1. What’s the Fair Housing Act (FHA) and why do I care?
The federal government’s Department of Housing and Urban Development (HUD) manages this one, but the basic idea is you can’t discriminate because of race, color, national origin, religion, sex, familial status or disability.
In other words, all renters must be treated equally, period. You can’t disqualify a renter because of his or her religion. You can’t change the terms of a rental because of it and you certainly cannot change the time schedule for repairs because of it. You must treat every renter the same way, regardless of how you feel.
If you’re caught violating the FHA, you can pay up to $16,000 in fines for a first-time offense.
2. How do I handle a security deposit?
First off, every landlord should take a security deposit. The security deposit is designed to protect you in the event that a tenant destroys your property and then disappears without a trace. You may not get all of your money back, but at least it’s not a total loss.
That said there are rules that you must follow when it comes to a security deposit.
In California, landlords of residential properties are only allowed to ask for a security deposit that is equal to twice the rent of an unfurnished property. If the property is furnished, they can ask for up to three times the rent.
Remember that a security deposit is just that, a deposit. In California, you must return it within 21 days of a tenant moving out or give the tenant a written letter explaining why you are keeping part or all of the deposit. That letter must include an itemized list of deductions and a check for any remaining balance. Keep all receipts for repairs and cleaning.
In all cases, you cannot deduct from a security deposit for ordinary wear and tear. However, you can deduct if there are damages that occurred while the tenant was living there or if the tenant leaves the home dirtier than when he moved in. You can also deduct any unpaid rent.
It is important that you take pictures before a tenant moves in and after a tenant moves out to prove that repairs or cleaning are necessary.
3. My tenant is horrible so I told him to leave, is that okay?
No. There are plenty of rules in place that you MUST follow to legally remove a tenant, in other words, evict him.
This is an incredibly complex issue, but there are some keys that you can remember. They will vary from state to state, county to county, and city to city, so make sure you do your own research before you tell a tenant to leave.
According to the California court’s website, you can evict a tenant if the tenant “…Fails to pay rent on time; breaks the lease or rental agreement and will not fix the problem…Damages the property bringing down the value; becomes a serious nuisance by disturbing other tenants and neighbors even after being asked to stop, or uses the property to do something illegal.”
It is even tougher to evict someone in cities with rent control or other rules regulating rental properties. That’s why it is very important that you know the laws in your city, county, and state before you try to evict a tenant.
Hopefully, this helps you out as you try to navigate the complex world of rental properties. If you have any questions, PMI is always here to help.