Laws & Regulations that Property Owners in Merced Must Know About

The laws and regulations governing how properties are rented out and managed in Merced are always changing. Keeping up with those changes has to be an ongoing process, and remaining compliant can be a struggle if you don’t have the resources to stay informed.

There’s a lot you need to know about tenant screening, security deposits, rent control, tenant evictions, and fair housing. You need to know how a service animal differs from a companion animal, and why neither of them are pets.

At River Drive Properties, we keep our owners informed. There are a lot of great ways not to get a tenant, and there are a lot of mistakes that are easy to make if you don’t know the local, state, and federal laws.

We’re providing a quick snapshot of what you need to know right now, and if you’d like to dive a little deeper into any of these issues, we’d be happy to talk with you further.

Federal and Statewide Eviction Moratoriums

It’s impossible to talk about California rental laws without discussing the Tenant Relief Act, which is a response to renters who are struggling financially due to the COVID-19 pandemic. In 2020, California passed AB 3088, which imposed an eviction moratorium for nonpayment of rent. If your tenant declared that they could not pay rent due to the pandemic, you were not permitted to evict them.

That law is still in force now, and it’s been strengthened by SB 91. This new law extends the moratorium against eviction for tenants who have been financially impacted by the pandemic to June 30, 2021. This doesn’t mean the tenants don’t have to pay; the amount due to you is not forgiven. It simply means that those months of unpaid rent cannot be used as a reason to evict.

There’s also a federal moratorium in place and while that may change, the California law is stricter and more complex. Evicting a tenant in Merced is nearly impossible right now. When the moratorium is lifted, if you need to remove a tenant who has not paid, we recommend you get some legal or professional Merced property management help.

The Tenant Protection Act: Rent Control and Just Cause Eviction

Pandemic aside, there are still some extremely tenant-friendly laws that owners need to understand in Merced and throughout California. The Tenant Protection Act of 2019 provided two new regulations:

  • Statewide rent control was established.
  • All evictions need to have a just cause, otherwise financial penalties may apply.

There’s also a requirement that while screening, source of income must include Section 8 and other housing vouchers. Certain types of properties are exempt from this law, and you’ll first need to determine whether the requirements apply to you and your rental properties. Even if you’re exempt, you need something in your lease agreement that tells tenants whether or not they are protected by rent control in your property.

Fair Housing Laws

Most Merced landlords are familiar with the federal Fair Housing Act, which protects seven specific classes from discrimination in leasing and property management. However, the state fair housing laws in California go even further than the federal law. You’re not permitted to make decisions based on source of income, sexual orientation, immigration status, or age.

Fair housing mistakes can be made if you try to charge a pet fee for a service animal. You can get in trouble if you advertise a home as unwelcoming to Section 8 tenants. Federal and state fair housing laws are often interpreted widely. It’s easy to make an unintentional mistake.

California Security Deposit Law

There are limits to what you can collect as a security deposit for your Merced rental property. Assuming your home is unfurnished, the maximum amount is twice the monthly rent. If your home is furnished, you can collect three times the monthly rent.

After your tenant leaves, you’ll conduct a thorough inspection to determine whether any damage needs to be deducted from the security deposit. California law requires you to return the security deposit to the tenants within 21 days of the tenant moving out. If the tenant isn’t receiving a full deposit refund, you must send the amount that they are getting back with an itemized list of what you’ve deducted and why.

Sometimes, a tenant may argue about what’s been withheld. Try to resolve this issue before it gets to court. If you’re found to have improperly withheld a security deposit or you didn’t return it within the 21 days, you could face penalties of three times the amount of the original security deposit.

There are more laws to discuss. If you’d like to talk about how we protect you from risk, lawsuits, and liability, please contact us at River Drive Properties.

Laws & Regulations that Property Owners in Merced Must Know AboutRiver Drive Properties provides effective and professional property management services in Merced and the surrounding areas including Fresno, Modesto, and Turlock. We have extensive experience with both single-family homes and multifamily properties.