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I want to rent my condo. What do I need to know to stay out of trouble?



QUESTION:


After I recently married, I moved in with my spouse. When I was single I bought a condo that I would now like to rent to generate some income. However, I have never been a landlord and I don’t want to get into trouble with my homeowners’ association. What do I need to know to stay out of trouble?


ANSWER:


You have taken the most important first step by learning about your responsibilities before becoming a landlord. Too many new landlords fail to take this crucial step. In your situation, you will have duties as a member of a homeowner association and you will also have additional duties as a California landlord.

As a condo owner, your homeowner unit is part of what is legally known as a “common interest development.” That means your ownership rights are primarily governed by the Covenants, Conditions and Restrictions (“CC&Rs”) that govern your condo community, along with the bylaws and regulations that may have been adopted by the homeowner association board of directors. Your first step should be to review all these documents to see if they contain any restrictions or regulations applying to renting your unit. Renting may be totally prohibited. Other provisions which may apply if rentals are permitted include repair and maintenance requirements, parking considerations, and security access. You should also check for any procedural requirements that apply to you, such as notifying the board if you rent.


Your next step should be to understand your general obligations under California law as a landlord. You will need to make certain decisions, for example whether you want to offer a month-to-month tenancy or a lease for a specific term, such as a year. You should definitely use a written rental agreement, which should be a well-designed rental agreement that conforms with California law. Do not rely a general form from the internet. There are reasonably priced references specifically for California landlords published by resources such as Nolo Press. These references may include sample rental agreements. There is also a tenant guide and a guide to living in a common interest development available as free downloads on the site of the State of California Department of Consumer Affairs. You should learn about the fair housing laws that apply to landlords when they advertise for tenants, when they select tenants, and when they manage the property once it is occupied by a tenant. You should also research whether there are any rent control or other local ordinances that may govern your actions as a landlord.


Alternatively, you could consider retaining a rental management company that will assume your operational responsibilities as a landlord, in exchange for a fee. If you decide to utilize this approach, make sure the management company is reputable, because there are so-called management companies that will not perform well and which could leave you with liabilities. Also make sure you understand the fee schedule you will be charged. Even if you hire a property manager handling day-to-day operations, remember that you will remain ultimately responsible for the landlord’s duties under California law.

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