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California Laws to Know Before Investing In Rental Real Estate

Landlord-Tenant Law Book on a Desk with a GavelIn the event that many beginning Hillcrest investors go into buying a single-family rental property, what usually comes to mind are the operational aspects of the investment: finding tenants, managing property maintenance, and collecting rent. What you may not consider is that there are, as well, a shockingly large number of laws and legal matters that relate to buying and leasing rental homes.

Even while lots of federal laws will concern rental properties nationwide, quite a lot of the laws that you will want to find out about are those on the books of your state, county, or even city. Thus, it is essential to do your research and secure clear info on these laws before you put money into an investment property.

Real Estate Agency and Licensing Law

One of the focal and important people on your investing team is your real estate agent. The laws that govern the relationship between an agent and their clients differ from state to state. As an investor, it’s necessary to realize and understand well what your real estate agent can and cannot legally do, from disclosures to acting in a dual agency capacity.

Besides that, know and realize that real estate agents may or may not be up to date on property management laws. You should indeed have a good knowledge of the procedures required by California for procuring and keeping a real estate license and make sure to ascertain that your agent’s license is current and in good standing.

Transfers of Ownership

Another state-specific set of laws you should distinguish and be sure to know is those with regard to voluntary and involuntary ownership transfers. Voluntary transfers of ownership are those that arise when a rental property is obtained. With that said, there are lots of differences among state laws in connection with who will handle the transfer (your real estate agent or an attorney, for example), whether title insurance is required, who pays which closing costs, and who owns the property on the day of closing.

Aside from that, on top of everything else, you should learn your state laws about involuntary ownership transfers. These transfers largely come into being when the heirs of a deceased property owner inherit the property. Understanding these laws can help you organize and make the process better whether you inherit property or leave your property to someone else.

Limitations on Use

In most states, local regulations will have control of how a property owner may actually use their property. Zoning ordinances, deed restrictions, historic preservation programs, and environmental review laws can all limit how a property owner may manage their land or structures.

As an investor, it’s integral to be informed as to any local ordinances that may interrupt and interfere with your designs to renovate or lease the property you like to buy. You should also follow and check closely if any occupancy laws impacted your plans and efforts to employ the property as a rental.

Fair Housing and Others

There are federal, state, and even multiple local laws intended to protect tenants’ rights and prevent discrimination. So while gathering your federal tenants’ rights laws is necessary, you have got to be aware of whether your state has supplemented those laws with stricter versions of their own. You should as well check heedfully for any rent control policies that may apply, both current and those to be enacted eventually.

Being informed of your local Landlord/Tenant laws and habitability standards will help guarantee that you manage your investment property the correct way. Tenants’ rights laws can cover an unusual bunch of things, from security requirements to frequency and notification about rent increases.


Taking in all of the salient laws in California can be a lot of work, hence it is a good idea for a large number of rental property investors to hire Hillcrest property management experts instead. At Real Property Management Realevate Specialists, we know very well all the ins and outs of state and federal laws and can check that your investment properties are leased and managed in accordance with those laws. Call today at 858-997-2100 or 951-461-0100.

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.

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