Updated: October 31, 2023
Key takeaways:
- Property management in California involves a wide range of responsibilities that go beyond basic rent collection.
- California property managers must obtain a real estate broker’s license or work under the supervision of a licensed individual. This involves completing training, passing a state-administered exam, and adhering to various requirements.
- California has rent control ordinances designed to ensure fair rent increases. These laws establish caps on rent hikes, and the specific regulations may vary at the local level.
Property management in California is a multifaceted role, requiring a unique blend of skills that go beyond conventional responsibilities like rent collection and security deposit management. Property managers in the state take on the responsibility of overseeing both the property and the well-being of residents, and oversee leasing while ensuring habitability standards. They face the challenge of navigating intricate real estate laws, health and safety codes, and workplace regulations, adding complexity to their already diverse set of duties.
This article delves into the intricacies of being a California property manager, offering insight into how these professionals effectively balance their myriad obligations in their quest to manage properties and enhance the quality of life for their residents.
Responsibilities of property managers
Secure real estate broker’s license
To operate as a property manager in California, you must either hold a real estate broker’s license or work under the supervision of an individual who possesses one. Obtaining a broker’s license necessitates completing specific training and passing a written examination administered by the California Department of Real Estate. The only exception to this requirement is if you own and personally manage the property.
Here are the steps in securing a California real estate license:
- Successfully complete 135 hours of pre-license education sanctioned by the state.
- Achieve a passing grade on the final exam for the course.
- Clear a criminal background check.
- Successfully pass the California Salesperson License Exam.
- Secure a sponsoring broker for your professional practice.
- Submit your licensing application upon meeting all requirements.
Further details on acquiring a real estate license can be found on the California Department of Real Estate website.
Conform to health, safety, and building codes
Property managers shoulder a crucial responsibility in ensuring that residential rental units adhere to pertinent health, safety, and building codes, and this obligation demands a deep understanding of these regulatory standards. The safety and well-being of tenants are at the core of this obligation, emphasizing the need for meticulous compliance.
Notably, it is important to highlight that tenants are standing on solid legal ground if they find their rental units non-compliant with these codes and they subsequently choose to withhold rent as a measure to prompt the necessary improvements. This principle has been unequivocally upheld by the California State Supreme Court, which underscores the significance of property managers’ compliance and tenants’ rights in maintaining safe and habitable living conditions.
Properly administer security deposits
Security deposits in California are subject to specific regulations, CA Civ. Code §1950.5, designed to protect both landlords and tenants. These rules state that security deposits can be as high as twice the monthly rent for unfurnished apartments, and for furnished properties, it can go up to three times the monthly rent. The landlord may also add an additional half a month’s rent if the lessee has a waterbed.
Furthermore, these deposits must be held in a manner akin to escrow, preventing their use for any purpose other than covering necessary expenses such as repairs, cleaning, or addressing outstanding rent owed by a departing tenant.
While some states, like Washington, require the separation of security deposit funds from regular rent accounts to prevent mishandling or accidental spending, in California, this separation is not explicitly mandated. Nevertheless, it is the landlord’s responsibility to refrain from investing these funds, as such actions could result in legal repercussions.
Upon a new tenant’s arrival, thorough inspections are mandatory. Landlords are required to document the unit’s condition using a move-in/move-out form. This same form is then employed when the tenant eventually moves out, allowing for a comparison of the unit’s condition and the state of its items. In the event of damage, the security deposit can be used to rectify the situation, though tenants are typically given the option to arrange and oversee the necessary repairs themselves.
Additionally, California law stipulates that security deposits must be returned to tenants within 21 days of their departure, with any deductions made from the deposit being itemized and supported by receipts for amounts exceeding $126. Tenants maintain the right to dispute the handling of their security deposit for up to four years after their lease concludes.
To avoid complications, it’s essential for both landlords and tenants to be aware of these security deposit guidelines and act in accordance with them, thereby preventing potential disputes and legal issues.
Comply with rent control ordinances and policies
California’s Tenant Protection Act, designed to ensure reasonable and fair rent increases, establishes a cap on rent increases. Landlords are prevented from raising rent by more than 10% total or 5% plus the cost of living change, whichever is lower, within a 12-month period. This formula links rent adjustments to economic factors, preventing sudden and burdensome hikes. Landlords can reference the national or California consumer price index to calculate the maximum permissible increase.
Beyond the state-level regulations, local cities and counties may have their own rent control laws, with varying restrictions and tenant protections. To understand the impact of local ordinances, tenants and landlords should consult local resources such as government websites, tenant associations, or legal advisors. These local laws may include stricter limits on rent hikes and additional tenant-friendly measures.
Now, California’s rent increase laws primarily target multi-family apartment complexes, but numerous exemptions exist to provide flexibility to landlords. These exemptions include:
- Single-family residences (SFRs)
- Condominiums
- Owner-occupied duplexes
- Mobile homes
- School dormitories
- Hotels
- Recently constructed rental properties (including accessory dwelling units)
- Non-corporate-owned properties
- Rentals by nonprofit organizations
- Properties already covered by pre-existing local ordinances
Understanding these exemptions is crucial for both landlords and tenants to navigate the complexities of rent control in California. It’s important to note that while these exemptions apply to certain types of properties, they do not negate the importance of understanding local rent control laws, which may introduce additional regulations and tenant protections on a city or county level. Tenants and landlords should stay informed about the specific rules and regulations that pertain to their rental situation.
Concluding thoughts
In a state known for its complex web of regulations, California property managers play a crucial role in ensuring the safety and well-being of residents while upholding the legal rights of both property owners and tenants. It is imperative that property managers and those involved in property rentals in California stay informed about these intricate rules and regulations, as the intricacies of their roles significantly impact the quality of life for all parties involved.
As the real estate landscape continues to evolve, property managers must remain vigilant, adaptable, and dedicated to maintaining safe and habitable conditions while navigating the ever-changing legal framework that defines their profession in the Golden State.
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