June 26, 2018
Real Estate Changes for Rental Owners
By Paul Miloe

Whether you currently own rental properties in CA, or are considering income properties in the future, some changes are coming, so be sure to check on the following with your leasing agent/broker/property management company to ensure you’re ready and any forms you are using are correct. Beginning July 1, 2018, owners will now have to provide tenants with a flood disclosure. This legislation was enacted under CA Assembly Bill 646, and it requires owners to disclose certain information about potential flood hazards and or knowledge of flooding. One plus to this disclosure is that it states that the property owner’s insurance does not cover the belongings of the tenant, and that the tenant should consider securing their own coverage.

Another change states that while an owner can inquire about a felony conviction of a potential tenant (like the nature of the felony), owners are not permitted to factor the felony into their decision to accept or reject the applicant until after completing a credit check. The fact that they’re a felon is not sufficient to deny the applicant in and of itself.

Next, if your rental property or HOA has a “no pets” policy, you may be required to reasonably accommodate emotional support and service animals for tenants. Service dogs are well-known and have been trained to provide specific functions for their owners. In CA, residents can also have emotional support (“companion”) animals that are there to assist with a specific symptom or effect of a disability, but these animals do not have to be dogs, do not have to be trained, and do not have to be certified. If a tenant/potential tenant states they have one of these animals (not a “pet”), then the owner must try to accommodate them unless the animal has had an assessment (vs. concern) to detect a direct threat/safety concern or if it would cause physical damage to property. Owners cannot deny the rental based on the animal’s size or breed. Owners are further not permitted to charge a deposit for these animals as they could with standard pets. Fortunately, owners are permitted to ask for documentation that the tenant requires a “companion animal’ and that the animal in question is truly there to assist. Lots of grey area here, so be careful!

Finally, a bit of good news…residential leases and month-to-month rental agreements will be able to note that light bulbs are officially the tenant’s responsibility!
Just as our team at Albitz/Miloe & Associates, Inc., is there to help with your asset management and financial planning, engaging qualified realtors, leasing agents, and attorneys can help you more easily navigate the rental markets. If you need a referral, let us know!

Note: This article is not intended to serve as legal advice. Any information presented should be verified with a qualified professional specializing in real estate/real property laws, rules, and regulations.