California: The Most Tenant-Friendly State

California landlord-tenant law is among the most complex and tenant-protective in the nation. New landlords who don't understand these rules often learn expensive lessons. Here are the seven most costly mistakes I see.

Mistake #1: Ignoring Just Cause Eviction Requirements

Under the Tenant Protection Act (AB 1482), most landlords cannot evict tenants who've lived in a unit for more than 12 months without "just cause." Valid reasons include:

Non-payment of rent

Material lease violations

Owner move-in (with relocation assistance)

Substantial renovations (with relocation assistance)

**The Cost:** Wrongful eviction lawsuits can result in actual damages, statutory penalties, and attorney fees often exceeding $50,000.

Mistake #2: Exceeding Rent Increase Limits

AB 1482 caps annual rent increases at **5% + local CPI (max 10%)**. Many new landlords:

Raise rent beyond legal limits

Fail to provide proper 30/90-day notice

Don't check if local ordinances have stricter limits

**The Cost:** Tenants can recover excess rent paid plus penalties.

Mistake #3: Improper Security Deposit Handling

California Civil Code §1950.5 requires:

Maximum deposit: 2 months' rent (unfurnished) or 3 months' (furnished)

Return within 21 days of move-out

Itemized statement of deductions

Receipts for repairs over $126

**The Cost:** Bad faith retention can result in **2x the deposit** in statutory damages.

Mistake #4: Skipping Habitability Repairs

Landlords must maintain "implied warranty of habitability":

Working plumbing, heating, and electrical

Weatherproofing and waterproofing

Clean and sanitary conditions

Functioning smoke and CO detectors

**The Cost:** Tenants can withhold rent, "repair and deduct," or sue for breach.

Mistake #5: Inadequate Tenant Screening

New landlords either:

Don't screen at all (risky)

Screen improperly and violate [Fair Housing laws](https://www.hud.gov/program_offices/fair_housing_equal_opp/fair_housing_act_overview)

**Best Practice:** Use consistent, objective criteria applied equally to all applicants.

Mistake #6: Poor Documentation

Every interaction should be documented:

Move-in/move-out condition reports with photos

Written notices for all communications

Signed receipts for rent payments

Repair requests and completion records

**The Cost:** Without documentation, "he said/she said" disputes usually favor tenants.

Mistake #7: No Written Lease Agreement

Oral agreements create month-to-month tenancies with minimal landlord protections. A comprehensive lease should address:

Rent amount and due date

Late fees and grace periods

Maintenance responsibilities

Pet policies

Subletting restrictions

Entry notice requirements

I've helped hundreds of landlords navigate California's complex regulations. The landlords who succeed are those who treat property management as a business, not a passive investment.

7 Costly Mistakes New California Landlords Make (And How to Avoid Them)