CA Tenant Laws

[Jonathan J.]

Hello California landlords and investors, 

I came across this post on reddit discussing issues with tenant biased laws in California and lots of the comments seem to suggest that investing or being a landlord in California is very difficult and potentially a hassle/litigious/costly in case of issues. 

For those who have been investing in California, what has been your experience?

Thanks in advance!

[Becca F.]

I self manage a SFH in the S.F. Bay Area and have an 11 unit apartment building (co-owned). Both are Class A areas. The 11 unit has a property management company with access to a legal team, haven't had any issues with tenants. It's under rent control so the 3 or 4 long term tenants don't cause any problems and they get a very reasonable rent. The other units are close to market rate and one is at market rate.

I rent out the SFH to family members and had some disagreements but they're getting a really good deal so they are unlikely to complain to the S.F. Rent board since they'd be moving to a studio apartment for what I charge them and they get access to the whole house (for now until I get roommates in, which they're open to). If I were renting out the house to strangers, I would most likely use a PM company.

I do hear more issues about Oakland landlords/investors and a few horror stories of a non-paying tenant, squatting for months and it takes thousands in legal fees to get them out. In Alameda County the COVID rent moratorium expired on April 29, 2023. One San Leandro landlord was owed as much as $120,000 in back rent. The one terrible story I heard is my friend's family member was renting to a tenant in S.F. who sued the landlord for $2 million when they found out the ADU/in-law unit was illegal and not up to code. The case settled in arbitration and judge awarded the tenant $70,000, which insurance company paid for most of it (which I thought was strange since the unit was had fire code violations, why would an insurance company pay out?). Lesson: make sure all units are legal and everything is up to current safety code

I also own rentals in a landlord friendly state, Indiana. Investors can still have issues with tenants - it comes down to having a trustworthy PM and vetting tenants thoroughly. 

I've heard from other CA investors if your properties are other parts of CA, not S.F., Berkeley and Oakland, it may not be as heavily pro-tenant.