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California Laws to Know Before Investing In Rental Real Estate

Landlord-Tenant Law Book on a Desk with a GavelIt’s but natural that when many beginning El Segundo investors decide to put money into a single-family rental property, what they generally think about are the operational aspects of the investment: finding tenants, managing property maintenance, and collecting rent. What you may actually not be aware of is that there are also a staggering selection of laws and legal matters that relate to buying and leasing rental homes.

Despite the fact that quite a lot of federal laws will have a bearing on rental properties nationwide, the majority of the laws that you are obliged to be familiar with are those on the books of your state, county, or even city. Consequently, it is very important to do your research and make a clear and solid comprehension of these laws before you buy an investment property.

Real Estate Agency and Licensing Law

One of the significant 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 indeed very important to discover what your real estate agent can and cannot legally do, from disclosures to acting in a dual agency capacity.

In addition, you also need to know that real estate agents may or may not be in the know on property management laws. You should therefore have a strong understanding of the procedures required by California for earning and keeping a real estate license and closely inquire to guarantee that your agent’s license is current and in good standing.

Transfers of Ownership

Another state-specific set of laws you should be informed about are those in regard to voluntary and involuntary ownership transfers. Voluntary transfers of ownership are those that emerge when a rental property is bought off. Be that as it may, there are so many differences among state laws 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.

Still, you should make sure to learn your state laws about involuntary ownership transfers. These transfers regularly appear when the heirs of a deceased property owner inherit the property. Discovering these laws can help you plot in detail and easily make the process far simpler whether you inherit property or leave your property to someone else.

Limitations on Use

In all states, local regulations will rule how a property owner may put into service their property. Zoning ordinances, deed restrictions, historic preservation programs, and environmental review laws can all limit how a property owner may make use of their land or structures.

As an investor, it’s essential to also consider any related local ordinances that may block your being able to renovate or lease the property you love to buy. You should moreover be mindful if any occupancy laws impacted your propositions to deal with the property as a rental.

Fair Housing and Others

There are federal, state, and even lots of local laws intended to protect tenants’ rights and prevent discrimination. So while realizing your federal tenants’ rights laws are focal to your success, you should also consider whether your state has supplemented those laws with stricter versions of their own. You should, in particular, check seriously for any rent control policies that may apply, both current and those about to be enacted promptly.

Grasping your local Landlord/Tenant laws and habitability standards will help make certain you manage your investment property correctly. Tenants’ rights laws can cover astonishingly many assorted things, from security requirements to frequency and notification about rent increases.


Taking into consideration all of the applicable laws in California can be a lot of work, that is why it is far more logical for many rental property investors to hire El Segundo property management experts instead. At Real Property Management California Coast, we master all the ins and outs of state and federal laws and can promise that your investment properties are leased and managed in accordance with those laws. Call today at 310-535-2150.

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