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California Laws to Know Before Investing In Rental Real Estate

Landlord-Tenant Law Book on a Desk with a GavelWhen countless new Arcadia investors start to think about acquiring a single-family rental property, what generally comes to mind are the operational aspects of the investment: finding tenants, managing property maintenance, and collecting rent. What you may not take on is that there are likewise an amazingly huge number of laws and legal matters that relate to buying and leasing rental homes.

While it is a matter of fact that some federal laws can be actually applied to rental properties nationwide, almost all of the laws that you will necessarily learn about are those on the books of your state, county, or even city. Precisely why, it is relevant to do your research and get a clear comprehension of these laws before you secure an investment property.

Real Estate Agency and Licensing Law

One of the critical 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 crucial to really understand what your real estate agent can and cannot legally do, from disclosures to acting in a dual agency capacity.

Another thing, be conscious that real estate agents may or may not be up to date regarding property management laws. You should as well have a better understanding of the procedures required by California for securing and keeping a real estate license and always keep in mind to double-check that your agent’s license is current and in good standing.

Transfers of Ownership

Another state-specific set of laws you should really know about is those related to voluntary and involuntary ownership transfers. Voluntary transfers of ownership are those that come up when a rental property is procured. Nonetheless, there are a few differences among state laws in relation to 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.

Having said that, you should in particular learn your state laws about involuntary ownership transfers. These transfers naturally happen when the heirs of a deceased property owner inherit the property. Appreciating these laws can help you anticipate and plan, and eventually, make the process a lot easier whether you inherit property or leave your property to someone else.

Limitations on Use

In lots of states, local regulations will demand how a property owner may put to use their property. Zoning ordinances, deed restrictions, historic preservation programs, and environmental review laws can all limit how a property owner may benefit from their land or structures.

As an investor, it’s beneficial to know well how any local ordinances that may impede your ability to renovate or lease the property you want to buy. You should also inquire around if any occupancy laws impact your designs and plans regarding the property as a rental.

Fair Housing and Others

There are federal, state, and even a  great deal of local laws intended to protect tenants’ rights and prevent discrimination. So while taking into consideration your federal tenants’ rights laws is crucial, you need also to take into consideration whether your state has supplemented those laws with stricter versions of their own. You should likewise check meticulously for any rent control policies that may apply, both current and those plausible to be enacted sooner or later.

Thinking about your local Landlord/Tenant laws and habitability standards will help nail down and help you manage your investment property the right way. Tenants’ rights laws can cover several broad things, from security requirements to frequency and notification about rent increases.


Grasping well all of the significant laws in California can be a lot of work, as a result, it holds true for many rental property investors to hire Arcadia property management experts instead. At Real Property Management Fairmate, we completely get all the ins and outs of state and federal laws and can ascertain that your investment properties are leased and managed in accordance with those laws. Call today at 626-691-9749.

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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