Househacking a Condo

[Faris Monshi]

Hey all,

First post on Bigger Pockets, stoked to be here!

I'm starting my real estate investment journey by househacking a condo I'm already living in here in North Hollywood. The HOA does allow me to take on tenants, so all good on that end.

But now I'm trying to dig up info on LA County's requirements/regulations, and was hoping this sub-forum could shed some light on what it takes to do things by the book here. Do I really need to do things like register with the Housing Department, obtain a business license or register for a tax certificate? Apparently this is necessary in some municipalities, but I can't seem to find specifics for LA.

Any info is much appreciated. Even better if you could teach a man to fish, so I'll know how and where to find this info efficiently for future investments.

Thanks!

Faris

[Rory Kinnear]

Hi Faris, I did the same thing! I'm in Los Angeles as well (city) and have a roommate to help offset the mortgage. One thing I found is that California does categorize my 'roommate' as a lodger not a tenant, and more specifically a single family lodger. So I did not register it as a rental property because it is still both owner occupied and my primary residence. I do report the rental income. I have a lodger agreement, which differs from a lease in some ways. Obviously you have the right of access to the unit without 24hrs notice because you live here. 

Now lodgers have a lot of the same rights and protections as tenants, even rent control, but from my researc eviction seems to be the big exception. From my understanding if you have a 'single family lodger' and they violate the lease or stop paying rent (or even at the end of a lease) you can serve 30 days notice and then change the locks, no courts needed. That was one of the things that convinced me to go ahead with it as I figured if I was living with the tenant I wouldn't want to be in a situation where I would have to go through the court's unlawful detainer process.

https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=1946.5


http://www.lapublichealth.org/eh/docs/housing/brochure/tenright.pdf   (search for lodger)

Hope this helps, if it's just you and a single lodger than the rules are streamlined.