California Tenant Laws

[Ahmed Sublaban]

Hello BP!

I've been looking at homes and made several offers with no luck. No biggie as I am switching my strategy up to match the current market conditions.

One big question that I've had is what am I to do with the current tenants in the home?

I plan to live in one unit, and rent the other. The issue is both sides are typically rented out (Far below rent), and the unit is extremely outdated. I want to be prepared when I purchase my first home here in California, so I'm not sued immediately. 

Here are some questions that I have and please feel free to add additional information.

1. How can I immediately remove the tenants staying within the units so I can update them, and move into one?

2. Is there any issues with keeping a tenant and raising rents with minor upgrades (Counter tops, paint)?

3. If I wanted to raise rents with no upgrades (Extremely below market value), how would I go about it?

4. Is it possible to include in the contingency that the seller remove the tenants (Give them a 60 days notice or 30 day notice)?

Any information or guidance would be helpful. 

I'm located in Lodi, and I am looking in the Sacramento, Galt, Lodi, Stockton areas.

Thanks BP!

[Wes Blackwell]

@Ahmed Sublaban

Generally speaking, if you're going to be doing renovations then you're going to want to get rid of the tenant. Otherwise it's quite the disturbance and they're not going to be too happy about it.

Plus, while you may be able to justify a higher rent to a new tenant for the paint and countertops, the current tenant might say they're perfectly fine with the countertops and paint they already have.

Not like that really means anything legally, just that you risk breaking rapport with the tenants. And since you're the new owner and won't have much to start with, not the best first impression.

As far as getting rid of them, it all depends on the leases. If they've got time left, you can offer them some incentive to move out (like cash). If they are on month to month, then just provide proper notice depending on their length of tenancy in the property.

For raising rents, they'll need to be on a month-to-month lease, and once again you'll have to provide proper notice. Look up the laws regarding this. You're going to be a landlord soon so you'll need to know this stuff.

Sellers aren't likely to remove the tenants, because if the deal falls through with you they are stuck with an empty property and a mortgage payment. So unless you hold the upper hand in the negotiation you don't want to ask for that. Not likely to be agreed upon.