Avoid the pitfalls of multiple-tenant rentals

Question: What are the customary requirements for renting an apartment to three adults in California? Who should be on the rental agreement? What income level should be required? Also, how much security deposit is necessary for an unfurnished unit?

Answer: When renting to tenants in California, it is customary and wise to place all tenants on the rental agreement. That includes minor children. The ages of the minor children should be noted on the agreement because after they come of age they also become liable for the rent and for their actions.

It is advisable to run credit checks on all of the prospective adult tenants. Even though some of the prospective tenants may have good credit and no evictions, the others may not. If the ones with the good credit subsequently move out, a landlord can be stuck with the ones with bad credit.

As for income requirements, although income that is equal to four times the amount of the rent used to be customary, it is not anymore. Some property owners still use that standard, but many use income that is three times the amount of the rent as their standard.

In lower-income areas, owners may accept income of 2 1/2 times the rent.

The important thing is to use the same income and credit-worthiness standards for everyone who applies for the unit. That includes friends and relatives. Using different standards for different applicants might lead to accusations of discrimination. Don’t do it.

Finally, you ask how large a security deposit is necessary for an unfurnished apartment. Again, there are no hard and fast rules on the amount that can be charged. A landlord is allowed to require a deposit equal to two months’ rent for an unfurnished apartment under California law, three months’ for a furnished apartment.

If you opt to charge the tenants last month’s rent, it is considered a part of the security deposit under state law, meaning that you can charge the tenants only one more month’s rent for the security deposit.

Rent hike notice raises legality issue

Question: I live in the San Fernando Valley and have a question about a rent increase that I got. On June 2, all of the month-to-month tenants in the building received notices of rent increases that were due July 1. The notices were dated June 1. I promptly e-mailed the owners to let them know that state law requires at least 30 days’ notice of a rent increase.

The next morning (June 3) a new notice was taped to the door indicating that the rent increase would become effective July 3. Is this kosher? I thought that if rents are due on the first of the month, then increases can only be served starting of the first of the month, not the third.

If it is legal for them to increase rent on the third, don’t they need to indicate the exact amount of the rent (two days at the old rate and the rest at the new rate)? Is it my responsibility to calculate the amount?

Answer: It is proper for the owners to serve you a notice of a rent increase that commences on the third of the month, regardless of the rent due date. Although technically you are correct that state law requires a minimum 30-day notice of a rent increase, making them re-serve the notice because it was one day late probably would not endear you to them when future problems arise. I’m not sure that saving the amount of the rent increase for two days is really worth it.

As for the new rent amount, the first of the month is the rent due date so you would pay the July rent on July 1 at the old rate. On Aug. 1 you will owe the new rental amount for the entire month of August plus the balance of the amount of the rent increase from the month of July (28 days).

You are also correct that the owner should compute the amount of the prorated July rent. But again, making a big issue out of such a small thing may not be the best idea if you have any interest in developing or maintaining a good working relationship with the owners.

Postema is the editor of Apartment Age magazine, a publication of the Apartment Assn. of Greater Los Angeles, an apartment owners’ service group. Send questions to AptlifeAAGLA@aol.com, c/o Kevin Postema.