and periodic pest control services is also crucial for commercial residential property lease agreements.

What can a landlord not do in California?

Under California landlord-tenant laws, landlords are prohibited from engaging in several practices to ensure the fair treatment of prospective and current tenants.

Landlords cannot refuse to rent to prospective tenants based on discriminatory factors covered under federal and state fair housing laws.

They are also not allowed to unilaterally change the terms of the rental contract, including increasing the tenant's rent, without providing reasonable notice depending on the lease duration.

It is also illegal to withhold essential services like water or power as a means to evict a tenant or withhold rent.

California law also sets strict limits on security deposits, with landlords required to return them within a specific timeframe after the lease agreement ends, minus lawful deductions. Furthermore, landlords must not enter the rental unit without providing reasonable notice, except in emergencies, respecting the tenant's right to privacy.

California tenant laws also prohibit intimidation or retaliation against tenants who exercise their legal rights, such as complaining about unsafe living conditions.