Politics and Business
Do I Need a Business License to Rent My Property in California?
For property owners in California, renting your property can be a lucrative source of income and could even grow into a profitable business. With California’s booming rental market, now is the perfect time to rent your unoccupied property.
Becoming a landlord in California requires research, preparation, and familiarization with local, California, and federa housing laws.Do property owners need a business license to rent out property? How Can prospective landlords grew a successful rental business? Good news: Answers to your California property rental concerns are here.
Do property owners need business licenses?
In California, no state law mandates that a business license is required to rent a property. However, prospective landlords will want to check with local city ordinances to ensure no business license is legally required.
In order to legally protect yourself as a landlord, consider hiring a licensed property manager or agent to help screen applicants and maintain compliance with fair housing guidelines. If you don’t want to break the bank, TurboTenant offers free software for landlords to help screen applicants and post listings.
Research local, state, and federal laws
Before renting your property, you’ll need to make sure you’re adhering to all relevant housing laws and guidelines. Check with your city or neighborhood homeowners association for more information about local rental property laws as well as familiarize yourself with other essential California real estate investing information.
In addition, California state housing laws set out guidelines for the rental process and the tenant screening process. Under California law, landlords are required to disclose certain information to tenants and applicants. State laws also govern what kinds of fees can be imposed on tenants, as well as how landlords can legally collect rent.
California landlords are also required to provide tenants with written information regarding Megan’s Law. Landlords renting properties built before 1978 must warn tenants of potential exposure to lead-based paint.
Create an LLC for your rental property
Becoming a landlord is similar to running your own business and should be treated as such. Although a business license is not legally required, real estate experts recommend establishing an LLC (Limited Liability Corporation) for your rental property.
When you rent out a property under your own name, you risk being named as a defendant in the event of a lawsuit, and losing the lawsuit could mean losing your personal assets. To protect yourself, establish an LLC for your rental. This will restrict your personal liability to the value of the rental property.
Prepare a rental agreement
Preparing a rental agreement that provides adequate legal protection requires research and compliance with fair housing laws. California state law does not have a standard rental agreement, so contracts vary per property owner.
Start by determining whether to offer rental or lease agreement to your tenants. While lease agreements are valid for a specified period of time—like six months or one year—rental agreements only last for the period of time covered by each rental payment.
For rookie landlords, it can be tempting to copy and paste a basic rental agreement from online. However, it’s important to decide what kind of terms you want to include in your contact. Be specific on every front, including the amount of rent paid, how it will be collected, how tenants should handle repair requests, and an outline of right of entry. Rental agreements can be complex and it is favorable to be sure yours is right for you.
If you’re not sure where to start, consider hiring a reputable attorney. Since the rental agreement specifies duties and obligations of both the tenant and the landlord, taking your time to prepare the contract can help you avoid legal issues in the future.
Although becoming a landlord can be a great way to earn extra income, it’s not for everyone. If you’re looking for a quick profit on an unoccupied property, a simple Google search like “sell my house fast in Solano County” will yield a variety of options in your area. For instance, companies like Sell Quick California can help you sell your house in as little as seven days.
Ultimately, becoming a successful landlord requires thorough research, preparation, and familiarization with California housing laws.